UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrantx    Filed by a Party other than the Registranto

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American River Bankshares

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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AMERICAN RIVER BANKSHARES

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

May 21, 202020, 2021

TO THE SHAREHOLDERS OF AMERICAN RIVER BANKSHARES:

NOTICE IS HEREBY GIVEN that, pursuant to the call of its Board of Directors, the Annual Meeting of Shareholders (the “Meeting”) of American River Bankshares (the “Company”) will be held on Thursday, May 21, 202020, 2021 at 4:3:00 p.m. Pacific Time, at American River Bank, 3100 Zinfandel Drive, Suite 450,the Homewood Suites by Hilton, 10700 White Rock Road, Rancho Cordova, CA 95670 for the following purposes:

As an accommodation to our shareholders in light of the challenges presented by the COVID-19 virus, the Company has decided to provide a call-in number for those shareholders who would prefer not to attend the shareholder meeting in person but would still like to listen to the proceedings. Although such remote attendance will not constitute legal attendance under applicable provisions of California law and you will not be able to cast your votes, change any votes you may have already made by proxy, or ask any questions, we are pleased to be able to provide this remote opportunity to our shareholders. To access the shareholder meeting remotely, please dial 1 (800) 774-6070 and enter the conference passcode 5368 197#6253 869# on Thursday, May 21, 202020, 2021 at 4:3:00 p.m. California time. For those who do attend the meeting in person, we will observe proper social-distancing protocol to the extent required by local and state officials.

Article III, Section 3.3 of the bylaws of the Company provides for the nomination of directors in the following manner:

“Nominations for election of members of the board may be made by the board or by any holder of any outstanding class of capital stock of the corporation entitled to vote for the election of directors. Notice of intention to make any nominations (other than for persons named in the notice of the meeting called for the election of directors) shall be made in writing and shall be delivered or mailed to the president of the corporation not less than twenty-one (21) days nor more than sixty (60) days prior to any meeting of shareholders called for the election of directors; provided, however, that if less than twenty-one (21) days’ notice of the meeting is given to shareholders, such notice of intention to nominate shall be mailed or delivered to the president of the corporation not later than the close of business on the tenth (10th) day following the day on which the notice of meeting was mailed. Such notification shall contain the following information to the extent known to the notifying shareholder: (a) the name and address of each proposed nominee; (b) the principal occupation of each proposed nominee; (c) the number of shares of capital stock of the corporation owned by each proposed nominee; (d) the name and residence address of the notifying shareholder; (e) the number of shares of capital stock of the corporation owned by the notifying shareholder; (f) the number of shares of capital stock of any bank, bank holding company, savings and loan association or other depository institution owned beneficially by the nominee or by the notifying shareholder and the identities and locations of any such institutions; and (g) whether the proposed nominee has ever been convicted of or pleaded nolo contendere to any criminal offense involving dishonesty or breach of trust, filed a petition in bankruptcy or been adjudged bankrupt. The notification shall be signed by the nominating shareholder and by each nominee, and shall be accompanied by a written consent to be named as a nominee for election as a director from each proposed nominee. Nominations not made in accordance with these procedures shall be disregarded by the chairperson of the meeting, and upon his or her instructions, the inspectors of election shall disregard all votes cast for each such nominee. The foregoing requirements do not apply to the nomination of a person to replace a proposed nominee who has become unable to serve as a director between the last day for giving notice in accordance with this paragraph and the date of election of directors if the procedure called for in this paragraph was followed with respect to the nomination of the proposed nominee.”

The Board of Directors has fixed the close of business on March 30, 202029, 2021 as the record date for determination of shareholders entitled to notice of, and to vote at, the Meeting and any and all postponements or adjournments thereof.

	BY ORDER OF THE BOARD OF DIRECTORS
	Kimberly A. Box
Dated: April 9, 20202021	Corporate Secretary

Please sign and return the enclosed Proxy Card (“PROXY”) as promptly as possible and indicate if you will attend the meeting in person. ALTERNATIVELY, a shareholder can choOse to vote by telephone or by using the internet as indicated on the proxy. if you vote by telephone or electronically through the internet, you do not need to return the proxy. please refer to the proxy statement AND PROXY for a more complete description of the procedures for telephone and internet voting.

AMERICAN RIVER BANKSHARES

PROXY STATEMENT

FOR

ANNUAL MEETING OF SHAREHOLDERS

May 21, 202020, 2021

INTRODUCTION

This proxy statement is furnished in connection with the solicitation of proxies for use at the 20202021 Annual Meeting of Shareholders (the “Meeting”) of American River Bankshares (the “Company”) to be held on Thursday, May 21, 2020,20, 2021, at 4:3:00 p.m. Pacific Time, at American River Bank, 3100 Zinfandel Drive, Suite 450,the Homewood Suites by Hilton, 10700 White Rock Road, Rancho Cordova, CA 95670 for the following purposes and at any and all postponements or adjournments thereof. Only shareholders of record on March 30, 202029, 2021 (the “Record Date”) will be entitled to notice of the Meeting and to vote at the Meeting. At the close of business on the Record Date, the Company had outstanding and entitled to be voted 5,918,3755,962,466 shares of the Company’s no par value common stock. Directions to the Meeting can be found later in this proxy statement. This proxy statement together with our Annual Report for 20192020 will be mailed to shareholders on or about April 9, 2020.2021.

As an accommodation to our shareholders in light of the challenges presented by the COVID-19 virus, the Company has decided to provide a call-in number for those shareholders who would prefer not to attend the shareholder meeting in person but would still like to listen to the proceedings. Although such remote attendance will not constitute legal attendance under applicable provisions of California law and you will not be able to cast your votes, change any votes you may have already made by proxy, or ask any questions, we are pleased to be able to provide this remote opportunity to our shareholders. To access the shareholder meeting remotely, please dial1 (800) 774-6070 and enter the conference passcode 5368 197#6253 869# on Thursday, May 21, 202020, 2021 at 4:3:00 p.m. California time. For those who do attend the meeting in person, we will observe proper social-distancing protocol to the extent required by local and state officials.

Revocability of Proxies

A proxy for voting your shares at the Meeting is enclosed. Any shareholder who executes and delivers such proxy has the right to and may revoke it at any time before it is exercised by filing with the Secretary of the Company an instrument revoking it or a duly executed proxy bearing a later date. In addition, a proxy will be revoked if the shareholder executing such proxy is in attendance at the Meeting and such shareholder votes in person. Subject to such revocation, all shares represented by a properly executed proxy received in time for the Meeting will be voted by the proxyholders in accordance with the instructions specified on the proxy.

Unless otherwise directed in the accompanying proxy, the shares represented by your executed proxy will be voted “FOR” the nominees for election of directors named herein, “FOR” the Company’s 2020 Equity Incentive Plan, “FOR” the ratification of the selection of Crowe LLP as the Company’s independent registered public accounting firm for the 20202021 fiscal year, and “FOR” approval on an advisory (non-binding) basis of the Company’s named executive officer compensation.Ifcompensation.If any other business is properly presented at the Meeting and at any and all postponements or adjournments thereof, the proxy will be voted in accordance with the recommendations of management.

Solicitation of Proxies

This solicitation of proxies is being made by the Board of Directors of the Company. The expenses of preparing, assembling, printing, and mailing this proxy statement and the materials used in this solicitation of proxies will be borne by the Company. It is contemplated that proxies will be solicited principally through the use of the mail, but directors, officers, and employees of the Company may solicit proxies personally or by telephone, without receiving special compensation. The Company will reimburse banks, brokerage houses and other custodians, nominees and fiduciaries for their reasonable expenses in forwarding the proxy statement and materials to shareholders whose stock in the Company is held of record by such entities. In addition, the Company may use the services of individuals or companies it does not regularly employ in connection with this solicitation of proxies, if management determines it advisable, at a cost not to exceed $12,500.advisable.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 21, 2020.20, 2021.

The Company’s Proxy Statement and Annual Report on Form 10-K for the fiscal year ended December 31, 20192020 are available free of charge atwww.envisionreports.com/AMRB.

We are furnishing materials to our shareholders primarily via the internet instead of mailing printed copies of those materials to our shareholders. By doing so, we save costs and reduce the environmental impact of the Meeting. On April 9, 2020,2021, the Company mailed a Notice of Internet Availability of Proxy Materials (“Notice”) to shareholders. The Notice contains instructions about how to access our proxy materials and vote online or by telephone. If you would like to receive a paper copy of our proxy materials, please follow the instructions included in the Notice.

Voting Securities

On any matter submitted to the vote of the shareholders, each holder of common stock will be entitled to one vote, in person or by proxy, for each share of common stock he or she held of record on the books of the Company as of the Record Date.

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. If, by the time scheduled for the Meeting, a quorum of shareholders of the Company is not present or if a quorum is present but sufficient votes in favor of any of the proposals have not been received, the Meeting may be held for purposes of voting on those proposals for which sufficient votes have been received, and the persons named as proxyholders may propose one or more adjournments of the Meeting to permit further solicitation of proxies with respect to any of the proposals as to which sufficient votes have not been received.

Votes cast will be counted by the Inspector of Election for the Meeting. Approval of any proposal (other than the election of directors) requires the affirmative vote of a majority of the shares represented and voting at the Annual Meeting which also constitutes a majority of the required quorum (unless a greater number is required as described in a proposal). In the election of directors, the nine (9)eight (8) nominees receiving the highest number of affirmative votes will be elected. Shares represented by proxies that reflect abstentions or “broker non-votes” will be treated by the Inspector of Election as shares present and entitled to vote for purposes of determining the presence of a quorum; however, broker non-votes will not be treated as shares voted on any proposal and therefore will have no effect upon the outcome of any proposal. Abstentions will not be treated as affirmative votes on any proposal at the Meeting and will have the same effect as a vote “against” a proposal (other than the election of directors proposal) if the affirmative votes in favor of a proposal are less than a majority of the required quorum. “Broker non-votes” means shares held by brokers or nominees as to which instructions have not been received from the beneficial owners or persons entitled to vote and the broker or nominee does not have discretionary voting power under applicable rules of the stock exchange or other self-regulatory organization of which the broker or nominee is a member.

