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Umpqua Holdings Corporation
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<PAGE>
UMPQUA HOLDINGS CORPORATION
445 S.E. Main St.
Roseburg, Oregon 97470
___________________________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 28, 1999
___________________________________________________
To the shareholders of Umpqua Holdings Corporation:
Notice is hereby given that the first annual meeting of shareholders of
Umpqua Holdings Corporation will be held at the principal office of the South
Umpqua Bank located at 445 S.E. Main St., Roseburg, Oregon, on Wednesday,
April 28, 1999, at 7:00 p.m. for the following purposes:
(1) To elect directors to serve either one, two, or three year
terms or until their successors are duly elected and
qualified;
(2) To transact such other business as may properly come before
the meeting or any adjournments thereof.
Only shareholders of record at the close of business on March 26, 1999,
are entitled to vote at the meeting or any adjournments thereof.
Further information regarding voting rights and the business to be
transacted at the meeting is given in the accompanying proxy statement. Your
continued interest as a shareholder in our growth and development, is
genuinely appreciated by the officers and employees who serve you.
April 2, 1999 BY ORDER OF THE BOARD OF DIRECTORS
Julie M. Ryan
Corporate Secretary
YOUR VOTE IS IMPORTANT
You are cordially invited to attend the meeting. It is important that your
shares be represented regardless of the number you own. Even if you plan to
be present, you are urged to complete, sign, date and promptly return the
attached proxy using the envelope provided. If you attend the meeting, you
may vote either in person or by your proxy. Any proxy given may be revoked
by you in writing or in person at any time prior to the exercise thereof.
Attendance at the meeting will not, of itself, revoke a previously given
proxy.
<PAGE>
UMPQUA HOLDINGS CORPORATION
445 S.E. Main St.
Roseburg, Oregon 97470
PROXY STATEMENT
This proxy statement is being furnished in connection with the
solicitation by the Board of Directors of Umpqua Holdings Corporation of
proxies to be used at the annual meeting of shareholders scheduled for April
28, 1999. This proxy statement and the enclosed form of proxy are being
mailed to shareholders on or about April 2, 1999, together with our 1998
Annual Report to Shareholders.
Only the holders of common stock as shown on our records as of March
26, 1999, are entitled to notice of, and to vote at, the meeting. A quorum
for the purpose of transacting business requires the presence, in person or
by proxy, of the holders of a majority of the outstanding shares. An
abstention from a given matter will not affect the presence of the shares as
to determination of a quorum. At the close of business on March 26, 1999,
there were 7,667,552 shares of common stock issued and outstanding, with each
share being entitled to one vote. In the election of directors, each share
is entitled to one vote for each director position to be filled, and
shareholders may not accumulate votes.
Proxies in the form enclosed are being solicited by the Board of
Directors. Execution of a proxy will not in any way affect a shareholder's
right to attend the meeting and vote. A proxy may be revoked prior to its
exercise at the meeting by presenting a proxy bearing a later date or
submitting a written revocation to Julie M. Ryan, Corporate Secretary, at
South Umpqua Bank, 445 S.E. Main St., Roseburg, Oregon, prior to commencement
of the meeting, or by oral request or submission of such an instrument of
revocation at the meeting if the shareholder is present at the meeting.
However, a shareholder who attends the meeting need not revoke his or her
proxy and vote in person unless he or she wishes to do so. Attendance at the
meeting will not, of itself, revoke a proxy.
If a proxy in the enclosed form is executed and returned, the shares
represented will be voted according to your instructions. If no instructions
are given, the proxy will be voted FOR the election of the nominees for
directors, and in the proxy holder's discretion on any other matters that may
properly come before the shareholders at the meeting.
Umpqua Holdings Corporation will bear the cost of this proxy
solicitation. We do not expect to pay any compensation for the solicitation
of proxies, but may reimburse brokers and other persons holding stock in
their names, or in the names of nominees, for their expenses in sending proxy
material to principals and obtaining their proxies. In addition to
solicitation of proxies by mail, we may also use officers and regular
employees to solicit proxies from shareholders, either in person or by
telephone, fax, or letter, without extra compensation.
1
<PAGE>
BUSINESS OF THE MEETING
Agenda Item 1. Election of Directors
As of March 12, 1999, South Umpqua Bank completed a reorganization and
as a result became a subsidiary of Umpqua Holdings Corporation. Shareholders
of South Umpqua Bank became shareholders of Umpqua Holdings Corporation.
