SCHEDULE 14A

 

(Rule 14a-101)

 

INFORMATION REQUIRED IN PROXY STATEMENT

 

SCHEDULE 14A INFORMATION

 

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

 

 

Filed by the Registrantx 
Filed by a Party other than the Registrant¨   
   
Check the appropriate box:  
¨ Preliminary Proxy Statement¨ Soliciting Material Under Rule 14a-12
¨ Confidential, For Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
  
x Definitive Proxy Statement 
¨ Definitive Additional Materials 

 

 Westamerica Bancorporation 
 (Name of Registrant as Specified In Its Charter) 
   
   
 (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) 

 

Payment of Filing Fee (Check the appropriate box):
x No fee required.
¨ 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 Statement No.:
     
  3) Filing Party:
     
  4) Date Filed:
     

 

 

 

West Am Bancorp 2lines

1108 Fifth Avenue


San Rafael, California 94901



March 12, 2018

2021

To Our Shareholders:

 

You are cordially invited to attend the Annual Meeting of Shareholders of Westamerica Bancorporation. It will be held at10:00 a.m. Pacific Time on Thursday, April 26, 2018,22, 2021, at Westamerica Bancorporation, 4550 Mangels Blvd., Fairfield, California as stated in the formal notice accompanying this letter. We hope you will plan to attend.

 

At the Annual Meeting, the shareholders will be asked to (i) elect nine Directors; (ii) approve a non-binding advisory vote on the compensation of our named executive officers; (iii) ratify the selection of the independent auditor; and (vi)(iv) conduct other business that may properly come before the Annual Meeting.

 

In order to ensure your shares are voted at the Annual Meeting, you can vote through the internet, by telephone or by mail. Instructions regarding internet and telephone voting are included on the Proxy Card. If you elect to vote by mail, please sign, date and return the Proxy Card in the accompanying postage-paid envelope. The Proxy Statement explains more about voting in the section entitled “Voting Information – How You Can Vote.”

 

We look forward to seeing you at the Annual Meeting on Thursday, April 26, 2018,22, 2021, at Westamerica Bancorporation, in Fairfield, California.

 

 Sincerely,
  
 
 David L. Payne
 Chairman of the Board, President
 and Chief Executive Officer

 

 

 

WESTAMERICA BANCORPORATION

1108 Fifth Avenue

San Rafael, California 94901

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

Date:Thursday, April 26, 201822, 2021

Time:10:00 a.m. Pacific Time

Place:Westamerica Bancorporation, 4550 Mangels Blvd., Fairfield, California.

Items of Business

1.Elect nine Directors to serve until the 20192022 Annual Meeting of Shareholders;

2.Approve a non-binding advisory vote on the compensation of our named executive officers;

3.Ratify selection of independent auditor; and

4.Conduct other business that may properly come before the Annual Meeting and any adjournments or postponements.

Management’s nine nominees are listed and described in the attached proxy statement.

Who Can Vote?

Shareholders of Record at the close of business on February 26, 201822, 2021 are entitled to notice of, and to vote at the Annual Meeting or any postponement or adjournment thereof.

Admission to the Annual Meeting

No ticket will be necessary for admission to the Annual Meeting. However, to facilitate the admission process, Shareholders of Record (“registered holder”) planning to attend the Annual Meeting should check the appropriate box on the Proxy Card. Your name will be added to a list of attendees. If you hold shares through an intermediary, such as a bank or broker, (“beneficial holder”), you may need to register at the desk in the lobby. Please bring the following as evidence of ownership: 1) a legal proxy, or your brokerage statement dated on or after February 26, 2018,22, 2021, evidencing your ownership on February 26, 2018,22, 2021, the record date; and 2) photo identification.

Annual Report

Westamerica Bancorporation’s Annual Report on Form 10-K (“Annual Report”) to shareholders for the fiscal year ended December 31, 20172020 is enclosed or is available for viewing as indicated on the Shareholder Meeting Notice and on the Company’s website at: www.westamerica.com, under “Shareholders.” The Annual Report contains financial and other information about the activities of Westamerica Bancorporation, but does not constitute a part of the proxy soliciting materials.

BY ORDER OF THE BOARD OF DIRECTORS

Kris Irvine

BY ORDER OF THE BOARD OF DIRECTORS
Kris Irvine
March 12, 20182021  VP/Corporate Secretary

Important notice regarding the availability of proxy materials for the shareholder meeting being held on

Thursday, April 26, 2018:22, 2021:

The Proxy Statement and the Annual Report on Form 10-K are available at:www.westamerica.com.

YOUR VOTE IS IMPORTANT

PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN YOUR PROXY, OR VOTE BY

TELEPHONE OR ONLINE USING THE PROCEDURES DESCRIBED IN THE PROXY STATEMENT.

 

 

TABLE OF CONTENTS

GENERALTABLE OF CONTENTS 
Voting Information1
Additional Information4
Stock Ownership4
Section 16(a) Beneficial Ownership Reporting Compliance6
BOARD OF DIRECTORS 
GENERAL1
Voting Information1
Additional Information4
Stock Ownership4
Delinquent Section 16(a) Reports6
Anti-Hedging and Anti-Pledging Policy6
PROPOSAL 1:  ELECTION OF DIRECTORS6
NomineesBoard of Directors6
Nominees6
Name of Nominees, Principal Occupations, and Qualifications7
Board of Directors and Committees9
Director Compensation1413
Director Compensation Table for Fiscal Year 2017202014
EXECUTIVE COMPENSATION14
Executive Officers14
Compensation Discussion and Analysis15
Employee Benefits Compensation Committee Report2625
Compensation Committee Interlocks and Insider Participation26
Summary Compensation26
Summary Compensation Table for Fiscal Year 201720202726
Grants of Plan-Based Awards Table for Fiscal Year 201720202827
Outstanding Equity Awards Table at Fiscal Year End 201720202928
Option Exercises and Stock Vested Table for Fiscal Year 2017202029
Pension Benefits for Fiscal Year 201720203029
Nonqualified Deferred Compensation Table for Fiscal Year 201720203029
Potential Payments Upon Termination or Change in Control3130
Certain Relationships and Related Party Transactions3231
PROPOSAL 2:  APPROVE A NON-BINDING ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS3231
PROPOSAL 3:  RATIFY SELECTION OF INDEPENDENT AUDITOR3432
AUDIT COMMITTEE REPORT3534
SHAREHOLDER PROPOSAL GUIDELINES3635
SHAREHOLDER COMMUNICATION TO BOARD OF DIRECTORS3635
OTHER MATTERS3635
EXHIBIT A - AUDIT COMMITTEE CHARTERA-1

 

 

Table of Contents 

WESTAMERICA BANCORPORATION

1108 Fifth Avenue

San Rafael, California 94901

___________

PROXY STATEMENT

March 12, 20182021

___________

GENERAL

 

The Westamerica Board of Directors is soliciting proxies to be used at the 20182021 Annual Meeting of Shareholders of Westamerica Bancorporation (the “Company”), which will be held at 10:00 a.m. Pacific Time, Thursday, April 26, 2018,22, 2021, or at any adjournment or postponement of the Annual Meeting. Proxies are solicitedMeeting (collectively, the “Annual Meeting”). The Board of Directors is soliciting proxies to give all Shareholders of Record (“registered holder”)shareholders an opportunity to vote on matters to be presented at the Annual Meeting. In the following pages of this Proxy Statement, you will find information on matters to be voted at the Annual Meeting.

 

We intend to hold the meeting in person.  However, we are actively monitoring the COVID-19 pandemic and we are sensitive to the public health concerns our shareholders may have and the protocols that federal, state, and local governments may impose or suggest. If it is not possible to hold the meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable. We plan to announce any such updates by a press release and posting details on our website that will also be filed with the SEC as proxy material. Please monitor the Shareholder section of our website at www.westamerica.com for updated information. If you are planning to attend the meeting, please check the website one week prior to the meeting date. As always, we encourage you to vote your shares prior to the meeting.

Voting Information

Internet Availability of Proxy Materials. We are providing proxy materials to our shareholders primarily via the internet, instead of mailing printed copies of those materials to each shareholder. By doing so, we save costs and reduce the environmental impact of our Annual Meeting. On or about March 12, 2018,2021, we mailed a Notice of Internet Availability of Proxy Materials (“Notice”) to certain of our shareholders. The Notice contains instructions about how to access our proxy materials and vote online or vote by telephone. If you would like to receive a paper copy of our proxy materials, please follow the instructions included in the Notice. If you previously chose to receive our proxy materials electronically, you will continue to receive access to these materials via email unless you elect otherwise.

 

Proof of Ownership May Be Required for Attending Annual Meeting in Person. You are entitled to attend the Annual Meeting only if you are a shareholder as of the close of business on February 26, 2018,22, 2021, the record date, or hold a valid proxy for the meeting. In order to be admitted to the Annual Meeting, the Company reserves the right to request proof of ownership of Westamerica Bancorporation common stock on the record date. This can be:

·Aa brokerage statement or letter from a bank or broker indicating ownership on February 26, 2018;22, 2021;
·Thethe Notice of Internet Availability of Proxy Materials;
·Aa printout of proxy distribution email (if you received your materials electronically);
·Aa Proxy Card;
·Aa voting instruction form; or
·Aa legal proxy provided by your broker, bank or nominee.

 

Table of Contents

Any holder of a proxy from a shareholder must present the Proxy Card properly executed, and a copy of the proof of ownership. The Company reserves the right to ask shareholders and proxy holders to present a form of photo identification such as a driver’s license.

 

Proxy Card. The Board has designated Arthur C. Latno, Jr., Ronald A. Nelson and Edward B. Sylvester to serve as Proxies for the Annual Meeting. As Proxies, theyproxies will vote the shares represented by proxies at the Annual Meeting. If you sign, date and return your Proxy Card but do not specify how to vote your shares, the Proxiesproxies will vote FOR the election of all of the Director nominees, FOR approval of the advisory vote on the compensation of our named executive officers, and FOR ratifying the selection of independent auditor. The Proxiesproxies will also have

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discretionary authority to vote in accordance with their judgment on any other matter that may properly come before the Annual Meeting that we did not have notice of by January 26, 2018.22, 2021. Management is not aware of any other business to come before the Annual Meeting, and as of the date of this proxy statement, no shareholder has submitted to management any proposal to be acted upon at the Annual Meeting.

 

Quorum and Shares Outstanding.A quorum, which is a majority of the total shares outstanding as of the record date, must be present to hold the Annual Meeting. A quorum is calculated based on the number of shares represented by shareholders attending in person or by proxy. On February 26, 2018, 26,574,33322, 2021, 26,806,764 shares of Westamerica Bancorporation common stock were outstanding. We also count broker non-votes, which we describe below, as shares present or represented at the Annual Meeting for the purpose of determining whether a quorum exists.

 

Election of Director Nominees.Each share is entitled to one vote, except in the election of Directors where a shareholder may cumulate votes as to candidates nominated prior to voting, but only whenif a shareholder gives notice of intent to cumulate votes prior to the voting at the Annual Meeting. If any shareholder gives such notice, all shareholders may cumulate their votes for nominees. Under cumulative voting, each share carries as many votes as the number of Directors to be elected, and the shareholder may cast all of such votes for a single nominee or distribute them in any manner among as many nominees as desired. This Proxy Statement solicits the discretionary authority to cumulate votes and allocate them in the Proxy Holders’proxy holders’ discretion if any shareholder requests cumulative voting. In the election of Directors, the nine nominees receiving the highest number of votes will be elected. If your proxy is marked “Withhold” with regard to the election of any nominee, your shares will be counted toward a quorum and for other nominees but they will not be voted for the election of that nominee. If you attend the Annual Meeting and have already voted, you may vote in person in order to rescind your previous vote.

 

Vote Required; Effect of Abstentions and Broker Non-Votes. The shares of a shareholder whose ballotproxy on any or all proposals is marked as “abstain”“Abstain” will be included in the number of shares present at the Annual Meeting to determine whether a quorum is present. If you are the beneficial holder of shares held by a broker or other custodian, you may instruct your broker how to vote your shares through the voting instruction form included with this Proxy Statement.provided by your broker or other custodian. If you wish to vote the shares you own beneficially at the meeting, you must first request and obtain a legal proxy from your broker or other custodian. If you choose not to provide instructions or a legal proxy, your shares are referred to as “uninstructed shares.” Whether your broker or custodian has the discretion to vote these shares on your behalf depends on the ballot item. Brokers and custodians cannot vote uninstructed shares on your behalf in the election of directors or the advisory votes on executive compensation. For your vote to be counted on these matters, you must submit your voting instruction form to your broker or custodian.

The following table summarizes the votes required for passage of each proposal and the effect of abstentions and uninstructed shares held by brokers.brokers:

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Brokers and custodians cannot vote uninstructed shares on your behalf in director elections or advisory votes on executive compensation. For your vote to be counted, you must submit your voting instruction form to your broker or custodian.Table of Contents

 

Proposal
Number 
ProposalVotes Required for
Approval
AbstentionsUninstructed SharesBoard Vote
Recommendation
1Election of directorsNine nominees
receiving the
most votes
Not votedNot votedFOR
2Advisory vote on executive
compensation "Say on Pay"
Majority of
shares voted
Not votedNot votedFOR
3Ratification of independent auditorMajority of
shares voted
Not votedBroker
discretionary vote
FOR

 

Votes in favor of Proposals 2 and 3 must also constitute a majority of the required quorum for the meeting. If votes in favor are less than a majority of the required quorum, abstentions and non-votes willwould have the effect of a vote against the proposal.

 

2

Other Matters. Approval of any other matter considered at the Annual Meeting will require the affirmative vote of a majority of the shares present or represented by proxy and voting at the Annual Meeting and a majority of the required quorum.

How You Can Vote.Your vote is very important and we hope that you will attend the Annual Meeting. However, whether or not you plan to attend the Annual Meeting, please vote by proxy.

 

Registered Holders.If your shares are registered directly in your name with the Company’s transfer agent, Computershare Investor Services, LLC, you are considered a registered holder of those shares. Please vote by proxy in accordance with the instructions on your Proxy Card, or the instruction you received by email.

 

A registered holder can vote in one of the following four ways:

·Via the Internet.Go to the website noted on your Proxy Card in order to vote via the internet. Internet voting is available 24 hours a day. We encourage you to vote via the internet, as it is the most cost-effective way to vote. When voting via the internet, you do not need to return your Proxy Card.

·By Telephone.Call the toll-free telephone number indicated on your Proxy Card and follow the voice prompt instructions to vote by telephone. Telephone voting is available 24 hours a day. When voting by telephone, you do not need to return your Proxy Card.

·By Mail.Mark your Proxy Card, sign and date it, and return it in the enclosed postage-paid envelope. If you elected to electronically access the Proxy Statement and Annual Report, you will not be receiving a Proxy Card and must vote via the internet or by telephone.

·In person.You may vote your shares at the Annual Meeting if you attend in person, even if you previously submitted a Proxy Card or voted via internet or telephone. Whether or not you plan to attend the Annual Meeting, however, we strongly encourage you to vote your shares by proxy before the meeting.

 

We have been advised by counsel that these telephone and internet voting procedures comply with California law.

Beneficial Shareholders.If your shares are held in a brokerage account in the name of your bank, broker, or other holder of record (“beneficial holder” or “street name”), you are not a registered holder, but rather are considered a beneficial holder of those shares. Your bank, broker, or other holder of record will send you instructions on how to vote your shares. If you are a beneficial holder, you must obtain a legal proxy, executed in your favor, from the holder of record to be able to vote in person at the Annual Meeting.

 

Voting Deadlines.If you are a participant in the Westamerica Bancorporation Tax Deferred Savings/Retirement Plan (ESOP) your vote must be received by 11:59 p.m. Central Time, on April 23, 2018.19, 2021. All other shareholders voting by telephone or internet must vote by 12:01 a.m. Central Time, on April 26, 201822, 2021 to ensure that their vote is counted.

 

Table of Contents

Revocation of Proxy. Registered Holdersholders who vote by proxy, whether by telephone, internet or mail, may revoke that proxy at any time before it is voted at the Annual Meeting. You may do this by: (a) signing another Proxy Card with a later date and delivering it to us prior to the Annual Meeting or sending a notice of revocation to the Corporate Secretary of Westamerica at 1108 Fifth Avenue, San Rafael, CA 94901; (b) voting

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at a later time by telephone or on the internet prior to 12:01 a.m. Central Time, on April 26, 201822, 2021 (prior to 11:59 p.m. Central Time, on April 23, 201819, 2021 for ESOP participants); or (c) attending the Annual Meeting in person and casting a ballot. If you are a beneficial holder, you may change your vote by submitting new voting instructions to your broker or other nominee.

 

Additional Information

Householding.As permitted by the Securities Exchange Act of 1934 (the “Exchange Act”) only one envelope containing two or more Notices of Internet Availability of Proxy Materials is being delivered to shareholders residing at the same address, unless such shareholders have notified their bank, broker, Computershare Investor Services, or other holder of record that they wish to receive separate mailings. If you are a beneficial holder and own your shares in street name, contact your broker, bank or other holder of record to discontinue householding and receive your own separate copy of the Notice in future years. If you are a registered holder and own your shares through Computershare Investor Services, contact Computershare toll-free at 877-588-4258 or in writing directed to Computershare Investor Services, 250 Royall Street, Mail Stop 1A, Canton, MA 02021 to discontinue householding and receive multiple Notices in future years. To receive an additional Annual Report or Proxy Statement this year, contact Shareholder Relations at 707-863-6992 or follow the instructions on the Notice. Mailing of dividends, dividend reinvestment statements, and special notices will not be affected by your election to discontinue duplicate mailings of the Notice.

 

Electronic Access to Proxy Materials and Annual Reports.Whether you received the Notice of Internet Availability of Proxy Materials or paper copies of proxy materials, this Proxy Statement and the 20172020 Annual Report are available on the Company’s website at:www.westamerica.com. www.westamerica.com. If you hold your Westamerica Bancorporation common stock in street name through a broker, a bank or other nominee, you may have the option of securing your Proxy Statement and Annual Report via the internet. If you vote this year’s proxy electronically, you may also elect to receive future Proxy Statements, Annual Reports and other materials electronically by following the instructions given by your bank, broker, or other holder of record when you vote. Our website is available for information purposes only and should not be relied upon for investment purposes, nor is it incorporated by reference into this Proxy Statement.

 

Stock Ownership

Security Ownership of Certain Beneficial Holders. Based on Schedule 13G filings, The following table sets forth information regarding shareholders beneficially holding more than 5% of Westamerica Bancorporation common stock outstanding as of December 31, 2017, in addition2020 based on information available to those disclosed in the Security Ownership of Directors and Management section below, were:Company, including filings made with the SEC.