Any shareholder may choose to vote shares of common stock by telephone by calling the toll-free number (at no cost to the shareholder) indicated on the proxy. Telephone voting is available 24 hours per day. Easy to follow voice prompts allow a shareholder to vote shares and to confirm that instructions have been properly recorded. The Company’s telephone voting procedures are designed to authenticate the identity of shareholders by utilizing individual control numbers.If a shareholder votes by telephone, there is no need to return the proxy.

Any shareholder may choose to vote shares of common stock electronically by using the Internet, as indicated on the proxy. Internet voting procedures are designed to authenticate the identity of a shareholder and to confirm that instructions have been properly recorded. The Company believes these procedures are consistent with the requirements of applicable law.If a shareholder votes electronically by using the Internet, there is no need to return the proxy.

If you vote by telephone or Internet, your vote must be received by 1:00 a.m.11:59 p.m., Eastern Time, on May 21, 202019, 2021 to ensure that your vote is counted.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of March 30, 2020,29, 2021, concerning the equity ownership of the Company’s directors, director-nominees, and the executive officers named in the “Summary Compensation Table” in this proxy statement, shareholders known to us to beneficially own more than 5% of our common stock, and directors, director-nominees, and executive officers as a group. Unless otherwise indicated in the notes to the table, each person listed below possesses sole voting and sole investment power, or shared voting and investment power with a spouse, for the shares of the Company’s common stock listed below. All of the shares shown in the following table are owned both of record and beneficially except as indicated in the notes to the table. The Company has only one class of shares outstanding, common stock. Management is not aware of any arrangements which may, at a subsequent date, result in a change in control of the Company.

PROPOSAL NO. 1

ELECTION OF DIRECTORS

The Company’s Bylaws provide that the number of directors of the Company shall not be less than eight (8) nor more than fifteen (15) until changed by an amendment to Article III, Section 3.2 of the Bylaws duly adopted by the vote or written consent of holders of a majority of the outstanding shares entitled to vote. The exact number of directors shall be fixed from time to time, within the range specified in the articles of incorporation or in Section 3.2: (i) by a resolution duly adopted by the board; (ii) by a bylaw or amendment thereof duly adopted by the board of directors or the vote of a majority of the shares entitled to vote represented at a duly held meeting at which a quorum is present, or by the written consent of the holders of a majority of the outstanding shares entitled to vote; or (iii) by approval of the shareholders entitled to vote. The Board of Directors has fixed the number of directors at nine (9)eight (8).

The Board of Directors has nominated the nine (9)eight (8) incumbent directors named below for election as directors of the Company and to apprise you of their qualifications to serve as directors, we include the information below concerning each of the nominees, as of the Record Date, that each nominee has given us regarding age, current positions held, principal occupation and business experience for the past five years, and the names of other publicly-held companies of which the nominee currently serves as a director or has served as a director during the past five years. In addition to the information presented regarding each nominee’s specific experience, qualifications, attributes and skills that led the Nominating Committee to recommend that our Board of Directors nominate these individuals, all of the nominees have a reputation for honesty, integrity and adherence to high ethical standards. The Nominating Committee also believes that the nominees possess the willingness to engage management and each other in a positive and collaborative fashion, and are prepared to make the significant commitment of time and energy to serve on our Board of Directors and its committees. The following persons are the nominees of the Board of Directors for election to serve for a one-year term until the 20212022 annual meeting of shareholders and until their successors are duly elected and qualified:

NICOLAS C. ANDERSONAge: 35,36, Director since 2018; Principal Occupation: Chief Executive Officer, ArcherHall, 2015 – Present; Managing Partner, Elm Grove Partners; 2013 – Present. 

Mr. Anderson is Chief Executive Officer of ArcherHall, a company that provides digital forensics and high-value digital discovery services to law firms, corporations and government agencies. Headquartered in Sacramento, the company has been operating in the region for over 20 years. Mr. Anderson is also currently a Managing Partner of Elm Grove Partners, a private investment firm currently based in Sacramento, California, organized to acquire and operate companies in the lower middle market. He has beenserves on the board of Sacramento’s Region Business Association, and is involved in a variety of community-based organizations including the Sacramento Federal Judicial Library and Learning Center Foundation and the California Innocence Project, and Streetwise Partners.Project. Mr. Anderson graduated from Harvard University with an AB in Economics (Bachelor of Arts degree in Economics) and graduated with Distinction from the Harvard Business School with a Master of Business Administration degree. We believe that Mr. Anderson’s strong educational background, financial and investment experience, and role as well as being a sitting CEO directing strategy and operations of an expanding company qualifies him to serve on our Board of Directors.

KIMBERLY A. BOXAge: 60,61, Director since 2012; Principal Occupation: Independent Director and Advisor since 2012. President & CEO Gatekeeper Innovation, Inc. since 2017.January 2017 to March 2020.

Ms. Box is former President and CEO of Gatekeeper Innovation, Inc., a company that provides products for medication safekeeping. She is a former Hewlett Packard Vice President with vast experience in the Information Technology industry. Over her career, she has led Information Technology outsourcing services, product engineering and support services including leading a $1 billion global organization. Since July 2018, Ms. Box has served asis a Director on the Board of McGrath Rentcorp a publicly-traded company (Nasdaq: (NASDAQ:MGRC), where she serves on the Compensation and Nomination/Governance Committees, and on the Board of Applied Science, Inc. where she serves on the Compensation Committee. She is very active in the community currently serving on the National Association of Corporate Directors NorCal Chapter not-for-profit and is on the Advisory Board of the Carlsen Center for Innovation and entrepreneurship at California State University, Sacramento. Ms. Box is currently Chairman of American River Bank’s Finance and Capital Committee and a member of the Audit Committee. Her extensive experience in the IT industry, CEO experience, entrepreneurial acumen and her active involvement in the community provides valuable insight and contribution to our Board of Directors.

CHARLES D. FITEAge: 62.63. Director since 1993; Principal Occupation: President, Fite Development Company in Sacramento since 1980. President, Fite Properties Inc. since 1999 and President, Fite Construction Inc. since 1999.

Mr. Fite is President of the Fite Development Company, founded in 1970 by D. Bruce Fite. As President, Mr. Fite is involved in all aspects of the company’s operations including development, management, marketing and financing of both existing and proposed projects. Mr. Fite serves as Chairman of the American River Bank Foundation, a non-profit organization whose mission is to serve the needs of the most vulnerable women and children within our communities. Mr. Fite is a licensed real estate broker and has 40 years of experience as a real estate developer. He is the Board President of Sacramento’s Region Business Association, the region’s leading champion for economic growth and job creation. He has been the Chairman of the Board of Directors of American River Bankshares since 2001. Mr. Fite’s qualifications to serve as Chairman of our Board of Directors include his business acumen, integrity, leadership and knowledge of the commercial real estate market, as well as his community service.

JEFFERY OWENSBYAge: 62.63. Director since 2016; Principal Occupation: Mediator and Arbitrator, Judicate West, 2020 to present, Partner, Kennaday Leavitt Owensby, PC, October 2016 to December 2019.Partner, Rediger, McHugh & Owensby, LLP, November 2007 to October 2016.

Mr. Owensby is a Mediator/Arbitrator for Judicate West, one of California’s leading providers of private dispute resolution services. Prior to his career as a “neutral,” his 37 plus years of experience in the practice of labor and employment law included advising clients in all aspects of California and Federal labor law, litigation, trials, as well as Labor/Management relations. For the last decade, he has been selected by other lawyers to help them resolve lawsuits in which they are engaged. He has mediated numerous employment disputes including class actions. He is regularly called upon as a subject matter expert to provide education in the fields of employment law and voluntary dispute resolution. He gives extensive pro bono time to the state and federal courts to assist the courts and parties resolve cases before trial. Over the years, he has been on several boards of directors of philanthropic and community organizations. Mr. Owensby serves on the Board of Directors of the American River Bank Foundation, a non-profit organization whose mission is to serve the needs of the most vulnerable women and children within our communities. Mr. Owensby’s extensive legal experience, analytical capabilities and diligence in guiding organizations through complex decision-making processes provides value to the Board of Directors.

JULIE A. RANEYAge: 51.52. Director since 2019; Principal Occupation: Vice President, Office of the General Counsel, Sutter Health, present, Deputy General Counsel for Sutter Health since 2016,-2020, Assistant General Counsel for Sutter Health from 2010 to 2016.

Ms. Raney currently serves as an in-house attorney for Sutter Health, a not for profit health care system in Northern California, where she leads the Employmentmanages legal work for labor and Labor Group, the Disability Access Compliance Team,employment, finance, philanthropy, real estate, tax, executive compensation, disability access compliance and the Special Investigation Unit.special investigations. Throughout her ten yearstenure at Sutter Health and the prior fifteen years in private practice, Ms. Raney has developed an expertise in employment related matters and risk reduction strategies. Additionally, she has served as a Court Appointed Special Advocate for Placer County. Ms. Raney earned a Juris Doctorate from King Hall School of Law at the University of California, Davis and a Bachelor of Arts, magna cum laude, in political science, also from the University of California, Davis. Ms. Raney’s extensive legal knowledge together with her expertise in compliance and risk management makes her highly qualified to serve on the Board.

