-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, olCrW1GzO2dRMUkXPI2qt2L2n5AI5DznJTWcKnZIytTPjaOx4jVMeTAWStdN/Hhj OHHH5XRnmnJ1jHs2oR4Log== 0000950005-95-000014.txt : 19950608 0000950005-95-000014.hdr.sgml : 19950608 ACCESSION NUMBER: 0000950005-95-000014 CONFORMED SUBMISSION TYPE: PRE 14A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950302 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTAMERICA BANCORPORATION CENTRAL INDEX KEY: 0000311094 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 942156203 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: PRE 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09383 FILM NUMBER: 95518121 BUSINESS ADDRESS: STREET 1: 1108 FIFTH AVE CITY: SAN RAFAEL STATE: CA ZIP: 94901 BUSINESS PHONE: 4152578000 MAIL ADDRESS: STREET 1: 1108 FIFTH AVENUE CITY: SAN RAFAEL STATE: CA ZIP: 94901 FORMER COMPANY: FORMER CONFORMED NAME: INDEPENDENT BANKSHARES CORP DATE OF NAME CHANGE: 19830801 PRE 14A 1 NOTICE OF MEETING AND PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [X] Preliminary Proxy Statement [ ] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 WestAmerica Bancorporation (Name of Registrant as Specified In Its Charter) WestAmerica Bancorporation (Name of Person(s) Filing Proxy Statement) Payment of Filing Fee (Check the appropriate box): [X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2). [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. [ ] 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 number, or the Form or Schedule and the date of its filing. WESTAMERICA BANCORPORATION LOGO 1108 FIFTH AVENUE SAN RAFAEL, CALIFORNIA 94901 March 21, 1995 To Our Shareholders: The Annual Meeting of Shareholders of Westamerica Bancorporation will be held at 7:30 p.m. on Tuesday, April 25, 1995, at the Showcase Theatre, Marin Center, San Rafael, 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 elect directors, to approve an amendment to the Restated Articles of Incorporation which would increase the number of shares of authorized Common Stock, to approve a new stock option plan, to approve the selection of independent auditors and to consider a shareholder proposal. Please sign and return the enclosed proxy as promptly as possible so that your shares may be represented at the Annual Meeting. If you attend, you may vote in person even though you previously returned your proxy. We look forward to seeing you at the Annual Meeting on Tuesday, April 25, 1995. Sincerely, ------------------------ DAVID L. PAYNE Chairman of the Board WESTAMERICA BANCORPORATION 1108 FIFTH AVENUE SAN RAFAEL, CALIFORNIA 94901 ---------- NOTICE OF ANNUAL MEETING OF SHAREHOLDERS--APRIL 25, 1995 To the Shareholders of WESTAMERICA BANCORPORATION: The Annual Meeting of Shareholders will be held at the Showcase Theatre, Marin Center, San Rafael, California, on Tuesday, April 25, 1995, at 7:30 p.m. for the purpose of: 1. Electing 12 directors; 2. Approving an amendment to the Restated Articles of Incorporation which would increase the number of shares of authorized Common Stock; 3. Approving a new stock option plan; 4. Approving the selection of independent auditors for 1995; 5. Consideration of a shareholder proposal to change the method of compensating the members who serve on the Board of Directors; 6. Transacting such other business as may properly come before the Annual Meeting. Shareholders of record at the close of business on March 1, 1995, are entitled to notice of and to vote at the Annual Meeting or any adjournment thereof. You are cordially invited to attend the Annual Meeting. If you do not expect to be present, please complete, sign and date the accompanying proxy and mail it at once in the enclosed envelope. No postage is necessary if mailed within the United States. WESTAMERICA BANCORPORATION'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994 IS ENCLOSED. THE ANNUAL REPORT CONTAINS FINANCIAL AND OTHER INFORMATION ABOUT THE ACTIVITIES OF WESTAMERICA BANCORPORATION, BUT IT IS NOT TO BE DEEMED A PART OF THE PROXY SOLICITING MATERIALS. BY ORDER OF THE BOARD OF DIRECTORS ----------------------------- Mary Anne Bell Assistant Corporate Secretary Dated: March 21, 1995 - -------------------------------------------------------------------------------- | YOUR VOTE IS IMPORTANT | | | YOU ARE URGED TO COMPLETE, SIGN, DATE AND PROMPTLY RETURN YOUR PROXY SO | | THAT YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES. | | | - -------------------------------------------------------------------------------- TABLE OF CONTENTS PAGE -------- GENERAL .................................................... 1 ELECTION OF DIRECTORS ...................................... 2 CERTAIN INFORMATION ABOUT THE BOARD OF DIRECTORS AND CERTAIN COMMITTEES OF THE BOARD ........................... 5 EXECUTIVE OFFICERS ......................................... 6 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ................................................ 8 EXECUTIVE COMPENSATION ..................................... 11 RETIREMENT BENEFITS AND OTHER ARRANGEMENTS ................. 12 BOARD COMPENSATION COMMITTEE REPORT ........................ 14 STOCK PERFORMANCE CHART .................................... 16 APPROVAL OF AMENDMENT OF THE RESTATED ARTICLES OF INCORPORATION ............................................. 16 APPROVAL OF THE CORPORATION'S STOCK OPTION PLAN OF 1995 ... 17 APPROVAL OF AUDITORS ....................................... 19 SHAREHOLDER PROPOSAL ....................................... 20 OTHER MATTERS .............................................. 21 EXHIBIT A WESTAMERICA BANCORPORATION 1108 FIFTH AVENUE SAN RAFAEL, CALIFORNIA 94901 --------------- PROXY STATEMENT March 21, 1995 --------------- GENERAL This proxy statement is furnished in connection with the solicitation of proxies by the Westamerica Bancorporation (the "Corporation") Board of Directors (the "Board") for use at the Annual Meeting of Shareholders to be held at 7:30 p.m., Tuesday, April 25, 1995, at the Showcase Theatre, Marin Center, San Rafael, California, for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders (the "Meeting"). This proxy statement and proxy were first mailed to shareholders on or about March 21, 1995. Voting Rights and Vote Required. Shareholders of record at the close of business on March 1, 1995, the record date, are entitled to vote at the Meeting. On that date, 9,237,141 shares of stock were outstanding. The determination of shareholders entitled to vote at the Meeting and the number of votes to which they are entitled was made on the basis of the Corporation's records as of the record date. Each share is entitled to one vote, except that with respect to the election of directors, a shareholder may cumulate votes as to candidates nominated prior to voting if any shareholder gives notice of intent to cumulate votes at the Meeting prior to the voting. 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. In the election of directors, the 12 nominees receiving the highest number of votes will be elected. Approval of an amendment to the Restated Articles of Incorporation will require the affirmative vote of a majority of the outstanding Common Stock of the Corporation. Approval of a new stock option plan and approval of the selection of the independent auditors will require the affirmative vote of a majority of the shares represented and voting at the Meeting. Approval of the shareholder's proposal which proposes changing the method of compensating the members of the Board will also require the affirmative vote of a majority of the shares represented and voting at the Meeting. Abstentions will not count as votes in favor of the election of directors or any of the other proposals. Quorum. A majority of the shares entitled to vote, represented either in person or by a properly executed proxy, will constitute a quorum at the Meeting. Shares which abstain from voting and "broker non-votes" (shares as to which brokerage firms have not received voting instructions from their clients and therefore do not have the authority to vote the shares at the Meeting) will be counted for purposes of determining a quorum only. Voting of Proxies. The shares represented by all properly executed proxies received in time for the Meeting will be voted in accordance with the shareholders' choices specified therein; provided, however, that where no choices have been specified, the shares will be voted to approve the amendment to the Restated Articles of Incorporation, to approve a new stock option plan, to approve the selection of KPMG Peat Marwick LLP as independent auditors and to disapprove the shareholder's proposal to change the method of compensating the members of the Board. When exercising the powers granted to proxy holders under the caption "ELECTION OF DIRECTORS," the shares will be voted for the election of directors in the manner described therein. The Board knows of no matters to be brought before the Meeting other than the election of directors, the approval of an amendment to the Restated Articles of Incorporation, the approval of a new stock option plan, the selection of independent auditors for 1995 and the consideration of a shareholder's 1 proposal. If, however, any other matters of which the Board is not now aware are properly presented for action, it is the intention of the proxy holders named in the enclosed form of proxy to vote such proxy on such matters in accordance with their best business judgment. Revocability of Proxy. The delivery of the enclosed proxy does not preclude the shareholder delivering the proxy from voting in person or changing the proxy should the shareholder so desire. The proxy may be revoked by a written directive to the Corporation, by another proxy subsequently executed and presented at the Meeting at any time prior to the actual voting or by attendance and voting at the Meeting. Shareholder Proposals. Proposals of shareholders to be considered for inclusion in the Corporation's annual proxy statement for next year's annual meeting must be received at the Corporation's executive offices at 1108 Fifth Avenue, San Rafael, California 94901, no later than November 21, 1995. ELECTION OF DIRECTORS The number of directors of the Board to be elected at the Meeting to hold office for the ensuing year and until their successors are elected and qualified is 12. It is the intention of the proxy holders named in the enclosed proxy to vote such proxies (except those containing contrary instructions) for the 12 nominees named below. The Board does not anticipate that any of the nominees will be unable to serve as a director, but if that should occur before the Meeting, the proxy holders reserve the right to substitute as nominee and vote for another person of their choice in the place and stead of any nominee unable so to serve. The proxy holders reserve the right to cumulate votes for the 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 the proxy holders may determine in their discretion. Nominees. The nominees for election to the office of director of the Board are named and certain information with respect to them is given below. The information has been furnished to the Corporation by the respective nominees. All of the nominees have engaged in their indicated principal occupation for more than five years, unless otherwise indicated. DIRECTOR NAME OF NOMINEE PRINCIPAL OCCUPATION SINCE - ------------------- ------------------------------------------------- -------- Etta Allen ......... Mrs. Allen, born in 1929, is president and owner 1988 of Allen Heating and Sheet Metal of Greenbrae, a company which she and her late husband founded in 1957. Mrs. Allen is a licensed contractor in heating, ventilating, air conditioning and sheet metal and is active in various building industry organizations, as well as many civic and community activities. She also owns Sunny Slope Ranch, a vineyard in Sonoma County. Mrs. Allen is a director of the State Assistance Fund for Enterprise Business and Industrial Development Corporation. She is a director of Westamerica Bank, a wholly owned banking subsidiary of the Corporation ("WAB"), and a member of the Audit Committee and the Employee Benefits and Compensation Committee. Louis E. Bartolini ..Mr. Bartolini, born in 1932, retired in 1988 as a 1991 vice president and financial consultant after being with Merrill Lynch, Pierce, Fenner & Smith, Inc. since 1961. A resident of Marin County since 1959, Mr. Bartolini has been active in various community, charitable and educational organizations and presently serves on the boards of several of these organizations. He is a director of WAB and a member of the Audit Committee and the Nominating Committee. 