This meeting is the first annual meeting of Umpqua Holdings Corporation.
Under Oregon law, the initial board of directors must stand for
election at the first annual meeting of shareholders. Umpqua Holdings
Corporation's Articles of Incorporation and Bylaws, like South Umpqua Bank's,
provide that directors are elected to serve staggered three year terms of
office. The Bylaws of Umpqua Holdings Corporation establish the number of
directors between 6 and 19, with the exact number to be fixed from time to
time by resolution of the Board of Directors. The number of directors is
currently set at nine.
All nine director positions are open for election to one of three
classes with terms expiring, respectively, in one, two or three years.
Thereafter, at each annual meeting, directors will be elected to fill their
respective terms until their successors are duly elected and qualified.
Directors are elected by a plurality of votes, and shareholders are not
entitled to accumulate votes in the election of directors. The Board is
nominating the following individuals to the specified class to serve the
terms indicated above their names. Each of the nominees except Mr. Chambers
are currently serving as directors of both Umpqua Holdings Corporation and
South Umpqua Bank.
CLASS I CLASS II CLASS III
(term expires 2000) (term expires 2001) (term expires 2002)
Scott Chambers Frances Jean Phelps David B. Frohnmayer
Ronald O. Doan Raymond P. Davis Neil D. Hummel
Allyn C. Ford Harold L. Ball
Lynn K. Herbert
It is the intention of the persons named in the proxy to vote FOR the
election of the nominees listed above. If any nominee is not available for
election, the proxy will be voted by the individuals named in the proxy for
such substitute nominee as the Board may designate. Management has no reason
to believe any nominee will be unavailable.
The Board recommends a vote FOR the election of all nominees.
2
<PAGE>
Information Regarding Executive Officers and Directors
The age, business experience, and position of each of the nominees for
director and executive officers for the past five years has been as follows:
Raymond P. Davis, age 49, serves as Director, President and Chief
Executive Officer. Mr. Davis has served as Director, President and Chief
Executive Officer of South Umpqua Bank since June, 1994. Prior to joining
South Umpqua Bank in 1994, he was President of US Banking Alliance in
Atlanta, Georgia, a bank consulting firm. Mr. Davis holds a bachelor's
degree from the University of Nevada, Reno. He has 20 years experience in
banking and banking related industries and 3 years experience as a certified
public accountant.
Steven A. May, age 46, serves as Senior Vice President/Retail Banking,
a position he has held since 1994. Prior to that time, Mr. May served as
Vice President and District Manager of the US Bank of Oregon from 1988 to
1994, as the administrator of a group of four retail branches. He holds a
bachelor's degree from Oregon State University.
Gerald (Gary) L. Pierpoint, age 60, was hired in 1996 as Senior Vice
President/Eugene Operations of South Umpqua Bank and has over 35 years of
banking experience. Mr. Pierpoint served as Vice President and Regional
Manager of the Bank of California in Eugene, Oregon (1989 to 1996) and as
Regional Vice President of First Interstate Bank (1983-89).
Daniel A. Sullivan, age 47, was hired in November 1997 as Senior Vice
President and Chief Financial Officer of South Umpqua Bank. Prior to that
time, Mr. Sullivan served as Senior Vice President and Controller for US
Bancorp in Portland, Oregon (1983 to 1996). Mr. Sullivan is a certified
public accountant and holds a bachelor's degree from the University of
Oregon. He has also worked as Vice President of Finance for Instromedix of
Hillsboro, Oregon, and as a CPA for Deloitte & Touche in their Portland,
Oregon office.
Harold L. Ball, age 61, serves as a Director and has served as a
Director of South Umpqua Bank since 1990. Mr. Ball is the President and
Chief Executive Officer of Orenco Systems, Inc., located in Sutherlin,
Oregon, that produces hardware to implement filter and pressure sewer
designs. Mr. Ball earned a bachelor's degree in engineering from the
University of California at Berkeley and a master's degree in engineering
from the University of California at Davis and has 36 years of civil
engineering experience in public works and private practice. Mr. Ball is
past president of the Oregon Onsite Wastewater Association.
Ronald O. Doan, age 54, serves as a Director and has served as a
Director of South Umpqua Bank since 1995. Mr. Doan is the General Business
Director of Pacific Power and Light Co., an electric utility company, for Mid
and Southern Oregon and Northern California. Mr. Doan has 31 years of
management, sales, and human resources experience with Pacific Power and
currently works at the Roseburg, Oregon, office. Mr. Doan served as
President of the Douglas County Industrial Development Board and the Roseburg
Area Chamber of Commerce. In 1994, Mr. Doan was honored as the Roseburg
First Citizen of the Year. Mr. Doan received his bachelor's degree from
Oregon State University.
