SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[x] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11)c) or Rule 14a-12
Umpqua Holdings Corporation
----------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
____________________________________________________________________
2) Aggregate number of securities to which transaction applies:
____________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
____________________________________________________________________
4) Proposed maximum aggregate value of transaction:
____________________________________________________________________
5) Total fee paid:
____________________________________________________________________
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration No.:
3) Filing Party:
4) Date Filed:
<PAGE>
UMPQUA HOLDINGS CORPORATION
445 S.E. Main St.
Roseburg, Oregon 97470
___________________________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 2000
___________________________________________________
To the shareholders of Umpqua Holdings Corporation:
Notice is hereby given that the annual meeting of shareholders of Umpqua
Holdings Corporation will be held at the principal office of South Umpqua Bank
located at 445 S.E. Main St., Roseburg, Oregon, on Wednesday, April 26, 2000,
at 7:00 p.m. for the following purposes:
(1) To elect directors to serve 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 17, 2000
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.
March 17, 2000 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.
1
<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
26, 2000. This proxy statement and the enclosed form of proxy are being mailed
to shareholders on or about March 27, 2000, together with our 1999 Annual
Report to Shareholders.
Only the holders of common stock as shown on our records as of March 17,
2000, 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 17, 2000, there were 7,609,727
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.
2
<PAGE>
BUSINESS OF THE MEETING
Agenda Item 1. Election of Directors
Umpqua Holdings Corporation's Articles of Incorporation and Bylaws
provide that directors are elected to serve staggered three year terms of
office. The Articles of Incorporation 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. Directors are elected by a plurality of
votes, and shareholders are not entitled to accumulate votes in the election
of directors.
As of the annual meeting, three directors are completing their terms.
These positions are open for election. The Board is nominating Scott Chambers,
Ronald O. Doan, and Allyn C. Ford for reelection to a term that will expire in
three years. Each of the nominees are currently serving as directors of both
Umpqua Holdings Corporation and South Umpqua Bank.
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.
3
<PAGE>
Information Regarding Directors and Executive Officers
The age, business experience, and position of each of the nominees for
director and executive officers for the past five years is as follows:
Directors
Harold L. Ball, age 62, has served as a Director 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 has 36 years of civil engineering experience in public
works and private practice.
Ronald O. Doan, age 55, has served as a Director since 1995. Mr. Doan
currently is the Operations Officer for Cow Creek Government Offices.
Previously, Mr. Doan served as 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. Mr. Doan served as President of the Douglas County
Industrial Development Board and the Roseburg Area Chamber of Commerce.
Allyn C. Ford, age 58, serves as Chairman of the Board of Directors and
has served as a Director 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.
David B. Frohnmayer, age 59, has served as a Director 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.
Lynn K. Herbert, age 48, has served as a Director since 1993. Mr. Herbert
is Manager of Herbert Lumber Company in Riddle, Oregon, and has served in that
capacity since 1988. Mr. Herbert has over 19 years of management experience
with Herbert Lumber Company. Mr. Herbert is the son of Milton Herbert, a
significant shareholder and one of the founders of South Umpqua Bank.
Neil D. Hummel, age 53, has served as a Director since 1986. Mr. Hummel
is the owner of and a broker with The Neil Company Realtors in Roseburg,
Oregon. He has over 20 years of experience as a real estate agent and broker.
Frances Jean Phelps, age 56, has served as a Director 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.
Scott Chambers, age 40, has served as a Director since 1999. 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.
South Umpqua Bank held 12 meetings of the Board of Directors during 1999.
All directors attended at least 75 percent of the total number of meetings
held during 1999.
4
<PAGE>
Executive Officers
Raymond P. Davis, age 50, serves as Director, President and Chief
Executive Officer of the Company. 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. He has 20 years experience in
banking and banking related industries.
Daniel A. Sullivan, age 48, serves as Senior Vice President and Chief
Financial Officer of the Company. He has served as Senior Vice President and
Chief Financial Officer of South Umpqua Bank since 1997. Prior to that time,
Mr. Sullivan served as Vice President of Finance for Instromedix of Hillsboro,
Oregon (1997) and has also worked as Senior Vice President and Controller for
US Bancorp in Portland, Oregon (1983 to 1996).
Steven A. May, age 47, serves as Senior Vice President/Retail Banking of
South Umpqua Bank, 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.
