UMPQUA HOLDINGS CORPORATION

RESTRICTED STOCK AGREEMENT

 

 

            This Restricted Stock Agreement is made and entered into pursuant to
the terms of the 2003 Stock Incentive Plan (the “Plan”) adopted by the Board of
Directors and Shareholders of Umpqua Holdings Corporation, an Oregon corporation
(the “Company”). Unless otherwise defined herein, capitalized terms defined in
this Restricted Stock Agreement shall have the meanings as defined in the Plan.

 

 

The “Grantee”

 

Target Number of Shares of the Company’s

Common Stock Awarded(the “Target Grant Shares”)

 

Maximum Number of Shares of the Company’s                                    

Common Stock Awarded                                                (the
“Maximum Grant Shares”)

 

“Date of Award”1/27/2012

 

Price Paid by Grantee per Share$  0

 

 

Fair Market Value per Share on Date of Award$12.28

 

Repurchase Price per Share$0.001

 

“Vesting Schedule”Per the attached Schedule A

 

 

1.            AWARD OF RESTRICTED STOCK GRANT

 

            The Company hereby awards to the Grantee and the Grantee accepts the
award of a Restricted Stock Grant of the number of shares of Common Stock of the
Company specified above as the Target Grant Shares. This Restricted Stock Grant
is being made as part of the Grantee’s compensation package without the payment
of any consideration other than the Grantee’s services to the Company and
payment of the Price Paid by the Grantee per Share specified above, if any. The
Award is being made pursuant to the Plan and is subject to and conditioned upon
the terms and conditions of the Plan and the terms and conditions set forth in
this Agreement. Any inconsistency between this Agreement and the terms and
conditions of the Plan will be resolved in accordance with the Plan.  As used
herein, the term “Grant Shares” refers to Target Grant Shares and Maximum Grant
Shares.

 

 

2.            REPRESENTATIONS OF THE GRANTEE

 

2.1No Representations by or on Behalf of the Company.  The Grantee is not
relying on any representation, warranty or statement made by the Company or any
agent, employee or officer, director, shareholder or other controlling person of
the Company regarding the Grant Shares or this Restricted Stock Grant.

 

1

Restricted Stock Agreement – PSA Vesting - Jan 2012

--------------------------------------------------------------------------------

 

 

            2.2.            Tax Election.  The Company has advised the Grantee
to seek the Grantee’s own tax and financial advice with regard to the federal
and state tax considerations resulting from the Grantee’s receipt of the Grant
Shares pursuant to the Award. The Grantee is making the Grantee’s own
determination as to the advisability of making a Section 83(b) election with
respect to the Target Grant Shares covered by the Award and this Agreement. The
Grantee understands that the Company will report to appropriate taxing
authorities the payment to the Grantee of compensation income either (i) upon
the vesting of Shares or (ii) if the Grantee makes a timely Section 83(b)
election, as of the Date of the Award. The Grantee understands that he or she is
solely responsible for the payment of all federal and state taxes resulting from
this Restricted Stock Grant.  With respect to Tax Withholding Amounts, the
Company has all of the rights specified in Section 5 of this Agreement and has
no obligations to the Grantee except as expressly stated in Section 5 of this
Agreement.

 

            2.3            Agreement to Enter into Lock-Up Agreement with an
Underwriter.  If the Grantee is then an executive officer of the Company, the
Grantee, by accepting the Award represented by this Agreement, understands and
agrees that whenever the Company undertakes a firmly underwritten public
offering of its securities, the Grantee will, if requested to do so by the
managing underwriter in such offering, enter into an agreement not to sell or
dispose of any securities of the Company owned or controlled by the Grantee
provided that such restriction will not extend beyond 12 months from the
effective date of the registration statement filed in connection with such
offering.

 

 

3.GENERAL RESTRICTIONS OF TRANSFERS OF UNVESTED SHARES

 

3.1No Transfers of Unvested Shares.  The Grantee agrees for himself or herself,
his or her executors, administrators and other successors in interest that none
of the Unvested Shares (as defined in Schedule A), nor any interest therein, may
be voluntarily or involuntarily sold, transferred, assigned, donated, pledged,
hypothecated or otherwise disposed of, gratuitously or for consideration prior
to their vesting in accordance with the Vesting Schedule set forth in Schedule
A.