Allyn C. Ford, age 57, serves as Chairman of the Board of Directors and
has served as a Director of South Umpqua Bank since 1971. Mr. Ford is
President and General Manager of Roseburg Forest Products, a company located
in Roseburg, Oregon, that is a fully integrated wood products manufacturer.
Mr. Ford has over 29 years of management experience with Roseburg Forest
Products. Mr. Ford received an MBA from Stanford University and his
bachelor's degree from Yale University.
3
<PAGE>
David B. Frohnmayer, age 58, serves as a Director and has served as a
Director of South Umpqua Bank since 1996. Mr. Frohnmayer is the President of
the University of Oregon in Eugene, and has served in that capacity since
1994. He is the former Dean of the University of Oregon School of Law and
former State of Oregon Attorney General. Mr. Frohnmayer has an A.B. from
Harvard University and bachelor's and master's degrees from Oxford University.
Lynn K. Herbert, age 47, serves as a Director and has served as a
Director of South Umpqua Bank since 1993. Mr. Herbert is Manager of Herbert
Lumber Co. in Riddle, Oregon, and has served in that capacity since 1988.
Mr. Herbert has over 19 years of management experience with Herbert Lumber
Co. Mr. Herbert is a graduate of the Executive Management Program for Small
Business of Stanford University and holds a bachelor's degree from Oregon
State University. Mr. Herbert is the son of Milton Herbert, a significant
shareholder and one of the founders of South Umpqua Bank.
Neil D. Hummel, age 52, serves as a Director and has served as a
Director of South Umpqua Bank since 1986. Mr. Hummel is the owner of and a
broker with The Neil Company Real Estate in Roseburg, Oregon. He has over
20 years of experience as a real estate agent and broker. Mr. Hummel holds a
bachelor's degree from the University of Oregon.
Frances Jean Phelps, age 55, serves as a Director and has served as a
Director of South Umpqua Bank since 1997. Ms. Phelps has served as the
Executive Director of Relief Nursery, a private nonprofit child abuse
prevention agency in Eugene, Oregon, since 1984. She received a bachelor's
degree from the University of Southern California.
Scott Chambers, age 39, is a nominee for Director. Mr. Chambers is
President of Chambers Communication Corp. of Eugene, Oregon--a
telecommunications company that owns and operates cable television systems,
network broadcast television stations, a film and video production company,
and an interest in a computer animation company. Mr. Chambers serves on the
Executive Board for CableLabs and is a board member of the National Cable
Television Association. He attended the University of Oregon and Oregon
State University and earned his bachelor of science degree in Business
Administration.
Richard L. Petterson, age 65, serves as a Director and has served as a
Director of South Umpqua Bank since 1988. Mr. Petterson is the retired owner
of Del's Building Supply of Myrtle Creek, Oregon--a retail hardware, lumber,
and building supplier. Mr. Petterson holds a master's degree from Humboldt
State University. Mr. Petterson is resigning as a Director of Umpqua
Holdings Corporation and South Umpqua Bank at the end of his term, which is
the date of the meeting.
South Umpqua Bank held 15 meetings of the Board of Directors during
1998. All directors attended at least 75 percent of the total number of
meetings held during 1998.
Committees of the Board of Directors
The Audit Committee appoints and reviews and approves the reports of
our independent public accountants, regulatory examinations and internal
audit reports. Reports of all examinations are reviewed with the entire
Board. The committee consists of directors Hummel (Chairperson), Doan and
Phelps.
The Budget, Compensation and Expansion Committee reviews and oversees
our budgeting process, compensation and expansion strategies. On a monthly
basis, the results of their meetings are reviewed with the entire Board of
Directors. The committee consists of directors Doan (Chairperson), Ball,
Herbert, Davis and Hummel.
4
<PAGE>
The Loan and Investment Committee approves certain loans, reviews the
adequacy of our allowance for loan losses, maintains an appropriate balance
in the interest rate sensitivity of our loan and investment portfolios, and
determines the liquidity, type and term of investment securities we purchase.
The committee consists of directors Herbert (Chairperson), Ball, Davis and
Hummel.