DAVID E. RITCHIE, JR.Age: 61.62. Director since 2017; Principal Occupation: President and Chief Executive Officer of American River Bankshares since 2017.

Mr. Ritchie’s prior roles include Senior Vice President and Regional Manager, Commercial Banking at US Bank, Executive Vice President and Regional Manager of Commercial Banking at One West Bank and 25 years in various leadership positions with Wells Fargo Bank. He attended the University of Southern California and University of California, Irvine and holds a Bachelor of Arts degree in Economics. He has served on the board of directors of the San Juan Capistrano Chapter of Legatus and is past chairman of the board of directors of the Orangewood Children’s Foundation in Southern California, an organization he was involved with for thirteen years, among many other community roles. He currently serves as President of the American River Bank Foundation and a Board Member of the Child Abuse Prevention Center. Mr. Ritchie’s extensive experience in the banking industry as well as his involvement in the community makes him highly qualified to serve on our Board of Directors.

WILLIAM A. ROBOTHAM Age: 78.79. Director since 2004; Principal Occupation: CPA, Former Executive Partner, Pisenti & Brinker LLP, Certified Public Accountants in Santa Rosa since 1996.

Mr. Robotham has been a Certified Public Accountant since 1967. He joined Pisenti & Brinker LLP in 1966, became a partner in 1969, managing partner in 1983 and executive partner in 1996. He has served as the partner-in-charge of the Auditing and Accounting department, the Tax department and the Management Advisory Services department. Mr. Robotham currently works in tax, general practice and management consulting for the firm. Mr. Robotham is currently Vice Chairman of the Board of Directors of American River Bankshares and serves as the Chairman of the Audit Committee for American River Bankshares. Mr. Robotham was a founding member and a director of North Coast Bank. He remained on the North Coast Bank board of directors until 2003 when North Coast Bank was merged into American River Bank. He joined the American River Bank Board of Directors in 2004. Mr. Robotham has also been the President of Randal Nutritional Products, Inc. (“Randal”) since 2000. Randal is based in Santa Rosa and has been manufacturing nutritional products since 1947. Mr. Robotham is also a founding member of the Board of Directors of the American River Bank Foundation and serves as the Foundation’s Vice Chairman. Mr. Robotham’s experience in public and private business and his more than 40 years of experience in the field of public accounting led us to conclude he should serve on our Board of Directors.

PHILIP A. WRIGHT Age: 73.74. Director since 2009; Principal Occupation: Real Estate Broker and President and Owner of Wright Investments Inc. dba Wright Realty since 1984; Developer, Wright Investment since 1984 and President, Trowbridge & Wright Investment Inc. since 1976.

Mr. Wright was a founding member of the board of directors of North Coast Bank and was its first Chairman from 1990 to 1995. He remained on the North Coast Bank Board of Directors until 2003 and joined the American River Bank Board of Directors in 2004 when the two banks merged. Mr. Wright was named to the American River Bankshares Board of Directors in 2009. Mr. Wright has been an active real estate agent/broker for over 40 years. He owned a mortgage company for four years and presently manages his own real estate business. Mr. Wright has been involved in subdividing and marketing land in Sonoma County since 1977, which included processing all governmental permits, project financing, budgets, construction bidding and overseeing construction of the final project. He currently serves on the Board of Directors of the American River Bank Foundation. Mr. Wright’s extensive experience in the real estate business as well as in the banking industry qualifies him to serve as a member of our Board of Directors.

MICHAEL A. ZIEGLER Age: 75. Director since 2002; Principal Occupation: Chief Executive Officer of PRIDE Industries in Roseville, California.

As CEO of PRIDE Industries, Mr. Ziegler oversees a company with over $340 million in sales and more than 5,700 part-time and full-time employees working throughout the country.  Mr. Ziegler attended San Francisco State University and completed his MBA at the University of San Francisco.  He was a graduate of the Stanford Small Business Executive Program and has an Honorary Ph.D. from the Golden Gate University.  His entrepreneurial background revolves around business ownership, sales/marketing and leadership. He serves on the board of directors of the Greater Sacramento Area Economic Council, UC Davis Health System National Board of Advisors, Teichert Inc., PRIDE Industries, PRIDE Foundation Advisory Board, and he is a founding member of the board of directors and a senior fellow of the American Leadership Forum Mountain Valley Chapter.  Mr. Ziegler’s experience in running a large-scale company including his involvement in many academic and community activities makes him a valuable member of our Board of Directors.

All proxies will be voted for the election of the nine (9)eight (8) nominees recommended by the Board of Directors, unless authority to vote for the election of any director or all directors is withheld. All of the nominees are incumbent directors.

If any of the nominees should unexpectedly decline or be unable to serve as a director, the proxies may be voted for a substitute nominee to be designated by the Board of Directors. The Board of Directors has no reason to believe that any nominee will become unavailable and has no present intention to nominate persons in addition to or in lieu of those named above.

None of the Company’s directors, nominees for election as directors listed above, or executive officers listed on page 3 of this proxy statement, were selected pursuant to any arrangement or understanding other than with the directors and executive officers of the Company acting within their capacities as such. There are no family relationships between any two or more of the directors, nominees for director, or executive officers. Except as disclosed above, no director or officer of the Company currently serves, or within the last five years has served, as a director of any public company, including any company which has a class of securities registered under, or which is subject to the periodic reporting requirements of, the Securities Exchange Act of 1934, or of any company registered as an investment company under the Investment Company Act of 1940. To our knowledge, none of the nominees were subject to any legal, judicial or administrative proceedings involving or based on violations of federal or state securities, commodities, banking or insurance laws and regulations or settlements thereof, involvement in mail or wire fraud or fraud in connection with any business entity, any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization, convictions in a criminal proceeding (excluding traffic violations and minor offenses) or had a petition under bankruptcy laws filed against themselves or an affiliate, in each case within the last ten years.

Recommendation of Board of Directors

The Board of Directors recommends a vote “FOR” each of the nine (9)eight (8) nominees listed above.

CORPORATE GOVERNANCE

Our Board of Directors and management are dedicated to the standard of exemplary corporate governance and believe that corporate governance is vital to the continued success of the Company. The Board of Directors annually reviews and updates the charters of the committees of the Board of Directors in response to evolving “best practices” and the results of changes in the regulatory environment.

Director Independence

Our Board of Directors has determined that each of our non-employee directors (excluding David E. Ritchie, Jr.) is independent. Each of our Audit, Nominating and Compensation Committees is composed only of independent directors.

Our Board of Directors has adopted certain standards to assist it in assessing the independence of each of our directors. A director who otherwise meets the definition of independence under applicable NASDAQ listing standards may be deemed “independent” by the Board of Directors after consideration of all of the relationships between the Company and the director, or any of his or her immediate family members (as defined in the NASDAQ listing rules), or any entity with which the director or any of his or her immediate family members is affiliated by reason of being a partner, officer or a significant shareholder thereof. However, ordinary banking relationships (such as depository, lending, and other services readily available from other financial institutions) are not considered by the Board of Directors in determining a director’s independence, as the Board of Directors considers these relationships to be immaterial. A banking relationship is considered “ordinary” if:

In assessing the independence of our directors, our Board of Directors carefully considered all of the business relationships between the Company and our directors or their affiliated companies, other than ordinary banking relationships. This review was based primarily on responses of the directors to questions in a directors’ and officers’ questionnaire regarding employment, business, familial, compensation and other relationships with the Company and our management. Where business relationships other than ordinary banking relationships existed, the Board of Directors determined that, except in the case of Mr. Ritchie, none of the relationships between the Company and the directors or the directors’ affiliated companies impair the directors’ independence because the amounts involved are immaterial to the directors or to those companies when compared to their annual income or gross revenues. The Board of Directors also determined for all of the relationships between the Company and our directors or the directors’ affiliated companies, that none of the relationships had unique characteristics that could influence the director’s impartial judgment as a director of the Company.

Code of Ethics

The Company has adopted a Code of Ethics that complies with the rules promulgated by the Securities and Exchange Commission pursuant to the Sarbanes-Oxley Act of 2002 and applicable NASDAQ listing rules. The Code of Ethics requires that the Company’s directors, officers (including the principal executive, financial and accounting officers, or controller and persons performing similar functions) and employees conduct business in accordance with the highest ethical standards and in compliance with all laws, rules and regulations applicable to the Company. The Code of Ethics is intended to supplement the provisions of any other personnel policies of the Company or codes of conduct, which may establish additional standards of ethical behavior applicable to the Company’s directors, officers and employees.

The Code of Ethics was filed as Exhibit 14.1 to the Company’s 2003 Annual Report on Form 10-K and may be accessed through the Company’s website by following the instructions for accessing reports filed with the Securities and Exchange Commission hereafter in this proxy statement under the heading “Website” or a copy is available, free of charge, upon written request to Mitchell A. Derenzo, American River Bankshares, 3100 Zinfandel Drive, Suite 450, Rancho Cordova, CA 95670.

Leadership Structure

The positions of the Chairman of the Board of Directors and the President and Chief Executive Officer (“CEO”) are filled by different persons. Mr. Fite, an independent director, serves as the Board of Directors Chairman, while Mr. Ritchie serves as President and CEO. The Board of Directors believes that separating the roles of Chairman and President and CEO is preferable and in the best interests of shareholders because it enhances the Board of Directors’ ability to fulfill its oversight responsibilities, inclusive of senior management. Separating the positions also provides an independent viewpoint and focus at meetings of the Board of Directors, and improves communication between management and the Board of Directors by giving our President and CEO a single initial source for Board of Directors-level communication and input on significant decisions.