 

Name and Address of Beneficial Owner Title of Class Number of Shares
Beneficially Owned
  Percent of Class Title of ClassNumber of Shares
Beneficially Owned
 Percent of Class
BlackRock, Inc.
55 East 52nd Street, New York, NY 10055
 Common  3,396,214(1)  12.90% Common  3,922,806(1)14.60%
Eaton Vance Management
2 International Place, Boston, MA 02110
 Common  2,345,696(2)  8.90%
T. Rowe Price Associates, Inc
100 East Pratt Street, Baltimore, MD 21202-1009
 Common  3,436,470(2)12.70%
The Vanguard Group, Inc.
100 Vanguard Boulevard, Malvern, PA 19355
 Common  2,749,499(3)  10.43% Common  2,968,371(3)11.05%
T. Rowe Price Associates, Inc
100 East Pratt Street, Baltimore, MD 21202-1009
 Common  2,241,564(4)  8.50%
American Century Investment Management, Inc.
4500 Main Street, Kansas City, MO 64111
 Common  2,326,469(5)  8.83%
American Century Investment Management, Inc.
4500 Main Street, 9th Floor, Kansas City, MO 64111
 Common  1,795,433(4)6.68%

 

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(1) The Schedule 13G filed with the SEC on January 17, 201826, 2021 disclosed that the reporting entity, BlackRock, Inc., held sole voting power over 3,338,6743,883,496 shares and sole dispositive power over 3,396,2143,922,806 shares.

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(2) The Schedule 13G filed with the SEC on February 15, 2017 disclosed that the reporting entity, Eaton Vance Management, held sole voting power over 2,345,696 shares and sole dispositive power over 2,345,696 shares.

(3) The Schedule 13G filed with the SEC on February 9, 2018 disclosed that the reporting entity, The Vanguard Group, Inc., held sole voting power over 27,990 shares and sole dispositive power over 2,719,423 shares, and shared dispositive power over 30,076 shares.

(4) The Schedule 13G was filed with the SEC on February 14, 2018.16, 2021. These securities are owned by various individual and institutional investors, which T. Rowe Price Associates, Inc. (Price Associates) serves as investment adviser with power to direct investments and/or sole power to vote the securities. For purposes of the reporting requirements of the Securities Exchange Act of 1934, T. Rowe Price Associates is deemed to be a beneficial holder of such securities; however, T. Rowe Price Associates expressly disclaims that it is, in fact, the beneficial holder of such securities.

(5)(3) The Schedule 13G filed with the SEC on February 9, 20188, 2021 disclosed that the reporting entity, The Vanguard Group, Inc., held shared voting power over 31,238 shares and sole dispositive power over 2,916,288 shares and shared dispositive power over 52,083 shares.

(4) The Schedule 13G filed with the SEC on February 11, 2021 disclosed that the reporting entity, American Century Investment Management, Inc., held sole voting power over 2,282,8231,764,134 shares and sole dispositive power over 2,326,4691,795,433 shares.

 

Security Ownership of Directors and Management. The following table shows the number of common shares and the percentage of the common shares beneficially owned (as defined below) by each of the current Directors, by the Chief Executive Officer (“CEO”), by the Chief Financial Officer (“CFO”), and by the three other most highly compensated executive officers, and by all Directors and Officers of the Company as a group as of February 26, 2018.22, 2021. As of February 26, 2018,22, 2021, there were 26,574,33326,806,764 outstanding shares of Westamerica Bancorporation’s common stock. For the purpose of the disclosure of ownership of shares by Directors and Officers below, shares are considered to be beneficially owned if a person, directly or indirectly, has or shares the power to vote or direct the voting of the shares, the power to dispose of or direct the disposition of the shares, or the right to acquire beneficial ownership of shares within 60 days of December 31, 2017.2020.

 

Amount And Nature Of Beneficial Ownership

Name and Address** Sole Voting
and
Investment
Power
  Shared Voting
and Investment
Power
  Right to Acquire
Within 60 days of
December 31, 2017
  Total(1)  

Percent of

Class(2)

 
Etta Allen  10,898(3)  -   -   10,898   * 
Louis E. Bartolini  1,700   -   -   1,700   * 
E. Joseph Bowler  -   25,887(4)  -   25,887   0.1%
Arthur C. Latno, Jr.  3,460(5)  -   -   3,460   * 
Patrick D. Lynch  1,000   -   -   1,000   * 
Catherine Cope MacMillan  8,600(6)  -   -   8,600   * 
Ronald A. Nelson  44,000   -   -   44,000   0.2%
David L. Payne  1,453(7)  885,570(8)  -   887,023   3.3%
Edward B. Sylvester  67,490   -   -   67,490   0.3%
John "Robert" A. Thorson  -   7,778(9)  19,320   27,098   0.1%
David L. Robinson(10)  30   2,097   24,764(11)  26,891   0.1%
Dennis R. Hansen  1,061   30,098   64,144(11)  95,303   0.4%
Russell W. Rizzardi(12)  10   1   -   11   - 
                     
All 14 Directors and Executives                    
Directors and Officers as a Group  139,727   952,435   108,228   1,200,390   4.5%

Amount And Nature Of Beneficial Ownership
Name and Address**Sole Voting
and
Investment
Power
Shared Voting
and Investment
Power
Right to Acquire
Within 60 days of
December 31, 2020
Total(1)Percent of
Class(2)
Etta Allen10,938(3)--10,938*
Louis E. Bartolini1,700--1,700*
E. Joseph Bowler-25,887(4)-25,8870.1%
Melanie Chiesa----*
Catherine Cope MacMillan8,600(5)--8,600*
Michele Hassid185--185*
Ronald A. Nelson44,000--44,0000.2%
David L. Payne1,453(6)885,570(7)-887,0233.3%
Edward B. Sylvester57,490--57,4900.2%
Jesse Leavitt1--1*
John "Robert" A. Thorson-11,432(9)49,10060,5320.2%
Brian Donohoe591-19,10019,691*
Russell W. Rizzardi----*
All 13 Directors and
Officers as a Group
124,958922,88968,2001,116,0474.2%

 

* Indicates beneficial ownership of less than one-tenth of one percent (0.1%) of the Company’s common shares.

** The address of all persons listed is 1108 Fifth Avenue, San Rafael, CA 94901.

(1) None of the shares held by the Directors and Officers listed above have been pledged.

5

(2) In calculating the percentage of ownership, all shares which the identified person or persons have the right to acquire by exercise of options are deemed to be outstanding for the purpose of computing the percentage of the class owned by such person, but are not deemed to be outstanding for the purpose of computing the percentage of the class owned by any other person.

(3) Includes 10,350 shares held in a trust as to which Mrs. Allen is trustee.

(4) Includes 25,887 shares held in trust as to which Mr. Bowler is co-trustee with shared voting and investment power.

(5) Includes 1,115 shares owned by Mr. Latno’s wife as to which Mr. Latno disclaims beneficial ownership.

(6) Includes 6,000 shares held in a trust as to which Ms. MacMillan is trustee and 400 shares held in trust under the California Uniform Gift to Minors Act as to which Ms. MacMillan is custodian.

(7)(6) Includes 462 shares held in a trust under the California Uniform Gift to Minors Act as to which Mr. Payne is custodian.

(8)

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(7) Includes 528,837 shares owned by Gibson Radio and Publishing Company, of which Mr. Payne is President and CEO, as to which Mr. Payne disclaims beneficial ownership, and 345,808 shares held in a trust as to which Mr. Payne is co-trustee with shared voting and investment power.

(9)(8) Includes 7,15210,837 shares held in a trust as to which Mr. Thorson is co-trustee with shared voting and investment power.

 

(10) Mr. Robinson retired from the position of Banking Division Manager of Westamerica Bank effective January 31, 2018.

(11) During 1996, the Company adopted the Westamerica Bancorporation Deferral Plan (the “Deferral Plan”) that allows recipients of Restricted Performance Shares (“RPS”) to defer receipt of vested RPS shares into succeeding years. Amounts shown include RPS shares that have been deferred into the Deferral Plan for the following accounts in amounts of: Messrs. Hansen - 14,780 shares; and Robinson - 19,140 shares.

(12) Mr. Rizzardi’s compensation is subject to garnishments and liens pursuant to certain domestic relations orders.

Delinquent Section 16(a) Beneficial Ownership Reporting ComplianceReports

Section 16(a) of the Securities and Exchange Act requires the Company’s Directors and Executive Officersdirectors, executive officers, and persons who own more than ten percent (10%) of a registered class of the Company’s equity securitiescommon stock to file with the SEC initial reports of ownership, andreports of changes in ownership of common stock of the Company, and to furnish the Company with the Securities and Exchange Commission. Our employees generally prepare thesecopies of all Section 16(a) reports on the basis of information received from each Director and Officer.they file. Based on thesolely upon a review of copies of the forms filed,such reports and written representations that no other reports were required, the Company believes that all reports required by Section 16(a) of the Exchange Act to be filed by its executive officers and directors during the last fiscal year all filing requirements under Section 16(a) applicable to its directors, officers, and 10% shareholders were filed on a timely basis except one Form 4 filing for three reportseach Messrs. Thorson, Ensinger and Donohoe disclosing two transactions was filed one day delinquent for Messrs. Robinson, Sylvester and Thorson with respect to the disposition of 9,200, 1,260 and 2,000 shares, respectively, and for two reports filed seventy-three days delinquent for Messrs. Hansen and Schneck with respect to the grant of nonqualified stock options of 19,400 and 5,900 shares, respectively, with one-third vesting on the first anniversary date of the grant date.late.

 

Anti-Hedging and Anti-Pledging Policy

The Company’s Insider Trading and Stock Hedging Policy prohibits our directors, executive officers, and other employees with access to material non-public information from engaging in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of Company securities in which they have an economic interest. Prohibited transactions include but are not limited to: (1) selling short any Company common stock; and (2) buying or selling puts or calls or other derivatives on Company securities, or otherwise entering into any hedging arrangements involving Company securities.

PROPOSAL 1 – ELECTION OF DIRECTORS

 

Board of Directors

Nine Directors have beenThe Board has nominated nine candidates for election as Directors at the Annual Meeting to hold office until the next Annual Meeting or until their successors are elected and qualified. The Proxiesproxies will vote for the nine nominees named below unless you give different voting instructions on your Proxy Card. Each nominee is presently a Director of the Company and has consented to serve a new term. The Board does not anticipate that any of the nominees will be unavailable to serve as a Director, but if that should occur before the Annual Meeting, the Board reserves the right to substitute another person as nominee. The Proxiesproxies will vote for any substitute nominated by the Board of Directors. The Proxiesproxies may use their discretion to cumulate votes for election of Directors and cast all of such votes for any one or more of the nominees, to the exclusion of the others, and in such order of preference as they may determine at their discretion.

 

Nominees

The nominees for election as Directors are named and certain information with respect to them is given below. Our nominees are seasoned leaders who bring to the Board an array of financial services, public and private company, non-profit, and other business experience. As a group they possess experience in leadership, consumer banking, commercial and small business banking, investment banking, capital markets, financial advisory services, finance and accounting, risk management and real estate. Many of the Board Members have seen the Company through a variety of economic conditions. The information below has been furnished to the

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Company by the respective nominees. All of the nominees have engaged in their indicated principal occupation for more than five years, unless otherwise indicated and no nominee has served on the Board of Directors of another public company during the past five years. Each nominee is a current director of both the Company and its subsidiary, Westamerica Bank.

 

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Name of Nominees, Principal Occupations, and Qualifications

Etta Allen – Director since 1988

Etta Allen (88)(91) is President and CEO of Sunny Slope Vineyard in Sonoma County, California. Until 2017, she was also President and CEO of Allen Heating and Sheet Metal. She is a memberthe chair of the Employee Benefits and Compensation Committee and member of the LoanExecutive Committee and Investmentthe Nominating Committee. Mrs. Allen is also a Director of Westamerica Bank.

 

In 1972, she became the second woman in the state of California to become a licensed contractor in heating, ventilation, air conditioning and sheet metal, and in 1974 she became President and CEO of Allen Heating and Sheet Metal. Under her leadership the company became recognized throughout California. She was the first woman president of Marin Builders Exchange and during her time on the executive committee she also served as a trustee and later as chairmanChairman of their successful insurance trust. She was the first woman contractor on the Executive Committee of the California Association of Builders Exchanges.

 

Etta Allen is one of the pioneers for women in non-traditional careers. As an entrepreneur, businesswoman and an involved community leader, she brings independence, operations management and executive experience to the Board.

 

Louis E. Bartolini – Director since 1991

Louis E. Bartolini (85)(88) retired from Merrill Lynch, Pierce, Fenner & Smith, Inc. (now Merrill Lynch and Co.) as a financial consultant. He currently serves on the Audit Committee and is also a Director of Westamerica Bank.the Employee Benefits and Compensation Committee. Mr. Bartolini has 34 years of experience in the financial industry serving as a financial consultant and branch manager for Merrill Lynch and Co. and has been active for over 36 years in the non-profit community in Marin County. He has served on the boards of many non-profit organizations, including a five-year term as president of the Marin Symphony, a Board member of the Association of California Symphony Orchestras, and a past District Governor of Rotary International.

 

Mr. Bartolini’s continuing interest in the financial industry, his leadership skills, and financial and investment expertise are of great value to the Board. His extensive ties to local community and business leaders through his long-term volunteer involvement provide the Board with a broad prospective and insights into key segments of our markets and customer base.

 

E. Joseph Bowler – Director since 2003

E. Joseph Bowler (81)(84) retired as Senior Vice President and Treasurer of the Company in 2002. He currently serves as a member of the Audit Committee and is also a Director of Westamerica Bank.the Loan and Investment Committee. Mr. Bowler holds a Masters of Business Administration from Stanford University.

 

With many years of direct banking experience, Mr. Bowler brings strong financial and investment expertise important to the oversight of our financial reporting and interest rate risk management. In addition, Mr. Bowler’s experience as a director and trustee of various non-profit community and educational organizations brings strategic planning and corporate governance skills to the Board.

 

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Arthur C. Latno, Jr.Melanie Martella Chiesa – Director since 19852020

Arthur C. Latno, Jr. (88) retired from Pacific Telesis Group (now Pacific Bell Telephone Company) asMelanie Martella Chiesa (55) is an Executive Vice President. He currently serves on the Company’s Executive Committee, the Employee Benefits and Compensation Committee, and the Loan and Investment Committee and is Chairman of the Nominating Committee. Mr. Latno is also a Director of Westamerica Bank. His expertise stems from his wide-ranging responsibilitiesoptometrist in private practice at Pacific Bell, which included operations, regulatory responsibilities, and public and governmental relations. His proficiencyMonte Vista Optometry in strategic planning was recognized by the City of San Francisco when he was selected to serve on the City’s Port of San Francisco Strategic Planning Advisory Panel. He has also been involved with the Marin General Hospital Foundation, the Fine Arts Museum of San Francisco and numerous other community organizations in the locations where the Company has a significant presence. Mr. Latno is also a former U.S. Ambassador and Chairman of the U.S. Delegation Treaty Conference (rank accorded by President Reagan) in Melbourne, Australia, and a former Chairman of the Board of Trustees and Past President of Board of Regents of St. Mary’s College inTurlock, California. He was a recipient of the Anti-Defamation League’s Americanism Award and the Friends of the Human Rights Commission’s Human Rights Award.

Mr. Latno’s most important contributions to the Board are his executive leadership, strategic planning skills, and regulatory and public relations experience.

Patrick D. Lynch – Director since 1986

Patrick D. Lynch (84) retired as Vice President and General Manager of the U.S. Semiconductor Division of Motorola. He currently serves as Chairman of the Employee Benefits and Compensation Committee,Dr. Martella Chiesa is a member of the ExecutiveLoan and Investment Committee.

Dr. Martella Chiesa is a lifelong resident of Hughson, California where she is a partner in her family’s walnut and almond farming operations. She is an owner and board member of Martella Farms, Inc., Ag Commodities, Grower

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Direct Nut, Inc., ARK Development and Nutty Gourmet Nut Company. Dr. Martella Chiesa is a graduate of the University of California, Berkeley, where she received her Doctor of Optometry degree. Dr. Martella Chiesa also received Bachelor of Science degrees in food science and nutrition, functional biology and visual sciences.

Dr. Chiesa is passionate about local community and philanthropy. She, along with her husband, founded the Ciara Chiesa Circle of Hope Fund. Melanie is also the board chair of the Stanislaus Community Foundation, chaired their Scholarship Committee and served on the Nominating Committee,Executive and isDevelopment Committees. Dr. Martella Chiesa also serves as a Director of Westamerica Bank. Mr. Lynch has held executive positions at Nicolet Instrument Company and several venture capital high-tech start-up companies.trustee for the Gallo Center for the Arts.

 

Mr. LynchAlong with leadership and private business knowledge, Dr. Chiesa brings to the Board operations,an understanding of agriculture, healthcare, philanthropy and issues of the Central Valley of California.

Michele Hassid – Director since 2019

Michele Hassid (58) is Managing Partner of Eckhoff and Company, San Rafael. Ms. Hassid is a member of the Audit and Employee Benefits and Compensation Committees. Ms. Hassid joined Eckhoff and Company in 1990, where along with being a Managing Partner, she also serves as a Partner with Eckhoff Wealth Management.

Ms. Hassid assists clients with financial and marketing expertise as well asoperational needs. Ms. Hassid graduated with honors from San Francisco State University with a valued historical perspective.B.A. in Accounting and is a graduate of the San Rafael Leadership Institute. She holds a CPA certificate and a CGMA certification.

 

Ms. Hassid has memberships with AICPA, CALCPA, is the Board Chair of the San Rafael Chamber of Commerce and is a finance committee member for Congregation Ner Tamid in San Francisco. Ms. Hassid is also the Treasurer of the San Rafael Chamber Educational Foundation.

Ms. Hassid’s background and education provides financial expertise and entrepreneurial skills.

Catherine Cope MacMillan – Director since 1985

Catherine Cope MacMillan (70)(73) is a former owner of the Huntington Hotel in San Francisco and La Playa Hotel in Carmel-by-the-Sea. She is a member of the Loan and Investment Committee and the Audit Committee. She is also a Director of Westamerica Bank. Ms. MacMillan previously owned and operated a prominent restaurant for nearly 20 years. She is a graduate of the University of California at Davis and Pacific McGeorge School of Law. She has also served in numerous leadership capacities for community organizations.

 

Ms. MacMillan’s experience in administration and operational aspects of various businesses and organizations provides the Board with sound leadership.

 

Ronald A. Nelson – Director since 1988

Ronald A. Nelson (75)(78) was Executive Vice President of Charles M. Schulz Creative Associates through 1995. He serves as the Chairman of the Audit Committee and is a member of the Employee Benefits and Compensation Committee, Executive Committee, and Nominating Committee. He is also a Director of Westamerica Bank. Mr. Nelson has a background as a Certified Public Accountant and has been designated as the Audit Committee’s “financial expert.” He has been a resident of Sonoma County since 1970, which is one of the bank’sWestamerica Bank’s primary markets and where he has been involved in business management, investment management, and the development of commercial real estate. He also served as a board member and chairmanChairman of Santa Rosa Memorial Hospital, which is the area’s primary acute care hospital.

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Mr. Nelson’s extensive business and financial expertise provides important oversight of our financial reporting and risk management.

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David L. Payne – Director since 1984

David L. Payne (62)(65) is Chairman, President & CEO of Westamerica Bancorporation. He was appointed Chairman in 1988 and Chief Executive Officer in 1989 and is Chairman of the Executive Committee. Mr. Payne is also Chairman, President & CEO of Westamerica Bank. He brings to the Board strong leadership and a vision for the future. He has a thorough knowledge of the banking industry, manages regulatory and business development issues, and has extensive financial and accounting expertise. Mr. Payne possesses excellent management, strategic development and business skills.