The Business and Development Committee, consisting of directors Phelps
(Chairperson), Davis, and Hummel, is responsible for reviewing our overall
marketing and business development strategies, which include deposit growth,
return on quality service and new product announcements.
The Strategic Positioning Committee, consisting of directors Frohnmayer
(Chairperson), Doan, Hummel, Phelps, Herbert, and Davis, is responsible for
development of our long term strategic plan and new strategic initiatives.
Director Compensation
Each non-employee director received a fee of $600 per month during
1998. The Chairman received $800 per month. The President received no
additional compensation for his service on the Board or any of its
committees. Directors can elect to receive their compensation in stock
rather than cash.
5
<PAGE>
Executive Compensation
The following table sets forth all compensation paid during the last
three calendar years to Mr. Davis, Mr. Pierpoint, Mr. May, and Mr. Sullivan.
No other executive officer received salary and bonuses during the year ended
December 31, 1998, in excess of $100,000.
<TABLE>
<CAPTION>
Summary Compensation Table
- ---------------------------------------------------------------------------------------------------
Other All
Annual Other
Name and Principal Position Year Salary Bonus(1) Comp. (2) Comp.
- ---------------------------------- ------ ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Raymond P. Davis, President and 1998 $166,500 $51,750 $ 7,750 $ 16,549 (4)
Chief Executive Officer 1997 $155,468 $48,150 $ 8,430 $276,559 (3)
1996 $143,832 $45,000 $ 8,400 $285,580 (3)
Gerald (Gary) L. Pierpoint, Sr. 1998 $ 98,880 $14,820 $ 8,400 $ 9,216 (4)
Senior Vice President/Eugene 1997 $ 96,000 $19,200 $ 5,640 $ 11,604 (4)
Operations 1996 $ 96,000 $19,200 $15,640 $ 10,497 (4)
Steven A. May, Senior Vice 1998 $ 84,800 $20,000 $ 1,750 $ 7,860 (4)
President/Retail Banking 1997 $ 80,000 $20,000 $ 1,680 $ 9,236 (4)
1996 $ 77,500 $17,200 $ 1,680 $ 8,638 (4)
Daniel A. Sullivan, Senior Vice 1998 $ 97,923 $20,900 $ 4,486 -
President and Chief Financial 1997 $ 15,833 $14,033 - - (5)
Officer 1996 - - - - (5)
</TABLE>
______________
(1) Includes bonuses paid, or to be paid, during the subsequent year but
attributable to the year indicated.
(2) Perquisites and other personal benefits, if any, did not exceed the
lesser of $50,000 or 10% of the total annual salary and bonus for the
named executive officer for any of the periods indicated.
(3) In connection with the grant of stock options to Mr. Davis in 1995, the
Bank entered into a stock appreciation rights agreement ("SAR") providing
for a cash payment to him of an amount determined by the increase in the
market price of the Bank's Common Stock in each of the years ended
December 31, 1995, 1996 and 1997. Mr. Davis' entitlement to the payment
was conditioned upon his continuing as an employee and President through
year end 1997. Under the SAR, he was entitled to a payment of $777,594
upon the expiration of the SAR as of December 31, 1997, reflecting the
significant increase in market value of the Bank's Common Stock over the
preceding three years, which payment was made in February 1998. The
amounts included in 1996 and 1997 as other compensation reflect that
portion of the SAR expiring in each of those years, as well as the Bank's
contribution to the 401(k) Profit Sharing Plan for Mr. Davis' benefit.
(4) Consists of the Bank's contribution to employees' the 401(k) Plan for
Mr. Davis's, Mr. May's and Mr. Pierpoint's benefit.
(5) Mr. Sullivan started working for South Umpqua Bank in November, 1997.
6
<PAGE>
Executive Compensation Plans and Agreements
Incentive Plan for Senior Management. Our Incentive Plan provides for a
performance incentive payable to the President/CEO at least annually. Payment
is targeted to be 30% of the President/CEO's year-end rate of base pay for
the year in question if we meet or exceed our projected financial goals for
the preceding year. The amount of bonuses (which can exceed the target) is
solely in the discretion of the Board of Directors. Distribution normally
occurs during the first quarter of the following year.
The plan for other key executives is payable at least annually, and is
targeted at 20% of the Executive's base pay for the year. Payment of such
performance bonus is contingent upon both our performance and the executive's
personal performance during the year. Distribution normally occurs during
the first quarter of the following year.