Gerald (Gary) L. Pierpoint, age 61, 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 to 1989).
Rodger L. Terrall, age 45, serves as Senior Vice President / Chief
Lending Officer of South Umpqua Bank, a position held since October, 1996. He
previously was the head of commercial lending in Eugene for Union Bank of
California (1989-1996).
Dora (Dolly) C. Lusty, age 52, was hired in May 1997 and serves as Senior
Vice President/Credit Administrator of South Umpqua Bank. Mrs. Lusty was a
senior bank examiner for the State of Oregon serving in that capacity for six
years. Mrs. Lusty holds a Bank Management Diploma from the American Institute
of Banking, and she has attended numerous FDIC and Federal Reserve System
examination and credit schools.
5
<PAGE>
Committees of the Board of Directors
The Audit Committee appoints and services 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), Frohnmayer, Doan and Phelps.
The Budget and Compensation Committee reviews and oversees our budgeting
process, and compensation strategies. On a quarterly 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.
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, Doan
and Hummel.
The Business Development Committee, consisting of directors Phelps
(Chairperson), Davis, Chambers and Doan, 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, Chambers, Phelps, Herbert, and Davis, is responsible for
the review and oversight of strategic planning, and the review of technology
and expansion strategies.
Director Compensation
Each non-employee director received a fee of $2,250 per quarter during
1999. The Chairman received $2,750 per quarter. These amounts are payable in
shares of Umpqua Holdings Corporation stock. Shares of Umpqua Holdings
Corporation stock are purchased quarterly by Ragen MacKenzie brokerage firm
for each director. The President received no additional compensation for his
service on the Board or any of its Committees.
6
<PAGE>
Executive Compensation
The following table sets forth all compensation paid during the last
three calendar years to the Chief Executive Officer and the five most highly
compensated Executive Officers. No other executive officer received salary
and bonuses during the year ended December 31, 1999 in excess of $100,000.
<TABLE>
<CAPTION>
Annual All Other
Name and Principal Position Year Salary Bonus (1) Compensation (2) Compensation
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Raymond P. Davis 1999 $ 179,792 $ 55,500 $ 8,520 $ 12,000 (4)
President and Chief Executive Officer 1998 $ 166,500 $ 51,750 $ 7,750 $ 16,549 (4)
1997 $ 155,468 $ 48,150 $ 8,430 $ 276,559 (3)
Gerald (Gary) L. Pierpoint, Sr. 1999 $ 98,880 $ 16,800 $ 8,568 $ 18,343 (4)
Senior Vice President/Eugene area 1998 $ 98,880 $ 14,820 $ 8,400 $ 9,216 (4)
1997 $ 96,000 $ 19,200 $ 5,640 $ 11,604 (4)
Steven A. May 1999 $ 90,000 $ 14,400 $ 1,860 $ 8,250 (4)
Senior Vice President/Retail Banking 1998 $ 84,800 $ 20,000 $ 1,750 $ 7,860 (4)
1997 $ 80,000 $ 20,000 $ 1,680 $ 9,236 (4)
Daniel A. Sullivan (5) 1999 $ 106,325 $ 23,000 $ 6,934 $ 15,468 (4)
Senior Vice President and 1998 $ 97,923 $ 20,900 $ 4,486 $ - (4)
Chief Financial Officer 1997 $ 15,833 $ 14,033 $ - $ - (4)
Rodger L. Terrall 1999 $ 87,500 $ 14,875 $ 1,560 $ 7,687 (4)
Senior Vice President and 1998 $ 83,200 $ 15,000 $ - $ 7,440 (4)
Chief Lending Officer 1997 $ 80,000 $ 16,000 $ - $ - (4)
Dolly Lusty (6) 1999 $ 69,750 $ 15,600 $ - $ -
Senior Vice President and
Credit Administrator
</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' 401(k) Plan for Mr.
Davis's, Mr. May's, Mr. Pierpoint's, Mr. Sullivan's Mr. Terrall's and Ms.
Lusty's benefit.
(5) Mr. Sullivan started working for South Umpqua Bank in November, 1997.
(6) Mrs. Lusty became an Executive Officer in 1999.
7
<PAGE>
Executive Compensation Plans and Agreements
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' 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.
Vesting of such options occurs annually based on our financial performance for
each fiscal year measured by the return on equity and return on gross book
value. If such performance standards are not met, the options vest on the
sixth anniversary of the date of grant.