 

3.2Stock Distributions.  If the Company makes any distribution of stock with
respect to the Grant Shares by way of a stock dividend or stock split, or
pursuant to any recapitalization, reorganization, consolidation, merger or
otherwise, and the Grantee receives any additional shares of stock in the
Company (or other shares of stock in another corporation) as a result thereof,
such additional (or other) shares shall be deemed Grant Shares hereunder and
shall be subject to the same restrictions and obligations imposed by this
Agreement.

 

3.3Invalid Transfers.  Any disposition of the Grant Shares other than in strict
compliance with the provisions of this Agreement shall be void. The Company
shall not be required (i) to transfer on its books any Grant Shares which have
been sold or transferred in violation of the provisions of this Section 3 or
(ii) to treat as the owner of the Grant Shares, or otherwise to accord voting,
dividend or any other rights to, any person or entity to whom Grantee
transferred or attempted to transfer the Grant Shares in contravention of this
Agreement.

 

3.4Status of Repurchased Grant Shares.  Any of the Grant Shares repurchased by
the Company pursuant to this Agreement shall return to the status of authorized,
but unissued, shares of the Company.

 

 

4.REPURCHASE OF UNVESTED GRANT SHARES

 

4.1Repurchase Right.  Unless the Company gives notice to the Grantee within a
period of ninety days (90) after the occurrence of any of the foregoing events
(each a “Repurchase Event”) of its intent

2

Restricted Stock Agreement – PSA Vesting - Jan 2012

--------------------------------------------------------------------------------

 

 

to waive its repurchase right, the Company will repurchase the Grant Shares from
the Grantee to the extent that they were Unvested on the date of the Repurchase
Event:

 

(i)upon the death of the Grantee;

 

(ii)upon the Grantee becoming Disabled, as such term is defined in the Plan; and

 

(iii)upon the Grantee ceasing, for any reason, to be an Employee, as such term
is defined in the Plan, except that a leave of absence in accordance with the
Company’s sick leave, family leave or military leave policies or that is
otherwise approved by the Committee that administers the Plan shall not
constitute cessation of Employment provided unless the Grantee fails to return
to employment with the Company at the end of such leave in accordance with such
policies or approval, or upon Grantee’s ceasing their membership in the
Company’s President’s Club.

 

Notwithstanding the foregoing, if the Company was not aware of the occurrence of
the Repurchase Event, the ninety-day period shall not begin to run until such
time as the Company actually becomes aware of such occurrence. If the Company
gives notice of its election not to repurchase the Unvested Grant Shares, this
shall not bar or waive the Company’s obligation or option to exercise its
repurchase right in connection with any subsequent Repurchase Event.

 

4.2Purchase Price and Payment.  The Repurchase Price of the Grant Shares under
this Section 4 is as specified on the first page of this Agreement and shall be
paid by the Company at the closing by check.

 

4.3Closing of the Repurchase.  Any shares repurchased pursuant to this Section 4
shall be transferred at a closing to be held at the principal office of the
Company no later than ten (10) days after the expiration of the ninety (90) day
period specified in Section 4.1. Failure to timely remit the Repurchase Price to
the Grantee shall not invalidate the Company’s repurchase obligation and right
as set forth in Section 4.1.

 

4.4Safekeeping of Stock Certificate Until the Expiration of the Repurchase
Right.  Until Grant Shares are vested in accordance with the vesting schedule
set forth in Schedule A, the stock certificate representing the Grant Shares may
be retained by the Company or its transfer agent. Upon the closing of any
repurchase pursuant to this Section 4, Grantee does hereby authorize and does
hereby irrevocably appoint the Secretary of the Company (with full power of
substitution) as Grantee’s attorney-in-fact to transfer the Grant Shares on the
books of the Company and to cancel or reissue a new certificate representing the
Grant Shares in accordance with this Section 4. Upon the written request of the
Grantee, the Company will deliver or cause to be delivered to the Grantee a
stock certificate representing the Grant Shares that have vested in accordance
with the vesting schedule set forth in Schedule A to the extent that stock
certificates for such vested shares have not previously been delivered to the
Grantee. The power of attorney contained in this Section 4.4 shall become null
and void as to Grant Shares that have vested in accordance with the vesting
schedule set forth in Schedule A.