 

Since Mr. Payne’s appointment as Chairman of the Board, Westamerica’s dividends per share have risen twelve-fold and capital levels have increased nine-fold.eleven-fold. Total assets have quadrupledincreased more than 500 percent during his tenure and net income has risen by a multiple of 10.16. Return on equity was 8.4%11.3% for the year ended December 31, 2017.2020.

 

Mr. Payne has successfully negotiated and led the Company through many mergers including: John Muir National Bank, Napa Valley Bancorporation, PV Financial, CapitolBank – Sacramento, North Bay Bancorp, ValliCorp Holdings, First Counties Bank, Kerman State Bank, Redwood Empire Bancorp, County Bank, and Sonoma Valley Bank. Mr. Payne also manages his family printing, publishing and cable television business.

 

Edward B. Sylvester – Director since 1979

Edward Sylvester (81) (84) is a licensedCalifornia registered civil engineer and the founder of Sylvester Engineering and SCO Planning and Engineering. He retired from the day-to-day engineering profession in 2007, but continues as a private consultant.currently provides pro bono technical services to non-profit organizations. Mr. Sylvester is currently a member of the Executive Committee, the Nominating Committee, Chairman of the Loan and Investment Committee, Chairman of the Nominating Committee and serves as the Lead Independent Director of Westamerica Bancorporation. He was a founding Director of Gold Country Bank headquartered in Grass Valley until the bank merged with Westamerica’s predecessor, Independent Bankshares, at which time he was nominated to serve on the corporate Board by his peers. Mr. Sylvester is the board Chairman of the Board of Nevada County Broadcasters.Broadcasters, which owns KNCO and STAR 94 radio stations. He is the Chairman of the Board of Sierra Nevada Memorial Hospital where he is also serves as a board member of their Finance Committee and a member of the Strategic Planning Committee. He is the liaison from the hospital board to the Sierra Nevada Memorial Hospital Foundation and was past president of the hospital board. Mr. Sylvester is a board member of the Foundation Board.Nevada County Finance Authority and the President of the Friends of Banner Mountain board, promoting preservation of trails and fire-wise issues. Mr. Sylvester has previously served as a member and Chairman of the California Transportation Commission, that prioritizes state transportation projects and allocates funding. He is a past PresidentChairman of the Rotary ClubNevada County Transportation Commission, Chairman of Grass Valley and past Chairmanthe Board of the Grass Valley Chamber of Commerce.Commerce, President of the Grass Valley Rotary Club, Chairman and founder of the Nevada County Business Association, President of the Sierra Trailblazers Running Club, Chairman of the California Alliance for Advanced Transportation Systems and numerous advisory committees of the county and the city of Grass Valley on engineering and policy-related issues. Mr. Sylvester has runcompleted 23 marathons to datearound the world and was the 14th person in the world to complete a full marathonmarathons on all seven continents including Antarctica. Mr. Sylvester is an avid traveler and photographer, who has visited 114 countries to date searching for new things to experience and photograph.

 

The depth of Mr. Sylvester’s experience gives him first-hand understanding of all the nuances of development and development funding, a current knowledge of the retail economy, and a state-wide perspective and experience in funding allocation. His long tenure on the Board brings a historical and long-term perspective while he remains current on financial issues with his continuing leadership role in the community and active management positions.

 

THE BOARD OF DIRECTORS RECOMMENDS ELECTION OF ALL NOMINEES

 

Board of Directors and Committees

Director Independence and Leadership Structure

. The Board of Directors has considered whether any relationships or transactions related to a Director were inconsistent with a Director’s independence. Based on this review, the Board has determined that E. Allen, L.E.

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Bartolini, E.J. Bowler, A.C. Latno, Jr., P.D. Lynch,M. Chiesa, M. Hassid, C.C. MacMillan, R.A. Nelson, and E.B. Sylvester are “independent” Directors as defined in NASDAQ rules. Mr. Payne is not independent because is an officer of the Company and the Bank.

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Our Board has carefully considered the critical issue of Board leadership. In the context of risk management, the leadership of each Board committee primarily responsible for risk management is vested in an independent committee chair. With regard to the leadership of the meetings of the full Board, our Board of Directors has carefully evaluated whether the positions of chairmanChairman and CEO should be separate or combined. Our Board believes that the most effective leadership structure for the Company at this time is to combine the responsibilities of the Chairman and CEO, a structure that has been successful since 1989. The combined positions avoid a duplication of efforts, enable decisive leadership, ensure a clear accountability for the performance of the Company, a more rapid implementation of decisions, and a consistent vision. Given the size of our employee base and our level of assets relative to larger, more complex banking structures, our Company is particularly well suited to combine the Chairman and CEO functions. Furthermore, our management team hasnamed executive officers have an average tenure of 2325 years and doesdo not require the substantial oversight needed by a less experienced team, which has allowed our Chairman and CEO to lead the Company through eleven acquisitions since 1992.

 

To ensure strong Board oversight eight of our nine Directors are, as noted above, independent as defined by NASDAQ. Only non-management directors sit on Board committees, with the exception of the Executive Committee, and every non-management director sits on one or more of these Committees. All non-management directors meet at least four times a year outside the presence of the Chairman and CEO. The Board completes an annual board evaluation that is discussed by the Nominating Committee and presented to the full Board.

Although the Board believes that it is more effective to have one person serve as the Chairman and CEO at this time, it also recognizes the importance of strong independent leadership on the Board, accordingly, the Board has established a strong, independent Lead Director, Mr. Sylvester, who must serve at least one year and has the following clearly delineated and comprehensive duties:

·Presidespresides at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent Directors;Directors;
·Servesserves as liaison between the Chairman and the independent Directors;
·Approvesapproves information sent to the Board;Board;
·Approvesapproves meeting agendas for the Board;Board;
·Approvesapproves meeting schedules to assure that there is sufficient time for discussion of all agenda items;
·Hashas the authority to call meetings of the independent Directors; and
·Ifif requested by major shareholders, ensures that he or she is available available for consultation and direct communication.

 

The Board does not believe that the fact an independent Lead Director does not preside over the normal Board meeting business sessions limits the ability of the Board to have open exchanges of views, or to address any issues the Board chooses, independently of the Chairman.

 

The Board of Directors of the Company also serve as the Board of Directors of Westamerica Bank, and as such are well informed of Bankbank operations through regular reports and discussions on the operations of the Bank. The Directors’ longevity with the Company has exposed them to a wide range of business cycles, which plays a critical role in managing the risk profile and profitability of the Company through the current economic environment.

 

Role of the Board of Directors in Risk Oversight

Oversight.The Board is also responsible for overseeing all aspects of management of the Company, including risk oversight, which is effected through all Board committees, but primarily through the Board’s Audit Committee. The Internal

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Audit Department reports directly to the Board’s Audit Committee. It presents its independently prepared company-wide annual risk assessment, its evaluation of Management’s prepared risk assessment and its audit plan incorporating the risk assessment, including the policies and procedures utilized to monitor and control such exposures, to the Board’s Audit Committee.

 

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The internal loan review function reports directly to the Board’s Audit Committee. It reports ongoing evaluations of loan portfolios and the risk rating of individual loans using guidelines established by bank regulatory authorities, to the Board’s Audit Committee.

 

Meetings

Meetings.The Company expects all Board members to attend all meetings, including the Annual Meeting of Shareholders, except for reasons of health or special circumstances. The Board met on nine days during 2017.2020. Every Director attended at least 75% of the aggregate of: (i) the Board meetings held during that period in which they served; and (ii) the total number of meetings of any Committee of the Board on which the Director served. Each individual who served on the Board of the Company on the date of the 20172020 Annual Meeting of Shareholders attended the meeting, except for Ms. Allen.meeting.

 

Committees of the Board

 

Director Name 

Executive

Committee

 

Audit

Committee

 

Employee

Benefits and

Compensation

Committee

 

Loan and

Investment

Committee

 

Nominating

Committee

Executive
Committee
Audit
Committee 
Employee
Benefits and
Compensation
Committee
Loan and
Investment
Committee
Nominating
Committee
Etta Allen X X X Chair  X
Louis E. Bartolini X  X 
E. Joseph Bowler X  X X 
Arthur C. Latno, Jr. X X X Chair
Patrick D. Lynch X Chair X
Melanie Martella Chiesa X 
Michele Hassid  X 
Catherine Cope MacMillan X X  X X 
Ronald A. Nelson Chair X XChairX X
David L. Payne Chair Chair 
Edward B. Sylvester X Chair XX Chair
Number of Meetings in 2017 9 5 5 9 1
Number of Meetings in 20209591

 

Executive Committee

Functions:Committee. The Board delegates to the Executive Committee all powers and authority of the Board in the management of the business affairs of the Company between board meetings, which the Board is allowed to delegate under California law.

 

Audit Committee

. The Board of Directors has determined that all members of the Audit Committee are independent, as that term is defined by applicable rules of NASDAQ for Audit Committee purposes. The Board has also designated Mr. Nelson as the “Audit Committee financial expert” as defined by the rules of the SEC and has determined that he is “financially sophisticated” under NASDAQ rules. In concluding that Mr. Nelson is the Audit Committee financial expert, the Board determined that he has:

·an understanding of generally accepted accounting principles and financial statements;
·the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves;

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·experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements, or experience actively supervising one or more persons engaged in such activities;
·an understanding of internal control over financial reporting; and
·an understanding of Audit Committee functions.

 

Designation of a person as an Audit Committee financial expert does not result in the person being deemed an expert for any purpose, including under Section 11 of the Securities Act of 1933. The designation does not impose on the

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person any duties, obligations or liability greater than those imposed on any other Audit Committee member or any other Director and does not affect the duties, obligations or liability of any other member of the Audit Committee or Board of Directors.

 

Functions:The Audit Committee provides independent, objective oversight of the integrity of the Company’s financial statements, the Company’s compliance with legal and regulatory requirements, the independence and performance of the Company’s independent auditor as it performs audit, review or attest services, and the Company’s internal audit and control function. It selects and retains the independent registered public accounting firm, and reviews the plan and the results of the auditing engagement. It acts pursuant to a written charter that was reaffirmed by the Board of Directors in January 20182021 and is attached as Exhibit A to the Proxy Statement for this 20182021 Annual Meeting of Shareholders.

 

Employee Benefits and Compensation Committee

Committee. The Employee Benefits and Compensation Committee of the Board of Directors (the “Compensation Committee”) is comprised solely of Directors who are not current or former employees of Westamerica or any of its affiliates. They are independent as defined by NASDAQ rules.

 

Functions:The Compensation Committee administers Westamerica Bancorporation’s 2012 Amended and Restated Stock Option Plan of 1995,equity incentive plan, Tax Deferred Savings and Retirement Plan, Deferred Profit Sharing Plan, Deferred Compensation Plan, and the Westamerica Bancorporation Deferral Plan. It administers the Company’s compensation programs and reviews and reports to the Board the compensation level for executive officers, including the CEO, of the Company and its subsidiaries and determines that compensation plans are balanced between financial results and prudent risk taking. The Compensation Committee determines annual corporate performance objectives for equity compensation and cash bonuses and their related corporate, divisional and individual goals. Based on the CEO’s assessment of the extent to which each executive officer met those objectives and goals, the Committee determines each executive officer’s annual equity compensation and cash bonus. The Compensation Committee also establishes the individual goals and targets for the CEO. All compensation approved by the Compensation Committee is reported to the full Board of Directors. The role of the Compensation Committee is described in greater detail under the section entitled “Compensation Discussion and Analysis.”

 

The Compensation Committee is governed by a written charter as required by NASDAQ rules. The charter was reaffirmed by the Board of Directors in January 20172021 and attached as Exhibit BA to the Proxy Statement for the 20172020 Annual Meeting of Shareholders. The Compensation Committee has the authority to seek assistance from officers and employees of the Company as well as external legal, accounting and other advisors. It has not retained outside consultants for compensation advice, but can request assistance on an as-needed basis. It does not delegate authority to anyone outside of the Compensation Committee. The Payroll and Employee Benefits Department supports the Compensation Committee by fulfilling certain administrative duties regarding the compensation programs.

 

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Nominating Committee

Committee. The Board of Directors has determined that all members of the Nominating Committee are independent, as defined in NASDAQ rules.

 

Functions:The Nominating Committee screens and recommends qualified candidates for Board membership. This Committee recommends a slate of nominees for each Annual Meeting. As part of that process, it evaluates and considers all candidates submitted by shareholders in accordance with the Company’s Bylaws, and considers each existing Board member’s contributions. The Committee applies the same evaluation standards whether the candidate was recommended by a shareholder or the Board. The Nominating Committee is governed by a written charter, which was reaffirmed by the Board of Directors in January 27, 20162021 and attached as Exhibit BA to the Proxy Statement for the 20162019 Annual Meeting of Shareholders.

 

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While the Board does not have a formal diversity policy, it broadly defines diversity to encompass a diverse range of skills and expertise sufficient to provide prudent guidance to the Company. In addition to the qualifications and characteristics described below, it considers whether the potential Director assists in achieving a mix of Board members that represents a diversity of background, perspective, and experience. Our Board includes Directors with experience in public corporations and non-profit organizations, as well as entrepreneurial individuals who have successfully run their own private enterprise. Our Board also has a broad set of skills necessary for providing oversight to a financial institution, which includes proven leadership, and expertise in capital management, finance, accounting, regulatory affairs, and investment management.

 

Nominating Directors. The Nominating Committee will consider shareholder nominations submitted in accordance with Section 2.14 of the Bylaws of the Company. That section requires, among other things, that nominations be submitted in writing and must be received by the Corporate Secretary at least 45 days before the anniversary of the date on which the Company first mailed its proxy materials for the prior year’s Annual Meeting of Shareholders. If the date for the current year’s Annual Meeting changes more than 30 days from the date on which the prior year’s meeting was held, the Company must receive notice with a reasonable amount of time before the Company mails its proxy materials for the current year.

 

Nominations must include the following information:

·Thethe principal occupation of the nominee;nominee;
·Thethe total number of shares of capital stock of the Company that the shareholder expects will be voted for the nominee;nominee;
·Thethe name and address of both the nominee and the nominating shareholder; and
·Thethe number of shares of capital stock of the Company owned by the nominating shareholder.

 

The Committee has specified the following minimum qualifications it believes must be met by a nominee for a position on the Board:

·Appropriateappropriate personal and professional attributes to meet the Company’s needs;
·Highesthighest ethical standards and absolute personal integrity;
·Physicalphysical and mental ability to contribute effectively as a Director;
·Willingnesswillingness and ability to participate actively in Board activities and deliberations;
·Abilityability to approach problems objectively, rationally and realistically;
·Abilityability to respond well and to function under pressure;
·Willingnesswillingness to respect the confidences of the Board and the Company;
·Willingnesswillingness to devote the time necessary to function effectively as a Board member;
·Possesspossess independence necessary to make unbiased evaluation of Management performance;

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·Bebe free of any conflict of interest that would violate applicable law or regulation or interfere with ability to perform duties;
·Broadbroad experience, wisdom, vision and integrity;
·Understandingunderstanding of the Company’s business environment; and
·Significantsignificant business experience relevant to the operations of the Company.

 

Loan and Investment Committee

Functions:Committee. This Committee reviews major loans and investment policies.policies.

 

Director Compensation

The following table and footnotes provide information regarding the compensation paid to the Company’s non-employee members of the Board of Directors in the fiscal year 2017.2020. Directors who are employees of the Company receive no compensation for their services as Directors.

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Director Compensation Table For Fiscal Year 2017

Director Compensation Table For Fiscal Year 2020
 
Name(1)Fees Earned
Paid in Cash
Change in Pension Value and
Nonqualified Deferred
Compensation Earnings(2)
Total
Etta Allen$44,250$125,159$169,409
Louis E. Bartolini40,0001,17741,177
E. Joseph Bowler42,400-42,400
Melanie Chiesa38,800-38,800
Michele Hassid40,000-40,000
Catherine Cope MacMillan42,400-42,400
Ronald A. Nelson47,250-47,250
Edward B. Sylvester47,90022,29270,192

 

Name(1) Fees Earned
Paid in Cash
  

Change in Pension Value and

Nonqualified Deferred

Compensation Earnings(2)

  Total 
Etta Allen $37,000  $56,616  $93,616 
Louis E. Bartolini  36,400   554   36,954 
E. Joseph Bowler  37,000   0   37,000 
Arthur C. Latno, Jr.  44,450   0   44,450 
Patrick D. Lynch  43,050   0   43,050 
Catherine Cope MacMillan  42,400   0   42,400 
Ronald A. Nelson  41,250   0   41,250 
Edward B. Sylvester  43,800   9,722   53,522 

(1) Non-employee Directors did not receive options or stock awards.awards and none hold any options. During 2017,2020, non-employee Directors of the Company each received an annual retainer of $22,000. Each non-employee Director received $1,200 for each meeting of the Board attended and $600 for each Committee meeting attended. The Chairman of each Committee received an additional $250 for each Committee meeting attended. All non-employee Directors are reimbursed for expenses incurred in attending Board and Committee meetings. The Chairman of the Board, David L. Payne, is compensated as an employee and did not receive any compensation as a Director.

(2) The Deferred Compensation Plan allows non-employee Directors to defer some or all of their Director compensation with interest earnings credited on deferred compensation accounts. The amount shown is the interest on nonqualified deferred compensation that exceeds 120% of the long-term Applicable Federal Rate, with compounding, on all cash compensation deferred in 20172020 and in previous years.

 

Westamerica Bancorporation does not have a charitable donations program for Directors nor does it make donations on behalf of any Director(s). The Company may make a nominal donation through its Community Relations program to non-profit organizations where a Director(s) may have an affiliation.

 

EXECUTIVE COMPENSATION

 

Executive Officers

The executive officers of the Company and Westamerica Bank serve at the pleasure of the Board of Directors and are subject to annual appointment by the Board at its first meeting following the Annual Meeting of Shareholders. It is anticipated that each of the executive officers listed below will be reappointedappointed to serve in such capacities at that meeting.

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David L. Payne – Held since 1984

David L. Payne (62)(65) is the Chairman of the Board, President and CEO of the Company and Westamerica Bank. Mr. Payne also manages his family printing, publishing and cable television business. For additional information regarding Mr. Payne, please see “Proposal 1 – Election of Directors - Board of Directors” above.

Jesse Leavitt – Held since 2020

Jesse Leavitt (35) is Senior Vice President and Chief Financial Officer of the Company. Mr. Leavitt is a California licensed certified public accountant. He held the position of Vice President and Controller upon joining the Company in March 2019 until December 2019. Prior to joining the Company, Mr. Leavitt was a bank examiner with the Federal Deposit Insurance Corporation from 2011 until 2016 and was Assistant Controller at Golden 1 Credit Union from 2016 until 2019.

 

John “Robert” Thorson – Held since 20052020

John “Robert” Thorson (57)(60) is Senior Vice President and Chief Financial Officer ofTreasury Division Manager for the Company. Mr. Thorson joined Westamerica Bancorporation in 1989, was Vice President and Manager of Human Resources from 1995 until

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2001, and was Senior Vice President and Treasurer from 2002 until 2005.2005, and was Senior Vice President and Chief Financial Officer from 2005 until 2019.