During 1999 options for 85,000 shares of common stock were issued to
employees under the 1995 Stock Option Plan.
8
<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)
---------------------------------------------------------- ------------------------
Percentage
of Total
Number of Options Exercise
Securities Granted to Price
Underlying Employees (Dollars Expira-
Options in Fiscal per tion
Granted Year Share) Date 5%($) 10%($)
-------------- ------------ ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Steven A. May 15,000 10.0% $9.63 5/3/10 $250,137 $417,268
Daniel A. Sullivan 25,000 16.7% $9.63 5/3/10 $416,895 $695,447
Gerald (Gary) L. Pierpoint 15,000 10.0% $9.63 5/3/10 $250,137 $417,268
Rodger L. Terrall 15,000 10.0% $9.63 5/3/10 $250,137 $417,268
Dolly Lusty 7,500 5.0% $9.63 5/3/10 $125,069 $208,634
</TABLE>
- - ---------
(1) The potential realizable value of the options granted is calculated by
multiplying the difference between the exercise price of the option and
the market value per share of the underlying stock (assuming a 5% or 10%,
as the case may be, compounded annual increase of the stock price from
the date of grant to the final expiration of the option) by the number of
shares underlying the options granted.
<TABLE>
<CAPTION>
Aggregate Option Exercises Last Fiscal Year and Fiscal Year-End Option Values (1)
------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at FY-End (#) FY-End ($) (2)
------------------------------------------------------------------------------------------
Shares Acquired Value
on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- - ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Raymond P. Davis 14,400 $ 91,083 271,425 35,000 $1,680,866 --
Steven A. May 3,600 $ 19,855 10,600 34,600 $ 30,492 $ 25,047
Daniel A. Sullivan -- $ -- 13,000 52,000 $ 5,000 $ 7,500
Gerald (Gary ) L. Pierpoint -- $ -- 17,000 38,000 $ 48,000 $ 32,000
Rodger L. Terrall -- $ -- 17,000 38,000 $ 40,500 $ 27,000
Dolly Lusty -- $ -- -- 7,500 $ -- $ --
</TABLE>
(1) All share amounts have been adjusted to reflect subsequent stock
dividends and stock splits through March 17, 2000.
(2) On December 31, 1999, the market price of the Bank's Common Stock was
purposes of the foregoing table, all stock options issued before 1998
have that amount and are therefore considered to be "in-the-money" and
have a between $9.25 and the exercise price of the stock option,
multiplied by the by the stock option. All stock options issued in 1998
and 1999 were issued exceeding $9.25 and are therefore not "in-the-money"
at fiscal year end.
9
<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, 1999, the aggregate outstanding amount of all loans to executive
officers, directors, principal shareholders and their associated and
affiliated companies was approximately $3,654,000 which represented 9.95% of
the 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-chartered bank, South Umpqua Bank filed its periodic reports, proxy
material, and other information with the FDIC. Upon completion of the
reorganization, in March 1999, Umpqua Holdings Corporation assumed the
obligations of South Umpqua Bank, and now files its periodic reports, proxy
material, and other information with the Securities and Exchange Commission
(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 to 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, 1999, we
believe that, other than as stated below, all reporting persons made all
required Section 16 filings with respect to such fiscal year on a timely
basis. The Annual Statement of Changes in Beneficial Ownership filing for
Raymond P. Davis, Steven A. May, Daniel A. Sullivan, Gerald (Gary) L.
Pierpoint, Rodger L. Terrall, and Dora (Dolly) C. Lusty were filed three days
beyond the filing deadline in order to accurately report the Company's
contribution to the respective employees' 401k Profitsharing Plan account.
10
<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 ten fiscal years ended December 31, 1999, 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, 1989, 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 from April 1998 to December 31, 1999, was obtained by using the
Nasdaq quote as of that date.