2 DIRECTOR NAME OF NOMINEE PRINCIPAL OCCUPATION SINCE - ------------------- ------------------------------------------------- -------- Charles I. Daniels, Jr. .... Mr. Daniels, born in 1926, is president and owner 1989 of House of Daniels, Inc., of Novato, a beverage distribution firm begun in 1933, which operates through its three sales companies, Golden Gate Distributing Company, Redwood Vintners and Golden Gate Liquors, covering the northern California market. Mr. Daniels is active in community, professional and trade-related associations and is a California director of the Wine & Spirits Wholesalers of America. He is a director of WAB and a member of the Audit Committee and the Nominating Committee. Don Emerson .........Mr. Emerson, born in 1928, was president of Calso 1979 Company (the holding company that owns the formula and name "Calso Water," a carbonated mineral water). He presently devotes his time to personal investments. Mr. Emerson is a director of Bank of Lake County, a wholly- owned banking subsidiary of the Corporation ("BLC"), and WAB. He is a member of the Executive Committee, the Employee Benefits and Compensation Committee and the Nominating Committee. Arthur C. Latno, Jr. Mr. Latno, born in 1929, was an Executive Vice 1985 President for Pacific Telesis Group (formerly Pacific Telephone Co.) in San Francisco from 1978, having worked for the telephone company since 1954. Mr. Latno retired from that company in November of 1992. He is director of WAB and is Chairman of the Nominating Committee and a member of the Executive Committee, the Employee Benefits and Compensation Committee and the Loan and Investment Committee. Patrick D. Lynch ... Mr. Lynch, born in 1933, is a consultant and 1986 director for several high technology firms. From 1987 to 1989 he was president of Microphoretics, which manufactured instruments for the biochemistry market. In 1989, Microphoretics declared bankruptcy under Chapter 11 of the Bankruptcy Code and was subsequently liquidated. From 1985 to 1987 he was president and a partner of Byars & Lynch International, Inc., an engineering consulting firm in Santa Clara. He is a director of WAB and is Chairman of the Employee Benefits and Compensation Committee and a member of the Executive Committee and the Loan and Investment Committee. Catherine Cope MacMillan ......... Ms. MacMillan, born in 1947, is president and 1985 owner of The Firehouse Restaurant in Sacramento. In addition to the restaurant business, Ms. MacMillan participates in numerous civic, community and trade activities in the Sacramento community. She is a director of WAB and is a member of the Employee Benefits and Compensation Committee, the Nominating Committee and the Loan and Investment Committee. 3 DIRECTOR NAME OF NOMINEE PRINCIPAL OCCUPATION SINCE - ------------------- ------------------------------------------------- -------- Dwight H. Murray, Jr., M.D. .......... Dr. Murray, born in 1927, was appointed to the 1993 Board in August of 1993. He is a founding director of Napa Valley Bank, a wholly-owned banking subsidiary of the Corporation ("NVB") and is a member of its Directors' Audit Committee. He was a founding director of Napa Valley Bancorp and served on that board until its merger into the Corporation in April of 1993. Dr. Murray is a self- employed vascular general surgeon and is an Associate Clinical Professor of Surgery at University of California at San Francisco. He is a director on the Corporate Board of Blue Shield, and formerly served a tenure as Chief of Staff of Queen of the Valley Hospital in Napa. Ronald A. Nelson ... Mr. Nelson, born in 1942, is vice president of 1988 Charles M. Schulz Creative Associates, a general partner in various Schulz partnerships and trustee for various Schulz trusts and the Schulz foundation, with responsibility for all Schulz business and financial matters including licensed use of the Peanuts characters. He is also vice president of Redwood Empire Ice Arena, Woodstock Aviation and C.B. Properties, Inc. He is a director of WAB and is Chairman of the Audit Committee and a member of the Employee Benefits and Compensation Committee. Carl R. Otto ....... Mr. Otto, born in 1946, is the President and 1992 Chief Executive Officer of John F. Otto, Inc., a general contracting firm in Sacramento, as well as a director of The Freeport Company, the real estate holding company that owns John F. Otto, Inc. Mr. Otto is also a director of Corey Delta Corp., a Benicia construction firm. He is a director of WAB and is a member of the Audit Committee. David L. Payne ..... Mr. Payne, born in 1955, has been Chairman of the 1984 Board of both the Corporation and WAB since January of 1988 and was appointed President and Chief Executive Officer in November of 1989. Mr. Payne holds the following additional positions: President of Westamerica Bank Properties, a wholly-owned real estate holding company subsidiary of WAB ("WABP"); Chairman, President and Chief Executive Officer of Community Banker Services Corporation, a wholly-owned subsidiary of the Corporation ("CBSC"); Chairman and Chief Executive Officer of Westcore, a wholly-owned employee benefits subsidiary of the Corporation ("Westcore"); Chairman of Weststar Mortgage Corporation, a wholly-owned mortgage servicing subsidiary of CBSC ("WMC"); and director of NVB. He is President and Chief Executive Officer of Gibson Printing and Publishing Company and Gibson Radio and Publishing Company, which are newspaper, commercial printing and real estate investment companies headquartered in Vallejo. Mr. Payne served on the board of directors of Vaca Valley Bank from 1982 until its consolidation with WAB in 1983. He is Chairman of the Executive Committee and a member of the Nominating Committee. 4 DIRECTOR NAME OF NOMINEE PRINCIPAL OCCUPATION SINCE - ------------------- ------------------------------------------------- -------- Edward B. Sylvester Mr. Sylvester, born in 1936, is the owner of 1979 Sylvester Engineering, Inc., a civil engineering and planning firm. He takes an active lead in various civic activities in Nevada County, especially in the business community and in the county's transportation improvements. Mr. Sylvester served as a director of Gold Country Bank from its incorporation in 1974 until its consolidation with WAB in 1983. He is a director of WAB and is a member of the Executive Committee, the Nominating Committee and is Chairman of the Loan and Investment Committee. CERTAIN INFORMATION ABOUT THE BOARD OF DIRECTORS AND CERTAIN COMMITTEES OF THE BOARD The Board held a total of 13 meetings during 1994. Every director attended at least 75% of the aggregate of: (i) the 13 Board meetings; and (ii) all of the Committee meetings of such Committee on which such director served. Committees of the Board. The Board has an Executive Committee, the members of which are D. L. Payne, Chairman, D. Emerson, A. C. Latno, Jr., P. D. Lynch and E. B. Sylvester. The Board delegates to the Executive Committee, subject to control of the Board and subject to the limitations of California General Corporation Law, any powers and authority of the Board in the management of the business and affairs of the Corporation. The Executive Committee held 12 meetings in 1994. The Board has an Audit Committee, the members of which are R. A. Nelson, Chairman, E. Allen, L. E. Bartolini, C. I. Daniels, Jr. and C. R. Otto. The Audit Committee reviews with the Corporation's independent auditors and management the Corporation's accounting principles, policies and practices and its reporting policies and practices. The Audit Committee reviews with the independent auditors the plan and results of the auditing engagement and reviews the scope and results of the procedures of the Corporation's internal Audit Department. The Audit Committee conducts investigations of the adequacy of the Corporation's internal accounting procedures and reviews the results of such investigations with the Corporation's internal audit staff and with the Board. The Audit Committee reviews the reports of examinations conducted by bank regulatory authorities. The Audit Committee held 11 meetings in 1994. The Board has an Employee Benefits and Compensation Committee, the members of which are P. D. Lynch, Chairman, E. Allen, D. Emerson, A. C. Latno, Jr., C. C. MacMillan and R. A. Nelson. The Employee Benefits and Compensation Committee administers and carries out the terms of the Corporation's employee stock option plans as well as the tax deferred savings and retirement plans. The Employee Benefits and Compensation Committee administers the Corporation's compensation programs and reviews and recommends to the Board the compensation level for the executive officers of the Corporation and its subsidiaries. The Employee Benefits and Compensation Committee also reviews the performance of and recommends promotions for the executive officers of the Corporation. The Employee Benefits and Compensation Committee held 12 meetings in 1994. The Board has a Nominating Committee for the election of directors, the members of which are A. C. Latno, Jr., Chairman, L. E. Bartolini, C. I. Daniels, Jr., D. Emerson, C. C. MacMillan, D. L. Payne and E. B. Sylvester. The Nominating Committee is responsible for reviewing the fees paid to directors for attendance at Board and Committee meetings and making recommendations with respect thereto. The Nominating Committee will consider shareholder nominations for election to the Board submitted in accordance with section 2.14 of the Bylaws of the Corporation ("Section 2.14"). Section 2.14 requires that nominations be submitted in writing to the Secretary (or Assistant Secretary) of the Corporation within not less than 14 days nor more than 50 days prior to the annual meeting at which directors will be elected and that nominations contain certain specified information regarding the nominee and the nominating shareholder. The Nominating Committee held 2 meetings in 1994. 5 The Board has a Loan and Investment Committee, the members of which are E. B. Sylvester, Chairman, A. C. Latno, Jr., P. D. Lynch and C. C. MacMillan. The Loan and Investment Committee is responsible for reviewing major loans and investment policies and for monitoring the activities related to the Community Reinvestment Act. The Loan and Investment Committee met 12 times in 1994. Directors' Fees. During 1994, directors of the Corporation and WAB received an annual retainer of $14,000. Each director received $1,000 for each meeting of the Board that he or she attended, except that if the director was a member of the Board of both the Corporation and a subsidiary bank and both Boards met on the same day, the director only received a single $1,000 fee for attending both meetings. During 1994, nonemployee directors received $500 for each Committee meeting of the Board attended. The Chairman of each Committee received an additional $250, for a total of $750, for each Committee meeting attended. The Chairman of the Board, D. L. Payne, is compensated as an employee and did not receive an annual retainer or director's fees. Indebtedness of Directors and Management. Certain of the directors, executive officers and their associates have had banking transactions with subsidiaries of the Corporation in the ordinary course of business. 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, did not involve more than a normal risk of collectibility and did not present other unfavorable features. EXECUTIVE OFFICERS The executive officers of the Corporation and WAB serve at the pleasure of the Board 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 reappointed to serve in such capacities at the first meeting of the Board following the Meeting. The executive officers include David L. Payne, President and Chief Executive Officer, about whom information is provided above, and the following persons: HELD NAME OF EXECUTIVE POSITION SINCE - ------------------ ------------------------------------------------------ ----- James M. Barnes .. Mr. Barnes, born in 1953, is Executive Vice President 1985 and Chief Financial Officer for the Corporation and WAB and is also Manager of the Finance and Administration Division of WAB. He is a director, Executive Vice President and Chief Financial Officer for WABP, a director and Chief Financial Officer of CBSC and a director, eXecutive Vice President and Chief Financial Officer of WMC. He is also a director and Chief Financial Officer of Westcore. Following four years with the First National Bank of Chicago, Mr. Barnes joined the Bank of California, where he held various financial management positions during his six-year tenure, holding the office of Treasurer prior to joining the Corporation in 1985. E. Joseph Bowler... Mr. Bowler, born in 1936, is Senior Vice President 1980 and Treasurer for both the Corporation and WAB and is head of WAB's Treasury Division. He is a director and President of WMC, Treasurer of CBSC and Senior Vice President and Treasurer for both NVB and BLC. Mr. Bowler joined the Corporation in 1972 as Investment Officer and received various officer promotions, being promoted to Treasurer in 1980 and to Senior Vice President in 1983. Mr. Bowler began his banking career in San Francisco in 1963. 