Risk Oversight

Risk management is the responsibility of management and risk oversight is the responsibility of the Board of Directors. The Board of Directors administers its risk oversight function principally through its division of responsibility within its committee structure, with each committee being responsible for overseeing risk within its area of responsibility. For example, the Loan Committee of American River Bank (the “Loan Committee”) plays an important role in overseeing our loan functions and monitoring related risks. Responsibilities of our various committees are discussed under each committee in this proxy statement. Significant risk oversight matters considered by the committees are reported to and considered by the Board of Directors. Some significant risk oversight matters are reported directly to the Board of Directors, including matters not falling within the area of the responsibility of any committee. Types of risks with the potential to adversely affect the Company include cybersecurity, credit, interest rate, liquidity, and compliance risks, and other risks relating to our operations and reputation.

Management regularly provides the Board of Directors and its various committees with a significant amount of information regarding a wide variety of matters affecting the Company. Matters presented to the Board of Directors and its committees generally include information with respect to risk. The Board of Directors and its committees consider the risk aspects of such information and often request additional information with respect to issues that involve risks to the Company. The Board of Directors and its committees also raise risk issues on their own initiative.

The impact of COVID-19 is felt by our teammates, our clients, our partners, and our communities. In response to COVID-19, our highest priority was protecting the health and wellbeing of our employees and the financial viability of our clients. The Company quickly put its pandemic plan into action to adjust to the impact of the health issues from the COVID-19 pandemic on our employees and our clients. We have been working with our clients by assisting them with loan payment deferrals and maintaining service at all of our branch locations, subject to reduced operating hours. We are encouraging the use of our digital and electronic channels and our night depositories, all the while adhering to the ever-evolving State and Federal guidelines. We have been participating in the Small Business Administration’s (“SBA’s”) Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief and Economic Security (“CARES”) Act to help provide loans to our business clients to provide them with additional working capital to enable them to retain their employees.

To assist the Company with respect to enterprise risk management, and to assist the Board of Directors and its committees with respect to risk oversight, the Company has an Enterprise Risk Management Committee made up of appropriate management personnel that works to identify and assess risks across all operations of the Company. The Enterprise Risk Management Committee reports to the Board of Directors and all of its members attend either Board of Directors and/or other committee meetings as needed.

Cyber-security incidents compromising non-public personal financial information may produce material effects to the business, including but not limited to, reputational harm, loss of intellectual property, disruption of key business operations, governmental fines/penalties, and litigation/remediation costs. Under the direction of its Chief Operating Officer, the Company maintains a formal information security management program. The program leverages industry frameworks and standards to ensure appropriate controls are established and are frequently assessed for adequacy. Major components of the program include Safeguarding Customer Information, third party vendor oversight and incident response. The Board and the Company’s Enterprise Risk Management Committee receive reports and briefings from executive management relating to a full range of cyber security issues, the Company’s risk posture to protect against cyber security threats, and policies that adequately implement the program. Annually, the Board reviews and approves the formal written information security program policy including information security risk appetite; obtaining assurance that the plan addresses the dynamic changes in the threat landscape and whenever there is a material change in the Company’s cyber security risks. Executive management periodically keeps the Board abreast of efforts relating to compliance, risk assessments, results of audits, examinations, penetration and vulnerability testing, security breaches or violations and recommended changes to the Company’s information security program.

The Company does not believe the risk oversight function of the Board of Directors has had a significant effect on the leadership structure, although a change in leadership structure could result in changes in the implementation of the risk oversight function.

Review of Risk Associated With Compensation Plans

The Company develops and implements compensation plans that provide strategic direction to the participants and engages them in the Company’s success, which contributes to shareholder value. We believe our approach to goal setting, establishing targets with payouts at multiple levels of performance, evaluation of performance results and our discretion to approve or disapprove the payout of incentive compensation helps to mitigate excessive risk-taking that could harm Company value or reward poor judgment by our executive officers. Compensation policies and practices are determined by reviewing compensation analyses including industry/market benchmarking reports to determine competitive pay packages. The Company’s variable pay programs are designed to reward outstanding individual and team performance while mitigating risk taking behavior that might affect financial results. Performance incentive compensation rewards for all plans continue to be focused on results that possibly impact earnings, profitability, credit quality, loan growth, deposit growth, sound operations and compliance, sustainable culture, and leadership excellence. Incentive compensation plans, which are reviewed and revised on an annual basis, have defined terms and conditions which enable the Company to adjust the final scoring and payments under the plans. Generally, there is more oversight of plans that have a higher degree of risk, larger payouts, and that could have the greatest negative impact on the Company and American River Bank’s safety and soundness, such as credit related risks. Plan reviews and approvals increase before any payments are made as the risks associated with a plan increase.

The Compensation Committee met with senior management officers, including the Human Resources Officer, of the Company to review the 20192020 incentive compensation plans and concluded that, based on the controls described above and elsewhere in this proxy statement, those plans do not present risks that are reasonably likely to have a material adverse effect on the Company.

Anti-Hedging and Anti-Pledging Policy

The Company maintains anAnti-Hedging and Anti-Pledging Policy which prohibits the board and all employees (including the executive officers)from hedging or otherwise offsetting or taking any actions that are designed to hedge or offset, their ownership of American River Bankshares stock, including trading in publicly-traded options, puts, calls, equity swaps, variable forward contracts, collars, exchange funds or other derivative instruments related to American River Bankshares stock or debt, should any be issued in the future and prohibits directors and executive officers of the Company, from purchasing Company securities on a margin or otherwise pledge Company securities as collateral for a loan.

Stock Ownership Requirements

The Company encourages equity ownership by its directors and executive officers to emphasize their link with the long term interests of the Company’s shareholders. Accordingly, directors and executive officers are expected to reach target equity ownership levels equal to a multiple of annual base salary/retainer at the previous year-end, as follows: Chief Executive Officer, two times base salary; other executive officers, one and one-half times base salary; and directors, three times their annual retention. This requirement may be met through common stock, restricted stock or restricted stock units. Each covered person is expected to reach his or her target ownership level within 5five years from the date he or she became subject to the ownership requirement, based on fair market value of the equity at each year end. The Company does not expect any of these executive officers or directors to sell any shares until they meet these ownership requirements, unless the sale was to pay for ordinary income taxes of vested or exercised shares.

Delinquent Section 16(a) Reports

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors, executive officers and any persons beneficially owning ten percent or more of the Company’s common stock to timely file initial reports of ownership and reports of changes in that ownership with the Securities and Exchange Commission. Such persons are required by Securities and Exchange Commission regulations to send copies of such reports to the Company. To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required during the fiscal year ended December 31, 2019,2020, the Company believes all such filing requirements applicable to its directors, executive officers and ten percent shareholders were met with the exception of a late Form 4’s4 filed by Messrs. Bender and Derenzo, bothMr. Wright relating to the purchase of 4,346 shares of the Company’s stock, which werewas filed 34two business days late.

Committees of the Board of Directors

Nominating Committee. The Nominating Committee, whose members are Charles D. Fite (Chairman), Jeffery Owensby and Michael A. Ziegler,Nicolas C. Anderson (effective February 2020) has the responsibility to assist the Board of Directors by (a) establishing criteria for candidates and identifying, evaluating, and recommending candidates, including candidates proposed by shareholders, for election to the Board of Directors, and (b) periodically reviewing and making recommendations on the composition of the Board of Directors. The Nominating Committee met twiceonce in 2019. Mr. Waks served on the Nominating Committee in 2019 prior to his resignation from the Board and all Committees effective December 31, 2019.2020. All members of the Nominating Committee are “independent,” as that term is defined under applicable NASDAQ listing rules, including Director Fite from whom the Company has leased one of its bank premises since 1985. The current lease terms and the Company’s policy are disclosed under “Transactions with Related Persons” on page 4336 of this proxy statement. Candidates are selected in accordance with a Nominating Charter. The Nominating Charter includes a policy for consideration of candidates proposed by shareholders. Any recommendations by shareholders will be evaluated by the Board of Directors in the same manner as any other recommendation and in each case in accordance with the Nominating Charter. Shareholders that desire to recommend candidates for consideration by the Company’s Board of Directors should mail or deliver written recommendations to the Company addressed as follows: Board of Directors, American River Bankshares, 3100 Zinfandel Drive, Suite 450, Rancho Cordova, CA 95670. Each recommendation should include biographical information indicating the background and experience of the candidate that qualifies the candidate for consideration as a director for evaluation by the Board of Directors. In addition to minimum standards of independence for non-employee directors and financial literacy, the Board of Directors considers various other criteria including the candidate’s experience and expertise, financial resources, ability to devote the time and effort necessary to fulfill the responsibilities of a director and involvement in community activities in the market areas served by the Company that may enhance the reputation of the Company. The provisions of our Nominating Committee Charter regarding diversity, as a matter of practice, may seek or favor a candidate with particular areas of expertise that complement our existing Board of Directors composition or satisfy legal requirements. In general, our objective is for the Board of Directors to reflect a diversity of perspectives and a broad range of experiences through individuals that possess the background, skills, expertise, and commitment necessary to make a significant contribution to our Company. Qualified candidates are considered without regard to race, color, religion, sex, ancestry, national origin, disability, or any other factor that qualifies the candidate as a member of a protected class under applicable law.

The Company operates in a highly regulated industry and is subject to the supervision, regulation and periodic examination by state and federal banking regulatory authorities including the Board of Governors of the Federal Reserve System, California Department of Business Oversight and Federal Deposit Insurance Corporation. Directors of the Company are subject to certain rules and regulations and potential liabilities not otherwise applicable to directors of non-banking organizations. Consequently, evaluation of candidates by the Company’s Board of Directors may include more extensive inquiries into personal background information including confirmation of the accuracy and completeness of background information by (a) requiring candidates to complete questionnaires to elicit information of the type required to be disclosed by the Company in reports filed with the Securities and Exchange Commission, NASDAQ, or such state and federal banking regulatory authorities, (b) conducting background investigations by qualified independent organizations experienced in conducting criminal and civil investigatory reviews, and (c) such other personal and financial reviews and analyses as the Board of Directors may deem appropriate in connection with the consideration of candidates.