 

Dennis R. HansenBrian Donohoe – Held since 20052019

Dennis R. Hansen (67)Brian Donohoe (40) is Senior Vice President and Manager of Operations and System Administration of Community Banker Service Corporation. Mr. Donohoe joined Westamerica Bancorporation in 1999 and has held a variety of positions in the Banking Division and the Operations and Systems Administration of Community Banker Services Corporation. Mr. Hansen joined Westamerica Bancorporation in 1978 and was SeniorDivision, most recently, Vice President and Controller for the Company until 2005.

David L. Robinson – Held since 2007(1)

David L. Robinson (58) was Senior Vice President and Banking Division Manager of Westamerica Bank. Mr. Robinson joined Westamerica Bancorporation in 1993 and has held several banking positions, most recently, Senior Vice President and Southern Banking Division ManagerBusiness Services until 2007.2018.

 

Russell W. Rizzardi – Held since 2008

Russell W. Rizzardi (62)(65) is Senior Vice President and Chief Credit Administrator of Westamerica Bank. Mr. Rizzardi joined Westamerica Bank in 2007. He has been in the banking industry since 1979 and was previously with Wells Fargo Bank and U.S. Bank.

 

Code of Ethics. The Company has adopted a Code of Ethics (as defined in Item 406 of Regulation S-K of the Securities Act of 1933) that is applicable to its senior financial officers including its chief executive officer, chief financial officer, and principal accounting officer.

 

Compensation Discussion and Analysis

The executive compensation practices described below have been followed consistently for twenty-fivetwenty-eight years. At each Annual Meeting of Shareholders since 2010, a majority of our shareholders approved an advisory proposal on the Company’s executive compensation. Last year 98.6% of the shares voting on this proposal voted to support our Corporation’s executive compensation strategy.

 

The Compensation Committee governs the executive compensation program that combines three compensation elements: base salary, annual non-equity cash incentives, and long-term stock grants. Several compensation philosophies and practices underlie this program:

·Basebase salaries for participants in this program should be limited to foster an environment where incentive compensation motivates and rewards corporate, divisional, and individual performance.
·Incentiveincentive compensation (annual non-equity cash incentives and long-term stock grants) is based on measurement of performance against pre-established objective measurable goals. Specific criteria for each objective are established for “threshold,” “target,” and “outstanding” performance. On any one measure, performance below “threshold” results in no credit for that objective. “Threshold” performance results in 75% achievement, “target” performance results in 100% achievement, and “outstanding” performance results in 150% achievement. The performance achievement level determines the size of incentive compensation awards.
·Long-termlong-term incentive stock grants will be awarded to senior management if the corporate performance level is rated “threshold” or better. The purpose of long-term incentive grants is to:

(1) Mr. Robinson retired from the position of Banking Division Manager of Westamerica Bank effective January 31, 2018.

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Motivatemotivate senior management to focus on long-term performance;
Avoidavoid excessive risk-taking and instill conservative management practices;
Buildbuild equity ownership among Westamerica’s senior management;
Linklink shareholder interests to management incentives; and
Createcreate ownership mentality among senior management.

 

In February 2013, the Board of Directors adopted a clawback policy that requires executive officers to forfeit previously awarded incentive compensation if the incentives were based on materially inaccurate financial statements or other performance measures that are later proven to be materially inaccurate or the achievement of which were due

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to fraud or other misconduct. The Company’s 2019 Omnibus Equity Incentive Plan (the “2019 Omnibus Plan”) includes a clawback provision with similar terms.

 

Establishing Incentive Levels, Determining Objectives and Measuring Performance

Performance. In administering the executive compensation program, the Compensation Committee determines “target” incentives for each position annually. The Compensation Committee exercises discretion in establishing “target” incentives in an effort to provide competitive pay practices while motivating and rewarding performance that benefits the Company’s long-term financial performance and shareholder interests, and avoids excessive risk-taking.

 

At the beginning of each calendar year, the Compensation Committee establishes annual corporate performance objectives. In establishing corporate performance objectives, the Compensation Committee takes into consideration the current operating environment for the commercial banking industry as well as internal management policies and practices which would, in the Compensation Committee’s opinion, benefit the long-term interests of the Company and its shareholders. Corporate performance measures include risk management elements considered to be responsive to the impact that current operating conditions could have on the long-term performance of the Company. The Compensation Committee monitors the economy and the banking industry’s operating environment throughout the ensuing year, and may exercise discretion in adjusting corporate performance objectives during the year.

 

The operating environment for the commercial banking industry is impacted by a myriad of factors including, but not limited to, local, national and global economic conditions, interest rate levels and trends, monetary policies of the Federal Reserve Board and its counterparts in other countries, fiscal policies of the United States government and other global political conditions, regulations and legislation, liquidity in capital markets, the demand for capital by commercial enterprises and consumers, new financial products, competitive response to changing conditions within the industry, trade balances, the changing values of real estate, currencies, commodities and other assets, and other factors.

 

Management policies and practices the Board considers in establishing corporate performance objectives include, but are not limited to, management of the Company’s balance sheet and product pricing in a manner which will benefit the long-term financial interests of shareholders, the type and variety of financial products offered by the Company, adherence to internal controls, management of the credit risk of the Company’s loan and investment portfolios, management of liquidity to meet depository customer needs, the results of internal, regulatory and external audits, service quality delivered to the Company’s customers, service quality of “back office” support departments provided to those offices and departments directly delivering products and services to the Company’s customers, maintenance of operating policies and procedures which remain appropriate for risk management in a dynamic environment, timely and efficient integration of acquired companies, operational efficiencies, and capital management practices.

 

Restricted performance shares (“RPS”) representare restricted stock unit awards of Westamerica Bancorporation’s common stock subject tothat vest upon the achievement of performance objectives established by the Compensation Committee. The 2012 AmendedHistorically, the Company has granted RPS awards to its executives with a three-year vesting period and Restated Stock Option Plan of 1995 (the “2012 Amended Plan”), which was originally approved by shareholders in

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1995, and amended with shareholder approval in 2003 and again in 2012, defines thevesting conditions based on performance factors including the Board must use in administering RPS grants as one or more of the following: earnings,Company’s three year cumulative diluted earnings per share revenue and revenue per diluted share, expenses, share price,(EPS), three year average of annual return on equity,average total assets (ROA); three year average of annual return on average shareholders’ equity relative to theindustry average return on equity for similarly sized institutions, return onROE (ROE differential); non-performing assets return onto total assets relative to(NPA); and the average return on assets for similarly sized institutions, efficiency ratio (operating expenses divided by operating revenues), net loan losses as a percentage of average loans outstanding, nonperforming assets, and nonperforming assets as a percentage of total assets.over three years.

 

In addition to establishing corporate performance objectives, the Compensation Committee also establishes individual goals for the CEO. In regard to the other executives named in the accompanying tables, the CEO recommends divisional and individual performance objectives to the Compensation Committee, which considers, discusses, adjusts as necessary, and adopts such performance objectives.

 

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Upon the closure of each calendar year, the Compensation Committee reviews corporate, divisional, and individual performance against the performance objectives for the year just completed. After thorough review and deliberation, the Compensation Committee determines the recommended amount of individual non-equity cash incentives and stock-based incentive awards. The Compensation Committee reports such incentives to the Board of Directors. Meetings of the Compensation Committee and Board of Directors routinely occur in January, immediately following the closure of the calendar year for which performance is measured for incentive compensation purposes.

 

Stock Grants

Equity Compensation Plans.Long-term stock grants may only be awarded under shareholder approved stock-based incentive compensation plans.plans (the “equity incentive plans”).

In 2019, the Company’s shareholders approved the 2019 Westamerica Omnibus Plan (the “2019 Plan”). The 2019 Plan authorizes the grant of up to 1,235,898 shares (plus shares that become available if awards under prior plans expire unexercised or are cancelled, forfeited or terminated before being exercised). In addition, the 2019 Plan authorizes the issuance of shares under an award granted in the assumption of, or in substitution for, outstanding awards previously granted by another business entity acquired by the Company. Any additional authorization of shares available for issuance must be approved by shareholders. The 2019 Plan expires on April 25, 2029 after which shareholder approval is again required to extend the term or approve a new equity incentive plan.

The 2019 Plan replaces the Company’s Proxy Statement dated March 12, 2012 as filed with the SEC on March 13, 2012, summarizesAmended and Restated Stock Option Plan of 1995 (the “2012 Amended Plan”). The Company may no longer grant any awards under the 2012 Amended Plan’s changes fromPlan, though awards previously issued under such plan continue to be outstanding, subject to the predecessor plan. Such changes included:

·reducing the issuable shares to 1,500,000 (plus shares that become available if awards under prior plans expire unexercised or are cancelled, forfeited or terminated before being exercised);
·any additional authorization of shares available for issuance must be approved by shareholders; and
·establishing a plan expiration date of April 26, 2022 after which shareholder approval is again required to extend the term or approve a new stock option plan.

terms of the applicable awards agreements. The 2012 Amended Plan established governing terms and conditions for all stock grants awarded from the effective date of the plan through the effective date of the 2019 Omnibus Plan.

The 2019 Plan allows fourthe following types of stock-based compensation awards:

 

Incentive Stock Options (“ISO”) allow the optionee to buy a certain number of shares of Westamerica Bancorporation common stock at a fixed price, which is established on the date of the option grant. ISOs are intended to meet the requirements of Section 422 of the Internal Revenue Code which provide advantages if certain conditions are met. If the optionee holds the acquired stock for the designated holding period, the optionee defers the timing of recognizing taxable income related to exercising the ISO. If the optionee complies with the ISO requirements, the Company does not receive a corporate tax deduction related to the shares issued.

 

Nonqualified Stock Options (“NQSO”) also give the optionee the option to buy a certain number of shares of Westamerica Bancorporation common stock at a fixed price, which is established on the date of grant. Unlike ISOs, NQSOs do not allow deferral of taxable income for the optionee. At the time NQSOs are exercised, the optionee incurs taxable income equal to the spread between the exercise price and the market price of the stock, and the Company receives a corporate tax deduction in the same amount.

 

StockShare Appreciation Rights (“SAR”) provide the holder a cash payment equal to the difference between the fair market value of the Westamerica Bancorporation’s common stock on the date the SAR is surrendered and the fair market value of the Company’s common stock on the date the SAR was granted. The optionee incurs taxable

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income at the time the SAR is settled and the Company receives a corporate tax deduction in the same amount.

 

Restricted Performance Share Grants,Shares and Restricted Stock Units. as noted above,The Compensation Committee determines the vesting schedule and performance goals, if any, applicable to the grant of restricted shares and Restricted Stock Units. Restricted Stock Units are awards of thethat may be settled in Westamerica Bancorporation’s common stock or cash, subject to vesting. As described above, the Company has historically granted Restricted Stock Units as RPS awards that aresettle in shares of

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Westamerica Bancorporation’s common stock, subject to the achievement of performance objectives. Award recipients receive shares at the end of the performance measurement period only if performance objectives are achieved.

The award recipient incurs taxable income at the time any RPS vests and the Company receives a corporate tax deduction in the same amount.

 

Determination of Awards to Grant

Grant.In determining which type of stock-based compensation awards to grant, the Compensation Committee considers the attributes of each form of incentive. Examples include the ability to motivate management to make decisions based on the long-term interests of shareholders, the desire to compensate with shares rather than cash, and the tax consequences of each type of award. The Compensation Committee retains the latitude to utilize all forms of incentives provided under the 2012 Amended Plan.equity incentive plans. In the current and preceding years, the Compensation Committee has utilized NQSO and RPS based on the motivational aspects of stock price appreciation, the settlement in shares rather than cash, and the preservation of tax deductions for the Company. As of February 26, 2018,22, 2021, the Company had no ISO, SAR or SARrestricted stock awards outstanding.

 

Determination of Option Exercise Price

Price.The 2012 Amended Plan also requiresequity incentive plans require the exercise price of each NQSO, ISO or ISOSAR to be no less than one hundred percent (100%) of the fair market value of the Company’s common stock on the date of grant. The 2012 Amended Plan doesequity incentive plans do not allow re-pricing stock options for poor stock price performance.

 

Stock-based compensation awards are submitted by the Compensation Committee to the full Board of Directors for review. As described above, these meetings have routinely occurred in January immediately following the closure of the calendar year for which performance is measured for incentive compensation purposes. The Compensation Committee meeting has routinely been held during the same week as the related Board of Directors meeting. These January meetings follow by no more than ten business days the Company’s public disclosure of its financial results for the preceding year. As a result, stock option grants are awarded, and the exercise price of such grants are determined at a time when the Company has broadly disseminated its financial condition and current operating results to the public. The Company’s outstanding stock option grants are dated, and related stock option exercise prices are determined, on the January date the Compensation Committee meets to approve such grants.

 

Long-Term Incentive Attributes

Attributes.The Board of Directors has designated the Compensation Committee as the administrator of the 2012 Amended Plan.equity incentive plans. The Compensation Committee reports to the Board the terms and conditions of stock option awards.awards granted under these plans. In carrying out this responsibility, the Compensation Committee designs such awards as long-term incentives. The terms and conditions of currently outstanding awards under the Company’s several equity incentive plans include:

·NQSO grants vest one-third (1/3) on each anniversary of the grant date. As such, NQSO grants become fully vested over a three-year period. NQSO grants expire on the tenth anniversary of the grant date. The Company does not pay dividends on shares underlying NQSO grants until the optionee exercises the option and the shares are outstanding on a dividend record date.
·RPS awards vest three years following the grant date, only if corporate performance objectives are achieved over the three-year period. The Company does not pay dividends on RPS shares until vesting occurs and shares awarded become outstanding on a dividend record date.

 

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Compensation for the Chairman, President & CEO

CEO.Mr. Payne performs two functions for the Company. These two functions tend to be compensated separately at similarly sized banking institutions. Mr. Payne serves as Chairman of the Board and CEO with responsibilities including oversight of the organization and external strategic initiatives. Mr. Payne also serves as President and CEO with responsibilities including daily management of internal operations. Mr. Payne’s total compensation reflects these broad responsibilities. Consistent with the overall compensation philosophy for senior executives, Mr. Payne’s compensation has a greater amount of pay at risk through incentives than through base

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salary. Since Mr. Payne is compensated as an executive, he is not eligible to receive compensation as a Director.

 

As noted on page 3029 of thethis Proxy Statement under the Pension Benefits Table, during 1997 the Company entered into a nonqualified pension agreement (“Pension Agreement”) with Mr. Payne in consideration of Mr. Payne’s agreement that RPS granted in 1995, 1996 and 1997 would be cancelled.(1)In entering the Pension Agreement, the Board of Directors considered the following:

·Mr. Payne had a significant beneficial interest in Westamerica Bancorporation common stock, which was more than adequate to continue to provide motivation for Mr. Payne to continue managing the Company in the best interests of shareholders.
·Inin 1997, the Company had consummated its largest acquisition, with significant total asset growth of approximately 51 percent. One of the Board’s objectives was to provide a compensation mechanism providing retention features for Mr. Payne. Retention of Mr. Payne as President and CEO was desired following the Company’s significant growth. The RPS shares surrendered for the Pension Agreement were scheduled to vest on dates in 1998, 1999 and 2000, while the Pension Agreement was not fully vested until December 31, 2002. Additionally, the 20-year certain pension provided under the Pension Agreement was to commence upon Mr. Payne’s attainment of age 55. Mr. Payne was age 42 at the time of entering the Pension Agreement.

 

Compensation Awarded to Named Executive Officers

Officers. Base salaries for participants in the executive compensation program are generally limited to foster an environment where incentive compensation motivates and rewards corporate, divisional, and individual performance. As such, base pay increases are generally infrequent and limited to “control points” assigned to each position. The non-equity cash incentive formula has the following components:

 

 

 

In structuring performance goals for the named executive officers, the Compensation Committee emphasizes goals, which if achieved, will benefit the overall Company. As such, senior management level positions have high relative weighting on corporate objectives, and divisional leadership positions also have significant weighting on divisional objectives. The “target” cash incentive and the weighting of goals for the named executive officers for 20172020 performance were as follows:

 

(1) The value of the surrendered RPS shares and the Pension Agreement were considered equivalent based on actuarial assumptions.

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 “Target” Goal Weighting 
Target”Goal Weighting
 Cash       Cash  
 Incentive Corporate Divisional Individual IncentiveCorporateDivisionalIndividual
Mr. Payne $371,000   80%     20%$371,00080%20%
Mr. Leavitt40,50055%25%20%
Mr. Thorson  107,200   55%  25%  20%111,00055%25%20%
Mr. Robinson(1)  82,500   50%  40%  10%
Mr. Hansen  73,900   55%  25%  20%
Mr. Donohoe71,50055%25%20%
Mr. Rizzardi  60,500   55%  35%  10%60,50055%35%10%

 

The Compensation Committee establishes corporate goals with the intent to balance current profitability with long-term stability of the Company and its future earnings potential. The 20172020 corporate performance goals related to current year “profitability” included return on equity, return on assets and diluted earnings per share. The performance goals designed to maintain the long-term stability of the Company include “quality” and “control” components. The “quality” measures include loan portfolio quality measures (originated classified(classified loans and other real estate owned, originated non-performingnon-

(1)The value of the surrendered RPS shares and the Pension Agreement were considered equivalent based on actuarial assumptions.

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performing loans and originated other real estate owned, and net loan losses to average originated loans) and service quality measures (external service quality to customers and internal service(service quality of support departments and branches). The “control” measures include non-interest expense to revenues (efficiency ratio), the level of non-interest expenses, and internal audit results. By maintaining both current year “profitability” goals and longer-term “quality” and “control” goals, Management has a disincentive to maximize current earnings at the expense of longer-term results.

 

For 2017,At the beginning of the year, the Compensation Committee expected nominalCommittee’s expectations for the 2020 operating environment included uncertain economic growth with an uncertainsteady interest rate environment., As a result, therates. The Committee reserved the ability to exercise a certain degree of judgment in adjusting target goals based on the resultingultimate operating environment.

 

The Compensation Committee determined the 20172020 operating environment was generally characterized as follows:

·Growth inthe COVID-19 pandemic became widespread throughout the United States’ economy increased slightly from the prior year, but growth was tempered;States and globally, causing a severe recession characterized by high unemployment and a severe reduction in aggregate demand;
·Inflation remained below targets established by the Federal Open Market Committee in spite of continuing monetary policy accommodation and improving employment conditions;economic activity slowed considerably;
·Thethe Federal Open Market Committee increasedreduced the federal funds rate on three occasions resulting in rising short-term interest rates; however, intermediate termto a target rate of 0.00% to 0.25% and increased bond purchases to drive interest rates did not begin to increase until late in the year;very low levels;
·Throughout most of 2017, the federal government enacted considerable fiscal stimulus including, but not limited to, enhanced unemployment benefits, direct payments to consumers, and the Small Business Administration administered Paycheck Protection Program providing business loans through banks; and
·competitive interest rates on loans remained below the yields required for the Company to deliver satisfactory financial results throughout a full business cycle;
·Interest rates on investment securities remained relatively low compared to interest rates which would exist with moderated monetary policies and economic conditions;
·Real estate values in the Company’s metropolitan geographies appeared to increase to levels above those which could be sustained by prevailing economic conditions; and
·Regulations imposed on banks continued to pressure compliance costs, revenue opportunities, and increased operational risks.cycle.