Employment and Change of Control Agreements. We have entered into
special agreements with certain executive officers. These agreements are
intended to motivate the executives to remain employed by us. We have
entered into an agreement expiring in July 2000 with Raymond P. Davis that
provides for his employment as President and Chief Executive Officer and
further provides for a payment of an amount equal to nine months' base
salary, plus any pro-rated executive incentive bonus if we terminate his
employment for any reason other than "cause." In addition, we agreed to
provide medical benefits to Mr. Davis for the maximum time allowed by law.
Should Mr. Davis's employment terminate as a result of a change in control,
the agreement provides for payment of an amount equal to two times the
average of the total annual compensation (including incentive bonuses) paid
to Mr. Davis during the last two full calendar years of employment.
Stock Option Plan
We have a non-qualified stock option plan which was approved by
shareholders during 1995. The plan reserves an aggregate of 1,150,000 shares
of common stock for grants to key employees. The Board of Directors
designates those key employees who are eligible. The maximum number of shares
which may be issued at any given time is limited to 10% of the shares
outstanding at the time the options are granted, excluding shares issued
pursuant to the plan. Options granted under the plan may have a term not
exceeding 11 years from the date of grant and the exercise price of the
options will not be less than the fair market value of the common stock on
the date of grant.
The purpose of the plan is to provide additional incentive to key
employees to enhance shareholder value by giving them an opportunity to
participate in the increase of such value and gain an ownership interest.
The Board of Directors has granted options to five executive officers.
Vesting of such options occurs annually based on our financial performance
for each fiscal year measured by the return on equity and return on assets.
If such performance standards are not met, the options vest on the sixth
anniversary of the date of grant.
7
<PAGE>
<TABLE>
<CAPTION>
Options Granted in Last Fiscal Year
-------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term (1)
------------------------------------------------------------------- --------------------------
Number of Percentage of
Securities Total Options Exercise
Underlying Granted to Price Expiration
Options Employees in (Dollars per Date 5%($) 10%($)
Granted Fiscal Year Share)
------------- --------------- -------------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Raymond P. Davis 50,000 38.4% 12.00 4/1/09 477,500 1,263,500
Steven A. May 20,000 15.4% 12.00 4/1/09 191,000 505,400
Daniel A. Sullivan 20,000 15.4% 12.00 4/1/09 191,000 505,400
Gerald (Gary) L. 20,000 15.4% 12.00 4/1/09 191,000 505,400
Pierpoint
</TABLE>
_______________
(1) The potential realizable value of the options granted is
calculated by multiplying the difference between the exercise
price of the option and the market value per share of the
underlying stock (assuming a 5% or 10%, as the case may be,
compounded annual increase of the stock price from the date of
grant to the final expiration of the option) by the number of
shares underlying the options granted.
<TABLE>
<CAPTION>
Aggregate Option Exercises Last Fiscal Year and Fiscal Year-End Option Values (1)
----------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at FY-End (#) at FY-End ($) (2)
-------------------------- ------------------------------
Shares Value
Name Acquired on Realized Exercisable Unexercisable Exercisable Unexercisable
Exercise (#) ($)
- --------------------------- -------------- ------------ ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Raymond P. Davis - - 270,825 50,000 1,909,316 -
Steven A. May 9,200 82,656 4,600 29,200 27,370 54,740
Daniel A. Sullivan - - 8,000 36,000 4,480 17,920
Gerald (Gary) L. Pierpoint - - 4,000 32,000 36,000 54,000
</TABLE>
_____________________
(1) All share amounts have been adjusted to reflect subsequent stock
dividends and stock splits through March 26, 1999.
(2) On December 31, 1998, the market price of the Bank's Common Stock was
$9.75 per share. For purposes of the foregoing table, all stock options
issued before 1998 have an exercise price less than that amount and are
therefore considered to be "in-the-money" and have a value equal to the
difference between $9.75 and the exercise price of the stock option,
multiplied by the number of shares covered by the stock option. All stock
options issued in 1998 were issued at $12.00 per share and are therefore
not "in-the-money" at fiscal year end.
8
<PAGE>
Transactions with Directors and Officers
Some of the directors and officers and members of their immediate
families and firms and corporations with which they are associated have been
parties to transactions with South Umpqua Bank, including borrowings and
investments in time deposits. All such loans and investments in time
deposits have been made in the ordinary course of business, have been made on
substantially the same terms, including interest rates paid or charged and
collateral required, as those prevailing at the time for comparable
transactions with unaffiliated persons, and did not involve more than the
normal risk of collectibility or present other unfavorable features. As of
December 31, 1998, the aggregate outstanding amount of all loans to officers
and directors was approximately $2,397,193 which represented 6.6% of our
consolidated shareholders' equity at that date. All such loans are currently
in good standing and are being paid in accordance with their terms.