Shareholders who wish to nominate a candidate for election to the Company’s Board of Directors, as opposed to recommending a potential nominee for consideration by the Board of Directors, are required to comply with the advance notice and any other requirements of the Company’s bylaws, applicable laws and regulations. The Board of Directors may elect to use third parties in the future to identify or evaluate candidates for consideration by the Board of Directors. The Nominating Charter adopted by the Board of Directors can be accessed through the Company’s websitewww.americanriverbank.com by accessing theInvestor Relationslink, then theCorporate Information link, then theGovernance Documents link located at that address. The Nominating Committee recommended the slate of nominees described in “Proposal No. 1, Election of Directors” on pages 4 through 6 of this proxy statement.

Compensation Committee. The Compensation Committee, whose members include Charles D. Fite, Jeffery Owensby Michael A. Ziegler (Chairman), William A. Robotham and Julie A. Rainey, (effective December 2019), oversees the performance and reviews the compensation of the executive officers and the directors of the Company and American River Bank. The Compensation Committee met seven (7)eight (8) times during 2019.2020. For additional information regarding the functions of the Compensation Committee, see the Compensation Discussion and Analysis on page 2417 and the Compensation Committee Charter which can be accessed through the Company’s websitewww.americanriverbank.comby accessing theInvestor Relationslink, then theCorporate Information link, then theGovernance Documentslink located at that address.

None of the current members of the Compensation Committee is or has ever been an officer or employee of the Company or any of its subsidiaries. During the last fiscal year, none of our executive officers served on the board of directors or on the compensation committee of any other entity, any officers of which served on either our Board or our Compensation Committee.

Audit Committee. The Audit Committee, whose members are William A. Robotham (Chairman), Nicolas C. AndersonKimberly A. Box and Philip A. Wright, oversees the Company’s independent registered public accounting firm, analyzes the results of internal and regulatory examinations and monitors the financial and accounting organization and reporting. Director Robotham has been designated by the Board of Directors as an “audit committee financial expert” as defined under rules promulgated by the Securities and Exchange Commission pursuant to the Sarbanes-Oxley Act of 2002. The Audit Committee met seven (7) times in 20192020 and held one (1) “executive session” which only the non-employee directors attended, each of whom is “independent” as defined under applicable NASDAQ listing rules. In addition, each other member of the Audit Committee is “financially literate” as defined under applicable NASDAQ listing rules. For additional information regarding the functions of the Audit Committee, see the Audit Committee Report on page 4538 and the Audit Committee Charter which can be accessed through the Company’s websitewww.americanriverbank.comby accessing theInvestor Relations link, then theCorporate Information link, then theGovernance Documentslink located at that address. In December 2019, Kimberly A. Box joined the Audit Committee and Nicolas C. Anderson left the Audit Committee.

Finance and Capital Committee.The Finance and Capital Committee, whose members include Jeffery Owensby, Stephen H. WaksKimberly A. Box (Chair), and Michael A. Ziegler,David E. Ritchie, Jr. (effective February 2020), has the responsibility to (a) oversee asset liability management and the investment portfolio including recommending to the Board of Directors the annual investment strategy; (b) recommend to the Board of Directors the annual operating budget for the Company; and (c) review premises leases and capital expenditures over $100,000 for recommendation to the Board of Directors. Mr. Waks resigned from the Board and all Committees effective December 31, 2019. In December 2019, Kimberly A. Box joined the Finance and Capital Committee and in January 2020, Ms. Box became the Chair of the Finance and Capital Committee. In September 2019, Julie A. Rainey joined the Finance and Capital Committee and in December 2019, Ms. Raney left the Finance and Capital Committee. The Finance and Capital Committee met five (5)six (6) times during 2019.2020.

Executive Committee. The Executive Committee, whose members include Charles D. Fite (Chair), David E. Ritchie, Jr., William A. Robotham, Stephen H. Waks,Kimberly A. Box, and Michael A. ZieglerNicolas C. Anderson oversees long range planning, formulates and recommends broad policy positions for the Board of Directors to consider and is responsible for evaluating and recommending to the Board of Directors matters pertaining to mergers and acquisitions. The Executive Committee did not have a meeting in 2019.2020. Ms. Box and Mr. Waks resigned fromAnderson joined the Board and all Committees effective December 31, 2019.Executive Committee in June 2020.

Loan Committee of American River Bank. The Loan Committee has the responsibility for establishing loan policy, approving loans which exceed certain dollar limits and reviewing the outside loan review firm’s examinations of the loan portfolios. The Loan Committee includes Kimberly A. Box (Chairman), Nicolas C. Anderson (Chairman), Charles D. Fite, Stephen H. Waks,Julie A. Raney, Jeffery Owensby and Philip A. Wright. The Loan Committee met eighteen (18)sixteen (16) times during 2019. In December 2019, Kimberly A. Box left the Loan Committee and was replaced by Nicolas C. Anderson as Chair. Also in December 2019, Julie A. Raney joined the Loan Committee. Mr. Waks resigned from the Board and all Committees effective December 31, 2019.2020.

During 2019,2020, the Company’s Board of Directors held twelve (12) regular meetings. In addition, the Company’s Board of Directors held three (3)two (2) “executive sessions” which only the non-employee directors attended, each of whom is “independent” as defined under applicable NASDAQ listing rules. All directors attended at least 75% of the aggregate of the total number of meetings of the Board of Directors and the number of meetings of the committees on which they served.

See “Detail of Director Compensation Elements – Cash Compensation” on page 13 of this proxy statement for information regarding fees paid to directors during 20192020 for Board of Directors and committee meetings.

Shareholder Communications

A majority of the members of the Board of Directors, each of whom is “independent” as defined under applicable NASDAQ listing rules, has established procedures for receipt and delivery of shareholder communications addressed to the Board of Directors. Any such shareholder communications, including communications by employees of the Company solely in their capacity as shareholders, should be mailed or delivered to the Company addressed as follows: Board of Directors, American River Bankshares, 3100 Zinfandel Drive, Suite 450, Rancho Cordova, CA 95670. During 2020, the Company did not receive any such communications to the independent members of the Board of Directors related to compensation matters.

It is the practice of management to hold quarterly conference calls with shareholders and analysts to discuss the financial results of the Company. Four such conference calls were held in 2020, with the Chief Executive Officer and Chief Financial Officer of the Company on the call. It is also the practice of the management to attend investor conferences for the purposes of meeting with current and prospective shareholders. During 2020, the Chief Executive Officer and Chief Financial Officer, due to COVID-19 restrictions attended one such conference in person and one remotely, and held many telephone conversations with our other shareholders and prospective shareholders as part of the Company’s ongoing shareholder engagement.

Annual Meeting Attendance

The Company requiresmembersrequiresmembers of its Board of Directors to attend the Company’s annual meeting of shareholders each year. All then-serving directors attended the Company’s annual meeting of shareholders held in 2019.2020.

DIRECTOR COMPENSATION

Director Compensation Program

The Compensation Committee of the Board of Directors (the “Compensation Committee”) oversees the Company’s director compensation program. The compensation program includes elements that are designed specifically for the non-employee directors (excluding David E. Ritchie, Jr.). Additionally, the Compensation Committee is charged with the review, and recommendation to the Board of Directors, of all annual compensation decisions relating to the directors.

The Compensation Committee’s compensation philosophy was developed to balance and align the interests of the directors and shareholders. The three primary elements of compensation for our directors are cash compensation, equity-based incentive compensation, and retirement benefits.

In 2018, theThe Compensation Committee, upon approval of the Board of Directors, consulted with McLaganBlanchard Consulting a business unit of AON PLC. (“McLagan”Blanchard”), a compensation and benefits consulting firm, to evaluate the Board of Directors compensation for 2019. McLagan2020. Blanchard served as an independent compensation consultant to advise the Compensation Committee on all matters related to the Board of Directors compensation and general compensation programs including guidance on industry best practices. Based on discussions with McLagan,Blanchard, the Compensation Committee recommended, and the Board of Directors approved, no changes to the cash retainers, meeting attendance fees, or equity portion of director compensation for 2019.2020. The elements of director compensation are described below.

For the analysis of the 20192020 director compensation, the Compensation Committee, with the help of McLagan,Blanchard, selected twentytwenty-four publicly-traded banking companies headquartered on the West Coast (the “Peer Group”). The Peer Group is used to benchmark compensation levels against companies that are similar in breadth and scope to our Company. The following twentytwenty-four companies havehad assets between $250$350 million and $1.5 billion as of MarchDecember 31, 2018 and comprise the Peer Group: 1st CapitalAmerican Riviera Bank, Bancorp 34, Inc., Bank of Commerce Holdings, BayCom Corp, Broadway Financial Corp., Central Valley Community Bancorp,Corporation, California BanCorp, Coastal Financial Corporation, Communities First Financial Corporation, Community West Bancshares, First Capital Bank, First Financial Northwest, Inc,Inc., First Northern Community Bancorp, FSFirst Northwest Bancorp, Inc., Idaho Independent Bank, Lighthouse Bank, Oak Valley Bancorp, OP Bancorp, Pacific Mercantile Bancorp, Plumas Bancorp, Provident Financial Holdings, Inc., Riverview Bancorp, Inc., Sound Financial Bancorp, Inc., Summit State Bank, Timberland Bancorp, Inc., United Security Bancshares, and Valley Republic Bancorp.