 

The Compensation Committee considered Management’s response to the current operating environment including:

·Managementimplementation of a Company-wide pandemic plan allowing all branches to remain open in a safe environment to continue providing full services to our customers;
·establishing operational procedures necessary to originate and service Paycheck Protection Program loans;
·maintaining appropriate levels of liquidity relative to the causes and levels of deposit growth;
·management maintained discipline in pricing loans and deposits for long-term financial results;
·Managementmanagement consistently maintained conservative bond and loan underwriting practices to appropriately manage the Company’s exposure to credit risk;

(1) Mr. Robinson retired from the position of Banking Division Manager of Westamerica Bank effective January 31, 2018.

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·Management avoided higher-yielding longer-dated investment securities, maintaining an appropriately short duration bond portfolio to provide asset re-pricing opportunities in a rising interest rate environment;
·Management increased the value of the Company’s deposit base by increasing checking and savings deposits and reducing time deposits;
·Management reducedmanagement contained operating costs to offset market interest rate pressure on revenues;
·Management maintained high levels of customer service;costs; and
·Managementmanagement prudently managed capital enabling the Company to continue delivering increasing annual levels of dividends per share and position the Company for growth opportunities.

 

The Compensation Committee chose to make adjustments to actual results to take into account the impact of the operating environment. Adjusted actual results against “target” performance goals were:

 

   Performance   Adjusted Actual 
   Target”   Results 
Profitability Goals:        
Return on average shareholders’ equity  10.30%   10.29% 
Return on average assets  1.09%   1.10% 
Diluted earnings per share $2.280   $2.285 
         
Quality Goals:        
Classified originated loans and other real estate owned  $40 million   $18 million 
Non-performing originated loans and other real estate owned  $11.0 million   $6.6 million 
Net loan losses to average originated loans  0.15%  0.08% 
Service quality  Improving   Improving 
         
Control Goals:       
Non-interest expense to revenues (efficiency ratio)  51.0%  50.4% 
Non-interest expenses  $99.0 million   $97.1 million 
Below satisfactory internal audits  none   none 
 PerformanceAdjusted Actual
 Target”Results
Profitability Goals:  
Return on average shareholders’ equity11.00%11.03%
Return on average assets1.44%1.45%
Diluted earnings per share$2.93$2.94
   
Quality Goals:  
Classified loans and other real estate owned$30 million$33 million
Non-performing loans and other real estate  
owned$7 million$5 million

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Net loan losses to average loans0.20%0.11%
Service qualityImprovingImproving
   
Control Goals:  
Non-interest expense to revenues (efficiency ratio)47.8%47.2%
Non-interest expenses$100.1 million$98.6 million
Below satisfactory internal auditsnonenone

 

In reviewing the operating environment, Management’s response to the operating environment, and adjusted results compared to “target” performance goals, the Compensation Committee determined corporate performance to be 110.5%111.0% of target goals.

 

As described above, divisional and individual goals are used in conjunction with corporate performance goals to determine cash bonus awards.

 

In addition to daily management responsibilities, Mr. Payne’s individual goals included:

·Manage the Company to achievement of assigned corporate performance financial goals including return on equity, return on assets, and earnings per share;share and expense level;
·Maintainimplement and improve credit quality in a manner prudent formanage the final stages of an economic expansion;Company-wide pandemic plan;
·Achieving budgeted deposit growth goals;oversee internal controls and risk management activities including internal audits, external audits and regulatory exams;
·Stabilizing loan volumes;manage credit quality objectives in regard to the pandemic-related recession;
·Satisfactory regulatory examinationsachievement of merchant processing services revenue and external and internal audit results;profitability objectives;
·Development of management succession plans;oversee transitions in divisional managers;
·Monitoring the development of sub-divisional employees;
·Investor relations goals;mentor new senior level managers; and
·Pursue mergersmerger and acquisitions.acquisition projects.

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Based on individual performance against these goals, the Committee exercised its discretion and assigned Mr. Payne a composite corporate and individual performance level of 61%81%.

 

In addition to routine on-going divisional responsibilities, Mr. Leavitt managed the Finance Division toward functional goals, which included:

·implementation of the new accounting standard for credit losses;
·provide management oversight of significant Facilities Department projects;
·manage operating units to deliver superior customer service; and
·satisfactory regulatory examinations, external audits, and internal audits within all areas of responsibility.

Based on the Finance Division’s results, the Committee determined divisional performance to be 101%.

In addition to daily management responsibilities, Mr. Leavitt’s individual goals included:

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·transitioning into division management roles and responsibilities; and
·developing effective working relationships and communication practices with other division managers.

Based on individual performance against these goals, the Committee determined Mr. Leavitt’s individual performance to be 108%. As a result Mr. Leavitt’s composite corporate, divisional and individual performance level was 108%.

In addition to routine on-going divisional responsibilities, Mr. Thorson managed the FinanceTreasury Division toward functional goals, which included:

·Managemanage the level of earning assetsbalance sheet to achieve desiredmeet financial results;performance objectives while maintaining appropriate liquidity and interest rate risk,
·Managemanagement of the investment securities portfolio including credit risk, liquidity, and risks derived from possible movements in anticipation of rising interest rates: maximize yield while meeting duration objectives and maintaining high credit quality;rates;
·Monitorestablish borrowing capability through the Paycheck Protection Program liquidity facility to maintain flexibility in funding sources;
·monitor market rates on depository products and meet the Company’s low-cost funding objective;
·Manage the process of adopting new accounting standards;
·Managemanage the Trust Department toward achieving fee growth goals, prudent investment portfolio management practices, maintaining satisfactory audit results, and achieving personnel development objectives;
·Provideprovide management oversight to the Regulatory Compliance Department;
·Develop personnel to foster business continuity;
·Implement upgrades to functional operational systems;
·Managingmanage operating units to deliver superior customer service; and
·Satisfactorysatisfactory regulatory examinations, external audits, and internal audits withwithin all areas of responsibility.

 

Based on the FinanceTreasury Division’s results, the Committee determined divisional performance to be 116%119%.

 

In addition to daily management responsibilities, Mr. Thorson’s individual goals included:

·Support cross-divisional regulatory compliance initiatives;provide training, mentoring and development to personnel hired to assume divisional responsibilities;
·Monitor federal tax reform legislationhire, train, mentor and implement the impact of enacted legislation on the Company’s financial position and operating results, and other operational and administrative impacts;develop key divisional personnel;
·Solicit shareholder votes which supportreview the Boardcompleteness of Directors proxy recommendations;the Company-wide pandemic plan;
·Management of Bank and Company level capital positions;investor relations activities; and
·Provide financialcapital management support to potential mergerfor the Company and acquisitions activities.subsidiary bank;

 

Based on individual performance against these goals, the Committee determined Mr. Thorson’s individual performance to be 138%150%. In considering all elements of performance, the Committee exercised its discretion and assignedAs a result, Mr. Thorson aThorson’s composite corporate, divisional and individual performance level of 146%was 121%.

 

In addition to routine on-going divisional responsibilities, Mr. Robinson(1)Donohoe managed the BankingOperations & Systems Division toward functional goals, which included:

·Achievementachievement of depositcustomer service standards;
·meet or exceed non-interest expense goals;
·Stabilization of Banking Division loan volumes;achieve risk management and internal controls goals;
·Achievement of Community Development loan objectives;
·Delivering superior customer service throughout the branching system;execute staff development plans; and
·Satisfactory branch audit results.completed divisional projects in the areas of systems upgrades, compliance, and the pandemic response.

 

Based on the BankingOperations & Systems Division’s results, the Committee determined divisional performance to be 100%117%.

 

In addition to daily management responsibilities, Mr. Robinson’sDonohoe’s individual goals included:

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·Regional sales management responsibilities;lead the pandemic response for the operations and systems functions;
·Coachdirect the operational design and mentor subordinates to higher levelseffectiveness of performance;

(1) Mr. Robinson retired from the position of Banking Division Manager of Westamerica Bank effective January 31, 2018.

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·Outbound customer calling activities;Paycheck Protection Program loan originations;
·Leadership in the career development initiatives;personnel management objectives; and
·Management of service quality standards within the Banking Division.satisfactory internal audit, external audit and regulatory exam outcomes.

 

Based on individual performance against these goals, the Committee determined Mr. Robinson’sDonohoe’s individual performance to be 138%. In considering all elements of performance, the Committee exercised its discretion and assigned Mr. Robinson a composite corporate, divisional and individual performance level of 133%.

In addition to routine on-going divisional responsibilities, Mr. Hansen managed the Operations and Systems Division toward functional goals, which included:

·Maintain and improve customer service quality;
·Meet or exceed non-interest expense goals;
·Satisfactory risk management as measured by the results of internal, third-party and regulatory examinations;
·Installation of new and upgraded systems;
·Management and satisfactory completion of information technology projects; and
·Improvements in divisional compliance programs.

Based on the Operations and Systems Division’s results, the Committee determined divisional performance to be 118%.

In addition to daily management responsibilities, Mr. Hansen’s individual goals included:

·Managerial oversight of marketing and merchant processing services functions;
·Management of divisional internal controls and risks;
·Satisfactory audit results; and
·Meeting staff development objectives to position the Company for internal growth.

Based on individual performance against these goals, the Committee determined Mr. Hansen’s individual performance to be 138%150%. As a result, Mr. Hansen’sDonohoe’s composite corporate, divisional and individual performance level was 118%120%.

 

In addition to routine on-going divisional responsibilities, Mr. Rizzardi managed the Credit Division toward functional goals, which included:

·Maintainmanage the loan underwriting standardsportfolio to ensure stable to improving credit quality;quality objectives;
·Maintain credit quality as measured by net loan charge-offs, levels of non-performing loans and other real estate owned, and delinquent loans;manage divisional expenses to budgeted levels;
·Manage staff to production objectives in commercial loan underwriting offices;
·Meet divisional compliance responsibilities;
·Delivery of superior customer service;satisfactory results from internal, third-party and regulatory examinations; and
·Satisfactory internal audit, loan review and regulatory examination results.meet customer service standards.

 

Based on the Credit Division’s results, the Committee determined divisional performance to be 108%104%.

 

In addition to daily management responsibilities, Mr. Rizzardi’s individual goals included:included:

·Progress in meeting staff development initiatives;lead credit decision making during the pandemic;
·achieve staffing goals;
·maintain consistency of loan underwriting standards; and
·Manage divisional compliance projects.provide support to the Loan Review function.

 

Based on individual performance against these goals, the Committee determined Mr. Rizzardi’s individual

23

performance to be 97%91%. As a result, Mr. Rizzardi’s composite corporate, divisional and individual performance level was 108%106%.

 

Based on the above described performance against objectives, the Committee determined cash incentive awards as follows:

 “Target”   Composite Corporate   Cash “Target” Composite Corporate Cash
 Cash X Divisional and Individual = Incentive CashXDivisional and Individual=Incentive
 Incentive   Performance Level   Award Incentive Performance Level Award
Mr. Payne $371,000       61%     $225,000 $371,000 81% $300,000
Mr. Leavitt40,500 108% 43,500
Mr. Thorson  107,200       146%      156,200 111,000 121% 134,000
Mr. Robinson(1)  82,500       133%      109,900 
Mr. Hansen  73,900       118%      86,900 
Mr. Donohoe71,500 120% 86,000
Mr. Rizzardi  60,500       108%      65,400 60,500 106% 64,400

 

The size of stock grants is determined by corporate performance using stated formulas. The formulas used to determine “target” NQSO and RPS grant sizes adjust for changes in the underlying value of one share of Westamerica Bancorporation common stock. For achievement of corporate performance in 2017,2020, the following stock grants were awarded in January 2018:2021:

 

 “Target”      Nonqualified “Target”   Nonqualified
 Nonqualified   Corporate   Stock Nonqualified Corporate Stock
 Stock Option X Performance = Option Stock OptionXPerformance=Option
 Grant   Level   Award Grant Level Award
Mr. Payne         110.5%        111.0% 
Mr. Leavitt11,100 111.0% 12,300
Mr. Thorson  19,095       110.5%      21,100 15,700 111.0% 17,400
Mr. Robinson(2)         110.5%       
Mr. Hansen  17,285       110.5%      19,100 
Mr. Donohoe13,600 111.0% 15,100
Mr. Rizzardi  15,385       110.5%      17,000 12,700 111.0% 14,100

 

  “Target”     Corporate       
  RPS  X  Performance  =  RPS 
  Grant     Level     Award 
Mr. Payne         110.5%       
Mr. Thorson  1,801       110.5%      1,990 
Mr. Robinson(3)         110.5%       
Mr. Hansen  1,620       110.5%      1,790 
Mr. Rizzardi  1,457       110.5%      1,610 

23 

Table of Contents

 Target” Corporate  
 RPSXPerformance=RPS
 Grant Level Award
Mr. Payne 111.0% 
Mr. Leavitt480 111.0% 530
Mr. Thorson1,960 111.0% 2,170
Mr. Donohoe1,700 111.0% 1,900
Mr. Rizzardi1,590 111.0% 1,760

The NQSO grants have an exercise price equal to the fair market value of Westamerica common stock on the grant date, vest over a three-year period beginning one year from the date of grant and expire on the tenth anniversary of the grant date.

 

RPS awards vest three years following the grant date, only if certain corporate performance objectives are achieved over the three-year period. In January 2018,2021, the Compensation Committee evaluated whether the three year corporate performance objectives were met for RPS awards granted in January 2015.2018. The performance objectives for the RPS granted in January 2015 included:2018 included:

·3 year cumulative diluted earnings per share (EPS);

(1) Mr. Robinson retired from the position of Banking Division Manager of Westamerica Bank effective January 31, 2018.

(2) Mr. Robinson retired from the position of Banking Division Manager of Westamerica Bank effective January 31, 2018. As such, no NQSO were granted to Mr. Robinson.

(3) Mr. Robinson retired from the position of Banking Division Manager of Westamerica Bank effective January 31, 2018. As such, no RPS were granted to Mr. Robinson.

24

·3 year average of annual return on average total assets (ROA);
·3 year average of annual return on average subsidiary Bank shareholders’ equity relative to industry average ROE (ROE differential);
·Ending originatedend of period non-performing assets to total originated assets (NPA); and
·Efficiencyefficiency ratio over three years.

 

The RPS would vest if any one of the following performance results were achieved:

·4 of 5 objectives reaching “threshold” performance level;
·3 of 5 objectives reaching “target” performance level; or
·2 of 5 objectives reaching “outstanding” performance level.

 

The goals and achieved results were:

 Threshold Target Outstanding ResultThreshold Target OutstandingResult
EPS $6.75  $6.85  $6.95  Target$7.89 $8.01 $8.25Outstanding
ROA  1.10%  1.14%  1.18% Threshold1.10% 1.15% 1.25%Outstanding
ROE differential  1.00%  1.50%  2.30% Target1.00% 1.50% 2.00%Outstanding
NPA  0.50%  0.35%  0.25% Outstanding$25 million $15 million $10 millionOutstanding
Efficiency Ratio  56.00%  55.00%  53.00% Outstanding54.00% 50.00% 48.00%Target

 

With fivefour of the goals achieving the “threshold”“outstanding” performance, level or better, the Compensation Committee determined the RPS shares awarded in 20152018 vested upon achievement of the three year goals.

 

Nonqualified Deferred Compensation Programs

Programs.The Company maintains nonqualified deferred compensation programs to provide senior and mid-level executives the ability to defer compensation in excess of the annual limits imposed on the Company’s ESOP401(k) plan. The Company believes these tax deferral programs enhance loyalty and motivate retention of executives. These programs allow executives to defer cash pay and RPS shares upon vesting. The programs also allow Directors to defer Director fees.

·Cash pay deferred in the program accumulates in accounts in the names of the participating Directors and

24 

Table of Contents

executives. The Company credits the balance of these accounts with interest using an interest rate that approximates the crediting rate on corporate-owned life insurance policies, under which Directors and executives are the named insured. Deferrals and interest credits represent general obligations of the Company.
·The common stock the Company issues to executives upon the vesting of RPS grants may be deferred into the program and deposited into a “Rabbi Trust.” Since these shares are outstanding shares of the Company’s common stock, the Company pays dividends on these shares at the same rate paid to all shareholders. The shares held in the “Rabbi Trust” are subject to claims by the Company’s creditors.

 

Employment Contracts

Contracts.None of the executives named in the accompanying tables have employment contracts with the Company.

 

Compensation in the Event of a Change in Control

Control. The banking industry has significant merger and acquisition activity. To promote retention of senior executives, unvested NQSO and RPS grants contain a “change in control” provision, which trigger full vesting upon a change in control. The Compensation Committee determined these provisions were appropriate in order to retain executives to continue managing the Company after any “change in control” was announced through its ultimate consummation. Since none of the named executive officers have entered employment contracts with the Company, they serve in an

25

“at-will” “at-will” capacity and could terminate their employment at any time. The Compensation Committee felt it would be in the best interests of shareholders to have a retention mechanism in place to provide continuity of management during a “change in control” process. Further, the Committee expects the named executive officers would be terminated by an acquiring institution rather than retained in a similar functional capacity.

 

The Company also maintains a Severance Payment Plan covering all employees to promote employee retention. The Severance Payment Plan provides salary continuation benefits for employees in the event of a “change in control.” The amount of salary continuation benefits is based on years of service and corporate title, but in no event exceed the equivalent of one times annual salary. All named executive officersMessrs. Payne, Thorson, Donohoe and Rizzardi are eligible for one year’s salary under the plan. Mr. Leavitt was eligible for the equivalent of 26-weeks salary under the plan as of December 31, 2020.

 

Other

Internal Revenue Code. Internal Revenue Code (“IRC”) Section 162(m) places a limit on the amount of compensation that may be deducted by the Company in any year with respect to certain of the Company’s highest-paid executives. Prior to enactment of the Tax Cuts and Jobs Act of 2017 (the “Act”), certain “performance-based compensation” was not counted toward this limit. The Act eliminated the “performance-based compensation” exemption.exemption as of November 2, 2017. The Company intends generally to qualify compensation paid to executive officers for deductibility under the IRC but reserves the right to pay compensation that is not deductible.

 

Employee Benefits Compensation Committee Report

We, the Compensation Committee of the Board of Directors of the Company, have reviewed and discussed the Compensation Discussion and Analysis with Management. Based on that review and discussion, we have recommended to the Board of Directors inclusion of the Compensation Discussion and Analysis in this Proxy Statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.2020.

 

Submitted by the Employee Benefits and Compensation Committee

Patrick D. Lynch, Chairman

Etta Allen, Chair

Arthur C. Latno, Jr.Louis E. Bartolini

Michele Hassid

Ronald A. Nelson

25 

Table of Contents

Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee is a current or former officer or employee of the Company or any of its subsidiaries, or entered into (or agreed to enter into) any transaction or series of transactions with the Company or any of its subsidiaries with a value in excess of $120,000. None of the executive officers of the Company has served on the Board of Directors or on the Compensation Committee of any other entity, where one of that entity’s executive officers served either on the Board of Directors or on the Compensation Committee of the Company.

Summary Compensation

The following table sets forth summary compensation information for the chief executive officer, chief financial officer and each of the other three most highly compensated executive officers for the fiscal years ending December 31, 2017, 2016,2020, 2019, and 2015.2018. These persons are referred to as named executive officers elsewhere in this Proxy Statement.

