Document:

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                                                                    EXHIBIT 10.5

                             STOCK OPTION AGREEMENT

      This Stock Option Agreement (the "Agreement"), dated as of July 22, 2002,
is made by and between Centennial Bancorp, an Oregon corporation ("Centennial")
and Umpqua Holdings Corporation, an Oregon corporation ("Umpqua").

      Concurrently with the execution hereof, Umpqua and its wholly owned
subsidiary, Umpqua Bank, are entering into a certain Agreement and Plan of
Reorganization (the "Merger Agreement") with Centennial and its wholly owned
subsidiary, Centennial Bank, which would result in the merger of Centennial with
and into Umpqua and the merger of Centennial Bank with and into Umpqua Bank, all
such transactions being collectively referred to herein as (the "Merger").

      It is understood and acknowledged that by negotiating and executing the
Merger Agreement and by taking actions necessary or appropriate to effect the
Merger, Umpqua and Umpqua Bank have incurred and will incur substantial direct
and indirect costs (including without limitation the costs of management and
employee time) and will forgo the pursuit of certain alternative investments and
transactions.

      THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and in the Merger Agreement, the parties hereto agree as follows:

      1.    Grant of Option. Subject to the terms and conditions set forth
herein, Centennial hereby irrevocably grants an option (the "Option") to Umpqua
to purchase an aggregate of 4,911,757 authorized but unissued shares of
Centennial common stock, without par value (the "Common Stock") (which
represents approximately 19.9% of total stock currently issued and outstanding),
at a per share price of $9.35 (the "Option Price").

      2.    Exercise of Option. Subject to the provisions of this Section 2 and
of Section 13(a) of this Agreement, this Option may be exercised by Umpqua or by
any permitted transferee pursuant to Section 5, in whole or in part, at any
time, or from time to time in any of the following circumstances and only in
such circumstances:

            (a)   Centennial or its board of directors enters into an agreement
or recommends to Centennial shareholders an agreement (other than the Merger
Agreement) pursuant to which any entity, person or group, within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (any of the foregoing hereinafter in this Section 2, a "Person")
other than Umpqua or any of its affiliates, would: (i) merge or consolidate with
Centennial, with Centennial shareholders holding less than 50 percent of the
stock of the surviving entity, (ii) acquire 50 percent or more of the assets or
liabilities of, Centennial or Centennial Bank, or (iii) purchase or otherwise
acquire (including by merger, consolidation, share exchange or any similar
transaction) securities representing 50 percent or more of the voting shares of
Centennial or Centennial Bank.

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            (b)   Any Person (other than Umpqua or any of its affiliates and
other than any Person owning as of the date hereof ten percent or more of the
voting shares of Centennial) acquires the beneficial ownership or the right to
acquire beneficial ownership of securities which, when aggregated with other
such securities owned by such Person, represents fifteen percent or more of the
voting shares of Centennial (the term "beneficial ownership" for purposes of
this Agreement shall have the meaning set forth in Section 13(d) of the Exchange
Act, and the regulations promulgated thereunder). Notwithstanding the foregoing
sentence, the Option shall not be exercisable pursuant to this subsection (b) if
(i) a Person acquires the beneficial ownership of securities which, when
aggregated with other such securities owned by such Person, represents fifteen
percent or more but less than 25 percent of the voting shares of Centennial and
(ii) either (x) the transaction does not result in, and is not presumed to
constitute, "control" as defined under Section 7(j)(1) of the Federal Deposit
Insurance Act or 12 CFR Section 225.41(c)(2) or (y) the Federal Reserve Board
determines pursuant to 12 CFR Section 225.41(g) that a presumption of control
does not exist with respect to that transaction.