In June 2019,December 2020, the Compensation Committee engagedwith the help of Blanchard, Consulting Grouprecommended, and the Board of Directors approved, no changes to review the Company’s priorcash retainers, meeting attendance fees, or equity portion of director compensation practices and programs for directors and executive officers and to make recommendations regarding such compensation programs for 2020.2021.

The Company targets total compensation to be at or above the Peer Group average.median. The goal of the cash compensation is to be close to the Peer Group average,median, while equity compensation and retirement benefits are targeted at or above the Peer Group averages.medians. The decisions by the Board of Directors about director compensation are based on analysis of the Peer Group averages,director compensation, the directors’ completion of continuing education programs, attendance at Board of Directors and committee meetings and prompt responses to management’s requests for information required to complete and timely file regulatory filings.

Overview of Director Compensation Elements

The Company’s Director Compensation Program consists of several compensation elements, as illustrated in the table below.

The use of these compensation elements enables us to reinforce our pay for performance philosophy, as well as strengthen our ability to attract and retain highly qualified directors.

The Compensation Committee believes the total compensation and benefits program for the directors should consist of the following: cash compensation, equity incentive compensation and retirement benefits.

The cash compensation paid to non-employee directors of American River Bankshares during 20192020 included a retainer of $1,833.33 per month, a fee of $275.00 for attendance at each American River Bank Board of Directors meeting, and a fee of $450.00 for attendance at each committee meeting, other than the Loan Committee whose outside director members received a fee of $500.00 for each meeting attended.

In addition to the fees received as non-employee directors in connection with the attendance at Board of Directors and committee meetings, the Chairman of the Board of Directors received an additional retainer fee of $1,000.00 per month, and the Chairman of the Audit Committee, the Chairman of the Finance and Capital Committee, the Chairman of the Compensation Committee, and the Chairman of the Loan Committee each received an additional retainer fee of $416.67 per month and the Chairman of the Nominating Committee received an additional retainer of $291.67 per month. The fees paid in 20192020 by American River Bankshares and American River Bank to all directors are disclosed in the “Director Compensation Table” on page 15 of this proxy statement.

Since 2010, restricted stock has been used as equity incentive compensation for non-employee directors. The Compensation Committee believes the use of restricted stock, rather than other forms of equity incentive compensation, provides value for the director based upon shareholder value, subject to vesting for continued service. The restricted stock’s value increases if the stock price subsequently increases. The Compensation Committee believes that this creates strong alignment between the interests of the directors and shareholders.

The restricted stock awardsaward grants to non-employee directors have been grantedin 2020 were made under our 20102020 Equity Incentive Plan (the “2010“2020 Plan”), adopted by the Board of Directors on March 17, 2010,18, 2020, and approved by the Company’s shareholders on May 20, 2010.21, 2020. The fair value related to restricted stock awards made to directors for service in 20192020 is shown in the “Director Compensation Table” on page 15 of this proxy statement. Future restricted stock awards or other equity grants to non-employee directors will be made under our 2020 Equity Incentive Plan, if that is approved by our shareholders pursuant to Proposal No. 2 set forth in this proxy statement.

Awards to the non-employee directors are generally made annually, at the same time as awards to the general eligible officer population, which are made at Compensation Committee meetings regularly scheduled in advance to meet appropriate deadlines for compensation related decisions. The Compensation Committee grants equity awards to non-employee directors based upon the dollar value of such awards approved by the Board of Directors as a whole. The Compensation Committee meetings at which the numbers of shares are determined are held after the close of the U.S. stock markets, and the Compensation Committee determines the number of such shares for each restricted stock award, using the dollar value approved by the Board of Directors and the closing price of the Company’s common stock on the date of the award.

Restricted stock awarded to each director will fully vest after a one-year term. A change in control may trigger accelerated vesting. In this instance, all unvested restricted stock will vest as of the date of the change in control.

Director equity awards are made after review of their performance for the preceding calendar year. The awards are made based on factors including: (a) attendance at Board of Directors and committee meetings (30% of award target), (b) completion of a specified number of continuing education hours (40% of award target), and (c) prompt responses to management’s requests for information required to complete and timely file regulatory filings (30% of award target). For equity awards made in 20192020 (based upon the foregoing factors in 2018)2019), the Board of Directors set the award target dollar value to be $18,000$22,000 for directors other than the Board Chair and $25,000 for the Board Chair. On May 16, 2019,June 17, 2020, Directors Anderson, Box, Owensby, Robotham, Waks,and Wright and Ziegler were each awarded 1,3612,140 shares of restricted stock with a value of $18,006,$21,999, Director AndersonRaney was awarded 1,020535 shares of restricted stock award with a value of $13,495$5,500 prorated for the ninethree months heshe served on the Board in 2018,2019, and Director Fite was awarded 1,8902,432 shares of restricted stock with a value of $25,005,$25,001, in each case based on the Company’s closing stock price on May 16, 2019June 17, 2020 of $13.23$10.28 per share. Mr. Waks forfeited his 1,361 restricted shares when he resigned from the Company effective December 31, 2019. See also the “Director Compensation Table” on page 15 and the “Grants of Plan-Based Awards Table” for Directors on page 16 of this proxy statement for more information regarding director equity awards. No other unvested equity awards and no unexercised stock options are outstanding to any non-employee directors.

Effective December 20, 2001, a Deferred Fee Plan was established for the purpose of providing the directors an opportunity to defer tax on director fees. Participating directors may elect to defer a portion, up to 100%, of their monthly cash compensation and meeting fees. The Company bears the administration costs and credits interest on the deferred balances at a rate equal to the five-year U.S. Treasury Bond plus 4.0%, but does not make contributions to the deferred account balances. For 2019,2020, the rate credited was 6.51%5.69%. The amounts deferred and the earnings thereon are unfunded and unsecured and subject to the claims of general creditors. During 2019,2020, only former Director Michael Ziegler participated in the Deferred Fee Plan and deferred $37,050.

$12,946.

In June 2004, the Board of Directors adopted a Director Emeritus Plan, whereby each non-employee director became entitled, upon full retirement from the Board of Directors of the Company and its subsidiaries, to receive installment payments over a 24-month period following retirement which for a non-employee director who is fully vested are equal to the total Board of Director and committee fees received by the director for such service during the two full calendar years prior to retirement. To qualify for the payments, a director participating in the Director Emeritus Plan must continue to support the Company by making himself/herself available for consultation with management and/or the Board of Directors, continue to be a referral source for business to the Company and attend Company functions such as annual meetings for a period of two years after retirement. The Director Emeritus Plan contains a ten-year vesting component. A director vests 10% for each year of service on the Board of Directors of the Company or its subsidiaries. During 2019, $12,6512020, $54,498 in payments were made under the Director Emeritus Plan to one retired director and the estate of another former director. Effective July 1, 2012, benefit accruals were suspended under the Director Emeritus Plan, but the benefits that had been previously earned have continued in effect. There have been no new participants in the Director Emeritus Plan after July 1, 2012. Mr.Former director Stephen Waks began receiving payments in January 2020, and is expected to receive payments until December 2021 as he was fully vested upin the Director Emeritus Plan. The estate of former director Ziegler began receiving payments in June 2020, and is expected to receive payments until May 2022 as Mr. Ziegler was fully vested in the Director Emeritus Plan. In addition, at December 31, 2019,2020, Messrs. Fite, Robotham, Wright and ZieglerWright were fully vested and are expected to receive payments upon their retirement. No other directors are eligible to receive payments under the Director Emeritus Plan.

Director Compensation Table

The following table shows the compensation of the Company’s non-employee directors (excluding David Ritchie) during the fiscal year 2019.2020.

Grants of Plan-Based Awards Table for Directors

The following table summarizes the restricted stock awards made pursuant to the Company’s 20102020 Plan to the Company’s non-employee directors (excluding David Ritchie) in the fiscal year ended December 31, 2019.2020. All of the awards were made on May 16, 2019.June 17, 2020. All restricted stock awarded to the directors fully vests one year after the award date provided that the directors continue to serve through the vesting date. Restricted stock may become vested in full in the event of a change in control as defined in the 20102020 Plan. There were no other awards made to any non-employee director during 20192020 under the Company’s 20102020 Plan.

Grants of Plan-Based Awards Table

PROPOSAL NO. 2

ADOPTION OF 2020 EQUITY INCENTIVE PLAN

The Board of Directors is asking our shareholders to approve the American River Bankshares 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan is designed to replace our 2010 Equity Incentive Plan (the “2010 Plan”), which expired on March 17, 2020.

The Board believes that the 2020 Plan is important for attracting and retaining well-qualified employees and directors in a competitive labor market and that the 2020 Plan will provide a significant incentive for our employees, directors and consultants to increase the value of the Company for all shareholders, which is essential to our long-term growth and success. The Board believes that the number of shares authorized under the 2020 Plan reflects an appropriate balance between providing us with the flexibility to offer an equity award program over a multi-year period and shareholder dilution considerations.

No new awards may be granted under the 2010 Plan after its expiration on March 17, 2020. The 2010 Plan will remain in place only for the issuance of shares of our common stock pursuant to equity compensation awards granted prior to March 17, 2020 and outstanding under the 2010 Plan, which awards will continue to be governed by the terms of the 2010 Plan. Although the 2020 Plan already has been adopted by the Board, no equity awards are permitted to be granted under the 2020 Plan unless and until shareholder approval is received within 12 months of the Board adoption. The 2020 Plan authorizes the grant of awards relating to up to 250,000 shares of our common stock.

Summary of the 2020 Plan.