 

26
Summary Compensation Table For Fiscal Year 2020
 
Name / PositionYearSalaryStock
Awards(1)
Option
Awards(2)
Non-Stock
Incentive Plan
Compensation(3)
Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings(4)
All Other
Compensation(5)
TOTAL
David L. Payne2020$371,000$-$-$300,000$-$27,807$698,807
Chairman,2019371,000--300,000-24,274695,274
President & CEO2018371,000--250,000-19,813640,813
Jesse Leavitt(6)2020135,000--43,500-9,252187,752
SVP & Chief2019106,875--15,000-4,224126,099
Financial Officer2018-------
John "Robert" A. Thorson2020149,000129,500171,936134,00079,60931,469695,514
SVP & Treasury2019149,000124,718216,028163,20023,95532,405709,306
Division Manager2018149,000123,688210,578160,70022,35129,012695,329
Russell W. Rizzardi2020120,960104,928138,24064,400-10,455438,983
SVP/Credit Administrator2019120,960101,529175,26866,800-9,050473,607
Division Manager2018120,960100,070169,66065,500-7,903464,093
Brian Donohoe(7)2020130,00883,677106,27286,000-29,422435,379
SVP/Operations & Systems2019120,000-55,02649,400-2,605227,031
Division Manager201887,348-54,89022,100-7,422171,760

 

Summary Compensation Table For Fiscal Year 2017

Name / Position Year Salary  

Stock

Awards(1)

  

Option

Awards(2)

  

Non-Stock

Incentive Plan

Compensation(3)

  

Change in

Pension Value

and

Nonqualified

Deferred

Compensation

Earnings(4)

  

All Other

Compensation(5)

  TOTAL 
David L. Payne 2017 $371,000  $-  $-  $225,000  $-  $19,031  $615,031 
Chairman, 2016  371,000   -   -   225,000   -   19,535   615,535 
President & CEO 2015  371,000   -   -   225,000   -   19,557   615,557 
John "Robert" A. Thorson 2017  149,000   122,932   179,459   156,200   36,594   27,366   671,551 
SVP & Chief 2016  149,000   124,027   164,175   150,200   42,431   28,749   658,582 
Financial Officer 2015  149,000   124,669   144,144   141,600   38,786   27,788   625,987 
David L. Robinson(6) 2017  150,000   124,075   180,286   109,900   30,526   20,235   615,022 
SVP/Banking Division 2016  150,000   124,450   164,772   109,800   36,094   18,491   603,607 
Manager 2015  150,000   125,523   145,236   110,000   33,782   16,027   580,568 
Dennis R. Hansen 2017  130,008   110,924   160,438   86,900   23,579   36,610   548,459 
SVP/Operations & Systems 2016  130,008   111,751   147,459   86,700   28,092   37,854   541,864 
Division Manager 2015  130,008   112,288   129,948   85,200   26,485   33,140   517,069 
Russell W. Rizzardi(7) 2017  120,960   100,061   144,725   65,400   -   7,491   438,637 
SVP/Credit Administrator 2016  120,960   100,322   133,131   62,300   -   7,695   424,408 
  2015  120,960   101,187   116,844   67,000   -   7,466   413,457 

(1) Stock Awards represent RPS shares as described in the Compensation Discussion & Analysis. The amounts shown represent the aggregate grant date fair market value.value computed in accordance with FASB ASC Topic 718. For further information, see Note 1 to the Company's audited financial statements for the year ended December 31, 2020 included in the Company's Annual Report on Form 10-K.

(2) Option awards represent Nonqualified Stock Options as described in the Compensation Discussion & Analysis. The amounts shown represent the aggregate grant date fair market value.value computed in accordance with FASB ASC Topic 718. For further information, see Note 1 to the Company's audited financial statements for the year ended December 31, 2020 included in the Company's Annual Report on Form 10-K.

(3) The amounts shown are non-equity incentive compensation only. No interest or other form of earnings was paid on the compensation.

(4) The amounts include interest paid on deferred cash compensation to the extent the interest exceeds 120% of the long-term Applicable Federal Rates with compounding. The Company has no defined benefit pension plan. Mr. Payne has a pension agreement, which is discussed under “Pension Benefits for Fiscal Year 2017.2020.

26 

Table of Contents

(5) Each of the above-named executive officers received less than $10,000 of aggregate perquisites and personal benefits, except for Mr. HansenDonohoe who received a car allowance of $12,000. All other compensation includes Company contributions to defined contribution plans (ESOP and Deferred Profit Sharing), and amounts added to taxable wages using IRS tables for the cost of providing group term life insurance coverage that is more than the cost of $50,000 of coverage. It also includes the dollar value of the benefit to Mr. Payne for the portion of the premium payable by the Company with respect to a split dollar life insurance policy (projected on an actuarial basis), and a bonus paid to Mr. Payne in the amount of his portion of the split dollar life insurance premium.

(6) Mr. Robinson retired fromLeavitt joined the position of Banking Division Manager of Westamerica Bank effectiveCompany March 18, 2019. He was appointed Chief Financial Officer on January 31, 2018.1, 2020.

(7) Mr. Rizzardi's compensation is subjectDonohoe was appointed to garnishmentsOperations and liens pursuant to certain domestic relations orders.Systems Division Manager January 1, 2019.

 

Based on the compensation disclosed in the Summary Compensation Table, approximately 32%37% of total compensation comes from base salaries. See Compensation Discussion and Analysis for more details.

 

Pay Ratio Disclosure

Disclosure. In August 2015 pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Securities and Exchange Commission adopted a rule requiring annual disclosure of the ratio of the median employee’s annual total compensation to the total annual compensation of the principal executive officer (“PEO”). The Company’s PEO is Mr. Payne.

 

Median Employee total annual compensation27$  36,451
Mr. Payne total annual compensation$698,807
Ratio of PEO to Median Employee Compensation19.1:1.0

Median Employee total annual compensation $38,387 
Mr. Payne total annual compensation $615,031 
Ratio of PEO to Median Employee Compensation  16.0:1.0 

 

In determining the median employee total annual compensation, the Company prepared a census of all employees as of December 31, 2017, who were employed2020, except the PEO, with compensation annualized for the full 2017 calendar year.those employees hired in 2020. For simplicity, the value of benefits provided by the Company’s qualified retirement plans and welfare benefit plans were excluded from the determination of total annual compensation as all employees are offered the same benefit programs.

 

Grants of Plan-Based Awards Table For Fiscal Year 2020
 
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards
All Other Stock
Awards: Number
of Shares
of Stock
All Other Stock
Awards: Number
of Securities
Underlying
Exercise or
Base Price of
Option Awards
Grant Date
NameGrant DateThresholdTargetMaximumor Units(1)Options(2)($/Share)(2)Fair Value(3)
David L. Payne1/22/20$-$371,000$556,500--$-$-
1/22/20-------
1/22/20-------
Jesse Leavitt1/22/20-40,50060,750----
1/22/20-------
1/22/20-------
John "Robert" A. Thorson1/22/20-111,000166,500----
1/22/20---1,950--129,500
1/22/20----19,90066.41171,936
Brian Donohoe1/22/20-71,500$107,250----
1/22/20---1,260--83,677
1/22/20----12,30066.41106,272
Russell W. Rizzardi1/22/20-60,50090,750----
1/22/20---1,580--104,928
1/22/20----16,00066.41138,240

27 

GrantsTable of Plan-Based Awards Table For Fiscal Year 2017Contents

    Estimated Future Payouts Under
Non-Equity Incentive Plan Awards
  All Other Stock
Awards: Number
of Shares
of Stock
  All Other Stock
Awards: Number
of Securities
Underlying
  Exercise or
Base Price of
Option Awards
  Grant Date 
Name Grant Date Threshold  Target  Maximum  or Units(1)  Options(2)  ($/Share)(2)  Fair Value(3) 
David L. Payne 1/26/17 $-  $371,000  $556,500   -   -  $-  $- 
  1/26/17  -   -   -   -   -   -   - 
  1/26/17  -   -   -   -   -   57.18   - 
John "Robert" A. Thorson 1/26/17  -   107,200   160,800   -   -   -   - 
  1/26/17  -   -   -   2,150   -   -   122,932 
  1/26/17  -   -   -   -   21,700   57.18   179,459 
David L. Robinson(4) 1/26/17  -   82,500   123,750   -   -   -   - 
  1/26/17  -   -   -   2,170   -   -   124,075 
  1/26/17  -   -   -   -   21,800   57.18   180,286 
Dennis R. Hansen 1/26/17  -   73,900   110,850   -   -   -   - 
  1/26/17  -   -   -   1,940   -   -   110,924 
  1/26/17  -   -   -   -   19,400   57.18   160,438 
Russell W. Rizzardi(5) 1/26/17  -   60,500   90,750   -   -   -   - 
  1/26/17  -   -   -   1,750   -   -   100,061 
  1/26/17  -   -   -   -   17,500   57.18   144,725 

(1) Includes RPS grants. There is no dollar amount of consideration paid by any executive officer on the grant or vesting date of an award.

The material terms of the RPS grants are as follows:

• The performance and vesting period is three years;

• Multiple three-year performance goals are established by the Compensation Committee for each grant;

• The Compensation Committee may revise the goals upon significant events;

Three-year performance criteria are limited to those provided in the 2012 Amended Plan, as described on page 16;

Accelerated vesting occurs upon a “change in control” as defined in the 2012 Amended Plan as described on page 25 of this Proxy statement;control;” and

• No dividends are paid or accrued prior to settlement or deferral delivery of shares which takes place approximately two months after vesting.

(2) Includes NQSO grants with an exercise price of not less than 100% of fair market value as of the date of grant.

The material terms of the NQSO’s listed in the table are as follows:

• Options vest ratably over three years beginning one year from date of grant;

• Options expire 10 years following grant date;

• Exercise price is 100% of fair market value as defined in the 2012 Amended2019 Omnibus Plan;

• Dividends are not paid on unexercised options;

• Vesting ceases upon termination of employment, whatever the reason, except if vesting is accelerated as described below;

• Vested options may be exercised within 90 days of termination of employment and within one year upon death or disability; and

• Accelerated vesting occurs upon a “change in control” as defined in the 2012 Amended Plan as described on page 25 of this Proxy statement.control.”

(3) The amounts shown for NQSOs and RPS awards represent the aggregate grant date fair market value.

(4) Mr. Robinson retired from the position of Banking Division Manager of Westamerica Bank effective January 31, 2018.

Outstanding Equity Awards Table at Fiscal Year End 2020
        
 Option Awards Stock Awards
NameNumber of
Securities
Underlying
Unexercised
Options
(#) Exercisable(1)    
Number of
Securities
Underlying
Unexercised
Options
(#) Unexercisable(1)
Option
Exercise
Price
($)(1)  
Option
Expiration
Date(1)
 Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That
Have Not
Vested (#)(2)
Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned Shares,
Units or Other Rights
That Have Not
Vested ($) valued at
12/31/20(2)
David L. Payne--$-- -$-
Jesse Leavitt---- --
John "Robert" A. Thorson7,233-57.1781/26/2027 --
 14,0677,03362.1551/25/2028 --
 7,06714,13362.6731/24/2029 5,930327,870
 -19,90066.4101/22/2030 --
Brian Donohoe5,900-57.1781/26/2027 --
 3,6671,83362.1551/25/2028 --
 1,8003,60062.6731/24/2029 1,26069,665
 -12,30066.4101/22/2030 --
Russell W. Rizzardi-5,83357.1781/26/2027 --
 5,6675,66662.1551/25/2028 --
 5,73411,46662.6731/24/2029 4,810265,945
 -16,00066.4101/23/2030 --

(5) Mr. Rizzardi's compensation is subject to garnishments and liens pursuant to certain domestic relations orders.

28

Outstanding Equity Awards Table at Fiscal Year End 2017

  Option Awards  Stock Awards 
Name 

Number of

Securities

Underlying

Unexercised
Options

(#) Exercisable(1)

  

Number of

Securities

Underlying

Unexercised

Options

(#) Unexercisable(1)

  

Option

Exercise

Price ($)(1)

  

Option

Expiration

Date(1)

  

Equity Incentive

Plan Awards:

Number of

Unearned Shares,

Units or Other

Rights That

Have Not

Vested (#)(2)

  

Equity Incentive Plan

Awards: Market or

Payout Value of

Unearned Shares,

Units or Other Rights

That Have Not Vested

($) valued at

12/31/17(2)

 
David L. Payne  -   -  $-   -   -  $- 
John "Robert" A. Thorson  -   8,800   42.695   1/22/2025         
   -   18,333   42.330   1/28/2026         
   -   21,700   57.178   1/26/2027   8,000   476,400 
David L. Robinson(3)  -   8,867   42.695   1/22/2025         
   -   18,400   42.330   1/28/2026         
   -   21,800   57.178   1/26/2027   8,050   479,378 
Dennis R. Hansen  15,867   7,933   42.695   1/22/2025         
   8,234   16,466   42.330   1/28/2026         
   -   19,400   57.178   1/26/2027   7,210   429,356 
Russell W. Rizzardi(4)  -   7,133   42.695   1/22/2025         
   -   14,866   42.330   1/28/2026         
   -   17,500   57.178   1/26/2027   6,490   386,480 

(1) Option Awards vest ratably over three years beginning one year from date of grant. Options expiring in 20252027 fully vested in January 2018.2020. Options expiring in 20262028 fully vested in January 2021. Options expiring in 2029 fully vest in January 2019.2022. Options expiring in 20272030 fully vest in January 2020.2023.

(2) RPS shares fully vest three years from date of grant if performance goals are met. RPS grants vest as follows: Messrs. Thorson - 2,9201,990 shares vested in January 2018, 2,9302021, 1,990 vest in January 2022, and 1,950 vest in January 2023; Rizzardi - 1,610 shares vested in January 2021, 1,620 shares vest in January 2019,2022, and 2,1501,580 shares vest in January 2020; Hansen - 2,630 shares vested in January 2018, 2,6402023; and Donohoe – 1,260 shares vest in January 2019, and 1,940 shares vest in January 2020; and Rizzardi - 2,370 shares vested in January 2018, 2,370 shares vest in January 2019, and 1,750 shares vest in January 2020. As described on page 31 of this Proxy statement, vesting can2023; Leavitt has no RPS shares. Vesting may occur on a pro-rated basis for employees separating from service due to retirement. Accordingly, Mr. Robinson’s RPS grants vest as follows: 5,624 shares vested in January 2018 and 2,426 shares were forfeited in January 2018.

(3) Mr. Robinson retired from the position28 

Table of Banking Division Manager of Westamerica Bank effective January 31, 2018.Contents

(4) Mr. Rizzardi's compensation is subject to garnishments and liens pursuant to certain domestic relations orders.

Option Exercises And Stock Vested Table For Fiscal Year 2020
 
 Option Awards Stock Awards
NameNumber of Shares
Acquired on
Exercise
Value Realized
on Exercise($)
 Number of Shares
Acquired on Vesting 
Value Realized on
Vesting($)(1)
David L. Payne-$- -$-
Jesse Leavitt-- --
John "Robert" A. Thorson-- 2,150124,990
Brian Donohoe-- --
Russell W. Rizzardi5,83357,295 1,750101,736

 

Option Exercises And Stock Vested Table For Fiscal Year 2017

  Option Awards  Stock Awards 
Name Number of Shares
Acquired on Exercise
  Value Realized
on Exercise($)
  Number of Shares
Acquired on Vesting
  

Value Realized on

Vesting($)(1)

 
David L. Payne  -  $-   -  $- 
John "Robert" A. Thorson  81,767   515,129   2,300   129,985 
David L. Robinson(2)  82,366   513,719   2,320   131,115 
Dennis R. Hansen  159,512   1,350,743   2,080   117,551 
Russell W. Rizzardi(3)  20,500   277,778   1,870   105,683 

(1) Amounts represent value upon vesting of RPS shares.

(2) Mr. Robinson retired from the position of Banking Division Manager of Westamerica Bank effective January 31, 2018.

(3)Mr. Rizzardi’s compensation is subject to garnishments and liens pursuant to certain domestic relations orders.

 

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Pension Benefits For Fiscal Year 2017

Pension Benefits For Fiscal Year 2020
Pension Benefits For Fiscal Year 2020
Name Plan Name Present Value of
Accumulated Benefit
 Payments during
Last Fiscal Year
Plan NamePresent Value of
Accumulated Benefit
Payments during
Last Fiscal Year
David L. Payne Non-Qualified Pension Agreement $4,861,948 $511,950Non-Qualified Pension Agreement$4,306,558$511,950

 

During 1997, the Company entered into a nonqualified pension agreement with Mr. Payne in consideration of Mr. Payne’s agreement that RPS awards granted in 1995, 1996 and 1997 would be cancelled.

In January 2000, the Compensation Committee, based on the Company’s achievement of certain performance goals which had first been established for Mr. Payne’s 1995, 1996 and 1997 RPS awards, determined Mr. Payne’s annual pension would be $511,950. The pension commenced in 2010 and will be paid to Mr. Payne for 20 years.

 

The discount rate used to determine the present value is 3.99%1.46%. The obligation is an unfunded general obligation of the Company.

 

Nonqualified Deferred Compensation Table For Fiscal Year 2020

 

NameExecutive Contributions
in Last
Fiscal Year(1)
Aggregate
Earnings in Last
Fiscal Year(2)     
Aggregate
Withdrawls/
Distributions(3)
Aggregate
Balance at Last
Fiscal Year End(4)
David L. Payne $-  $-  $-  $- 
Jesse Leavitt
John "Robert" A. Thorson115,7112,374,960
Brian Donohoe
Russell W. Rizzardi

Nonqualified Deferred Compensation Table For Fiscal Year 2017

Name 

Executive Contributions

in Last

Fiscal Year(1)

  

Aggregate

Earnings in Last

Fiscal Year(2)

  

Aggregate

Withdrawls/

Distributions(3)

  

Aggregate

Balance at Last

Fiscal Year End(4)

 
David L. Payne $-  $-  $-  $- 
John "Robert" A. Thorson  50,000   97,324   -   2,001,836 
David L. Robinson(5)  12,000   46,544   (30,050)  2,812,454 
Dennis R. Hansen  -   35,959   (23,205)  2,167,268 
Russell W. Rizzardi  -   -   -   - 

(1) No RPS shares were deferred upon vesting in 2017. Non-equity incentive plan compensation deferred in 2017 was earned in 2016 and disclosed as compensation in the Summary Compensation Table for 2016 and is therefore excluded from the Summary Compensation Table for Fiscal Year 2017.2020.

(2) Includes change in value of deferred RPS shares, dividends earned on deferred RPS shares, and interest earned on deferred cash compensation. The amountscompensation included in the Summary Compensation Table for Fiscal Year 2017 on page 27 are as follows: Messrs. Thorson - $42,431; Robinson - $36,094; Hansen - $28,092.of $79,609

(3) IncludesNo dividends were paid on deferred RPS shares.shares in 2020.

(4) Aggregate balance of deferred compensation reported as compensation prior to 2017 is as follows: Messrs. Thorson - $1,854,512; Robinson - $2,783,960; Hansen - $2,154,514.2020 was $2,259,249.

(5) Mr. Robinson retired from the position of Banking Division Manager of Westamerica Bank effective January 31, 2018.