6 HELD NAME OF EXECUTIVE POSITION SINCE - ------------------ ----------------------------------------------------- ----- Robert W. Entwisle Mr. Entwisle, born in 1947, is Senior Vice President 1986 in charge of the Banking Division of WAB which entails the overall supervision of WAB's branch system. He is also a director of WMC, a director and Senior Vice President of CBSC and a director and Senior Vice President of Westcore. Mr Entwisle joined WAB in 1980 as Vice President in the commercial lending area and has held the positions of Manager of Corporate Banking as well as Regional Vice President of the Solano and northern Marin County branches of WAB. He was promoted to Senior Vice President of the Corporation in 1985. Evan N. Fricker .. Mr. Fricker, born in 1938, is Vice President and 1983 General Auditor for the Corporation and WAB and is responsible for all audit functions of the Corporation and its subsidiaries. Mr. Fricker has been a Chartered Bank Auditor since 1984 and a Certified Public Accountant since 1969. Charles L. Fritz... Mr. Fritz, born in 1936, is Executive Vice President 1988 and Chief Credit Officer of the Corporation, WAB, NVB and BLC. He is responsible for WAB and all other subsidiary banks' lending functions to ensure that the loan portfolios meet established objectives in terms of credit quality, risk diversification, profitability and funds allocation. Since 1975 and before joining WAB in 1988, Mr. Fritz held various management positions in the lending area at Barclays Bank of California. Dennis R. Hansen... Mr. Hansen, born in 1950, is Senior Vice 1978 President and Controller for the Corporation and is Senior Vice President, Controller and Cashier for WAB. In addition, Mr. Hansen is a director and Senior Vice President of WABP, Senior Vice President and Chief Financial Officer of NVB and BLC and Controller of CBSC and Westcore. His responsibilities include financial planning, accounting and reporting, risk management and other accounting- related matters. Mr. Hansen joined the Corporation in 1978 as Controller, was promoted to Vice President in 1979 and Senior Vice President in 1983. Mr. Hansen has been a member of the American Institute and the California Society of Certified Public Accountants since 1974. 7 HELD NAME OF EXECUTIVE POSITION SINCE - ------------------ ----------------------------------------------------- ----- Thomas S. Lenz ... Mr. Lenz, born in 1937, is Senior Vice President and 1989 Chief Credit Administrator of WAB. He is also Senior Vice President of CBSC. He manages WAB's Credit Administration Division, supervises approval of credits, including their administration and monitoring, in accordance with WAB's established policies and procedures relating to risk, profitability, funds allocation and business development objectives. He shares responsibility for the quality and profitability of WAB's loan portfolio with WAB's Chief Credit Officer. Prior to joining WAB in 1989, Mr. Lenz had been employed since 1976 by Barclays Bank of California in a variety of positions, his last being Senior Vice President and Manager of Branch Loan Administration. Prior to that, he was Regional Manager of that bank's 35-unit branch system in northern California. Hans T. Y. Tjian... Mr. Tjian, born in 1939, joined WAB in May of 1989, 1989 as Senior Vice President and Manager of the Operations and Systems Administration Division. He is also a director and Senior Vice President of CBSC. His responsibilities include data processing, item processing, loan operations and bank administrative services. Prior to joining WAB, Mr. Tjian was a senior vice president at Wells Fargo Bank, responsible for product management, finance, risk management and planning for the Wholesale Services Group. Mr. Tjian has been involved in the banking business since 1969 and his experience includes operations, computer systems management, strategic planning and credit policy. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Security Ownership of Certain Beneficial Owners. The following table shows, to the best knowledge of the Corporation, the beneficial owners of more than 5% of the Corporation's outstanding shares as of February 1, 1995. For the purpose of this disclosure and the disclosure of ownership of shares by management below, shares are considered to be "beneficially" owned if the person 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 (as so defined) within 60 days of February 1, 1995.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP ------------------------------------------------------ SOLE SHARED SOLE SHARED PERCENT VOTING VOTING INVESTMENT INVESTMENT OF POWER POWER POWER POWER CLASS --------- ------ ------------ ------------ --------- Alpha Capital Company, Inc. ("Alpha") 1425 Leimert Boulevard Suite 400 Oakland, CA 94602(1)............................ -- -- 536,403 -- 7.65% J. P. Morgan & Co. Incorporated ("J.P. Morgan") 60 Wall Street New York, NY 10260(2)........................... 317,100 -- 462,600 -- 5.00 - ---------- (1) Based upon information provided in Alpha's 5% Ownership Questionnaire. (2) Based upon information provided in J.P. Morgan's Schedule 13G for the period ended December 31, 1994.
8 Security Ownership of Directors and Management. The following table shows the number of shares and the percentage of the shares beneficially owned (as defined above) by each of the current directors, by each of the nominees for election to the office of director, by the Chief Executive Officer and the four other most highly compensated executive officers and by all directors and executive officers of the Corporation as a group as of February 1, 1995.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP ------------------------------------------------------------------ SOLE SHARED RIGHT TO VOTING AND VOTING AND ACQUIRE WITHIN PERCENT OF INVESTMENT INVESTMENT 60 DAYS OF SHARES OF NAMES POWER POWER FEBRUARY 1,1995(1) TOTAL(2) CLASS(3 ----- ------------ ------------ ------------------ --------- ----------- Etta Allen(4) ................. 3,551 3,551 * Louis E. Bartolini(5) ......... 600 600 * Charles I. Daniels, Jr. ...... 676 676 * Don Emerson ................... 21,475 21,475 * Arthur C. Latno, Jr.(6) ...... 1,038 1,038 * Patrick D. Lynch .............. 500 500 * Catherine C. MacMillan ........ 500 500 * Dwight H. Murray, Jr.(7) ..... 59,881 59,881 * Ronald A. Nelson .............. 12,000 12,000 * Carl R. Otto .................. 1,500 1,500 * David L. Payne(8) ............. 190,886 3,069 45,633 239,588 2.58% Edward B. Sylvester(9) ........ 26,775 26,775 * James M. Barnes ............... 7,100 3,118 51,210 61,428 * Robert W. Entwisle(10) ........ 4,989 1,956 26,150 33,095 * Hans T. Y. Tjian(11) .......... 15,207 3,037 20,133 38,377 * Charles L. Fritz(12) .......... 14,800 2,952 12,333 30,085 * All 20 Directors and Executive Officers as a group .......... 377,455 30,759 208,009 616,213 6.52 * Indicates that the percentage of the outstanding shares beneficially owned is less than one percent (1%). (1) Includes restricted performance shares vesting on March 31, 1995. (2) Includes directors' qualifying shares. (3) 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. (4) Includes 3,100 shares held in a trust as to which Mrs. Allen is trustee. (5) Includes 300 shares held in a profit sharing account for the benefit of Mr. Bartolini. (6) Includes 400 shares owned by Mr. Latno's wife as to which Mr. Latno disclaims beneficial ownership. (7) Includes 1,669 shares owned by Dr. Murray's wife, 397 shares owned by Dr. Murray's wife as custodian for their grandchildren and 9,294 shares owned by Dr. Murray's father-in-law who resides in the family home, as to all of which Dr. Murray disclaims beneficial ownership. (8) Includes 176,279 shares owned by Gibson Radio and Publishing Company, of which Mr. Payne is President and Chief Executive Officer, as to which Mr. Payne disclaims beneficial ownership. (9) Includes 56 shares owned jointly by Mr. Sylvester's wife, her mother and sister, as to which Mr. Sylvester disclaims beneficial ownership. (10) Held in a trust as to which Mr. Entwisle is co-trustee with sole voting and investment power. (11) Includes 240 shares owned by Mr. Tjian's wife as to which Mr. Tjian disclaims beneficial ownership and 12,567 shares held in a trust as to which Mr. Tjian is co-trustee with sole voting and investment power. (12) Includes 1,300 shares owned by Mr. Fritz's wife as to which Mr. Fritz disclaims beneficial ownership.
9 Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") requires the Corporation's directors and executive officers and persons who own more than 10% of a registered class of the Corporation's equity securities to file with the Securities and Exchange Commission (the "SEC") and the National Association of Securities Dealers initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Corporation. Officers, directors and greater than 10% shareholders are required by the SEC to furnish the Corporation with copies of all Section 16(a) forms they file. To the Corporation's knowledge, based on a review of the copies of such reports furnished to the Corporation and written representations that no other reports were required, during the fiscal year ended December 31, 1994, with the exception of Hans T. Y. Tjian, all Section 16(a) filing requirements applicable to its executive officers, directors and 10% shareholders were complied with. On November 2, 1994, the wife of Mr. Tjian, Senior Vice President and Manager of the Operations and Systems Administration Division, purchased 240 shares of the Corporations's Common Stock. This purchase was not reported on a Form 4 for November 1994, but was reported on Mr. Tjian's Form 5 filed for the period ended December 31, 1994. 10 EXECUTIVE COMPENSATION The following Summary Compensation Table sets forth the compensation of the Corporation's Chief Executive Officer and the four other most highly compensated executive officers for services in all capacities to the Corporation, WAB and other subsidiaries during 1994, 1993 and 1992: SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION -------------------------------------- ----------------------- NAME AND RESTRICTED ALL OTHER PRINCIPAL STOCK COMPENSA- POSITION YEAR SALARY BONUS(1) OTHER(2) AWARDS(3) OPTIONS(3) TION(4) -------- ------ ---------- ---------- --------- ------------ ---------- --------- David L. Payne, 1994 $272,016 $200,000 $ 2,379 $174,038 27,050 $8,367 CEO 1993 260,016 190,000 12,836 187,425 13,000 7,088 1992 260,015 240,200 14,214 162,750 11,150 5,310 James M. Barnes, 1994 $149,040 $102,400 $12,777 $ 60,775 6,450 $3,750 EVP & CFO 1993 149,040 100,600 12,508 72,275 4,650 4,497 1992 149,000 72,400 12,667 58,125 4,000 4,364 Robert W. Entwisle, 1994 $134,280 $ 62,600 $15,937 $ 55,250 5,850 $6,369 SVP 1993 134,280 68,500 15,839 64,925 4,200 6,216 1992 134,280 60,400 16,856 52,312 3,600 2,982 Hans T. Y. Tjian, 1994 $130,008 $ 66,600 $16,230 $ 44,200 5,250 $3,750 SVP 1993 130,008 65,700 14,714 58,800 3,800 4,497 1992 130,008 58,200 15,173 47,469 3,250 4,364 Charles L. Fritz, 1994 $120,960 $ 57,800 $15,004 $ 49,725 5,250 $3,750 EVP & CCO 1993 120,942 56,500 13,728 58,800 3,800 8,069 1992 120,744 53,700 14,523 47,469 3,250 4,364 - ---------- (1) Includes bonuses in the year in which they were earned. (2) Includes monthly auto allowance for each individual, the amount of any taxable perquisites and split dollar life insurance for Mr. Payne in 1994, 1993 and 1992. (3) The Corporation grants restricted performance shares and nonqualified stock options in the first quarter of each year based on corporate performance in the prior calendar year. These grants are reported in the year in which they were granted. At December 31, 1994 these individuals held the following unvested restricted performance shares with the following fair market values, based on a price of $29.50 per share: Payne (25,400 shares valued at $749,300); Barnes (9,550 shares valued at $281,725); Entwisle (8,600 shares valued at $253,700); Tjian (7,800 shares valued at $230,100); and Fritz (7,800 shares valued at $230,100). The following table sets forth the restricted performance share grants which were made on the following dates to the named individuals: JANUARY 20, 1992 JANUARY 27, 1993 JANUARY 26, 1994 MARKET PRICE: MARKET PRICE: MARKET PRICE: $19.375/SHARE $24.50/SHARE $28.06/SHARE ---------------- ---------------- ---------------- Payne 8,400 7,650 9,350 Barnes 3,000 2,950 3,600 Entwisle 2,700 2,650 3,250 Tjian 2,450 2,400 2,950 Fritz 2,450 2,400 3,250 (4) Includes 1994 matching contributions made by the Corporation under the Westamerica Bancorporation Tax-Deferred Savings/Retirement Plan (ESOP) for the accounts of Messrs. Payne, Barnes, Entwisle, Tjian and Fritz of $3,750 each.
11 The following table describes stock options and stock appreciation rights ("SARs") that were granted pursuant to the Westamerica Bancorporation 1985 Stock Option Plan (the "1985 Stock Option Plan") to the Corporation's Chief Executive Officer and the four other most highly compensated executive officers in the fiscal year ended December 31, 1994. All of these grants were made on January 26, 1994, based on achievement of 1993 corporate performance objectives. OPTION/SAR GRANTS IN LAST FISCAL YEAR PERCENT OF TOTAL GRANT NUMBER OPTIONS GRANTED DATE OF OPTIONS TO ALL EMPLOYEES EXERCISE EXPIRATION PRESENT NAME GRANTED(1) IN FISCAL YEAR PRICE DATE VALUE(2) ---------- ---------------- -------- ---------- -------- David L. Payne .... 27,050 22% $28.06 1-26-04 $353,003 James M. Barnes ... 6,450 5 28.06 1-26-04 84,173 Robert W. Entwisle.. 5,850 5 28.06 1-26-04 76,343 Hans T. Y. Tjian ... 5,250 4 28.06 1-26-04 68,513 Charles L. Fritz.... 5,250 4 28.06 1-26-04 68,513 - ---------- (1) All options are nonqualified stock options which vest over a three-year period: 1/3 one year after grant date, 2/3 two years after grant date, and fully three years from grant date. All options have an exercise price equal to the market value on the date of grant. The terms of all of the Corporation's stock option plans provide that options may become exercisable in full in the event of a change of control as defined in each stock option plan. (2) A Black-Scholes option pricing model using standard assumptions, including 7.4% annual dividend growth, a risk-free rate equal to the ten-year U.S. Treasury yield of 5.71%, volatility of 26% and a ten-year maturity was used to derive the per share option value of $13.05. The following table sets forth the stock options or SARs exercised in 1994 and the December 31, 1994 unexercised value of both vested and unvested stock options and SARs for the Corporation's Chief Executive Officer and the four other most highly compensated executive officers. AGGREGATED OPTION AND SAR EXERCISES AND VALUE