COMPLIANCE WITH SECTION 16 FILING REQUIREMENTS
With the public offering in April, 1998, South Umpqua Bank became
subject to the reporting requirements of the Securities Exchange Act of
1934. As a state bank, South Umpqua Bank filed its periodic reports, proxy
material, and other information with the FDIC. Upon completion of the
reorganization, Umpqua Holdings Corporation assumed the obligations of South
Umpqua Bank, and now files its periodic reports, proxy material, and other
information with the SEC.
Section 16 of the Securities Exchange Act of 1934 requires that all
executive officers, directors and persons who beneficially own more than 10
percent of the common stock file an initial report of their beneficial
ownership of common stock and periodically report changes in their
ownership. The reports must now be made with the Securities and Exchange
Commission with a copy sent to us.
Based solely upon our review of the copies of the Section 16 filings
that we received with respect to the fiscal year ended December 31, 1998, we
believe that all reporting persons made all required Section 16 filings with
respect to such fiscal year on a timely basis.
9
<PAGE>
STOCK PERFORMANCE GRAPH
The chart, shown below, compares the yearly percentage change in the
cumulative shareholder return on Umpqua Holdings Corporation's common stock
during the five fiscal years ended December 31, 1998, with (I) the Total
Return Index for The NASDAQ Stock Market (U.S. Companies) as reported by the
Center for Research in Securities Prices, and (ii) the Total Return Index for
NASDAQ Bank Stocks as reported by the Center for Research in Securities
Prices. This comparison assumes $100.00 was invested on December 31, 1993,
in Umpqua Holdings Corporation's common stock, and the comparison indices,
and assumes the reinvestment of all cash dividends prior to any tax effect,
and retention of all stock dividends. Prior to April 1998, Umpqua Holdings
Corporation common stock was not quoted on NASDAQ. Prior to its listing on
NASDAQ trading activity was limited. For purposes of computing return
information for the periods being compared, the chart is based on price
information for trades that were reported to Umpqua Holdings Corporation
prior to April 1998. Price information for December 31, 1998, was obtained
by using the NASDAQ quote as of that date.
UMPQUA HOLDINGS CORPORATION
(formerly South Umpqua Bank Common Stock)
TOTAL RETURN PERFORMANCE
---------------------------------------------------------------
Total Return As of December 31
---------------------------------------------------------------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
Umpqua
Holdings $100 $140.34 $201.47 $244.99 $468.74 $464.45
Corporation
NASDAQ
Total $100 $97.752 $138.256 $170.015 $208.576 $293.209
Return
Index (US
Companies)
NASDAQ
Total $100 $99.636 $148.383 $195.908 $328.018 $324.908
Return
Index (Bank
Stocks)
10
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth the shares of common stock beneficially
owned as of March 26, 1999, by each director and each named executive
officer, the directors and executive officers as a group and those persons
known to beneficially own more than 5% of our common stock:
Number of
Shares Percentage of
Name Beneficially Class
Owned (1)
- --------------------------------------------- -------------- -------------
Lynn K. Herbert, Director 525,996 (3) 6.9%
Raymond P. Davis, Director, President & CEO 295,282 (4) 3.9%
Allyn C. Ford, Director 88,885 (5) 1.2%
Neil D. Hummel, Director 37,530 (6) *
Harold L. Ball, Director 31,254 (7) *
Richard L. Petterson, Director 18,067 (2) *
Gerald (Gary) L. Pierpoint, Executive 16,277 (8) *
Officer
Daniel A. Sullivan, Executive Officer 11,200 (9) *
Steven A. May, Executive Officer 9,600 (10) *
Frances Jean Phelps, Director 5,667 (2) *
David B. Frohnmayer, Director 4,470 (2) *
Ronald O. Doan, Director 4,356 (2) *
Scott Chambers, Director 684 *
All directors and executive officers as a 1,064,620 (2-11) 13.9%
group (14 persons)
Milton Herbert, shareholder, Canyonville, OR 906,342 (2) 11.8%
_________________
* Less than 1.0%.
(1) Shares held directly with sole voting and investment power, unless
otherwise indicated, and shares held in the Dividend Reinvestment Plan
have been rounded down to the nearest whole share.