Under the Westamerica Bancorporation and Subsidiaries Deferred Compensation Plan (the “Deferred Compensation Plan”), Directors and Officers may defer up to 100% of their Director’s compensation, salary and/or non-equity incentive compensation (cash bonus) into a non-qualified, unfunded deferred compensation program. The interest rate paidcredited during 20172020 was 5.0%. The interest rate may be changed annually. Interest is compounded semi-monthly. Participants choose in advance from the following distribution commencement dates: termination

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of employment, January 1 following termination of employment, or a specific date at least five years from date of deferral. Payment is made in a lump sum unless the participant chooses a four year, five year or ten year annual installment.

 

Under the Westamerica Bancorporation Deferral Plan, 100% of vested RPS grants may be deferred. Dividends paid on such issued and outstanding shares are paid in cash to the deferral participants, and are paid at the same

30

rate as is paid to all other shareholders. The distribution of deferred RPS shares occurs at least two years after deferral, one month following termination, or the January 1 immediately following termination as elected by the participant at the time of deferral. If the participant is one of the named executive officers, benefit distributions that are made upon termination of employment may not start earlier than six months after the date of termination.

 

Potential Payments Upon Termination or Change in Control

Payments to be made to the named executive officers in the event of termination of employment or change in control are described below.

 

Termination

Termination. Vested NQSOs may be exercised within 90 days of termination and within one year of death or disability. RPS shares vest if the Compensation Committee determines performance goals are met. Terminated employees will receive vested RPS shares if the settlement date of the RPS grant occurs within 90 days of termination. Employees separating from service due to death, disability or retirement are eligible to receive a pro rata portion of granted RPS shares if the Compensation Committee determines that the performance goals are likely to be met for the grant period.

The pro rata basis is determined by the number of full years of the vesting period completed before date of death, disability or retirement.

 

Deferred compensation account balances are distributed on January 1 following termination, or a specific date at least five years from the date of deferral in the form of annual payments over four years. Payment may also be made in a lump sum or in annual payments for five or 10 years as elected by the participant at the time of deferral. If the participant is one of the named executive officers, benefit distributions that are made upon termination of employment may not start earlier than six months after the date of termination.

 

Change in Control

Control. A change in control is defined under the 2012 Amended Plan as shareholder approval of a dissolution or liquidation of the Company or a sale of substantially all of the Company’s assets to another company, or a tender offer for 5% or more of the Company’s outstanding common stock or a merger in which the Company’s shareholders before the merger hold less than 50% of the voting power of the surviving company after the merger.

 

Under the 2019 Omnibus Plan, a change in control occurs when (i) a person or entity becomes the beneficial owner of more than 50% of voting power of the Company; (ii) there is an unapproved change in the majority membership of the Board of Directors; (iii) a merger of the Company or any of its subsidiaries is completed, other than (A) a merger that results in the Company’s voting securities continuing to represent 50% or more of the combined voting power of the surviving entity and the Board of Directors immediately prior to the merger or consolidation continuing to represent at least a majority of the Board of Directors of the surviving entity or (B) a merger or consolidation effected to implement a recapitalization in which no person is or becomes the owner of voting securities representing more than 50% of the combined voting power of the Company; or (iv) shareholders approve of a plan of liquidation or dissolution.

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In the event of a change in control, unvested NQSOs and RPS shares immediately vest. The value is computed by multiplying the market price at December 31, 2020 by the number of in-the-money options andshares. The value RPS shares subject to accelerated vesting for each of the named executive officers is as follows: Messrs. Payne: $0; Thorson: $991,902; Robinson(1): $997,399; Hansen: $892,637;$327,870; Donohoe: $69,665; Rizzardi: $265,945; and Rizzardi(2) $804,217.Leavitt: $0. The value is computed by multiplying the difference between the market value on December 29, 2017, the last business day of 2017,31, 2020 and the exercise price of each option by the number of shares subject to accelerated vesting. The market value at December 31, 2020 was lower than the exercise price of vested and unvested options.

 

Under the Company’s Severance Payment Plan, executive officers receive six week’s pay for every year or partial year of service up to one year’s base salary (see Summary Compensation Table for Fiscal Year 20172020 for annual base salary for all named executive officers). All named executive officers have met the service requirementMessrs. Payne, Thorson, Donohoe and Rizzardi are eligible for one year’s base salary.salary under the plan. Mr. Leavitt was eligible for 26 weeks pay under the plan at December 31, 2020. Severance pay is paid in a lump sum or on a semi-monthly basis at the discretion of the Company. The Severance Payment Plan is subject to Section 409A of the Internal Revenue Code.

 

(1) Mr. Robinson retired from the position of Banking Division Manager of Westamerica Bank effective January 31, 2018.

(2) Mr. Rizzardi’s compensation is subject to garnishments and liens pursuant to certain domestic relations orders.

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Certain Relationships and Related Party Transactions

In accordance with the Audit Committee Charter, the Audit Committee is responsible for reviewing and approving or disapproving all related party transactions required to be disclosed by Item 404 of Regulation S-K for potential conflicts of interest. The Company is also required by NASDAQ Rule 5250(b)(3) to disclose all agreements and arrangements between any director or nominee for director, and any person or entity other than the Company (the “Third Party”), relating to compensation or other payment in connection with such person’s candidacy or service as a director of the Company. The Company is not aware of any such agreements. Additionally, the Company’s Code of Conduct and Ethics provides rules that restrict transactions with affiliated persons.

 

Certain of the Directors, executive officers and their associates have had banking transactions with subsidiaries of the Company in the ordinary course of business. With the exception of the Company’s Employee Loan Program, all outstanding loans and commitments included in such transactions were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons not related to the Company, did not involve more than a normal risk of collectability, and did not present other favorable features. As part of the Employee Loan Program, all employees, including executive officers, are eligible to receive mortgage loans with interest rates one percent (1%) below Westamerica Bank’s prevailing interest rate at the time of loan origination. Westamerica Bank makes all loans to executive officers under the Employee Loan Program in compliance with the applicable restrictions of Section 22(h) of the Federal Reserve Act. Messrs. Payne Thorson, and HansenThorson have mortgage loans through this Program. The largest aggregate amount of principal during 20172020 was $384,877, $267,611,$329,659 and $214,079,$203,677, respectively. The principal amount outstanding at December 31, 20172020 was $367,495, $254,253,$309,697 and $0,$189,185, respectively. The amount of principal paid during 20172020 was $17,382, $13,358,$19,962 and $214,079,$14,492, respectively. The amount of interest paid during 20172020 was $8,825, $6,215,$9,735 and $825,$6,134, respectively. The rate of interest payable on the loans is 2.875%, 3.125%,2.00% and 0%1.88%, respectively.

 

PROPOSAL 2 – APPROVE A NON-BINDING ADVISORY VOTE ON THE COMPEN-SATIONCOMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

Background

 

The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) requires that shareholders cast a non-binding advisory vote on the executive compensation paid to the executive officers listed in the Summary Compensation Table (a so-called “say on pay” vote) as well as an advisory vote with respect to whether future say on pay votes will be held every one, two or three years. The result of the most recent shareholder vote on the proposal to determine the frequency of future say on pay proposals was that shareholders

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should review executive compensation annually. Therefore, Proposal 2 requests that shareholders again approve the compensation paid to our named executive officers.

Last year 99%98.6% of the shares voting on this proposal voted to support our Corporation’s executive compensation strategy. The proposal to determine how often the say on pay proposal should be voted on by shareholders will again be brought to a shareholder vote in 2022.

 

We believe that our compensation policies and procedures are centered on a pay-for-performance culture and are strongly aligned with the long-term interests of our shareholders. Our incentive compensation plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, and restricted performance shares. The Summary Compensation Table shows very stable base salaries indicative of our greater emphasis on performance-based stock and non-stock awards. Our stockRPS and option awards are based on a minimum

achievement of meeting the “threshold” level for each pre-established objective. Vesting of our RPS award is conditioned upon the achievement of performance criteria. Both awards have a three-year vesting period. Our annual incentive plan incorporates at least four financial and/or strategic

32

performance metrics in order to properly balance risk with the incentives to drive our key annual financial and/or strategic initiatives; in addition, the annual incentive program incorporates a 150% maximum payout to further manage risk and the possibility of excessive payments.

 

In 2003, shareholders approvedConsistent with our pay-for-performance philosophy, the Company’s 20032019 Omnibus Plan and the 2012 Amended Plan, towhich were approved by shareholders, include the following changes:features:

·Disallowingdisallow re-pricing stock options for poor stock performance;
·Limitinglimits the number of shares that may be awarded; and
·Requiring the Compensation Committee to meet the definition of independence to enable any award intended to qualify as “performance-based compensation” to meet Section 162(m) of the Internal Revenue Code.includes a clawback provision.

 

In 2009, shareholders re-approved the performance criteria for performance-based awards under the 2003 Amended Plan.

In 2012, shareholders approved the Company’s 2012 Amended and Restated Stock Option Plan of 1995. The 2012 Amended Plan includes the following changes:

·Reduced the number of shares available for future issuance from 4,307,593 to 1,500,000 (plus shares that become available if awards under prior plans expire unexercised or are cancelled, forfeited or terminated before being exercised; and
·Extended the term of the 2012 Amended Plan to April 26, 2022 from April 24, 2013.

Vote Required

Required. The “say on pay” proposal gives you as a shareholder the opportunity to endorse or not endorse our executive pay program through the following resolution:

 

“Resolved, that the shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, which disclosure includes the compensation discussion and analysis, the compensation tables and any related footnotes and narratives in the Company’s proxy statement for the Annual Meeting of Shareholders.”

 

Because your vote is advisory, it will not be binding on the Board or create or imply any additional fiduciary duty by the Board. However, the Compensation Committee may take into account the outcome of the vote when considering future executive compensation arrangements.

 

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A

VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED
EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT
PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE
SECURITIES AND EXCHANGE COMMISSION

 

33

PROPOSAL 3 – RATIFY SELECTION OF INDEPENDENT AUDITOR

 

Ratify Selection of Independent Auditor

Action byAuditor. At the Annual Meeting, shareholders is not required by law inwill be asked to ratify the appointmentAudit Committee’s selection of Crowe LLP to serve as the Company’s independent auditors but their appointment is submitted byfor the Audit Committee and the Boardfiscal year ending

32 

Table of Directors in order to give the shareholders an opportunity to present their views.Contents

December 31, 2021. If the proposal is approved, the Audit Committee, in its discretion, may direct the appointment of different independent auditors at any time during the year if it determines that such a change would be in the best interests of the Company and its shareholders. If the proposal to ratify the selection of Crowe Horwath LLP as the Company’s independent auditors is rejected by the shareholders, then the Audit Committee will reconsider its choice of independent auditors. A representative of Crowe Horwath LLP is expected to be present at the Annual Meeting and will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

 

Audit Fees

Fees. The aggregate fees billed to the Company by Crowe Horwath LLP with respect to services performed for fiscal 20172020 and 20162019 are as follows:

  2017  2016 
Audit Fees(1) $510,000  $510,000 
Audit related fees(2)  35,210   34,450 
Tax fees(3)  40,200   39,000 
All other fees  -   - 
Total $585,410  $583,450 

 

  2020 2019
Audit Fees(1) $570,000  $619,800 
Audit related fees(2)  37,950   43,305 
Tax fees(3)  45,000   42,400 
All other fees  —     77,072 
Total $652,950  $782,577 

(1) Audit fees consisted of fees billed by Crowe Horwath LLP for professional services rendered for the audit of the Company’s consolidated financial statements, reviews of the consolidated financial statements included in the Company’s quarterly reports on Form 10-Q, and the audit of the Company’s internal controls over financial reporting. The audit fees also relate to services such as consents and audits of mortgage banking subsidiaries.

(2) Audit-related fees consisted of fees billed by Crowe Horwath LLP for audits of certain employee benefits plans.

(3) Tax fees consisted of fees billed by Crowe Horwath LLP for the compilation and review of the Company’s tax returns.

 

Preapproval Policies and Procedures

Procedures. The Audit Committee is responsible for the appointment, compensation, retention and oversight of the work of any public accounting firm engaged by the Company for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company. Any accounting firm appointed by the Company reports directly to the Audit Committee.

 

The Audit Committee must preapprove all auditing services and permitted non-audit services by its independent auditors and the fees to be paid by the Company for these services, except for those fees qualifying for the “de minimis exception” which provides that the preapproval requirement for certain non-audit services may be waived if certain express standards and requirements are satisfied prior to completion of the audit under certain conditions. This exception requires that the aggregate amount of all such services provided constitutes no more than five percent of the total amount of revenue paid to the audit firm by the Company during the fiscal year in which the services are provided. This exception also requires that at the time of the engagement, the Company did not recognize such services to be non-audit services, and such services are promptly brought to the attention

34

of the Audit Committee and approved prior to the completion of the audit by the Audit Committee. During fiscal year 2017,2020, there were no non-audit services that were provided using this exception.

 

The Audit Committee may delegate to one or more members of the Audit Committee the authority to grant preapprovals of non-audit services and fees. In such event, the decisions of the member or members of the Committee regarding preapprovals are presented to the full Audit Committee at its next meeting. The Audit Committee preapproved 100% of all services performed on behalf offor the Company by Crowe Horwath LLP during fiscal year 2017.2020.

 

33 

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE
RATIFICATION OF THE SELECTION OF CROWE HORWATH LLP AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

 

AUDIT COMMITTEE REPORT

 

The material in this report is not soliciting material and is not deemed filed with the SEC. It is not incorporated by reference in any of the Company’s filings under the Securities Act of 1933 or the Exchange Act, whether made in the past or in the future even if any of those filings contain any general incorporation language.

 

The Audit Committee is composed of fourfive Directors who are neither officers nor employees of the Company, and who meet the NASDAQ independence requirements for Audit Committee members. The Audit Committee selects, appoints and retains the Company’s independent auditors and is responsible for their compensation and oversight.

 

In performing its functions, the Audit Committee acts only in an oversight capacity and necessarily relies on the work and assurances of the Company’s management, which has the primary responsibility for financial statements and reports, and of the independent auditors. The auditors express an opinion on the conformity of the Company’s annual financial statements to United States generally accepted accounting principles and on internal control over financial reporting. In fulfilling its oversight responsibilities, the Audit Committee reviewed the audited consolidated financial statements for the fiscal year 20172020 and discussed them with Management and with Crowe Horwath, LLP, the Corporation’s independent registered public accountants.

 

Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles. Management also represented that it performed an assessment of the effectiveness of internal control over financial reporting as of December 31, 2017,2020, and that internal control over financial reporting was effective. The independent auditor discussed with the Audit Committee matters required to be discussed by Auditing Standard of the Public Accounting Oversight Board (PCAOB), including certain matters related to the conduct of an audit and to obtain certain information from the Audit Committee relevant to the audit.

 

The auditors also provided to the Audit Committee the written disclosures and the letter from the independent auditors required by PCAOB standards. The Audit Committee discussed with auditors the firm’s independence.

 

Based on the Audit Committee’s discussion with Management and the independent auditors, the Audit Committee’s review of the representations of Management and the Report of the Independent Auditors to the Audit Committee, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 20172020 for filing with the SEC.

35

 

Submitted by the Audit Committee

Ronald A. Nelson, Chairman

Louis E. Bartolini

E. Joseph Bowler

Michele Hassid

Catherine C. MacMillan

 

34 

SHAREHOLDER PROPOSAL GUIDELINES

 

To be considered for inclusion in the Company’s Proxy Statement and form of proxy for next year’s Annual Meeting, shareholder proposals must be delivered to the Corporate Secretary, Westamerica Bancorporation A-2M, P.O. Box 1200, Suisun City, CA 94585, no later than 5:00 p.m. on November 12, 2018.2021. However, if the date of next year’s Annual Meeting is changed by more than 30 days from the date of this year’s meeting, the notice must be received by the Corporate Secretary a reasonable time before we begin to produce and distribute our Proxy Statement. All such proposals must meet the requirements of Rule 14a-8 under the Exchange Act.

 

In order for business, other than a shareholder proposal submitted for the Company’s Proxy Statement, to be properly brought before next year’s Annual Meeting by a shareholder, the shareholder must give timely written notice to the Corporate Secretary. To be timely, written notice must be received by the Corporate Secretary at least 45 days before the anniversary of the day our Proxy Statement was mailed to shareholders in connection with the previous year’s Annual Meeting, orwhich will be January 25, 2019,26, 2022, for the 20192022 Annual Meeting. If the date of the Annual Meeting is changed by more than 30 days, the deadline is a reasonable time before we begin to produce and distribute our Proxy Statement. A shareholder’s notice must set forth a brief description of the proposed business, the name and residence address of the shareholder, the number of shares of the Company’s common stock that the shareholder owns and any material interest the shareholder has in the proposed business. The Company will have discretionary voting authority with respect to any non-Rule 14a-8 proposals for the next annual shareholders meeting that are not received by January 25, 2019.26, 2022.

The requirements and process for shareholder nominations of director candidates are described under the heading “Nominating Directors” on page 13.

 

Westamerica reserves the right to reject, to rule out of order, or to take other appropriate action with respect to any proposal that does not comply with these and other applicable legal requirements.

 

SHAREHOLDER COMMUNICATION TO BOARD OF DIRECTORS

 

Shareholders and other interested parties who wish to communicate with the Board may do so by writing to: Kris Irvine, VP/Corporate Secretary, Westamerica Bancorporation A-2M, P.O. Box 1200, Suisun City, CA 94585. The Directors have established procedures for the handling of communications from shareholders and other interested parties and have directed the Corporate Secretary to act as their agent in processing any communications received. All communications that relate to matters that are within the responsibility of one of the Board Committees are to be forwarded to the Chair of the appropriate Committee. Communications that relate to ordinary business matters that are not within the scope of the Board’s responsibilities, such as customer complaints, are to be sent to Management. Solicitations, junk mail and obviously frivolous or inappropriate communications are not to be forwarded, but will be made available to any Director who wishes to review them.

 

OTHER MATTERS

 

The Board of Directors does not know of any matters to be presented at the Annual Meeting other than those specifically referred to in this Proxy Statement. If any other matters should properly come before the meeting or any postponement or adjournment of the meeting, the persons named in the enclosed proxy intend to vote

36

thereon in accordance with their best business judgment. If a nominee for Director becomes unavailable to serve as a Director, the Proxies will vote for any substitute nominated by the Board of Directors.

 

35 

The Company will pay the cost of proxy solicitation. The Company has retained the services of Georgeson to assist in the proxy distribution at a cost not to exceed $2,000 plus reasonable out-of-pocket expenses. The Company will reimburse banks, brokers and others holding stock in their names or names of nominees or otherwise, for reasonable out-of-pocket expenses incurred in sending proxies and proxy materials to the holders of such stock.

 

BY ORDER OF THE BOARD OF DIRECTORS

Kris Irvine

VP/Corporate Secretary

March 12, 20182021

Fairfield, California

36 

37

EXHIBIT A

Westamerica Bancorporation

Audit Committee Charter – Updated and Reaffirmed January 24, 201827, 2021

 

The Audit Committee is appointed by the Board to assist the Board in monitoring (1) the integrity of Westamerica Bancorporation’s (“Company”) financial statements, (2) the compliance by the Company with legal and regulatory requirements, (3) the independence, qualifications and performance of the Company’s registered public accounting firms (“independent auditor” or “independent auditors”) preparing or issuing an audit report or performing other audit, review or attest services for the Company, (4) the Company’s Internal Audit and control function, and (5) the Company’s Loan Review function. The Audit Committee shall prepare the report that the Securities and Exchange Commission (“SEC”) rules require be included in the Company’s annual proxy statement.