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS SHARES DECEMBER 31, 1994 AT DECEMBER 31, 1994(1) ACQUIRED VALUE ----------------------------- ----------------------------- NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE ---- ------------ ---------- ------------- --------------- ------------- --------------- David L. Payne ..... 0 $ 0 20,166 39,434 $211,374 $119,922 James M. Barnes .... 5,010 103,514 45,556 10,884 591,916 38,295 Robert W. Entwisle.. 3,500 57,563 18,900 9,850 169,863 34,574 Hans T. Y. Tjian ... 0 0 13,582 8,868 149,980 31,206 Charles L. Fritz ... 0 0 5,782 8,868 60,280 31,206 - ---------- (1) Fair market value of the Corporation's Common Stock was $29.50 per share on December 31, 1994.
RETIREMENT BENEFITS AND OTHER ARRANGEMENTS DEFINED BENEFIT RETIREMENT PLAN Illustrated below are the estimated annual retirement benefits, based upon a single life annuity, which would be payable under the terms of the Corporation's retirement plan to employees, in the salary ranges shown, retiring at or after age 65 in 1994. 12 PENSION PLAN TABLE YEARS OF SERVICE ESTIMATED ANNUAL RETIREMENT INCOME VALUATION PERIOD ------------------------------------------------- AVERAGE COMPENSATION 15 20 25 30 35 - -------------------- --------- --------- --------- --------- --------- $ 60,000 ................... $14,800 $19,700 $24,600 $ 29,600 $ 34,500 100,000 ................... 25,600 34,100 42,600 51,200 59,700 140,000 ................... 36,400 48,500 60,600 72,800 84,900 150,000 (1994 maximum) .... 39,100 52,100 65,200 78,200 91,200 180,000 ................... 47,200 62,900 78,600 94,400 110,100 200,000 (pre-1994 maximum) 52,600 70,100 87,700 105,200 122,700 The Corporation's retirement plan provides for minimum pension benefits that are determined by a participant's years of service credited under the Corporation's retirement plan, career average compensation, taking into account the participant's social security wage base, and the value of the participant's company contributions, plus earnings, in the Westamerica Bancorporation Deferred Profit-Sharing Plan (the "Deferred Profit-Sharing Plan"). If the annuity value of the profit-sharing account balance exceeds the pension guarantee, the participant will receive benefits from the Deferred Profit-Sharing Plan only. Compensation includes regular earnings and bonuses. However, maximum eligible compensation for 1994 is $150,000 in accordance with section 401(a)(17) of the Internal Revenue Code of 1986, as amended (the "IRC"). This amount is subject to cost of living adjustments in accordance with section 415(d) of the IRC. Messrs. Payne, Barnes, Entwisle, Tjian and Fritz have five, nine, fourteen, five and six years, respectively, of credited service. CERTAIN EMPLOYMENT CONTRACTS WAB entered into an employment agreement with Mr. Barnes, dated January 7, 1987. WAB also entered into an employment agreement with Mr. Entwisle dated January 7, 1987. The agreements of these individuals are essentially identical except for salary and term. Mr. Barnes' annual base salary is $149,040 and Mr. Entwisle's is $134,280. The agreements are "evergreen" in the sense that the term of the agreement is automatically extended for one additional month upon completion of each additional month of employment unless WAB gives Mr. Barnes or Mr. Entwisle one or two years', respectively, notice of intent to terminate. WAB may terminate each of these executive's employment without cause and each of these executives may terminate his employment for "good reason," as defined in the agreements. Under such circumstances, however, Messrs. Barnes and Entwisle each would be entitled to severance pay equal to the sum of: (i) two or one, respectively, times his base salary; (ii) his maximum bonus(es) had he remained employed two or one, respectively, additional years past the date of termination; and (iii) an amount equal to his automobile allowance for the two or one, respectively, years preceding the date of termination. The agreements with Messrs. Barnes and Entwisle also provide for the payment to the executive of liquidated damages upon termination of employment by WAB without cause or termination by the executive for "good reason." Under the terms of the agreements, the amount of liquidated damages is reduced by any severance pay received by the executive and the executive is under a duty to mitigate his damages. Hans T. Y. Tjian accepted a position with WAB as Senior Vice President and Manager of Operations and Systems Administration under the terms set forth in a letter agreement dated April 14, 1989. Under the terms of this agreement, Mr. Tjian is entitled to: (i) receive an annual salary of $130,000; (ii) receive a car allowance of $1,000 per month; (iii) participate in WAB's executive bonus plan; (iv) participate in the 1985 Stock Option Plan; and (v) vacation leave. In addition, Mr. Tjian is entitled to receive severance pay equal to his annual base salary for one year if his position is eliminated as a result of a change of control. 13 BOARD COMPENSATION COMMITTEE REPORT The Board, operating through its Employee Benefits and Compensation Committee, has established an executive compensation program and determines annual compensation for executives based on performance. This executive compensation program and annual evaluation process establishes a competitive base salary for each executive and offers incentive compensation which can provide additional compensation if established performance measures are achieved. This additional compensation can be in the form of short-term annual cash bonuses, long-term stock options and long-term restricted performance shares. As described in the Summary Compensation Table above, each named executive receives a monthly base salary, and is eligible to receive an annual cash bonus, an annual grant of stock options and an annual grant of restricted performance shares. Corporate performance measures are established each year based on the Corporation's objectives. The extent to which these objectives are achieved determines if and what size the annual option grants and restricted performance share grants will be. Achievement of these annual performance measures also determines between 55% and 80% of the annual cash bonus to be paid to each named executive, with the remaining 20% to 45% determined by individual and division performance. Corporate performance measures for 1993, which determined January 1994 cash bonuses, option grants and restricted performance share grants were to: * successfully merge Napa Valley Bancorp into the Corporation; * reach target levels of return on equity, return on assets and earnings per share; * maintain credit quality measures at established levels; * hold noninterest expenses below a specified level and maintain satisfactory audit results; and * increase low cost deposits and commercial loan commitments. Corporate performance measures for 1994, which determined January 1995 cash bonuses, option grants and restricted performance share grants were to: * reach target levels of return on equity, return on assets and earnings per share; * maintain credit quality measures at established levels; * hold noninterest expenses below a specified level and maintain satisfactory audit results; and * increase low cost deposits and loan volumes. Additional corporate performance objectives for a three-year period are established by the Employee Benefits and Compensation Committee to accompany each grant of restricted performance shares. Whether each grant vests three years following the grant is determined by achievement of these preestablished, three-year performance objectives. The Chief Executive Officer's base salary in 1994 of $272,016 was established at a level judged to be competitive with comparable positions at other financial institutions. The Chief Executive Officer's $200,000 cash bonus earned in 1994 (included in the Summary Compensation Table listed above) and paid in January of 1995, was related 80% to the achievement of the 1994 corporate goals listed above and 20% to achievement of individual management goals. Individual management goals achieved in 1994 included satisfactory results from regulatory examinations, satisfactory internal controls and satisfactory progress on acquisitions. Compared to the 1994 corporate objectives listed above, the Corporation: * exceeded its targeted profitability objectives; * improved credit quality measures to better than established levels; * outperformed noninterest expense and control goals; and * fell short of low cost deposit growth goals and commercial loan goals. 14 The Chief Executive Officer's receipt, pursuant to the 1985 Stock Option Plan, of 27,050 nonqualified stock options and 9,350 restricted performance shares in January 1994 was related to achievement of the 1993 corporate performance measures listed above. Compared to the 1993 corporate objectives listed above, the Corporation: * exceeded its Napa Valley Bancorp merger objectives; * exceeded its targeted profitability goals; * improved credit quality measures to better than established levels; * met noninterest expense control goals; and * exceeded low cost deposit growth goals and met commercial loan commitment goals. A description of the Westamerica Bancorporation Stock Option Plan of 1995 (the "1995 Stock Option Plan") is set forth in Proposal Number 3 below. Under the 1995 Stock Option Plan, if approved by holders of a majority of the shares represented and voting at the Meeting, the Corporation will be permitted to issue awards in the form of restricted performance shares, stock options, SAR's or any combination thereof, to eligible employees including but not limited to, the executive officers, for the same reasons as the 1985 Stock Option Plan. The 1985 Stock Option Plan will expire on December 18, 1995, but will be terminated and the shares reserved thereunder canceled, on the effective date of the 1995 Stock Option Plan. The 1995 Stock Option Plan, if approved, will replace the 1985 Stock Option Plan on a prospective basis. No awards have been made to date under the 1995 Stock Option Plan. Since each award under the 1995 Stock Option Plan increases if the price of the Corporation's stock increases, the Employee Benefits and Compensation Committee believes that the 1995 Stock Option Plan provides strong incentive to achieve excellent results and that all shareholders should therefore benefit from the program. Other In 1993, the IRC was amended to add section 162(m). Section 162(m) places a limit of $1,000,000 on the amount of compensation that may be deducted by the Corporation in any year with respect to certain of the Corporation's highest paid executives. The Corporation intends generally to qualify compensation paid to executive officers for deductibility under the IRC, including new section 162(m). The Corporation is submitting for a vote of the shareholders at the Meeting the 1995 Stock Option Plan to maximize the tax deductibility of awards under such 1995 Stock Option Plan. However, the Corporation may from time to time in the future pay compensation to its executive officers that may not be deductible. The Employee Benefits and Compensation Committee believes that the foregoing compensation programs and policies provide competitive levels of compensation, encourage long-term performance and promote management retention while further aligning shareholders' and managements' interests in the performance of the Corporation and the Corporation's Common Stock. Members of the Employee Benefits and Compensation Committee as of January 25, 1995 are: Patrick D. Lynch, Chairman, Etta Allen, Don Emerson, Arthur C. Latno, Jr., Catherine Cope MacMillan and Ronald A. Nelson. 15 [The following descriptive data is supplied in accordance with Rule 304(d) of Regulation S-T] STOCK PERFORMANCE CHART(1) Year Westamerica Western Bank S&P 500 Ended Bancorporation Monitor Industry Proxy(2) Index - ----- -------------- ------------------------- -------- 1989 100 100 100 1990 70 89 93 1991 90 95 118 1992 109 115 123 1993 128 133 132 1994 143 135 130 (1) Assumes $100 invested on December 31, 1989 in the Corporation's Common Stock, the S&P 500 composite stock index and Montgomery Securities' index of 41 Western bank stocks, with reinvestment of dividends. (2) Source: Montgomery Securities' Western Bank Monitor--Western Bank Monitor Industry Proxy. APPROVAL OF AMENDMENT OF THE RESTATED ARTICLES OF INCORPORATION On February 27, 1995, the Board adopted an amendment of the Corporation's Restated Articles of Incorporation (the "Articles") which will increase the number of authorized shares of Common Stock from 20,000,000 to 50,000,000. In order to be effective, the amendment of the Articles must be approved by holders of a majority of the outstanding Shares of Common Stock of the Corporation. The text of Article III of the Articles is to read as follows: Capitalization. This corporation is authorized to issue three classes of shares designated "Common Stock", "Class B Common Stock" and "Preferred Stock", respectively. The number of shares of Common Stock authorized to be issued is 50,000,000, the number of shares of Class B Common Stock authorized to be issued is 1,000,000 and the number of shares of Preferred Stock authorized to be issued is 1,000,000. The Preferred Stock and Class B Common Stock may be issued from time to time in one or more series. The Board of Directors is authorized to fix the number of shares of any series of Preferred Stock and Class B Common Stock and to determine the designation of any such series. The Board of Directors is also authorized to determine or alter the rights, preferences, privileges, and restrictions granted to or imposed upon any wholly unissued class or series of Preferred Stock or Class B Common Stock, and, within the limits and restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any such series subsequent to the issue of shares of that series. 