            (c)   The board of directors of Centennial fails to recommend, or
withdraws its prior recommendation of, the Merger to Centennial shareholders for
any reason other than (i) termination of the Merger Agreement pursuant to
Section 11.1(a), 11.1(b), 11.1(c) (second clause), 11.1(e) or 11.1(f) of the
Merger Agreement; (ii) material breach of a representation, warranty or covenant
of Umpqua; (iii) withdrawal by Hovde Financial LLC of its opinion that the
Merger is fair, from a financial point of view, to Centennial shareholders (or
failure by Hovde Financial LLC to deliver its "bring-down" letter immediately
before the mailing of the Proxy Statement to Centennial shareholders) where such
withdrawal or failure is for reasons other than the existence of an Alternative
Acquisition Transaction; or (iv) material breach of Umpqua's representations or
warranties pursuant to Section 5, covenants pursuant to Section 7 or material
failure by Umpqua to satisfy the conditions to closing set forth in Section 9 of
the Merger Agreement which would be expected to be satisfied on or before the
mailing of the Proxy Statement to Centennial Shareholders other than those set
forth in Section 9.1 (with respect to Centennial). The exception set forth in
clause (i) of the first sentence of Section 2(c) of this Agreement relating to
terminations pursuant to Section 11.1(b) of the Merger Agreement shall not
operate to terminate the Option where (a) either (i) Centennial enters into an
Alternative Acquisition Transaction prior to December 31, 2003 that had been
publicly announced prior to the date of the Centennial shareholder meeting; or
(ii) Centennial enters into an Alternative Acquisition Transaction within six
months after terminating the Merger Agreement whether or not such Alternative
Acquisition Transaction had been publicly announced prior to the date of the
Centennial shareholder meeting; and (b) at the time of the failure to recommend
or withdrawal of the recommendation of the Merger to the Centennial
Shareholders, there existed no material breach of Umpqua's representations or
warranties pursuant to Section 5, covenants pursuant to Section 7 or material
failure by Umpqua to satisfy the conditions set forth in Section 9 of the Merger
Agreement which would be expected to be satisfied on or before the mailing of
the Proxy Statement to Centennial Shareholders.

            (d)   The shareholders of Centennial fail to approve the Merger by
the required affirmative vote at a meeting of the shareholders called for such
purpose, after any Person (other than Umpqua or an affiliate of Umpqua)
announces publicly or communicates in writing an Alternative Acquisition
Transaction or makes any public communication of a plan or proposal intended to
(i) purchase or otherwise acquire securities representing 50 percent or more of
the voting shares of Centennial or (ii) elect a majority of the board of
directors of Centennial from persons who are not presently directors of
Centennial.

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      It is understood and agreed that the Option shall become exercisable upon
the occurrence of any of the above-described circumstances even though the
circumstance occurred as a result, in part or in whole, of the board of
Centennial complying with its fiduciary duties.

      Notwithstanding any contrary provision of this Section 2, the Option may
not be exercised if either (i) any applicable and required governmental
approvals have not been obtained with respect to such exercise or if such
exercise would violate any regulatory restrictions applicable to Centennial or
Umpqua, (ii) at the time of exercise Umpqua or Umpqua Bank is failing in any
material respect to perform or observe its representations, warranties,
covenants or conditions under the Merger Agreement unless the reason for such
failure is that Centennial is failing to perform or observe its covenants or
satisfy all applicable conditions under the Merger Agreement, or (iii) Umpqua
has elected to receive, been entitled to receive, and did receive the payment of
$5,000,000 from Centennial as provided in Section 11.2.2 of the Merger Agreement
(the "Termination Fee"). Solely in the case of clause (iii) of the foregoing
sentence, this Option shall not be exercisable within the thirty (30) day period
within which the Termination Fee may be paid pursuant to Section 11.2.2 of the
Merger Agreement; provided that in such case Centennial gives reasonable
assurance to Umpqua that it intends to make such payment and at all times during
such period Umpqua has reason to believe its rights hereunder are not prejudiced
by such delay.

      3.    Notice, Time and Place of Exercise. Each time that Umpqua or any
permitted transferee wishes to exercise any portion of the Option, Umpqua or
such transferee shall give written notice of its intention to exercise the
Option specifying the number of shares as to which the Option is being exercised
("Option Shares") and the place and date for the closing of the exercise (which
date shall be not later than ten business days from the date such notice is
mailed). If any law, regulation or other restriction will not permit such
exercise to be consummated during such ten-day period, the date for the closing
of such exercise shall be within five business days following the cessation of
such restriction on consummation.

      4.    Payment and Delivery of Certificate(s). At any closing for an
exercise of the Option or any portion thereof, (a) Umpqua and Centennial will
each deliver to the other certificates of their respective chief executive
officers as to the accuracy, as of the closing date, of their respective
representations and warranties hereunder, (b) Umpqua or the transferees will pay
the aggregate purchase price for the shares of Common Stock to be purchased by
wire transfer of immediately available Portland, Oregon funds to an account
designated by Centennial, and (c) Centennial will deliver to Umpqua or the
transferees a certificate or certificates representing the shares so purchased.