 

4.5Assignment of Rights by the Company.  The Company may, in its sole
discretion, assign its repurchase obligation with respect to any Unvested Grant
Shares to any one or more persons without notice to, or the prior consent of,
the Grantee.

 

 

5.PROVISION FOR PAYMENT OF TAX WITHHOLDING AMOUNTS

 

            5.1            Payment of Tax Withholding Amounts.  Upon the vesting
of the Grant Shares or upon the Grantee making a valid election under
Section 83(b) of the Internal Revenue Code, the Grantee must

3

Restricted Stock Agreement – PSA Vesting - Jan 2012

--------------------------------------------------------------------------------

 

 

pay to the Company or make adequate provision for the payment of all Tax
Withholding as such term is defined in the Plan. By accepting the Award
represented by this Agreement, the Grantee shall be deemed to have consented to
the Company withholding the amount of any Tax Withholding from any amounts
payable by the Company to the Grantee. No shares of Common Stock will be
released from the restrictions on their transfer under Section 3 of this
Agreement unless and until payment or adequate provision for payment of the Tax
Withholding has been made. If the Company later determines that additional Tax
Withholding was or has become required beyond any amount paid or provided for by
the Grantee, the Grantee will pay such additional amount to the Company
immediately upon demand by the Company. If the Grantee fails to pay the amount
demanded, the Company may withhold that amount from other amounts payable by the
Company to the Grantee, including salary or any bonus.

 

5.2Alternative Provisions for the Payment of Tax Withholding Amounts.  The
Grantee may elect to pay all or any portion of the Tax Withholding (i) by
surrender of shares of Common Stock (including vested Grant Shares) valued at
their Fair Market Value as such term is defined in the Plan, (ii) by authorizing
a duly registered and licensed broker-dealer to sell shares of Common Stock that
are vested or vesting under this Agreement (or, at least a sufficient portion
thereof) and instructing such broker-dealer to immediately remit to the Company
a sufficient portion of the proceeds from such sale to pay the Tax Withholding
(iii) by the surrender of other securities of the Company in the manner
specified in Section 8.4 of the Plan, or (iv) any combination of the foregoing.

 

 

6.MISCELLANEOUS PROVISIONS

 

6.1Specific Performance.  The parties hereby acknowledge and agree that it is
impossible to measure in money the damages which will be suffered by a party
hereto by reason of any breach by another party of any term of this Agreement,
that the Company and its common stock are unique and that a non‑breaching party
will suffer irreparable injury if this Agreement is not specifically performed.
Accordingly, the parties hereto acknowledge that a non‑breaching party shall, in
addition to all other remedies available hereunder or at law, be entitled to
equitable relief (including without limitation preliminary and permanent
injunctive relief) to enforce the terms of this Agreement.

 

6.2No Rights to Continued Employment.  Nothing contained herein shall confer
upon Grantee any right to continue in the employ of the Company or continue in
their position, and the Company reserves all rights to discharge or demote
Grantee for any reason whatsoever, with or without cause, as an at-will
employee, subject to the terms of any other written agreement that may exist
between the Company and Grantee.

 

6.3Amendment and Modification.  This Agreement may be amended, modified and
supplemented only by written agreement of all of the parties hereto.

 

6.4Assignment.  This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by the Grantee
without the prior written consent of the Company.

 

6.5Governing Law.  This Agreement and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with the internal
laws of the State of Oregon applicable to the construction and enforcement of
contracts wholly executed in Oregon by residents of Oregon and wholly performed
in Oregon. Any action or proceeding brought by any party hereto shall be brought
only in a state or federal court of competent jurisdiction located in the County
of Multnomah in the State of Oregon and all

4

Restricted Stock Agreement – PSA Vesting - Jan 2012

--------------------------------------------------------------------------------

 

 

parties hereto hereby submit to the in personal jurisdiction of such court for
purposes of any such action or procedure.