The principal features of the 2020 Plan are described below. However, this summary of the 2020 Plan does not purport to be exhaustive and is expressly qualified in its entirety by reference to the full text of the 2020 Plan document, which is attached to this proxy statement asExhibit A.

Administration.The 2020 Plan will be administered and interpreted by the compensation committee of our Board, which is comprised of non-employee directors, each of whom is a “nonemployee director” within the meaning of applicable federal securities laws and “independent” within the meaning of applicable stock exchange listing requirements. Subject to the provisions of the 2020 Plan, the compensation committee has full power and authority (a) to select the participants to whom awards are to be granted, (b) to set the terms and conditions of the awards at initial grant and any subsequent revisions or changes to the terms and conditions of awards, including, but not limited to, changes to, or removal of restrictions on, outstanding awards relating to vesting, restriction periods and exercise periods, (c) to interpret the Plan, (d) to adopt, amend and revoke rules for the administration, interpretation and application of the Plan, (e) to adopt, amend and revoke sub-plans or supplements to the Plan, including to comply with the laws of, or to accommodate the tax policy, accounting principles or custom of, foreign jurisdictions in which the Company, and (f) to interpret any rules, guidelines and policies relating to the Plan and any sub-plans and supplements to the Plan.

Types of Awards.Our 2020 Plan provides the compensation committee with the authority to grant a variety of types of equity awards, which include incentive stock options, nonqualified stock options, stock appreciation rights (SARs), restricted stock, restricted stock units (RSUs), and other stock-based awards, briefly summarized as follows:

Eligibility.All of our employees, officers, directors and consultants are eligible to participate in the 2020 Plan. All participants may receive all types of awards under the 2020 Plan, except that incentive stock options may be granted only to employees (including officers and directors who are also employees). The compensation committee determines which persons eligible to participate will receive awards and the terms of their individual awards.

On March 15, 2020, we had approximately 104 employees (including officers and directors who are also employees), and eight non-employee directors who were then eligible to participate in the 2020 Plan. The actual number of persons who will receive awards from time to time cannot be determined in advance because the compensation committee has the discretion to select the award recipients. As of the date of this proxy statement, the compensation committee has not made any grants of awards to any of our directors or executive officers under the 2020 Plan.

Maximum Shares Reserved.The maximum number of shares of our common stock available for issuance under the 2020 Plan is 250,000 shares. This includes the maximum number of shares that may be granted as incentive stock options under the 2020 Plan, which also is 250,000 shares.

The following rules apply for counting shares against the maximum share limit under the 2020 Plan:

Terms of Awards.The compensation committee will determine the types of awards to be granted from among those provided under the 2020 Plan and the terms of such awards, including the number of shares of our common stock or other securities underlying the awards; restrictions and vesting requirements, which may be time-based vesting or vesting upon satisfaction of performance goals and/or other conditions; the exercise price for options and SARs, which may not be less than 100% of the fair market value of a share on the grant date; and, where applicable, the expiration date of awards, which for options and SARs may not be more than 10 years after the grant date.

Minimum Vesting of Awards.No stock option or SAR may become vested or exercisable and no restricted stock, RSUs or stock-based awards may become vested less than one year following the grant date of such award; provided, however, that the compensation committee may provide for earlier exercisability or vesting in the event a participant’s service terminates due to death or disability or following a Change in Control, and the compensation committee may provide for earlier exercisability and vesting of awards that in the aggregate do not exceed 5% of the total number of shares of common stock authorized to be issued under the 2020 Plan.

Performance-Based Awards.Vesting and/or exercise of awards under the 2020 Plan may be made subject to the satisfaction of financial criteria or other objective performance measures. The specific performance measures listed in the 2020 Plan that the compensation committee may use in granting performance-based awards are the following:

total loans; loan growth; total deposits; total trust assets; fee income; demand deposits; business loans (or any other subgroup of total loans), operating efficiency; net interest margin; return on assets; return on equity; return on capital; economic value added; total shareholder return; net income; pre-tax income; operating profit margin; book value; earnings per share; earnings growth; fee income; new trust assets; new trust fees; trust revenue; nonperforming assets to assets ratio; efficiency ratio; investment services earnings; investment services revenue; stock price earnings ratio; earnings before taxes and unusual or nonrecurring items as measured either against the annual budget or as a ratio to revenue.

As determined by the compensation committee, these performance criteria may be measured either in absolute terms or compared to results of a peer group and may be measured at a business unit level or other Company-specific basis specified by the compensation committee. Achievement of any such performance goal are to be measured over performance periods of up to ten years. Notwithstanding the foregoing, the compensation committee, in its sole discretion, may grant performance-based awards that are not based on these criteria or otherwise deviate from these conditions.

No Repricing.Without the prior approval of our shareholders, options and SARs granted under the 2020 Plan may not be repriced, replaced, regranted or amended to reduce the exercise price, and any options and SARs with exercise prices greater than current fair market value may not be canceled in exchange for cash or any other award under the Plan.

Transferability of Awards.Awards under the 2020 Plan generally are not transferable by the participant other than by will or the laws of descent and distribution and are generally exercisable, during the participant’s lifetime, only by the participant. Any amounts payable or shares issuable pursuant to an award generally will be paid only to the participant or the participant’s estate or legal representative or guardian. The compensation committee has discretion, however, to permit the transfer by gift of awards other than incentive stock options to a participant’s immediate family members or to trusts or partnerships for their benefit or to foundations that they control.

Adjustments and Substitute Awards.The share limits and the number and kind of shares available under the 2020 Plan, and the shares subject to any outstanding awards, as well as the exercise or purchase prices of such awards, are subject to adjustment in the event of certain reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, spin-off, combination or other similar change in our capital stock or the number or kind of shares outstanding.

In the event we acquire another entity, the 2020 Plan provides for the issuance of substitute equity awards for existing equity compensation of the acquired company, which do not count against the 2020 Plan aggregate share limit.

Change in Control.If the Company undergoes a change in control, which includes certain corporate transactions such as a merger, reorganization or consolidation resulting in a change in majority ownership, a sale of substantially all of our assets, a sale of more than 50% of our stock, or a change in the majority of directors on our Board during a 12-month period, then awards outstanding under the 2020 Plan may be assumed, substituted or otherwise continued or may be cashed out or exchanged for other property based upon the fair market value of our common stock or the consideration paid per share in the Change in Control. Awards that are not assumed, substituted, or otherwise continued upon such an event will terminate if not exercised. Vesting and exercisability of awards outstanding upon a Change in Control may be accelerated at the discretion of the compensation committee, which may include circumstances in which a participant’s employment is terminated in connection with the Change in Control or in which the acquirer fails to assume, continue or substitute for such awards.

Clawback of Awards. Awards granted to an executive officer of the Company under the 2020 Plan will be subject to recovery or clawback if the compensation committee later determines either (i) that financial results used to determine the amount of that award must be materially restated and that the executive officer engaged in fraud or intentional misconduct related thereto or (ii) that recovery or repayment of the award is required by the Sarbanes-Oxley Act or other applicable law. In addition, the compensation committee may provide that any award, including any shares subject to or issued under an award, is subject to any other recovery, recoupment, clawback and/or other forfeiture policy maintained by the Company from time to time.

Amendment and Termination.The Board may amend or terminate the 2020 Plan at any time, provided that any such amendment or termination may not adversely affect any awards then outstanding without the participant’s consent. Amendments to increase the number of shares of common stock available for awards under the 2020 Plan, amendments to alter or delete the shareholder approval requirement for repricing options and SARs, and any other amendments for which shareholder approval is required by applicable laws, regulations or stock exchange rules may not be adopted without shareholder approval. No awards will be granted under the 2020 Plan after March 17, 2030.

Federal Tax Aspects

The following is a general discussion of certain U.S. federal income tax consequences relating to certain of the awards that may be issued under the 2020 Plan, based on U.S. federal income tax laws in effect on the date of this proxy statement. This discussion is general in nature only, and is not intended to be specific income tax advice on which we or any participant will rely. This summary does not describe all of the possible federal income tax consequences that could result from the acquisition, holding, exercise or disposition of any award or of any shares of common stock received pursuant to any award granted under the 2020 Plan. This summary does not describe any state, local or foreign tax consequences or any gift, estate or excise tax consequences.

Tax Consequences to Participants.

Incentive Stock Options. A participant will not recognize income upon the grant of an incentive stock option. Furthermore, a participant will not recognize ordinary income upon the exercise of an incentive stock option if he or she satisfies certain employment and holding period requirements, although the exercise may be subject to alternative minimum tax. To satisfy the employment requirement, a participant must exercise the option not later than three (3) months after he or she ceases to be our employee (one (1) year if he or she is disabled). To satisfy the holding period requirement, a participant must hold the shares acquired upon exercise of the incentive stock option for more than two (2) years from the grant of the option and more than one (1) year after the shares are transferred to him or her. If these requirements are satisfied, a participant will be taxed on the difference between his or her basis in the shares (which is typically the option exercise price) and the net proceeds of the sale at capital gain rates on the sale of the shares.

If the employment requirement is not met, the option will be taxed as a nonqualified stock option at time of exercise. If a participant disposes of shares of our common stock acquired upon the exercise of an incentive stock option without satisfying the holding period requirement, that participant generally will recognize ordinary income as of the date of disposition equal to the lesser of (i) the difference between the fair market value of the shares on the date of exercise and the exercise price, or (ii) the difference between the selling price and the exercise price; and additional gain on disposition generally will be long-term or short-term capital gain.