16 The Board believes that the number of shares currently authorized for issuance does not provide the Corporation with the flexibility required to pursue the Corporation's long term goals, such as pursuing expansion opportunities which may arise from time to time and require the issuance of additional shares of Common Stock. Accordingly, the Board believes it is in the best interest of the Corporation and its shareholders to approve an amendment of the Articles to increase the number of authorized shares of Common Stock. If the shareholders do not approve this proposal, the Corporation will attempt to repurchase shares sufficient to meet its long-term goals. However, there can be no assurance that the Corporation will be able to purchase sufficient shares to meet such goals. THE BOARD RECOMMENDS A VOTE FOR AMENDMENT OF THE RESTATED ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF SHARES OF AUTHORIZED COMMON STOCK. APPROVAL OF THE CORPORATION'S STOCK OPTION PLAN OF 1995 STOCK OPTION PLAN OF 1995 Adoption. The Corporation's Stock Option Plan of 1995 (the "1995 Stock Option Plan") was adopted by the Board on January 26, 1995, subject to the approval of the Corporation's shareholders on April 25, 1995. The 1995 Stock Option Plan is attached to this proxy statement as Exhibit A. Shares Available for Issuance. The 1995 Stock Option Plan provides for awards in the form of restricted performance shares, stock options, SARs or any combination thereof. To date, no awards have been made under the 1995 Stock Option Plan. Upon approval of the 1995 Stock Option Plan, there will be no shares available for issuance under the 1985 Stock Option Plan since such shares will have been canceled. On January 1, 1995 and each January 1 thereafter for the remaining term of the 1995 Stock Option Plan, 2% of the Corporation's issued and outstanding shares of Common Stock on January 1 of each calendar year shall be reserved for awards; provided, however, that any reserved shares that have been reserved for award but not issued under such awards shall remain available for award in any subsequent calendar year. In addition, if any restricted performance shares, options or SARs granted under the 1995 Stock Option Plan are forfeited, or if options or SARs terminate for any other reason prior to exercise, then the underlying shares of Common Stock shall again become available for awards. If SARs are exercised for cash, the number of shares underlying such awards shall become available for further awards. Notwithstanding the foregoing, no more than 400,000 shares of Common Stock shall be available for the grant of incentive stock options ("ISOs") over the term of the 1995 Stock Option Plan. Administration and Eligibility. The 1995 Stock Option Plan is administered by a committee of the Board consisting of at least two members who are "disinterested" as such term is defined under Rule 16b-3 of the Exchange Act (the "Committee"). The Committee selects the employees of the Corporation or any subsidiary who will receive awards, determines the size of the award and establishes the vesting or other conditions. All employees of the Corporation (or any subsidiary of the Corporation) are eligible to participate in the 1995 Stock Option Plan. As of January 1, 1995, 37 employees were eligible to participate in the 1995 Stock Option Plan. Payment. In general, no payment will be required upon receipt of an award. Restricted Performance Shares. A restricted performance share is an unfunded bookkeeping entry representing the equivalent of one share of Common Stock, and it is nontransferable prior to the holder's death. A holder of restricted performance shares has no voting rights or other privileges as a shareholder. Restricted performance shares, when vested, will be settled by distributing shares of Common Stock. The number of shares of Common Stock distributed in settlement of restricted performance shares may be smaller than the number of restricted performance shares granted, depending upon the attainment of performance objectives. Vested restricted performance shares will be settled at the time determined by the Committee. 17 Stock Options. Options may include nonstatutory stock options ("NSOs") as well as ISOs intended to qualify for special tax treatment. No optionee shall be granted options during any calendar year in excess of 1% of the total outstanding shares of the Common Stock of the Corporation on January 1, 1995. The term of an option cannot exceed ten years, and the exercise price of an option must be equal to or greater than the fair market value of the Common Stock on the date of grant. The exercise price of an option may be paid in any lawful form permitted by the Committee, including (without limitation) the surrender of shares of Common Stock already owned by the optionee. The 1995 Stock Option Plan also allows the optionee to pay the exercise price of an option by giving "exercise/sale" directions. If exercise/sale directions are given, a number of option shares sufficient to pay the exercise price and any withholding taxes is issued directly to a securities broker selected by the Corporation who, in turn, sells these shares in the open market. The broker remits to the Corporation the proceeds from the sale of these shares, and the optionee receives the remaining option shares or cash. The Committee may also permit optionees to satisfy the exercise price of an option (including any applicable taxes) by surrendering a portion of their option shares to the Corporation. Stock Appreciation Rights. An SAR permits the participant to elect to receive any appreciation in the value of the underlying stock from the Corporation in cash. No optionee shall be granted SARs during any calendar year in excess of 1% of the total outstanding shares of the Common Stock of the Corporation on January 1, 1995. The amount payable on exercise of an SAR is measured by the difference between the market value of the underlying stock at exercise and the exercise price. Vesting Conditions. As noted above, the Committee determines the number of restricted performance shares, stock options or SARs to be included in the award as well as the vesting and other conditions. The vesting conditions may be based on the employee's service, his or her individual performance, the Corporation's performance or other criteria. It is anticipated that the vesting conditions generally will be based on the employee's service after the date of grant. Vesting may be accelerated in the event of the employee's death, disability or retirement and will be accelerated in the event of a change in control with respect to the Corporation. For purposes of the 1995 Stock Option Plan, the term "change in control" is defined as (i) a dissolution or liquidation of the Corporation, (ii) a sale of all or substantially all of the Corporation's assets, or (iii) a tender within the meaning of section 14 of the Exchange Act made for 5% or more of the Corporation's stock by any person other than the Corporation or any of its subsidiaries. Modifications. The Committee is authorized, within the provisions of the 1995 Stock Option Plan, to amend the terms of outstanding restricted performance shares to modify or extend outstanding options or SARs or to exchange new options for outstanding options, including outstanding options with a higher exercise price than the new options. FEDERAL INCOME TAX CONSEQUENCES The following discussion of the federal income tax consequences of the ISOs and NSOs under the 1995 Stock Option Plan is intended to be a summary of applicable federal law. State and local tax consequences may differ. Because the federal income tax rules governing options and related payments are complex and subject to frequent change, optionees are advised to consult their tax advisors prior to exercise of options or dispositions of stock acquired pursuant to option exercise. ISOs and NSOs are treated differently for federal income tax purposes. ISOs are intended to comply with the requirements of section 422 of the IRC. NSOs need not comply with such requirements. An optionee is not taxed on the grant or exercise of an ISO. The difference between the exercise price and the fair market value of the shares on the exercise date will, however, be a preference item for purposes of the alternative minimum tax. If an optionee holds the shares acquired upon exercise of an ISO for at least two years following grant and at least one year following exercise, the optionee's gain, if any, upon a subsequent disposition of such shares is long-term capital gain. The measure of the gain is the difference between the proceeds received on disposition and the optionee's basis in the shares (which generally equals the exercise price). If an optionee disposes of stock acquired pursuant to exercise of an ISO before satisfying the one and two 18 year holding periods described above, the optionee will recognize both ordinary income and capital gain in the year of disposition. The amount of the ordinary income will be the lesser of (i) the amount realized on disposition less the optionee's adjusted basis in the stock (usually the option price) or (ii) the difference between the fair market value of the stock on the exercise date and the option price. The balance of the consideration received on such a disposition will be long-term capital gain if the stock had been held for at least one year following exercise of the ISO. The Corporation is not entitled to an income tax deduction on the grant or exercise of an ISO or on the optionee's disposition of the shares after satisfying the holding period requirement described above. If the holding periods are not satisfied, the Corporation will be entitled to a deduction in the year the optionee disposes of the shares, in an amount equal to the ordinary income recognized by the optionee. An optionee is not taxed on the grant of a NSO. On exercise, however, the optionee recognizes ordinary income equal to the difference between the option price and the fair market value of the shares on the date of exercise. The Corporation is entitled to an income tax deduction in the year of exercise in the amount recognized by the optionee as ordinary income. Any gain on subsequent disposition of the shares is long-term capital gain if the shares are held for at least one year following exercise. The Corporation does not receive a deduction for this gain. NEW 1995 STOCK OPTION PLAN BENEFITS The Committee has full discretion to determine the number and amount of options to be granted to employees under the 1995 Stock Option Plan. Therefore, the benefits and amounts that will be received by the Chief Executive Office and the four other most highly compensated executive officers, the executive officers as a group and all other employees are not determinable. Details on stock options granted during the last three years to the Chief Executive Officer and the four other most highly compensated executive officers are presented in the table entitled "Summary Compensation Table." REQUIRED APPROVAL The affirmative vote of the holders of a majority of the shares of Common Stock represented and voting at the Meeting is required to approve the 1995 Stock Option Plan. Properly executed proxies received by the Corporation which have not indicated any vote on the 1995 Stock Option Plan will be voted "FOR" approval of the 1995 Stock Option Plan. THE BOARD RECOMMENDS A VOTE FOR THE APPROVAL OF THE 1995 STOCK OPTION PLAN. APPROVAL OF AUDITORS The Board has selected KPMG Peat Marwick LLP as independent auditor for the Corporation for the 1995 fiscal year, subject to the approval of the shareholders. KPMG Peat Marwick LLP has informed the Corporation that it has had no connection during the past three years with the Corporation or its subsidiaries in the capacity of promoter, underwriter, voting trustee, director, officer or employee. Representatives of KPMG Peat Marwick LLP will be present at the Meeting with the opportunity to make a statement if they desire to do so and to respond to appropriate questions. THE BOARD RECOMMENDS A VOTE FOR THE APPROVAL OF KPMG PEAT MARWICK LLP AS INDEPENDENT AUDITOR FOR THE CORPORATION FOR THE 1995 FISCAL YEAR. 19 SHAREHOLDER PROPOSAL SHAREHOLDER'S PROPOSAL TO CHANGE METHOD OF COMPENSATING THE DIRECTORS OF THE CORPORATION