(2) Includes shares held with or by his/her spouse.
(3) Includes shares held jointly with his spouse. Includes shares held as
custodian for minor children.
(4) Includes shares held jointly with or by his spouse. Includes 256,425
shares covered by options exercisable within 60 days.
(5) Includes 71,572 shares held as Agent for Ford Family Investment Pool.
(6) Includes shares held jointly with his spouse and includes 19,836 shares
held as trustee for The Neil Co. Realtors Money Purchase Pension Plan.
(7) Includes shares held jointly with or by his spouse. Does not include
shares beneficially owned by Mr. Ball's adult sons as to which shares Mr.
Ball disclaims beneficial ownership.
(8) Includes 13,000 shares covered by options exercisable within 60 days.
(9) Includes 9,000 shares covered by options exercisable within 60 days.
(10) Includes 9,600 shares covered by options exercisable within 60 days.
(11) Includes 319,525 shares covered by options exercisable within 60 days.
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REPORT OF THE BUDGET, COMPENSATION AND EXPANSION COMMITTEE ON EXECUTIVE
COMPENSATION
The Budget, Compensation and Expansion Committee is responsible for
establishing and administering our executive compensation program.
Compensation Philosophy and Objectives
The philosophy underlying the development and administration of our
compensation plan is the alignment of the interests of executive management
with those of the shareholders. Key elements of this philosophy are:
o Set base compensation at a level to attract and retain competent
executives.
o Establish incentive compensation plans which deliver bonuses based on
the financial performance of the company.
o Provide significant equity based incentives for executives to ensure
they are motivated over the long term to respond to the company's
business challenges and opportunities, as owners rather than just
employees.
The objective in determining base salaries for executives is to set
levels that are competitive and commensurate with the level of responsibility
assumed. The 1995 Stock Option Plan is the vehicle by which executives can
earn additional compensation depending on our financial performance. Grants
are made at the discretion of the Board of Directors and awarded to
individual executives, thereby providing additional incentive for executives
to increase shareholder value. Executives receive value from these options
when our stock appreciates over the long term.
Budget, Compensation and Expansion Committee Members
Ronald O. Doan (Chairperson)
Lynn K. Herbert
Neil D. Hummel
Harold L. Ball
Raymond P. Davis
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Agenda Item 2. Other Business
At the meeting, management will report on our business and shareholders
will have the opportunity to ask questions.
The Board knows of no other matters to be brought before the
shareholders at the meeting. In the event other matters are presented for a
vote at the meeting, the proxy holders will vote shares represented by
properly executed proxies at their discretion in accordance with their
judgment on such matters.
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PROXIES AND VOTING AT THE ANNUAL MEETING
Each copy of this proxy statement sent to shareholders is accompanied
by a proxy solicited by the Board of Directors for use at the 1999 annual
meeting of shareholders and any adjournments thereof. Only holders of record
of common stock at the close of business on March 26, 1999, are entitled to
notice of, and to vote at, the meeting. Shareholders will vote on the
election of directors and consider such other matters as may properly come
before the meeting. Shares represented by properly executed proxies will be
voted at the meeting in accordance with the instructions on the proxy. If no
instructions are given, the shares represented thereby will be voted in favor
of the persons nominated by the Board to serve as directors and in the
discretion of the proxy holders on such other matters that may be considered
at the meeting. Ballots and proxies will be counted by employees appointed
by management.
Execution of a proxy will not in any way affect a shareholder's right
to attend the meeting and vote. A proxy may be revoked prior to its exercise
at the meeting by presentation of a proxy bearing a later date or by
submitting a written revocation to Julie Ryan, Corporate Secretary, at 445
S.E. Main St., Roseburg, Oregon, before the meeting, or by oral request or
submission of such an instrument of revocation at the meeting if the
shareholder is present. However, a shareholder who attends need not revoke
his or her proxy and vote in person unless he or she wishes to do so.
Attendance at the meeting will not, of itself, revoke a proxy.
SHAREHOLDERS ARE REQUESTED TO COMPLETE, DATE, AND SIGN THE ACCOMPANYING
PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED EVEN IF THEY ARE
PLANNING TO ATTEND THE MEETING.