 

While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits, or to determine that the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditor.

 

The function of the Audit Committee is oversight. Management is responsible for the preparation and integrity of the Company’s financial statements. Management is responsible for maintaining appropriate accounting and financial reporting policies and an appropriate internal control environment. Subject to appointment, review and oversight by the Audit Committee, the independent auditor is responsible for planning and conducting a proper audit of the Company’s internal control environment and of its annual financial statements, reviewing the Company’s quarterly financial statements prior to the filing of each quarterly report on Form 10-Q, and other procedures.procedures.

 

The members of the Audit Committee shall meet the independence requirements of the Nasdaq Stock Market (“Nasdaq”) and the rules and regulations of the SEC. No member shall be an affiliated person (as defined in relevant SEC or Nasdaq rules) of the Company or any of its subsidiaries or have participated at any time in the preparation of financial statements of the Company or any current subsidiary during the prior three years, and each member shall be free of any relationship that would interfere with the exercise of his or her independent judgment in carrying out the responsibilities of a member of the Audit Committee. The Audit Committee shall include members with banking or related financial management expertise who are able to read and understand fundamental financial statements, including the Company’s balance sheet, statement of income and comprehensive income, statement of changes in shareholders’ equity and statement of cash flows and at least one member must have the additional financial sophistication as required by and as defined in Nasdaq rules.

 

The Committee shall be subject to the provisions of the Company’s bylaws relating to committees of the Board, including those provisions relating to removing committee members and filling vacancies. The members of the Audit Committee and its Chairman shall be appointed and may be removed by the Board on its own initiative or at the recommendation of the Nominating Committee. The Audit Committee shall have no fewer than three members. If not designated by the Board, the Audit Committee may designate a member as its Chair.

 

The Audit Committee, in its capacity as a committee of the Board, shall be directly responsible for the appointment, compensation, retention, termination and oversight of the work of any independent auditors, and each independent auditor must report directly to the Audit Committee. The Audit Committee, or its designee, will sign the independent auditor engagement letter. The Audit Committee shall be directly responsible for the resolution of disagreements between management and the independent auditor regarding financial reporting.

 

A-1 

The Audit Committee shall have the authority to retain independent legal, accounting or other advisors as it deems necessary to carry out its duties. The Company shall provide for appropriate funding, as determined by the Audit Committee, for payment of compensation to any independent auditor engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services, compensation to any advisors employed by the Audit Committee, and ordinary administrative expenses that the Audit Committee deems to be necessary or appropriate in carrying out its duties.

A-1

 

The Audit Committee may request any officer or employee of the Company or the Company’s outside counsel or independent auditor to attend a meeting of the Audit Committee.

 

The Audit Committee shall pre-approve all auditing services and permitted non-audit services and fees to be paid for such services to be performed for the Company by its independent auditor, subject to the limited de minimis exceptions for non-audit services described in Section 10A of the Securities Exchange Act of 1934, provided that compliance with the limitations and procedural requirements of Section 10A is fulfilled. The Audit Committee may delegate to one or more designated members of the Committee the authority to grant pre-approvals of non-audit services and fees. Any such pre-approval shall be presented to the full Audit Committee at its next scheduled meeting.

 

The Audit Committee shall make regular reports to the Board.

 

The Audit Committee shall have the authority to conduct investigations that are related to its responsibilities under this Charter or otherwise assigned to it by the Board.

 

In addition, the Audit Committee, to the extent that it deems necessary or appropriate shall:

 

Financial Statement and Disclosure Matters

 

1.Prepare the report required by the rules of the SEC to be included in the Company’s annual proxy statement.

 

2.Review the annual audited financial statements with management and the independent auditor, including disclosures made in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and recommend to the Board whether the audited financial statements should be included in the Company’s Form 10-K.

 

3.Review with management and the independent auditor any significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including any significant changes in the Company’s selection or application of accounting policies, practices and estimates, significant unusual transactions, any major issues as to the adequacy of the Company’s internal controls and any special steps adopted in light of material control deficiencies; and review any reports prepared by or for management or the auditor with respect to these matters.

 

4.Review with the independent auditor their views regarding significant accounting or auditing matters when the independent auditor is aware that management consulted with other accountants about such matters and the independent auditor has identified a concern regarding these matters.

 

5.Obtain from the independent auditor information about significant aspects of the annual audit, including:

 

(a)an overview of the overall audit strategy, particularly the timing of the audit, significant risks the auditor identified and significant changes to the planned audit strategy or identified risk;

A-2 

(b)information about the nature and extent of specialized skill or knowledge needed in the audit; the extent of the planned use of internal auditors; company personnel or other third parties; and other independent public accounting firms or other persons not employed by the auditor who are involved in the audit;
(c)the basis for the auditor’s determination that he or she can serve as principal auditor, if significant parts of the audit will be performed by other auditors;
(d)situations in which the auditor identified a concern regarding management’s anticipated application of accounting pronouncements that have been issued but are not yet effective and might have a significant effect on future financial reporting;
(e)difficult or contentious matters for which the auditor consulted outside the engagement team;

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(f)the auditor’s evaluation of management’s use of the going concern basis of accounting in the preparation of the financial statements;
(g)departure from the auditor’s standard report;
(h)other matters arising from the audit that are significant to the oversight of the Company’s financial reporting process, including complaints or concerns regarding accounting or auditing matters that have come to the auditor’s attention during the audit;
(i)any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to required information;
(j)any significant disagreements with management.

 

6.Annually review with the independent auditor the quality of the Company’s financial reporting, internal accounting and financial control, the auditor’s report or opinion thereon and any recommendations the auditor may have for improving or changing the Company’s internal controls, as well as management’s letter in response thereto and any other matters required to be discussed under relevant Statements of Auditing Standards and PCAOB Auditing Standard No. 1301 (as they may be modified or supplemented).

 

7.Review management’s proposed annual report on internal control over financial reporting which is required to be included in the Company’s 10-K pursuant to rules of the SEC.

 

8.Review with management and the independent auditor the Company’s quarterly financial statements prior to the filing of its Form 10-Q, including the results of the independent auditor’s review of the quarterly financial statements.

9.Review and discuss quarterly reports from the independent auditors on:

 

(a)all critical accounting policies and practices to be used;
(b)all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative treatments, and the treatment preferred by the independent auditor;
(c)the matters required to be discussed by Statements on Auditing Standards, as may be amended or supplemented, relating to the audit of the Company’s periodic reports; and
(d)other material written communications between the independent auditor and management.

 

10.Meet periodically with management to review the Company’s major financial risk exposures and the policies and procedures that management utilizes to monitor and control such exposures.

 

11.Discuss, prior to release by the Company, the earnings press releases (paying particular attention to any use of “pro forma,” or “adjusted” or other non-GAAP information) as well as financial information and earnings guidance provided to analysts and rating agencies, if any, as well as any financial information which the Company proposes to provide to financial analysts and rating agencies (being mindful of the need to avoid violations of SEC Regulation FD, which prohibits the selective disclosure of material information).

 

12.Discuss the quarterly and annual financial statements with the appropriate officers and/or employees of the Company and with the independent auditor, including the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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13.Review the schedule of unrecorded adjustments to the Company’s financial statements and the reasons underlying the Company’s assessment of the immateriality of such adjustments.

 

14.Review prior to publication or filing and approve such other Company financial information, including appropriate regulatory filings and releases that include financial information, as the Audit Committee deems desirable.

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15.Review the adequacy of the Company’s system of internal accounting and financial control, including its “disclosure controls and procedures” and “internal control over financial reporting,” as defined in SEC Rules 13a-15(e) and 13a-15(f) under the Securities Exchange Act of 1934, and the Chief Executive Officer’s (“CEO”) and Chief Financial Officer’s (“CFO”) proposed disclosures and certifications with respect to these matters which are required to be included in the Company’s annual and quarterly reports to the SEC on Form 10-K and Form 10-Q.

 

16.Review disclosures made to the Audit Committee by the Company’s CEO and CFO during their certification process for the Form 10-K and Form 10-Q about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Company’s internal controls.

17.Review the effect of regulatory and accounting initiatives on the financial statements of the Company.

 

Oversight of the Company’s Relationship with its Independent Auditors

 

18.Review and evaluate the experience and qualifications of the lead members of each independent auditor’s team.

 

19.Evaluate the performance and independence of each independent auditor, including considering whether the auditor’s quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditor’s independence. The opinions of management and the internal auditor shall be taken into consideration as part of this review.

 

20.Receive and review a report from each independent auditor at least annually regarding the independent auditor’s independence and discuss such reports with the auditor. Ensure that each independent auditor submits a formal written statement, as required by PCAOB Rule 3526, as it may be amended or supplemented, describing all relationships between the independent auditor and any of its affiliates and the Company that might bear on the independent auditor’s independence. The independent auditor must also discuss with the Audit Committee the potential effects of any such relationships on the firm’s independence. Receive and review a formal written statement of the fees billed by the independent auditor for each of the categories of services requiring separate disclosure in the annual proxy statement.

 

21.Obtain and review a report from each independent auditor at least annually regarding the independent auditor’s internal quality control procedures. The report should include any material issues raised by the most recent internal quality control review or peer review of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues. Obtain auditor and review inspection reports issued by the PCAOB under Section 104 of the Sarbanes-Oxley Act.

 

22.Meet with each independent auditor prior to the audit to review the planning and staffing of the audit.

 

23.Advise the Board of its determinations regarding the qualification, independence and performance of each independent auditor.

 

24.Annually require the independent auditor to confirm in writing its understanding of the fact that it is ultimately accountable to the Audit Committee.

 

25.Require the independent auditor to rotate every five years the lead audit partner in charge of the Company’s audit and the concurring audit partner responsible for reviewing the audit.

 

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26.Periodically consider the advisability of rotating the independent audit firm to be selected as the Company’s independent auditors. The Audit Committee should present its conclusions to the full Board.

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Oversight of the Company’s Internal Audit Function

 

27.Review and, at its option, recommend the appointment and replacement of the senior internal auditing executive.

 

28.Review any reports to management prepared by the Internal Audit department and management’s responses.

 

29.Review with each independent auditor, management and the senior internal auditing executive the Internal Audit department responsibilities, budget, structure and staffing and any recommended changes in the planned scope of the internal audit at least annually.

 

Oversight of the Company’s Loan Review Function

 

30.Review any reports to management prepared by the Loan Review department.

 

Compliance Oversight Responsibilities

 

31.Obtain reports from management and the Company’s senior internal auditing executive that the Company’s subsidiary affiliated entities are in conformity with applicable regulatory and legal requirements and the Company’s code of ethics.

 

32.Advise the Board with respect to the Company’s compliance with the Company’s Code of Ethics for Chief Executive Officer and Senior Financial Officers.

 

33.Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

 

34.Discuss with management and each independent auditor any correspondence with regulators or governmental agencies and any published reports that raise material issues regarding the Company’s financial statements or accounting policies.

 

35.Review with appropriate members of management or appropriate legal counsel legal matters that may have a material impact on the financial statements, the Company’s compliance policies and any material reports or inquiries received from regulators or governmental agencies.

 

36.Review for approval or disapproval all related-party transactions required to be disclosed by Item 404 of Regulation S-K for potential conflicts of interests.

 

37.In the event the Audit Committee is made aware of any allegation of fraud relating to the Company and/or any of its officers, directors or employees that the Audit Committee deems could be material to the Company’s business or operations, the Audit Committee shall (i) convene a meeting of the Audit Committee to review such allegation and (ii) if the Audit Committee deems it necessary or advisable, it shall engage independent counsel to assist in an investigation, including, if the Audit Committee and such counsel deem it necessary or advisable, an investigation to determine whether such allegation implicates any violation of Section 10A of the Exchange Act of 1934. If pursuant to such investigation the Audit Committee discovers that a material fraud has occurred, the Audit Committee shall (i) assess the Company’s internal controls and implement such remedial measures as it determines necessary or advisable, (ii) cause the Company to take appropriate action against the perpetrator(s) of such fraud

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and (iii) cause the Company to make appropriate disclosures relating to the matter in the Company’s periodic reports filed with the SEC or otherwise.

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38.The Audit Committee shall also be designated as the committee of the Board of Directors that shall receive, review and take action with respect to any reports by attorneys, pursuant to Section 307 of the Sarbanes-Oxley Act of 2002, of evidence of material violations of securities laws or breaches of fiduciary duty or similar violations by the Company or one of its agents.

 

39.Meet at least four times each year. In addition, meet at least four times each year in separate executive sessions with each of the Company’s CEO, senior internal audit executive and the independent auditor; and each such person shall have free and direct access to the Audit Committee and any of its members.

 

40.Review and approve all related-party transactions (e.g. transactions with any director or executive officer of the Company or significant shareholder, or their immediate family members or affiliates), other than transactions which the Board has delegated to the Company’s Employee Benefits/Compensation Committee or Loan & Investment Committee.

 

41.Annually review and reassess the adequacy of this Charter and any bylaw of the Company which relates to the Audit Committee, and recommend any proposed changes to the Board for approval. The Chair of the Audit Committee shall draft a proposed schedule of the Audit Committee’s activities for the coming year and the times at which such activities shall occur, which shall be submitted to the Audit Committee for its review and approval, with such changes as the Audit Committee shall determine to be appropriate.

 

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IMPORTANT ANNUAL MEETING INFORMATION Electronic Voting Instructions Available 24 hours a day, 7 days a week! InsteadMMMMMMMMMMMM 000004 ENDORSEMENT_LINE______________ SACKPACK_____________ 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext C123456789 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxiesthis card. Votes submitted by the Internet or telephoneelectronically must be received by 12:01 a.m.A.M., Central Time, on April 26, 2018. Vote by Internet Go to www.envisionreports.com/22, 2021. Online GIof ntoo welwewct.reonnviicsivoontrienpgo, rts.com/wabc Or scan thedelete QR code with your smartphone Followand control # o?r scan the˜QR code — login details are located in the steps outlined on the secure website Vote by Telephone Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone Follow the instructions provided by the recorded messageshaded bar below. Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas.Xareas. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/wabc Annual Meeting Proxy Card 1234 5678 9012 345 q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION,VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q A Proposals - The Board of Directors recommends a vote FOR all nominees, FOR Proposal 2 and FOR Proposal 3. 1. Election of Directors: For Against Abstain For Against Abstain For Against Abstain + 1. Election of Directors: 01 - E. Allen 04 - M. Chiesa 07 – R. Nelson 02 - L. Bartolini 05 - M. Hassid 08 – D. Payne 03 - E.J. Bowler 04 - A. Latno, Jr. 05 - P. Lynch 06 - C. MacMillan 07 - R. Nelson 08 - D. Payne 09 - E. Sylvester For Against Abstain 2. Approve a non-binding advisory vote on the compensation of our named executive officers. For Against Abstain 3. Ratification of Independent Auditor. Change of Address - Please print your new address below. Comments - Please print your comments below.independent auditors. For Against Abstain B Non-Voting Items Meeting Attendance Mark the box to the right if you plan to attend the Annual Meeting. C Authorized Signatures - This section must be completed for your vote to be counted. - Datecount. Please date and Sign Belowsign below. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) - Please print date below. Signature 1 - Please keep signature within the box. Signature 2 - Please keep signature within the box.

 

C 1234567890 J N T MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND 9 2 D M 4 8 9 4 2 4 MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND 03DF0D Admission to the Meeting WESTAMERICA BANCORPORATION ANNUAL MEETING OF SHAREHOLDERS 10:00 A.M. PACIFIC TIME, THURSDAY, APRIL 26, 2018,22, 2021, WESTAMERICA BANCORPORATION, 4550 MANGELS BLVD., FAIRFIELD, CALIFORNIA Registered holders can avoid registration lines by marking the Meeting Attendance box to the right of your signature on your Proxy Card and returning it to Computershare Investor Services in the enclosed return envelope, or indicate your intent to attend through a toll free telephone vote or Internet vote. Beneficial Owners holding their shares in a brokerage account or at a bank or other intermediary must proceed to the registration desk and provide the following evidence of ownership: 1) a Legal Proxy, which you can obtain from your bank or broker or other intermediary or your shareholder statement dated on or after February 26, 2018,22, 2021, the Annual Meeting Record Date; and 2) a picture identification. Because of seating limitations, no more than one guest will be allowed per shareholder. We intend to hold the meeting in person. If we are unable to hold the meeting in person, we will announce alternative arrangements for the meeting by a press release and posting details on our website. Please monitor the Shareholder section of our website at www.westamerica.com for updated information. If you are planning to attend the meeting, please check the website one week prior to the meeting date. As always, we encourage you to vote your shares prior to the meeting. Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/wabc q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION,VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Proxy - Westamerica Bancorporation PROXY SOLICITED BY THE BOARD OF DIRECTORS OF WESTAMERICA BANCORPORATION FOR THE ANNUAL MEETING OF SHAREHOLDERS ON APRIL 26, 2018.22, 2021. The undersigned holder hereby authorizes Catherine MacMillan, Ronald A. Latno, Jr., R. Nelson and E.Edward B. Sylvester, each with full power of substitution, to represent and vote, as designated on the reverse side, all full and fractional shares of Common Stock of Westamerica Bancorporation which the undersigned would be entitled to vote at the Annual Meeting of Shareholders of said corporation to be held at Westamerica Bancorporation, 4550 Mangels Blvd., Fairfield, California at 10:00 a.m., Pacific Time, on Thursday, April 26, 2018,22, 2021, upon the matters set forth on the reverse side of this Proxy and described in the accompanying Proxy Statement and upon such other business as may properly come before the meeting or any postponement or adjournment thereof. The Proxy, when properly executed will be voted as directed herein by the undersigned shareholder. If no direction is indicated, this Proxy will be voted FOR ALL NOMINEES, FOR Proposal 2 and FOR Proposal 3, and at the direction of the Proxies on all other matters which may properly come before the meeting. If you are a participant in the Westamerica Bancorporation Tax Deferred Savings/Retirement Plan (ESOP) (the "Plan"“Plan”), you may direct the Trustee of the Plan to vote all full and fractional shares of Westamerica Bancorporation common stock standing to your credit of your individual account(s) as of February 26, 2018.22, 2021. The Board of Directors of Westamerica Bancorporation recommends a vote FOR ALL NOMINEES, FOR Proposal 2 and FOR Proposal 3. Please instruct the Trustee how to vote on these proposals by indicating your selection on the reverse of this Proxy Card. If the Trustee does not receive written instructions from you before 11:59 p.m., Central Time, on April 23, 2018,19, 2021, it will vote all the shares for which you are entitled to provide instruction in the same proportion as shares for which instructions are received. C Non-Voting Items PLEASE MARK, SIGN, DATE, AND MAIL THIS PROXY PROMPTLY, USING THE ENCLOSED ENVELOPE. (Continued, and to be signed on the other side) Change of Address — Please print new address below. Comments — Please print your comments below. Meeting Attendance Mark box to the right if you plan to attend the Annual Meeting. +