The Corporation has been advised that a shareholder intends to present a proposal at the Meeting. The name and address of the shareholder and the number of shares of the Corporation's Common Stock owned by such individual will be furnished by the Corporation to any person, either orally or in writing, as requested, promptly upon either the oral or written request therefor. Requests should be directed to the Corporations's Assistant Corporate Secretary, Mary Anne Bell. The proposal and supporting statement submitted by the shareholder are quoted below. The Board opposes the proposal for the reasons stated below. SHAREHOLDER PROPOSAL The shareholders of WestAmerica Corporation request the Board of Directors take the necessary steps to amend the company's governing instruments to adopt the following: Beginning on the 1996 WestAmerica Corporation fiscal year all members of the Board of Director's total compensation will be 1000 shares of WestAmerica Corporation common stock each year. No other compensation of any kind will be paid. SHAREHOLDER'S SUPPORTING STATEMENT For many years the [*] Family have been submitting for shareholder vote, at this corporation as well as other corporations, proposals aimed at putting management on the same playing field as the shareholders. This proposal would do just that. A few corporations have seen the wisdom in paying directors solely in stock. Most notably, Scott Paper and Travelers. Ownership in the company is the American way. We feel that this method of compensation should be welcomed by anyone who feels they have the ability to direct a major corporation's fortunes. The directors would receive 1000 shares each year. If the corporation does well, the directors will make more money in the value of the stock they receive and the dividend that usually rise with more profits. If things go bad, they will be much more inclined to correct things, because it will be coming directly out of their pockets. Instead of the way it is done now, where directors receive the same compensation for good or bad performance. BOARD OF DIRECTORS' STATEMENT IN OPPOSITION TO SHAREHOLDER PROPOSAL The Board recommends that the shareholders vote against this proposal. The Board agrees that the shareholders of the Corporation deserve a Board which is "accountable" to the Corporation and its shareholders and that share ownership is a relevant factor in considering a director's qualifications. However, the Board believes that the Corporation's current compensation package for its directors encourages and mandates the type of "accountability" that the shareholder desires and is supported by well settled legal standards concerning the duties of directors. The Corporation's directors include men and women who are leaders in a wide range of business fields. The experience and varied perspectives they bring to the Board's deliberations are critical in making informed, reasoned policy decisions on the diverse and complex issues with which the Board must deal. In order for the Corporation to attract and retain highly qualified individuals to serve on the Board, the Corporation must provide compensation to its directors competitive with that which is provided by other public companies. In California, the majority of public corporations compensate their directors with cash payments as well as other benefits. During 1994, each of the directors of the Corporation received an annual retainer of $14,000. In addition, each director received $1,000 for every meeting of the Board that he - ---------- * The name of the individual will be furnished by the Corporation to any person, either orally or in writing, as requested, promptly upon either the oral or written request therefor. 20 or she attended. Nonemployee directors received $500 for each committee meeting attended and the chairman of each committee received an additional $250 for each committee meeting attended. As Chairman of the Board, David L. Payne is compensated as an employee and does not receive any annual retainer or a director's fee for attending Board or committee meetings. The average outside director spends 12-20 hours per month on Corporation matters (the hours vary because directors who are members of more than one committee spend more time), and travels 12 times (meetings are monthly) per year to Board and committee meetings (the Board and the various committee meetings take place over a two-day period). Since the time a director spends on Corporation matters and travel is time away from that director's principal occupation or business, the Corporation compensates its directors in cash payments just as a shareholder would expect to be compensated for services which he or she provides to a business employing him or her. The supporting statement to the shareholder's proposal states that by compensating the directors with Common Stock, the directors will be more "accountable" to the Corporation. This sentiment presupposes that the director's existing interest in the Corporation is limited to the receiving of an annual retainer and a director's fee for attending Board and committee meetings. In fact, the members of the Board have a significant ownership interest in the Corporation. The directors of the Corporation, as of February 1, 1995, owned 131,287 shares or 1.42% of the outstanding shares of the Corporation on that date. The Corporation currently requires that each director own at least $1,000 worth of the Corporation's stock. The Board believes that an individual's level of share ownership is not necessarily the best indicator of judgment and commitment to the Corporation. THE BOARD THEREFORE RECOMMENDS A VOTE AGAINST THE ABOVE SHAREHOLDER PROPOSAL. OTHER MATTERS Management of the Corporation does not know of any matters to be presented at the Meeting other than those specifically referred to herein. If any other matters should properly come before the Meeting or any adjournment thereof, the persons named in the enclosed proxy intend to vote thereon in accordance with their best business judgment. For a matter to be properly brought before the Meeting by a shareholder, section 2.02 of the Corporation's Bylaws ("Section 2.02") provides that the shareholder must deliver or mail a written notice to the Secretary (or Assistant Secretary) of the Corporation not less than 14 days nor more than 50 days prior to the Meeting. Section 2.02 also provides that the notice must set forth as to each matter that the shareholder proposes to bring before the Meeting a brief description of the business desired to be brought before the Meeting and the reasons for conducting such business at the Meeting, the name and residence address of the shareholder proposing such business, the number of shares that are owned by the shareholder and any material interest of the shareholder in such business. The cost of the solicitation of proxies in the accompanying form, including, but not limited to, the cost of a proxy solicitation firm, will be borne by the Corporation. The Corporation has retained the services of Corporate Investor Communications, Inc. to assist in the solicitation of proxies at a cost not to exceed $5,500 plus reasonable out-of-pocket expenses. The Corporation 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 beneficial owners of such stock. BY ORDER OF THE BOARD OF DIRECTORS ---------------------------------- Mary Anne Bell Assistant Corporate Secretary Dated: March 21, 1995 21 EXHIBIT A WESTAMERICA BANCORPORATION STOCK OPTION PLAN OF 1995 (AS ADOPTED APRIL 25, 1995) TABLE OF CONTENTS PAGE -------- I. DEFINITIONS .......................................... 1 1. "Award" .......................................... 1 2. "Board" .......................................... 1 3. "Code" ........................................... 1 4 "Committee" ................................. 1 5. "Common Stock" ................................... 1 6. "Corporation" .................................... 1 7. "Employee" ....................................... 1 8. "Fair Market Value" .............................. 1 9. "Grant" .......................................... 1 10. "ISO" ............................................ 1 11. "NQSO" ........................................... 1 12. "Option Agreement" ............................... 1 13. "Option" ......................................... 1 14. "Optionee" ....................................... 1 15. "Plan" ........................................... 1 16. "SAR" ............................................ 1 17. "Subsidiary" ..................................... 1 18. "Westamerica Bancorporation" ..................... 1 II. PURPOSE .............................................. 1 III. SHARES SUBJECT TO THE PLAN ........................... 2 IV. ADMINISTRATION OF THE PLAN ........................... 2 1. Committee Procedures .............................. 2 2. Committee Responsibilities ........................ 2 3. Modification, Extension and Renewal of Awards .... 3 4. Limitations on SARs and Options ................... 3 IVA. STOCK APPRECIATION RIGHTS ............................ 3 V. ELIGIBLE EMPLOYEES ................................... 3 VI. OPTION EXERCISE PRICE ................................ 3 VII. PAYMENT OF OPTION EXERCISE PRICE ..................... 4 VIII. TERMS AND EXERCISE OF OPTIONS ........................ 4 IX. TERMINATION OF EMPLOYMENT ............................ 4 X. NON-TRANSFERABILITY .................................. 4 XI. RESTRICTED PERFORMANCE SHARE GRANTS .................. 5 XII. ADJUSTMENTS UPON CHANGES IN STOCK .................... 5 XIII. RIGHTS AS AN OPTIONEE, STOCKHOLDER, OR EMPLOYEE ..... 5 XIV. OTHER PROVISIONS ..................................... 6 XV. REGISTRATION AND RESALE .............................. 6 XVI. EFFECTIVE DATE, TERM AND SHAREHOLDER APPROVAL ....... 6 XVII. AMENDMENT OF PLAN .................................... 6 XVIII. TAXES ................................................ 6 i WESTAMERICA BANCORPORATION STOCK OPTION PLAN OF 1995 I. DEFINITIONS As used herein, the following terms have the following meanings: 1. "Award" means an Option, a SAR or a Grant. 2. "Board" means the Board of Directors of the Corporation. 3. "Code" means the Internal Revenue Code of 1986, as amended. 4. "Committee" means the Committee described in Article IV hereof. 5. "Common Stock" means the Common Stock of the Corporation. 6. "Corporation" means Westamerica Bancorporation, a California corporation. 7. "Employee" means any officer or salaried employee of Westamerica Bancorporation. 8. "Fair Market Value" shall mean (i) the mean of the highest and lowest selling price of a share of Common Stock on the principal exchange which the shares are trading, on the first trading day immediately preceding the date on which the Fair Market Value is determined, or (ii) if the shares are not traded on an exchange but are quoted on the National Market System or a successor quotation system, the mean of the highest and lowest selling price on the first trading day immediately preceding the date on which the Fair Market Value is determined, or (iii) if the shares are not traded on an exchange or quoted on the National Market System or a successor quotation system, the fair market value of a share, as determined by the Committee in good faith. Such determination shall be conclusive and binding on all persons. 9. "Grant" means a restricted performance share grant awarded pursuant to Article XI. 10. "ISO" means a stock option that is intended to meet the requirements of section 422 of the Code and is designated an Incentive Stock Option or ISO by the Committee. 11. "NQSO" means an option that is not an ISO. 12. "Option Agreement" means a written option agreement duly executed on behalf of the Corporation, delivered to an Optionee, and executed by such Optionee in accordance with Article XIII hereof. 13. "Option" means either an ISO or an NQSO granted under the Plan and entitling the holder to purchase share(s) of Common Stock. 14. "Optionee" means an Employee who has been granted an Option. 15. "Plan" means the Westamerica Bancorporation Stock Option Plan of 1995, as set forth herein. 16. "SAR" means a stock appreciation right granted pursuant to Article IVA. 17. "Subsidiary" shall mean any corporation, if the Corporation and/or one or more other Subsidiaries own not less than 50 percent of the total combined voting power of all classes of outstanding stock of such corporation. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date. 18. "Westamerica Bancorporation" means the Corporation or any present or future Subsidiary. II. PURPOSE It is the purpose of the Plan to provide a means whereby those Employees who have responsibilities for the successful administration and management of Westamerica Bancorporation and whose present and potential contributions to the success of Westamerica Bancorporation are of importance to the Corporation can acquire a proprietary interest in the Corporation thereby providing an incentive for continuing beneficial services to the Corporation. A-1 III. SHARES SUBJECT TO THE PLAN 1. The aggregate number of shares which may be issued under Awards during any calendar year shall be that number which is equal to 2.0% of the number of issued and outstanding shares of Common Stock of the Corporation as of January 1 of such year (January 1, 1995 in the case of the first year), subject to adjustment as provided for in Article XII below. Any shares that have been reserved but not issued under Awards during any calendar year shall remain available for grant during any subsequent calendar year. Notwithstanding the foregoing, no more than 400,000 shares of Common Stock shall be available for the grant of ISOs over the term of the Plan. 2. For the purposes of computing the total number of shares of Common Stock available for Awards under the Plan, there shall be counted against the annual limitation shares of Common Stock subject to Awards. If any Award expires, is canceled, forfeited or terminates for any reason before being exercised, then the shares of Common Stock subject to such Award shall again become available for future Awards under the Plan. In addition, when SARs are surrendered for cash, the shares of Common Stock subject to such SARs shall be restored to the share pool available for future Awards. IV. ADMINISTRATION OF THE PLAN 1. Committee Procedures. The Committee shall be designated by the Board and shall have such membership composition which enables the Plan to qualify under Rule 16b-3 issued under the Securities Exchange Act of 1934 (the "Exchange Act") with regard to the grant of Awards to persons who are subject to Section 16 of the Exchange Act. The Committee may hold meetings at such times and places as it shall determine. The acts of a majority of the Committee members present at meetings at which a quorum exists, or acts reduced to or approved in writing by all Committee members, shall be valid acts of the Committee. 2. Committee Responsibilities. Subject to the provisions of the Plan, the Committee shall have full authority and discretion to take the following actions: (a) To interpret the Plan and to apply its provisions; (b) To adopt, amend or rescind rules, procedures and forms relating to the Plan; (c) To authorize any person to execute, on behalf of the Corporation, any instrument required to carry out the purposes of the Plan; (d) To determine when Awards are to be granted under the Plan; (e) To select the recipients of Awards; (f) To determine the number of shares to be subject to each Award; (g) To prescribe the terms and conditions of each Award, including (without limitation) the exercise price, the vesting or duration of the Award (including accelerating the vesting of the Award), to determine whether an Option is to be classified as an ISO or NQSO, and to specify the provisions of the Award Agreement relating to such Award; (h) To amend any outstanding Award Agreement, subject to applicable legal restrictions and to the consent of the Employee who entered into such agreement; (i) To prescribe the consideration for the grant of each Award under the Plan and to determine the sufficiency of such consideration; (j) To determine the disposition of each Award under the Plan in the event of an Employee's divorce or dissolution of marriage; (k) To determine whether Options or other Awards under the Plan will be granted in replacement of other grants under an incentive or other compensation plan of an acquired business; (l) To correct any defect, supply any omission, or reconcile any inconsistency in the Plan, or any Option or Award Agreement; and A-2 (m) To take any other actions deemed necessary or advisable for the administration of the Plan. Subject to the requirements of applicable law, the Committee may designate persons other than members of the Committee to carry out its responsibilities and may prescribe such conditions and limitations as it may deem appropriate, except that the Committee may not delegate its authority with regard to the selection for participation of or the granting of Awards under the Plan to persons subject to Section 16 of the Exchange Act. All decisions, interpretations and other actions of the Committee shall be final and binding on all Award recipients, and all persons deriving their rights from an Award recipient. No member of the Committee shall be liable for any action that he has taken or has failed to take in good faith with respect to the Plan or any Award to acquire Shares under the Plan. 3. Modification, Extension and Renewal of Awards. Within the limitations of the Plan, the Committee may modify, extend or renew outstanding Awards or may accept the cancellation of outstanding Awards (to the extent not previously exercised) in return for the grant of new Awards at the same or a different price or without regard to such grants. The foregoing notwithstanding, no modification of an Award shall, without the consent of the Employee, impair his rights or increase his obligations under such Award. 4. Limitations on SARs and Options. No Employee shall be granted SARs or Options during any calendar year in excess of 1.0% of the total outstanding shares of Common Stock of the Corporation on January 1, 1995. IVA. STOCK APPRECIATION RIGHTS 1. The Committee shall also have the authority to grant SARs on such terms and conditions as it deems appropriate, consistent with the purposes of the Plan. On surrender of each SAR, the SAR holder shall receive a cash payment equal to the difference obtained by subtracting (1) the Fair Market Value of one share of Common Stock on the surrender date from (2) the Fair Market Value of one share of Common Stock on the date the SAR was granted. 2. The Committee shall from time to time determine which Employees shall be granted SARs under the Plan, the terms thereof, and the number of SARs to be granted. 3. The term of a SAR shall be determined by the Committee but in no event shall the term extend beyond ten years from the date of the grant. SARs may be exercisable in full or in installments, as the Committee determines at the date of grant. 4. The provisions of this Plan applicable to Options shall apply to SARs where the context so permits and as necessary to carry out the purposes of the Plan. V. ELIGIBLE EMPLOYEES 1. The persons who shall be eligible to receive Options shall be such Employees as the Committee, in its sole discretion, shall select from time to time during the duration of the Plan. 2. A director of the Corporation or of a Subsidiary shall not be eligible to receive an Option unless such director is also an Employee. 3. No person shall be eligible to receive an Option who owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Corporation or of a Subsidiary. VI. OPTION EXERCISE PRICE The exercise price of each Option granted hereunder shall be determined by the Committee, but in no event shall be less than one hundred percent (100%) of the Fair Market Value of the Common Stock at the time such Option is granted, as determined by the Committee. Such exercise price shall be adjusted as provided in Article XII hereof. A-3 VII. PAYMENT OF OPTION EXERCISE PRICE The exercise price with respect to the Common Stock being purchased by an Optionee upon the exercise of an Option in whole or in part shall be paid in full to the Corporation either (i) in cash, (ii) by delivery of Common Stock owned by the Optionee for such duration as may be specified by the Committee and duly endorsed for transfer to the Corporation, or (iii) a combination of cash and Common Stock. Shares of Common Stock owned by the Optionee and delivered to the Corporation in payment of all or part of the exercise price of an Option shall be valued for this purpose at one hundred percent (100%) of the Fair Market Value of such Common Stock on the day of such exercise, as determined by the Committee. Optionees electing to pay all or part of the exercise price of an Option by delivery of Common Stock shall not be entitled to receive fractional shares to the extent, if any, that the Fair Market Value of such Common Stock exceeds such exercise price, but instead shall be entitled to cash in lieu thereof. To the extent that an Option Agreement so provides, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell shares of Common Stock and to deliver all or part of the sale proceeds to the Corporation in payment of the aggregate exercise price and any taxes. To the extent that an Option Agreement so provides, payment may also be made all or in part by delivery (on a form prescribed by the Committee) of an election to the Corporation to withhold a sufficient number of shares from the shares otherwise due upon exercise of the Option having an aggregate Fair Market Value on the date of exercise equal to the exercise price of the Option, or by any other method of payment permitted under applicable laws, regulations or rules. VIII. TERMS AND EXERCISE OF OPTIONS 1. The term of each Option granted hereunder shall be determined by the Committee, but in no event shall the term of an ISO be greater than ten (10) years from the date of grant or such shorter term as may be fixed by the Committee. 2. Each Option Agreement shall specify the date when all or any installment of the Option is to become exercisable. The Option Agreement shall also specify the term of the Option. Subject to the preceding two sentences, the Committee at its sole discretion shall determine when all or any installment of an Option is to become exercisable and when an Option is to expire. 3. Notwithstanding the preceding paragraph, all outstanding Options shall immediately become exercisable in full in the event that either (a) the shareholders of the Corporation approve a dissolution or liquidation of the Corporation or a sale of all or substantially all of the Corporation's assets to another corporation, or (b) a tender within the meaning of Section 14 of the Exchange Act is made for five percent (5%) or more of the Corporation's outstanding Common Stock by any person other than the Corporation or any of its Subsidiaries. IX. TERMINATION OF EMPLOYMENT Each Option Agreement shall set forth the extent to which the Optionee shall have the right to exercise the Option following termination of employment with Westamerica Bancorporation, and the right to exercise the Option of any executors or administrators of the Optionee's estate or any person who has acquired such Option(s) directly from the Optionee by bequest or inheritance. Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of employment. X. NON-TRANSFERABILITY Unless otherwise permitted by the Code and Section 16 of the Exchange Act and the interpretive letters thereunder, no Option may be transferred by an Optionee otherwise than by will or the laws of descent and distribution, and each Option may be exercised, during the Optionee's lifetime, only by the Optionee. A-4 XI. RESTRICTED PERFORMANCE SHARE GRANTS 1. The Committee shall also have the authority to award Restricted Performance Share Grants pursuant to agreements with such terms and conditions as it deems appropriate, consistent with the purposes of the Plan. In determining whether or not to award a Grant to a particular individual, the Committee shall consider the performance of Westamerica Bancorporation during the prior year and such individual's performance during such year. 2. Such key Employees as shall be selected by the Committee in its sole discretion (hereinafter the "Grant Participants") shall be eligible to receive Grants hereunder. 3. The provisions of this Plan applicable to Options shall apply to Grants where the context so permits and as necessary to carry out the purposes of the Plan. 4. A Grant shall become vested, in full or in installments, upon satisfaction of the conditions set forth in the Grant Agreement. The Committee in its sole discretion shall determine when all or any installment of a Grant is to vest and when a Grant is to expire or be terminated. Settlement of vested Grants may be made in the form of cash or shares of Common Stock or any combination of both, and may be made in a lump sum or installments. The actual number of Grants eligible for settlement may be larger or smaller than the number included in the Grant Agreement, based on predetermined performance factors. 