 

            6.6.              Arbitration.  The parties agree to submit any
dispute arising under this Agreement to final, binding, private arbitration in
Portland,  Oregon. This includes not only disputes about the meaning or
performance of the Agreement, but disputes about its negotiation, drafting, or
execution. The dispute will be determined by a single arbitrator in accordance
with the then-existing rules of arbitration procedure of Multnomah County,
Oregon Circuit Court, except that there shall be no right of de novo review in
Circuit Court and the arbitrator may charge his or her standard arbitration fees
rather than the fees prescribed in the Multnomah County Circuit Court
arbitration procedures. The proceeding will be commenced by the filing of a
civil complaint in Multnomah County Circuit Court and a simultaneous request for
transfer to arbitration. The parties expressly agree that they may choose an
arbitrator who is not on the list provided by the Multnomah County Circuit Court
Arbitration Department, but if they are unable to agree upon the single
arbitrator within ten days of receipt of the Arbitration Department list, they
will ask the Arbitration Department to make the selection for them. The
arbitrator will have full authority to determine all issues, including
arbitrability, to award any remedy, including permanent injunctive relief, and
to determine any request for costs and expenses in accordance with Section 6.7
of this Agreement. The arbitrator’s award may be reduced to final judgment in
Multnomah County Circuit Court. The complaining party shall bear the arbitration
expenses and may seek their recovery if it prevails. Notwithstanding any other
provision of this Agreement, an aggrieved party may seek a temporary restraining
order or preliminary injunction in Multnomah County Circuit Court to preserve
the status quo during the arbitration proceeding.

 

6.7Attorney Fees.  If any suit, action, or proceeding is instituted in
connection with any controversy arising out of this Agreement or the enforcement
of any right hereunder, the prevailing party will be entitled to recover, in
addition to costs, such sums as the court or arbitrator may adjudge reasonable
as attorney fees, including fees on any appeal.

 

6.8Headings.  The headings of the sections and subsections of this Agreement are
inserted for convenience only and shall not constitute a part hereof.

 

6.9Entire Agreement.  This Agreement and the Plan embody the entire agreement
and understanding of the parties hereto in respect of the subject matter
contained herein and supersedes all prior written or oral communications or
agreements all of which are merged herein. There are no restrictions, promises,
warranties, covenants, or undertakings, other than those expressly set forth or
referred to herein.

 

6.10No Waiver.  No waiver of any provision of this Agreement or any rights or
obligations of any party hereunder shall be effective, except pursuant to a
written instrument signed by the party or parties waiving compliance, and any
such waiver shall be effective only in the specific instance and for the
specific purpose stated in such writing.

 

6.11Severability of Provisions.  In the event that any provision hereof is found
invalid or unenforceable pursuant to judicial decree or decision, the remainder
of this Agreement shall remain valid and enforceable according to its terms.

 

5

Restricted Stock Agreement – PSA Vesting - Jan 2012

--------------------------------------------------------------------------------

 

 

6.12Notices.  All notices or other communications pursuant to this Agreement
shall be in writing and shall be deemed duly given if delivered personally or by
courier service, or if mailed by certified mail, return receipt requested,
prepaid and addressed to the Company executive offices to the attention of the
Corporate Secretary, or if to the Grantee, to the address maintained by the
personnel department, or such other address as such party shall have furnished
to the other party in writing.

 

 

            IN WITNESS WHEREOF, the Grantee and the Company have executed this
Agreement effective as of the Date of Award.

 

 

The GRANTEE

                                                                                                                                    

                                                            Type or Print Name:
                                                

                                                            Social Security
Number:                                                

 

 

 

COMPANY                                                UMPQUA HOLDINGS
CORPORATION

 

 

                                                            By:                                                                        

 

6

Restricted Stock Agreement – PSA Vesting - Jan 2012

--------------------------------------------------------------------------------

 

 

RESTRICTED STOCK AGREEMENT

Schedule A – Vesting Schedule

 

Grant Shares Awarded under the Restricted Stock Agreement to which this Schedule
A is attached shall vest in accordance with the following conditions.  Grant
Shares that have not yet vested in accordance with the vesting schedule set
forth herein, are referred to in the Restricted Stock Agreement as “Unvested
Shares.”

 

Performance-Based and Accelerated Vesting.  Under the Restricted Stock Agreement
to which this Vesting Schedule is attached, Grant Shares shall vest only in
accordance with the following provisions:

 

A.        For the purposes of this Vesting Schedule, the terms below have the
following meanings:

            “Final Closing Price” means in the case of the Company the closing
price of a share of the Company’s common stock, and in the case of the KRXTR the
closing price of the KRXTR (symbol “KRXTR”).