Our authorized capital stock consists of 20,000,000 shares of common
stock, no par value, and 2,000,000 shares of preferred stock. As of March
26, 1999, there were 7,667,552 shares of common stock issued and outstanding
and entitled to vote at the meeting, held by approximately 608 shareholders
of record, and no shares of preferred stock issued and outstanding. As of
March 26, 1999, directors, executive officers, and principal shareholders,
together with their affiliates, had beneficial ownership of 1,970,962 shares
(representing 25.7%) of the total outstanding shares, all of which are
entitled to vote.
A majority of the outstanding shares of common stock must be
represented at the meeting, in person or by proxy, to constitute a quorum for
the transaction of business. Shares that are not represented in person or by
proxy may not be counted toward a quorum or in favor of any proposition.
Shares represented at the meeting, in person or by proxy, will be counted
toward a quorum, and thereafter, an abstention from a given matter will not
affect the presence of the shares as to determination of a quorum. Other
than the election of directors, any action to be taken by the shareholders
must receive the affirmative vote of the majority of shares represented at
the meeting. An abstention from approval of any matter will not be counted
as a vote in favor of that matter and, except in the election of directors,
will thus have the effect of a vote against that matter. An abstention with
respect to the election of directors will have no effect as a vote for or
against any nominee, because the directors are elected by a plurality of the
votes cast; nominees receiving the most votes will be elected. Each share is
entitled to one vote. Shareholders do not have the right to accumulate votes
for directors.
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INFORMATION AVAILABLE TO SHAREHOLDERS
Our annual report is being mailed to shareholders with this proxy
statement. Additional copies of the Annual Report may be obtained without
charge by writing to Daniel A. Sullivan, Senior Vice President and Chief
Financial Officer, at South Umpqua Bank, 445 S.E. Main St., Roseburg, Oregon
97470. South Umpqua Bank was required to file periodic reports and other
information with the FDIC pursuant to the Securities Exchange Act of 1934 and
the rules thereunder. The reporting obligations of South Umpqua Bank became
our obligations with the reorganization of South Umpqua Bank as our
subsidiary. Our reports are filed with the SEC.
Copies of the public portions of reports to the FDIC may be inspected
and copied at the office of the FDIC, 550 17th St. N.W., Washington, D.C.
Certain financial information filed by South Umpqua Bank with the FDIC is
available electronically at the FDIC's internet web site at www.fdic.gov.
Copies of the public portions of reports to the SEC may be inspected
and copied at the headquarters of the SEC, 450 Fifth Street, NW, Washington,
D.C. 20549. Certain information is available electronically at the SEC's
internet web site at www.sec.gov.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG LLP, independent Certified Public Accountants, audited the
consolidated financial statements of the Bank for the year ended December 31,
1998. Representatives of KPMG are expected to be present at the annual
meeting, will be given the opportunity to make a statement, and will be
available to respond to any appropriate questions.
PROPOSALS OF SHAREHOLDERS
Any shareholder who wishes to submit a proposal for consideration at the
Bank's next annual meeting must submit the proposal no later than November 26,
1999.
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REVOCABLE PROXY
UMPQUA HOLDINGS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
April 28, 1999
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Allyn C. Ford and Neil Hummel, and each
of them, proxies with power of substitution to vote on behalf of the
undersigned all shares of Common Stock of Umpqua Holdings Corporation at the
annual meeting to be held on April 28, 1999, and any adjournments thereof,
with all powers the undersigned would possess if personally present, with
respect to the following:
1. Election of directors. [ ] FOR all nominees listed [ ] WITHHOLD
below (except as marked AUTHORITY
to the contrary below) to vote for all
nominees
listed below
INSTRUCTION: To withhold authority to vote for any individual, strike a line
through the nominee's name below.
CLASS I CLASS II CLASS III
(term expires (term expires 2001) (term expires
2000) 2002)
Scott Chambers Frances Jean Phelps David B.
Frohnmayer
Ronald O. Doan Raymond P. Davis Neil D. Hummel
Allyn C. Ford Harold L. Ball
Lynn K. Herbert
2. Other Matters. At the discretion of the proxy holder, on such other
business as may properly come before the meeting and any adjournments
thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE, BUT IF
NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL
NOMINEES. Proxies may vote in their discretion as to other matters which may
come before the meeting.
Dated: ----------------------, 1999 ------------------------------------
------------------------------------
[LABEL] Please date and sign exactly
as your name appears on your stock
certificate(s) (which should be the
same as the name on the address
label on the envelope in which this
proxy was sent to you), including
designation as executor, trustee,
etc., if applicable. A corporation
must sign its name by the president
or other authorized officer. All
co-owners must sign.