      5.    Transferability of the Option and Option Shares. Prior to the time
the Option, or a portion thereof, becomes exercisable pursuant to the provisions
of Section 2 of this Agreement, neither the Option nor any portion thereof shall
be transferable. Upon the occurrence of any of the events or circumstances set
forth in Sections 2(a) through (d) above, the Option or any portion thereof or
any of the Option Shares may be freely transferred by Umpqua, subject to Section
13 and applicable federal and state securities laws and the Bank Holding Company
Act of 1956, as amended. Such transfer shall be effected by delivery of written
notice by Umpqua to Centennial specifying the name(s) of the transferee(s) and
shall be effective on the date of receipt or deemed receipt of notice pursuant
to Section 13(d).

      6.    Representations, Warranties and Covenants of Centennial.
Centennial hereby represents, warrants, and covenants to Umpqua as follows:

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            (a)   Due Authorization. This Agreement has been duly authorized by
all necessary corporate action on the part of Centennial, has been duly executed
by a duly authorized officer of Centennial and, assuming compliance with the
representations, warranties and covenants of Umpqua herein, constitutes a valid
and binding obligation of Centennial enforceable against Centennial in
accordance with its terms. No shareholder approval by Centennial shareholders is
required by applicable law or otherwise prior to the exercise of the Option in
whole or in part.

            (b)   Option Shares. Centennial has taken all necessary corporate
and other action to authorize and reserve and to permit it to issue, and at all
times from the date hereof to such time as the obligation to deliver shares
hereunder terminates will have reserved for issuance, at the closing(s) upon
exercise of the Option, or any portion thereof, the Option Shares (subject to
adjustment, as provided in Section 8 below), all of which, upon issuance
pursuant hereto shall be duly and validly issued, fully paid and nonassessable,
and shall be delivered free and clear of all claims, liens, encumbrances and
security interests, including any preemptive right of any of the shareholders of
Centennial other than liens or encumbrances arising solely because of the act or
omission of Umpqua. All taxes, fees, assessments and like charges shall be and
remain the sole obligation of Umpqua.

            (c)   No Conflicts. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
violate or result in any violation of or be in conflict with or constitute a
default under any term of the articles of incorporation or bylaws of Centennial
or any agreement, instrument, judgment, decree, law, rule or order applicable to
Centennial or any subsidiary of Centennial or to which Centennial or any such
subsidiary is a party.

            (d)   Notification of Record Date. At any time from and after the
date of this Agreement until such time as the Option is no longer exercisable,
Centennial shall give Umpqua or any permitted transferee 20 days prior written
notice before setting the record date for determining the holders of record of
the Common Stock entitled to vote on any matter, to receive any dividend or
distribution or to participate in any rights offering or other matters, or to
receive any other benefit or right, with respect to the Common Stock.

      7.    Representations, Warranties and Covenants of Umpqua.  Umpqua
hereby represents, warrants and covenants to Centennial as follows:

            (a)   Due Authorization. This Agreement has been duly authorized by
all necessary corporate action on the part of Umpqua, has been duly executed by
a duly authorized officer of Umpqua and, assuming the accuracy of the
representations and warranties, and compliance with the covenants, of Centennial
herein, constitutes a valid and binding obligation of Umpqua enforceable against
Umpqua in accordance with its terms.

            (b)   Transfers of Common Stock. No portion of the Option or any
Option Shares will be transferred by Umpqua or its transferee hereunder except
in a transaction registered or exempt from registration under any applicable
securities laws.

            (c)   No Conflicts. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
violate or result in any violation of or be in conflict with or constitute a
default under any term of the articles of incorporation or bylaws of Umpqua or
any agreement, instrument, judgment, decree, law, rule or order applicable to
Umpqua or any subsidiary of Umpqua or to which Umpqua or any such subsidiary is
a party.

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      8.    Adjustment Upon Changes in Capitalization. In the event of any
change in the Common Stock by reason of stock dividends, stock splits, mergers,
recapitalizations, combinations, exchanges of shares or similar transactions,
the number and kind of shares or securities subject to the Option and the
purchase price per share of Common Stock shall be proportionately adjusted. If
prior to the termination or exercise of the Option Centennial is acquired by
another party, consolidates with or merges into another corporation or
liquidates, this Option shall convert automatically into an option to purchase
shares or other securities or property of the acquiring or surviving entity into
which Centennial Common Stock shall have been converted or exchanged with an
exercise price and number of shares proportionately adjusted based upon the
consideration received by Centennial shareholders in such transaction. Such
option, once converted, shall retain the same terms, transfer, termination and
other provisions contained in this Agreement.