 

            “Initial Closing Price” means, in the case of the Company $12.28,
and in the case of the KRXTR $71.22 (using the symbol “KRXTR”).

 

            “KRXTR” means the KBW Regional Banking Total Return Index, or such
other similar index as selected by the Committee should the KBW Regional Banking
Total Return Index cease to be available.

 

            “Retirement” means termination of employment after becoming eligible
for retirement by reaching age 62 and having 5 years of continuous service.

 

“TSR” means the cumulative total shareholder return as measured by dividing the
sum of the cumulative amount of dividends for the TSR Period, assuming dividend
reinvestment, and the difference between the Initial Closing Price and the Final
Closing Price, by the Initial Closing Price.

 

“TSR Performance” compares the Company’s TSR to the KRXTR TSR, each converted
into a fixed investment, stated in dollars, assuming $100.00 was invested at the
Initial Closing Price at the commencement of TSR Period. 

 

TSR Performance, for the purposes of determining vesting, is the quotient
resulting from dividing Company TSR Performance by KRXTR TSR Performance.

 

Company TSR Performance and KRXTR TSR Performance are calculated in the same
manner as the performance of the Company’s common stock in the Stock Performance
Graph presented in the Company’s Annual Report on Form 10-K as required by Item
201(e) of SEC Regulation S-K except that the measurement period is three years
for the purposes of this Agreement and five years for the Stock Performance
Graph. 

 

            “TSR Period” means the three-year period ending on January 27, 2015.

 

B.        The vesting of Grant Shares shall be conditioned upon the satisfaction
of a performance vesting requirement based on TSR Performance.  Unless earlier
vested in accordance with Sections C or

7

Restricted Stock Agreement – PSA Vesting - Jan 2012

--------------------------------------------------------------------------------

 

 

D of this Vesting Schedule, Target Grant Shares shall become vested, provided
Grantee is employed by the Company at the end of the TSR Period and upon the
written certification by the Committee, or its delegate, of the achievement of
the performance goal of TSR Performance, in accordance with the applicable
Vesting Percentage specified for TSR Performance in the following schedule:

 

TSR Performance

 

Vesting Percentage of Target Grant Shares

 

Lower than 60%

 

 

 

0%

60%

 

25%

between 60% and 100%

 

**

100% (the Company TSR Performance equals or exceeds the KRX TSR Performance)

 

100%

Above 100%

 

***

 

 

 

**    ** When TSR Performance is between 60% and 100%, such results will be
interpolated on a straight-line basis to determine the applicable Vesting
Percentage. For example, 80% TSR Performance represents the midpoint of TSR
Performance and would result in the midpoint of the Vesting Percentage, or
62.5%.

 

***  *** When TSR Performance is between 100% and 125%, the applicable Vesting
Percentage shall be equal to the TSR Performance.  If TSR Performance exceeds
125%, the Vesting Percentage shall be 125%.  In no event shall the total vested
shares exceed the Maximum Grant Shares.

 

C.        Notwithstanding Section B of this Vesting Schedule, upon the
consummation of a Change of Control Transaction, as such term is defined in the
Plan, all of the Target Grant Shares that remain unvested shall become vested.

 

D.        Notwithstanding Section B of this Vesting Schedule, upon Retirement by
the Grantee, death or Disability of the Grantee, or a termination of employment
by the Grantee for “good reason” (as defined in the Grantee’s Employment
Agreement with the Company) prior to the end of the TSR Period, a percentage of
the unvested Target Grant Shares, rounded to the nearest whole share, shall vest
as of the date of such termination and become exercisable, with such percentage
equal to the number of months of service by the Grantee during the TSR Period
divided by 36.

 

Notwithstanding the foregoing: (i) no additional Grant Shares will vest after
the occurrence of any Repurchase Event; and (ii) the number of Grant Shares
vesting above shall automatically be adjusted as appropriate to reflect any
stock dividend, stock-split, combination of shares or other similar event as
referred to in Section 10.1 of the Plan.

 

 

8

Restricted Stock Agreement – PSA Vesting - Jan 2012

--------------------------------------------------------------------------------