5. All outstanding Grants shall immediately be deemed to be fully vested and the appropriate number of shares of Common Stock shall be issued to the Grant Participants in the event that either (i) the shareholders of the Corporation approve a dissolution or liquidation of the Corporation or a sale of all or substantially all of the Corporation's assets to another corporation, or (ii) a tender within the meaning of Section 14 of the Exchange Act is made for five percent (5%) or more of the Corporation's outstanding Common Stock by any person other than the Corporation or any of its Subsidiaries. XII. ADJUSTMENTS UPON CHANGES IN STOCK In the event that (a) each outstanding share of Common Stock (except shares held by dissenting shareholders) shall be changed into or exchanged for a different number or kinds of shares of stock or other securities of the Corporation or of another corporation, whether through merger, consolidation, reorganization, recapitalization or otherwise, or (b) a stock dividend is paid to holders of Common Stock or a stock split or reverse stock split is effected, then the Committee shall make appropriate and equitable adjustments and substitutions for (i) the number and type of shares appropriated for purposes of the Plan pursuant to Article III hereof but not yet covered by Awards, (ii) the number and type of shares subject to each Award then outstanding, and (iii) the exercise price of each Award then outstanding so that there will be no change in the aggregate exercise price payable upon the exercise of such outstanding Awards and so that an Award recipient does not receive additional benefits, within the meaning of Section 424(a) of the Code. XIII. RIGHTS AS AN OPTIONEE, STOCKHOLDER, OR EMPLOYEE Nothing contained in the Plan, in any resolution adopted by the Board, in any approval by the stockholders of the Corporation or in any action taken by the Committee shall vest in any individual employed by the Corporation or by any Subsidiary the right to receive any Award under the Plan. No person shall acquire any rights as contemplated by or pursuant to the Plan unless and until a written Option or Award Agreement shall have been duly executed on behalf of the Corporation by such officer and officers as the Committee shall designate for such purpose, delivered to the Optionee named therein, and executed by him. No person shall have any rights as a stockholder with respect to any shares covered by an Option until the date of the issuance of a stock certificate to the Optionee for such shares. Nothing contained in the Plan shall confer, and each Option or Award Agreement shall expressly provide that the granting of an Award does not confer on any Employee any right to or guarantee of continued employment by Westamerica Bancorporation, or in any way limit the right of Westamerica Bancorporation to terminate the employment of any Employee at any time and for any reason. A-5 XIV. OTHER PROVISIONS Notwithstanding the express provisions of the Plan, any Option may be granted on such additional or more restrictive terms as the Committee shall deem advisable consistent with the Plan. XV. REGISTRATION AND RESALE The Plan, the shares of Common Stock subject thereto, and the Awards granted thereunder may, in the discretion of the Board, be registered under the Securities Act of 1933, as amended, or under the securities laws of any state. As a condition to the grant of any Award under the Plan or the issuance of shares of Common Stock upon the exercise thereof, the Committee may require that the Employee agree to comply with such provisions of Federal and State securities laws as may be applicable to such grant or issuance or the sale of shares acquired thereby and deliver to the Corporation a written agreement in form and substance satisfactory to the Corporation and its counsel implementing such agreement. XVI. EFFECTIVE DATE, TERM AND SHAREHOLDER APPROVAL The Plan shall become effective upon approval by the stockholders of the Corporation and shall remain in effect until April 24, 2005, unless it is sooner terminated by the Board. In any event the Plan shall terminate no later than April 24, 2005, and no Awards may be granted under the Plan thereafter. XVII. AMENDMENT OF PLAN The Board may at any time in its discretion terminate, suspend, revise, modify or amend the Plan in any manner whatsoever. An amendment of the Plan shall be subject to the approval of the stockholders of the Corporation only to the extent required by applicable laws, regulations or rules. XVIII. TAXES As a condition to the exercise of an Award, the Employee shall make such arrangements as the Committee may require for the satisfaction of any federal, state or local tax obligations that may arise in connection with such exercise. The Employee shall also make such arrangements as the Committee may require for the satisfaction of any federal, state or local tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Award. Such arrangements may include share withholding or the delivery of previously owned shares of Common Stock in accordance with the Committee's rules. This Plan is adopted this 25th day of April, 1995. WESTAMERICA BANCORPORATION By ---------------------------------------- Name Its ---------------------------------------- Title A-6 APPENDIX B WESTAMERICA BANCORPORATION CONFIDENTIAL VOTING INSTRUCTIONS TO THE TRUSTEE SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF WESTAMERICA BANCORPORATION FOR THE ANNUAL MEETING OF SHAREHOLDERS ON APRIL 25, 1995 The undersigned holder hereby authorizes and instructs the Trustee of the Westamerica Bancorporation Tax Deferred Savings/Retirement Plan to represent and vote, as designated below, all 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 the Showcase Theatre, Marin Center, San Rafael, California at 7:30 p.m. on Tuesday, April 25, 1995 and any postponement or adjournment thereof. P These confidential voting instructions to the Trustee, when properly executed, will be voted as directed herein by the undersigned R shareholder. If no direction is indicated, the Trustee will vote all of the shares you are entitled to instruct in the same proportion O as to which instructions for other shares have been received. The Trustee may vote according to its discretion on any other matter X which may properly come before the meeting. Y PLEASE MARK, SIGN, DATE AND MAIL THESE CONFIDENTIAL VOTING INSTRUCTIONS PROMPTLY, USING THE ENCLOSED ENVELOPE. - ---------------------------------------- COMMENTS/ADDRESS CHANGE: | | (Continued and to be signed | on other side) | Please mark / X / your votes -------- as this COMMON THE BOARD OF DIRECTORS RECOMMENDS A THE BOARD OF DIRECTORS RECOMMENDS VOTE FOR ITEMS 1, 2, 3 AND 4. A VOTE AGAINST ITEM 5. WITHHELD FOR FOR ALL FOR AGAINST ABSTAIN Item 1--ELECTION OF DIRECTORS / / / / Item 3-- / / / / / / Etta Allen, Louis E. APPROVAL OF Bartolini, Charles I. 1995 STOCK OPTION PLAN. Daniels, Jr., Don Emerson, Emerson, Arthur C. Latno, Jr., Item 4-- / / / / / / Patrick D. Lynch, Catherine C. APPROVAL OF MacMillan, Dwight H. Murray, Jr., AUDITORS. Ronald A. Nelson, Carl R. Otto, David L. Payne, Edward B. Item 5-- / / / / / / Sylvester SHAREHOLDERS' PROPOSAL CONCERNING CHANGING WITHHELD FOR: (Write that nominee's name METHOD OF COMPENSATION in the space provided below). FOR DIRECTORS. - ------------------------------------------ I PLAN TO ATTEND MEETING / / FOR AGAINST ABSTAIN If you check this box to the Item 2--APPROVAL OF / / / / / / right an admission card will AMENDMENT be sent to you. OF RESTATED ARTICLES OF I have made an address / / INCORPORATION. change or comment on the reverse side of this proxy. Receipt is acknowledged of the Proxy Statement for the meeting. Whether or not you expect to attend the meeting, you are urged to execute and return this proxy, which may be revoked at any time prior to its use. SIGNATURE(S)____________________________________________ DATE___________________ NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. FOLD AND DETACH HERE WESTAMERICA BANCORPORATION LOGO March 21, 1995 Dear Participant: As a participant in the Westamerica Bancorporation Tax Deferred Savings/Retirement Plan (the "Plan"), you have an interest in the Annual Meeting of Shareholders of Westamerica Bancorporation which will be held on Tuesday, April 25, 1995 (the "Meeting"). You may direct the Trustee of the Plan how to vote all full and fractional shares of Westamerica Bancorporation stock standing to the credit of your individual account(s) (from the Supplemental Retirement Plan Account, Employer Matching Contributions and Employee Contributions) as of December 31, 1994, and your pro rata share of any unallocated shares held by the Plan as of March 1, 1995. For your information, we have enclosed a copy of the Proxy Statement and the Annual Report supplied to shareholders of Westamerica Bancorporation. The enclosed Proxy Statement describes five proposals to be voted on by the shareholders of Westamerica Bancorporation at the Meeting. The Board of Directors of Westamerica Bancorporation recommends a vote FOR PROPOSALS 1, 2, 3 AND 4 and AGAINST PROPOSAL 5. Please instruct the Trustee how to vote on these proposals by indicating your selection on the above proxy. The Trustee will keep your individual instructions confidential and will not disclose them to Westamerica Bancorporation or its officers and directors. If the Trustee does not receive written instructions from you before the close of business on April 18, 1995, it will vote all of the shares you are entitled to instruct in the same proportion as shares as to which instructions are received. Under the terms of the Plan, with respect to fractional shares in plan accounts (from the Supplemental Retirement Plan Account, Employer Matching Contributions and Employee Contributions), the Trustee may pool the results of instructions received from all participants to whom fractional shares have been allocated and vote such shares accordingly. The Trustee may also use its discretion in voting on any other business which may properly be brought before the Meeting (or any adjournment thereof) that was not specified in the Notice of Annual Meeting of Shareholders, unless you limit the Trustee's authority in this respect by striking out the sentence granting such authority on the above proxy. Please instruct the Trustee how to vote your shares. A return envelope is enclosed for your convenience. Sincerely yours, Mary Anne Bell Assistant Corporate Secretary APPENDIX C WESTAMERICA BANCORPORATION PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF WESTAMERICA BANCORPORATION FOR THE ANNUAL MEETING OF SHAREHOLDERS ON APRIL 25, 1995 The undersigned holder hereby authorizes A. Latno, Jr., R. Nelson and E. Sylvester, each with full power of substitution, to represent and vote, as designated on the reverse side, all 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 the Showcase Theatre, Marin Center, San Rafael, California at 7:30 p.m. on Tuesday, April 25, 1995, 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. You may vote according to your discretion (or that of the proxy holder(s) you appoint) on any other matter which may properly P come before the meeting. R This Proxy, when properly executed, will be voted as directed herein by the undersigned shareholder. If no direction is indicated, O this Proxy will be voted FOR all nominees, FOR Items 2, 3 and 4 and AGAINST Item 5. X PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY, USING THE Y ENCLOSED ENVELOPE. - ---------------------------------------- COMMENTS/ADDRESS CHANGE: | | (Continued and to be signed | on other side) | Please mark /X/ your votes -------- ---------------------------- as this COMMON DIVIDEND REINVESTMENT SHARES THE BOARD OF DIRECTORS RECOMMENDS A THE BOARD OF DIRECTORS RECOMMENDS VOTE FOR ITEMS 1, 2, 3 AND 4. A VOTE AGAINST ITEM 5. WITHHELD FOR FOR ALL FOR AGAINST ABSTAIN Item 1--ELECTION OF DIRECTORS / / / / Item 3-- / / / / / / Etta Allen, Louis E. APPROVAL OF Bartolini, Charles I. 1995 STOCK OPTION PLAN. Daniels, Jr., Don Emerson, Emerson, Arthur C. Latno, Jr., Item 4-- / / / / / / Patrick D. Lynch, Catherine C. APPROVAL OF MacMillan, Dwight H. Murray, Jr., AUDITORS. Ronald A. Nelson, Carl R. Otto, David L. Payne, Edward B. Item 5-- / / / / / / Sylvester SHAREHOLDERS' PROPOSAL CONCERNING CHANGING WITHHELD FOR: (Write that nominee's name METHOD OF COMPENSATION in the space provided below). FOR DIRECTORS. - ------------------------------------------ I PLAN TO ATTEND MEETING / / FOR AGAINST ABSTAIN If you check this box to the Item 2--APPROVAL OF / / / / / / right an admission card will AMENDMENT be sent to you. OF RESTATED ARTICLES OF Discontinue mailing Annual / / INCORPORATION. Report Subject to Proxy Regulations I have made an address / / change or comment on the reverse side of this proxy. Receipt is acknowledged of the Proxy Statement for the meeting. Whether or not you expect to attend the meeting, you are urged to execute and return this proxy, which may be revoked at any time prior to its use. SIGNATURE(S)____________________________________________ DATE___________________ NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. FOLD AND DETACH HERE MEETING TICKET REQUEST INSTRUCTIONS WESTAMERICA BANCORPORATION ANNUAL MEETING OF SHAREHOLDERS 7:30 P.M., TUESDAY, APRIL 25, 1995 THE SHOWCASE THEATRE, MARIN CENTER SAN RAFAEL, CALIFORNIA You can avoid registration lines by obtaining tickets in advance. If you plan to attend the Meeting, please mark the "I Plan to Attend Meeting" box on your proxy and return it in the enclosed preaddressed return envelope to Westamerica Bancorporation, c/o Chemical Trust Company of California, P.O. Box 24871, New York, NY 10242-4871. You will be mailed a ticket entitling admission for two people. - -------------------------------------------------------------------------------- Because of seating limitations, your ticket is valid for admission of up to two people. If you desire additional tickets, please call Westamerica Bancorporation at (415) 257-8024. DO NOT RETURN THIS CARD WITH YOUR PROXY EX-99 2 ADDITIONAL INFORMATION SHAREHOLDER/GUEST This is your ticket for the Westamerica Bancorporation Annual Meeting of Shareholders, 7:30 P.M., Tuesday, April 25, 1995, at the Showcase Theatre, Marin Center, San Rafael, California. With your ticket you can bypass the registration process and go directly into the meeting. Only shareholders of record as of March 1, 1995, or their proxies, may address the meeting. Thank you for your interest in Westamerica Bancorporation. We look forward to seeing you on April 25th. ADMITS TWO Please indicate number attending _________ M WESTAMERICA BANCORPORATION E c/o CHEMICAL TRUST COMPANY OF CALIFORNIA E PROXY TALLY DEPARTMENT T CHURCH STREET STATION I POST OFFICE BOX 24871 N NEW YORK, NY 10242-4871 G T I C K E T -----END PRIVACY-ENHANCED MESSAGE-----