      9.    Nonassignability. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and the successors of each of the undersigned.
This Agreement and any right hereunder shall not be assignable by either party,
except that Umpqua may transfer the Option, the Option Shares or any portion
thereof, and its rights under this Agreement related thereto, in accordance with
Section 5. A merger or consolidation of Umpqua (whether or not Umpqua is the
surviving entity) or an acquisition of Umpqua shall not be deemed an assignment
or transfer.

      10.   Regulatory Restrictions. Centennial shall use commercially
reasonable efforts to obtain or to cooperate with Umpqua or any permitted
transferee in obtaining all necessary regulatory consents, approvals, waivers or
other action (whether regulatory, corporate or other) to permit the acquisition
of any or all Option Shares by Umpqua or any such transferee. All costs of
obtaining such approvals shall be paid by Umpqua.

      11.   Remedies. Centennial agrees that if for any reason Umpqua or any
transferee shall have exercised its rights under this Agreement and Centennial
shall have failed to issue the Option Shares to be issued upon such exercise or
to perform its other obligations under this Agreement, unless such action would
violate any applicable law or regulation by which Centennial is bound, then
Umpqua or any permitted transferee shall be entitled to specific performance and
injunctive and other equitable relief to cause such issuance. The parties
acknowledge that the Option, if exercised by Umpqua or its transferee, is the
sole remedy for termination of the Merger Agreement by Umpqua in connection with
an Alternative Acquisition Transaction and that the exercise of the Option in
whole or in part shall discharge Centennial's obligation to pay any part of the
Termination Fee or reimburse Umpqua for its expenses in connection with the
Merger Agreement. This provision is without prejudice to any other rights that
Centennial or Umpqua or any permitted transferee may have against the other
party for any failure to perform its obligations under this Agreement.

      12.   No Rights as Shareholder. This Option, prior to the exercise
thereof, shall not entitle the holder hereof to any rights as a shareholder of
Centennial at law or in equity; specifically this Option shall not entitle the
holder to receive dividends or other distributions to shareholders, to vote on
any matter presented to the shareholders of Centennial, or to any notice of any
meetings of stockholders or any other proceedings of Centennial except as
otherwise specifically provided herein.

      13.   Limited Right of First Refusal. If Umpqua or any successor to
Umpqua's interest herein (a "Proposed Seller") acquires any Option Shares by
exercising the Option, and if the Merger does not occur, and if the Proposed
Seller shall receive and shall desire to accept a bona fide offer to purchase
any of the Option Shares within 12 months after the date of such exercise, then,
prior to any

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such sale, the Proposed Seller shall notify Centennial of such offer, the name
of the offeror and the dollar value thereof, and Centennial shall have the
right, by notice delivered to the Proposed Seller within two business days after
the date Centennial receives the Proposed Seller's notice of such offer, to
purchase all (but not less than all) of the Option Shares so proposed to be sold
for a cash price equal to such dollar value, payable immediately. If Centennial
does not elect to purchase any of the Option Shares, the Proposed Seller shall
thereafter be free to sell the Option Shares to anyone (subject to Section 5).

      14.   Miscellaneous.

            (a)   Termination. This Agreement and the Option, to the extent not
previously exercised, shall terminate upon the earliest of (i) December 31, 2003
(unless Centennial enters into an Alternative Transaction in which event the
applicable date is the closing or terminating of such Alternative Transaction);
(ii) the mutual agreement of the parties hereto; (iii) 30 days after the date on
which any application for regulatory approval for the Merger shall have been
denied; provided, however, that if prior to the expiration of such 30-day
period, Centennial, Centennial Bank, Umpqua or Umpqua Bank are engaged in
litigation or an appeal procedure relating to an attempt to obtain approval of
the Merger, this Agreement will not terminate until 30 days after the completion
of such litigation and appeal procedure; (iv) the date on which Centennial
tenders payment in full of the Termination Fee after demand by Umpqua for
payment of the same; or (v) the date of termination of the Merger Agreement
other than terminations to which Section 11.2.2. If the Option has been validly
exercised, in whole or in part, but not closed prior to the termination of this
Agreement, then this Agreement shall remain in effect until the closing of such
exercise solely with respect to shares issuable in connection with that
exercise.