<TABLE>
<CAPTION>
UMPQUA HOLDINGS CORPORATION STOCK
12/89 12/90 12/91 12/92 12/93 12/94
- - -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total Return Index $100.00 $114.92 $136.70 $177.83 $282.75 $397.48
- - -----------------------------------------------------------------------------------------------------------
NASDAQ U.S. $100.00 $ 84.907 $136.134 $158.480 $181.869 $177.874
NASDAQ Bank Stocks $100.00 $ 73.229 $120.069 $174.762 $199.367 $198.639
S&P 500 $100.00 $ 96.758 $126.450 $136.166 $149.450 $151.519
</TABLE>
<TABLE>
<CAPTION>
12/95 12/96 12/97 12/98 12/99
- - --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total Return Index $ 570.60 $693.89 $1,327.60 $1,317.43 $1,270.92
- - --------------------------------------------------------------------------------------------------
NASDAQ U.S. $251.398 $309.309 $ 379.001 $ 534.062 $ 964.842
NASDAQ Bank Stocks $295.975 $390.790 $ 654.290 $ 649.776 $ 624.568
S&P 500 $208.473 $256.799 $ 342.645 $ 442.138 $ 535.989
</TABLE>
11
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth the shares of common stock beneficially
owned as of March 17, 2000, 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
Beneficially Percentage
Name and Position Owned (1) of Class
- - ----------------------------------------------- -------------- -----------
Lynn K. Herbert, Director 537,311 (3) 7.06%
Raymond P. Davis, Director, President/Chief 310,418 (4) 3.93%
Allyn C. Ford, Director 121,944 (5) 1.60%
Neil D. Hummel, Director 34,261 (6) *
Harold L. Ball, Director 32,309 (7) *
Rodger L. Terrall, Sr. VP/Chief Lending 29,725 (8) *
Gerald (Gary) L. Pierpoint, Sr. VP/Eugene 29,027 (8) *
Daniel A. Sullivan, Sr. VP/Chief Financial 27,515 (9) *
Steven A. May, Sr. VP/Retail Banking 20,752 (10) *
Frances Jean Phelps, Director 6,391 (2) *
David B. Frohnmayer, Director 5,166 (2) *
Ronald O. Doan, Director 6,151 (2) *
Dora (Dolly) C. Lusty, Sr. VP/Credit 2,203 (12) *
Scott Chambers, Director 1,380 *
All directors and executive officers as a 1,164,553 (2, 14.56%
Milton Herbert, Shareholder, Canyonville, OR 920,548 (2) 12.09%
- - ---------
* 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 286,425
shares covered by options exercisable within 60 days.
(5) Includes 97,661 shares held as Agent for Ford Family Investment Pool.
(6) Includes shares held jointly with his spouse and includes 20,898 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 25,750 shares covered by options exercisable within 60 days.
(9) Includes 24,250 shares covered by options exercisable within 60 days.
(10) Includes 19,350 shares covered by options exercisable within 60 days.
(11) Includes 383,400 shares covered by options exercisable within 60 days.
(12) Includes 1,875 shares covered by options exercisable within 60 days.
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<PAGE>
REPORT OF THE BUDGET AND COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Budget and Compensation 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.
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
at 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.
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 and Compensation 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
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.
At the meeting, management will report on our business and shareholders
will have the opportunity to ask questions.
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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 2000 annual meeting
of shareholders and any adjournments thereof. Only holders of record of common
stock at the close of business on March 17, 2000 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 17,
2000, there were 7,609,727 shares of common stock issued and outstanding and
entitled to vote at the meeting, held by approximately 600 shareholders of
record, and no shares of preferred stock issued and outstanding. As of March
17, 2000, directors, executive officers, and principal shareholders, together
with their affiliates, had beneficial ownership of 2,085,101 shares, of which
1,701,701 shares 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 Investor Relations, 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, in March 1999. 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,
1999. 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,
2000.
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[FRONT]
REVOCABLE PROXY
UMPQUA HOLDINGS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
APRIL 26, 2000
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 represent and 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 26, 2000, and any adjournments thereof,
with all powers the undersigned would possess if personally present, with
respect to the following:
(Continued and to be signed and dated on the other side)
[REVERSE]
1. Election of Directors INSTRUCTION: To withhold authority to vote for any
individual, strike a line through the nominee's name below.
Scott Chambers
Ronald O. Doan
Allyn C. Ford
[ ] FOR all nominees listed (except as marked to the contrary)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed
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.
Either or both of the proxies (or substitutes) present at the meeting may
exercise all powers granted hereby.
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_________________________, 2000
__________________________
Signature of Stockholder(s)
_________________________
Signature of Stockholder(s)
Please date and sign above 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.
Please mark, sign and date your proxy card and return it promptly in the
enclosed envelope.