            (b)   Amendments. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.

            (c)   Severability of Terms. Any provision of this Agreement that is
invalid, illegal, or unenforceable shall be ineffective only to the extent of
such invalidity, illegality, or unenforceability without affecting in any way
the remaining provisions hereof or rendering any other provisions of this
Agreement invalid, illegal or unenforceable. Without limiting the generality of
the foregoing, if the right of Umpqua or any permitted transferee to exercise
the Option in full for the total number of shares of Common Stock or other
securities or property issuable upon the exercise of the Option is limited by
applicable law, or otherwise, Umpqua or any such transferee may, nevertheless,
exercise the Option to the fullest extent permissible.

            (d)   Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given by hand or
courier delivery, by electronic mail or facsimile, or by registered or certified
mail, postage prepaid, return receipt requested, to the respective parties as
follows:

            If to Centennial:

                  Centennial Bancorp
                  One SW Columbia St.
                  Portland, OR  97201
                  Attention: Ted R. Winnowski

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            With a copy to:

                  Tonkon Torp LLP
                  888 SW Fifth Ave, Suite 1600
                  Portland, OR  97204
                  Attention: Kenneth D. Stephens
                  Fax:  (503) 972-3708
                  Email: ken@tonkon.com

            If to Umpqua:

                  Umpqua Holdings Corporation
                  200 SW Market
                  Suite 1900
                  Portland, OR 97201
                  Attn: Raymond Davis, President & CEO
                  Fax: (503) 546-2498
                  Email: raydavis@umpquabank.com

            With a copy to:

                  Foster Pepper & Shefelman LLP
                  101 SW Main Street, 15th Floor
                  Portland, OR 97204
                  Attn:  Kenneth E. Roberts, Esq.
                  Fax:  (800) 601-9234
                  Email: robek@foster.com

or to such other address or facsimile number as either party may have furnished
to the other in writing in accordance herewith. Notices dispatched
electronically or by facsimile shall be effective at 5:00 p.m. on the date
transmitted with answer-back or receipt verification enabled; notices dispatched
by courier shall be deemed effective at 5:00 p.m. on the date on which delivery
occurs; and notices dispatched by United States Mail shall be deemed effective
at 5:00 p.m. on the third business day after being deposited in a mailbox,
postage prepaid. Notwithstanding the previous sentence, notices of change of
address shall be effective at 5:00 p.m. on the date of receipt.

            (e)   Governing Law. This Agreement and the Option, in all respects,
including all matters of construction, validity and performance, are governed by
the internal laws of the State of Oregon without giving effect to the principles
of conflicts of law thereof. This Agreement is being delivered in Portland,
Oregon.

            (f)   Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.

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            (g)   Effects of Headings.  The section headings herein are for
convenience only and shall not affect the construction hereof.

      DATED as of the day first written above.

                                          CENTENNIAL BANCORP

                                          By: /s/ TED R. WINNOWSKI
                                             -----------------------------------
                                             Ted R. Winnowski, President & CEO

                                          UMPQUA HOLDINGS CORPORATION

                                          By: /s/ RAYMOND P. DAVIS
                                             -----------------------------------
                                             Raymond P. Davis, President & CEO<PAGE>
                                                                    EXHIBIT 10.6

                                 UMPQUA HOLDINGS

                            EXECUTIVE INCENTIVE PLAN

The Executive Incentive Plan is a compensation program intending to reward
participating executives for the effective performance of the holding company,
the effective management of their organizational elements and their personal
managerial effectiveness.

The plan is based on the total cash compensation provided to each executive
consisting of base salary and annual discretionary performance bonus expressed
as target compensation.

Performance goals will be set at the beginning of each performance (calendar)
year. Achievement of the performance targets will result in the target bonuses.
To the degree the performance objectives are exceeded, the annual bonuses will
exceed target and, to the extent that performance does not meet expectations,
the bonus will be reduced.

EFFECTIVE DATE - The effective date of this plan will be the calendar year
beginning January 1, 2002.

TERMS - The terms used in this document are defined as follows:

   -  Actual Bonus - the bonus delivered to the participant at the end of the
      performance year, consisting of the target bonus with the modifications
      for corporate, organizational and personal achievements

   -  Base salary - the annualized salary that is delivered to the participant
      via the company's normal payroll practices

   -  Bonus - Discretionary compensation paid to the participant following the
      end of the performance period. The amount is a discretionary payment based
      on the judgment of the CEO that reflects the perceived value of the
      contribution of the participant

   -  Total Cash Compensation - Base salary plus bonus

   -  Target Bonus - The bonus intended to be paid to the participant if all
      goals are met

   -  Target Total Cash Compensation - Base salary plus target bonus.

ELIGIBILITY - Eligibility shall be limited to the Chief Executive Officer,
Executive Vice Presidents and selected other officers as nominated by the CEO
and approved by the Budget and Compensation Committee of the board. Participants
will be notified in writing of their participation and target total cash
compensation within the first 60 days of the year. Participants are not eligible
for participation in other incentive plans.

ADMINISTRATION - Administration of the plan will be by the CEO or his
designee(s).

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   -  Base salaries will be set at the beginning of the performance period and
      will not be changed during the year unless there is a significant change
      in responsibility via a new organization structure or job title.

   -  An accrued budget item will be created for an estimate of the aggregate
      bonuses of participants. The budget will be reviewed on April 1, July 1,
      September 1, and October 15, to determine if the accrual pool should be
      increased or decreased.

   -  Once full year performance is known, the CEO will direct that assessments
      be made on the performance of the company, its various divisions and
      individual performance. This assessment shall be used as a primary source
      to formulate recommendations for awards.

            After an assessment of corporate bonuses, the CEO will make a
            determination of target bonuses will be paid for corporate
            performance; generally, the same bonus payout will be calculated for
            all participants.

            Once determinations are made regarding corporate performance, the
            CEO will assess the performance of each of the elements of the
            organization and will modify the corporate bonus for each of the
            division's based on their achievements. Each of the divisions will
            be evaluated independently and modifications will be based on the
            division's contributions (or lack thereof) to company success;
            generally the same bonus payout will be awarded to all participants
            from the same division.

            Once the corporate bonus has been determined and modified for
            division performance, the direct superior of each of the
            participant's in the division will evaluate the managerial
            contributions (managerial style, effectiveness and judgement) and
            will submit a proposed modification of bonus for the personal
            contributions.

      None, all or a portion of the award pool may be awarded to eligible
      participants.

      The CEO will make recommendations for the individual awards that shall be
      reviewed and approved by the Budget and Compensation Committee in
      accordance with the executive compensation philosophies outlined in the
      corporation's annual proxy statement.

   -  Bonuses will be paid as soon as administratively feasible following
      determination of corporate, division and individual performance and the
      approval process but no later than March 15, 2003.

   -  A participant who, by virtue of hire or promotion, becomes eligible for
      participation may, at the recommendation of the CEO be included for a
      partial-year, pro-rated participation.

   -  Administrative decisions made by the CEO and approved by the Budget and
      Compensation Committee are final and binding.

   -  Exceptions will require the endorsement of the Budget and Compensation
      Committee.

<PAGE>
TERMINATION - Termination of employment prior to the end of the performance
year, except as outlined below will disqualify a participant for an award.

   -  An award may be considered if the participant transitions to employment by
      a subsidiary or affiliated organization.

   -  A partial award may be considered in the event of a participant's death,
      disability or retirement. Definitions of disability or retirement will be
      as defined in the company's benefit programs.

   -  Awards may be superceded by any valid employment agreement in effect at
      the time of termination.

BENEFICIARY - any amount due under this program that is unpaid at a
participant's death will be paid as soon as administratively feasible to the
last named beneficiary(ies) on file for Umpqua's life insurance program. A
participant may make a different beneficiary designation by advising the plan
administrators in writing. In all events, the last named beneficiary shall
apply.

In the event that no beneficiary is named for the company life insurance and no
beneficiary is designated under this plan, payment shall go to the estate of the
deceased participant.

ASSIGNMENT - any amounts due under this plan cannot be pledged or assigned in
any manner.

AMENDMENT OR TERMINATION - The plan can be amended or terminated at any time by
the Budget and Compensation Committee upon the recommendation of the CEO.
However, should the plan be terminated, partial year awards will be made
covering the period of the plan's effective dates.

The awards earned under this plan are binding upon any successor organization.

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