Nonqualified Stock Options. In general, a participant will not recognize income at the time a nonqualified stock option is granted. At the time of exercise of the option, the participant will recognize ordinary income if the shares are not then subject to a substantial risk of forfeiture. The amount of such income will be equal to the difference between the option exercise price and the fair market value of the shares of our common stock on the date of exercise. At the time of the sale of the shares of our common stock acquired pursuant to the exercise of an option, appreciation in value of the shares after the date of exercise will be treated as either short-term or long-term capital gain, and depreciation in value will be treated as short-term or long-term capital loss, depending on how long the shares have been held. Long-term capital gains may be eligible for reduced tax rates if the participant has satisfied applicable holding period requirements.

Stock Appreciation Rights. In general, a participant will not recognize income at the time a stock appreciation right is granted. Upon exercise of the right, the participant will recognize ordinary income in an amount equal to the excess of the fair market value of the underlying shares on the exercise date over the exercise price, whether such amount is payable in cash or in shares of common stock. If the participant receives such excess value in common stock, any additional gain or any loss recognized upon later disposition of any shares received on exercise will be capital gain or loss.

Restricted Stock. In general, a participant will not have taxable income upon the grant of restricted stock. Instead, at the time the participant holds stock free of any substantial risk of forfeiture, the participant will recognize ordinary income equal to the fair market value (on that date) of the shares or other property less any amount paid. Alternatively, the participant may elect under Section 83(b) of the Internal Revenue Code to include as ordinary income in the year of grant of restricted stock, an amount equal to the fair market value (on the grant date) of the restricted stock less any amount paid. Any disposition of shares after restrictions lapse will be subject to the regular rules governing long-term and short-term capital gains and losses with the basis for this purpose equal to the fair market value of the shares at the end of the restriction period (or on the date of receipt of the restricted stock, if the participant elects to be taxed upon grant). To the extent dividends are payable during the restricted period under the applicable award agreement, any such dividends will be taxable to the participant at ordinary income tax rates and will be deductible by the Company unless the participant has elected to be taxed on the fair market value of the restricted stock upon transfer, in which case they will be taxable to the participant as dividends and will not be deductible by the Company.

Restricted Stock Units. A participant normally will not recognize taxable income upon an award of restricted stock units. Upon the lapse of the restrictions and the issuance of the earned shares, the participant will recognize ordinary taxable income in an amount equal to the fair market value of the common stock received.

Other Stock-Based Awards. Normally, a participant will not recognize taxable income upon the grant of performance awards or other stock-based awards. Subsequently, when the conditions and requirements for the grants have been satisfied and the payment determined, any cash received and the fair market value of any common stock received will be taxed as ordinary income to the participant.

Tax Withholding. Ordinary income recognized on exercise of nonqualified stock options and stock appreciation rights and on vesting of restricted stock, restricted stock units and other similar awards is subject to income and employment tax wage withholding, unless the participant is a non-employee director or consultant. The compensation committee may allow a participant to satisfy his or her tax withholding requirements under federal and state tax laws in connection with the exercise or receipt of an award by payment in cash, withholding from the participant’s other compensation, electing to have shares withheld, and/or delivering to us already-owned shares of our common stock.

Section 409A. A participant receiving an award that is subject to, but fails to comply with, the deferred compensation requirements of Section 409A of the Internal Revenue Code (“Section 409A”) may be subject to a penalty tax of 20% of the income from such award plus interest charges, in addition to ordinary income tax. Failure to comply with Section 409A also may result in an acceleration of the timing of income taxation of such awards. Awards granted under the 2020 Plan are intended to be exempt from or to comply with the rules of Section 409A.

Tax Consequences to the Company.To the extent that a participant recognizes ordinary income as described above, we will generally be entitled to a corresponding deduction provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense, is not an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code and is not disallowed by the $1,000,000 limitation on certain executive compensation under Section 162(m) of the Internal Revenue Code.

Section 162(m) Limitation.Section 162(m) of the Internal Revenue Code and the regulations thereunder contain special rules regarding the income tax deductibility of compensation paid to our chief executive officer, our chief financial officer and to certain of our other executive officers, or to any person who previously was such an officer at any time on or after January 1, 2017. The general rule is that compensation paid to any of these specified executives is deductible only to the extent that it does not exceed $1 million in any tax year. Prior to 2020, certain “performance-based compensation” was exempt from this $1 million limitation on deductibility, but this exemption from the limitation has been removed from Section 162(m) of the Internal Revenue Code and is no longer applicable for income tax deductibility purposes.

Shareholder Dilution Considerations

The following table reflects the number of shares of our common stock that will be available for awards under the 2020 Plan in combination with awards outstanding under the 2010 Plan:

To protect shareholder interests from the potential dilutive impact of equity awards, we actively manage our equity plan resources as effectively as possible, as indicated by the table below. The “unadjusted burn rate” for any particular fiscal year is the total number of shares of our common stock issuable under the equity-based awards granted in that fiscal year divided by our weighted average total number of shares of common stock issued and outstanding during that fiscal year.

Our unadjusted burn rates for the past three fiscal years are set forth in the following table:

During February 2020, the Compensation Committee awarded 19,497 shares of restricted stock to the named executive officers and other executives under the 2010 Plan. There will be no additional awards granted under the 2010 Plan. It is anticipated that the Company will award restricted stock to members of the Board and key officers of the Company (excluding executive officers, who received awards in February 2020) in June 2020, subject to shareholder approval of the 2020 Plan pursuant to this Proposal No. 2. We anticipate that the 250,000 shares under the 2020 Plan will give us flexibility to grant equity awards for five years, accommodating anticipated grants relating to the hiring, retention and promotion of employees and for the compensation of non-employee directors and consultants for such period. However, the total number of shares available under the 2020 Plan could be exhausted sooner based on any number of variables, including, without limitation, the value of our common stock, changes in competitors’ compensation practices or changes in compensation practices in the market generally, changes in the number of employees, changes in the number of directors and officers, the extent to which vesting conditions applicable to equity-based awards are satisfied, the need to attract, retain and incentivize key talent, the type of awards we grant, and how we choose to balance total compensation between cash and equity-based awards.

The inclusion of this information in this proxy statement should not be regarded as an indication that the assumptions used to determine the number of shares will be predictive of actual future equity grants. These assumptions are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements involve risks and uncertainties that could cause actual outcomes to differ materially from those in the forward-looking statements, including our ability to attract and retain talent, achievement of performance metrics with respect to certain equity-based awards, the extent of option exercise activity, and others described in our Form 10-K for the year ended December 31, 2019.

Plan Benefits

The future benefits or amounts that would be received under the 2020 Plan are discretionary and are therefore not determinable at this time. Similarly, the benefits or amounts which would have been received by or allocated to executive officers and our other employees for the last completed fiscal year if the 2020 Plan had been in effect cannot be determined. However, we expect that future awards under the 2020 Plan will be granted in a manner substantially consistent with the historical grant of awards under the 2010 Plan. All grants made in 2019 under the 2010 Plan to our named executive officers are disclosed in the Summary Compensation Table. For information regarding the size and structure of awards made in the past, please see the disclosures in this proxy statement under “Grants of Plan-Based Awards,” “Outstanding Equity Awards” and “Equity Compensation Plan Information.”

Market Value of Underlying Securities

Our common stock underlies all of the options and other awards to be made under the 2020 Plan. The market value of our common stock at the close of trading on the Nasdaq Global Select Market on the record date was $9.29 per share.

Required Vote

Proposal No. 3 requires the affirmative vote of a majority of the shares of our common stock constituting a quorum present at the Annual Meeting in person or by proxy and entitled to vote on this proposal. In the event our shareholders do not approve this Proposal, the 2020 Plan will not be adopted. Broker nonvotes and abstentions will be counted for the purposes of a quorum but will not be counted for purposes of determining whether the requisite vote has been achieved. Unless you instruct your broker how to vote on Proposal No. 3, your broker will not be able to vote on this Proposal.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” APPROVAL OF OUR 2020 EQUITY INCENTIVE PLAN.

EXECUTIVE OFFICERS

The current executive officers of the Company are:

COMPENSATION DISCUSSION AND ANALYSIS

Oversight of Executive Compensation Program

The Compensation Committee of the Board of Directors (the “Compensation Committee”) oversees the Company’s compensation programs. The compensation programs include elements that are designed specifically for the executive officers, which include the Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and the other executive officers named in the “Summary Compensation Table” on page 3730 of this proxy statement. Additionally, the Compensation Committee is charged with the review and recommendation to the Board of Directors of all annual compensation decisions relating to the executive officers.

The Compensation Committee is composed entirely of non-employee members of the Board of Directors. The Board of Directors has determined that each member of the Compensation Committee is independent under applicable NASDAQ listing rules. No Compensation Committee member participates in any of the Company’s employee compensation programs. The CEO of the Company was not present during the Compensation Committee voting or deliberations regarding his compensation.

Over the years, the Compensation Committee has increasingly focused on and acted to improve executive officer and overall Company performance. Accordingly, it has taken the following actions to improve the links between executive officer pay and performance including:

The responsibilities of the Compensation Committee, as stated in its charter, include the following:

Overview of Compensation Philosophy

The Compensation Committee’s compensation philosophy was developed to balance and align the interests of the executive officers and shareholders. The philosophy is intended to attract, motivate, reward and retain qualified management talent required to achieve corporate objectives and increase shareholder value, while at the same time the compensation philosophy seeks to make the most efficient use of shareholder resources. To this end, the compensation philosophy emphasizes and rewards for performance.

The three primary components of compensation for the executive officers are base salary, annual cash incentive compensation and long-term, equity-based incentive compensation. The Company also provides the executive officers with retirement benefits that are earned over time.

The compensation philosophy reflects the corporate mission, culture, and long-term goals of the Company. In order to recruit and retain qualified and competent individuals as executive officers, the Company strives to maintain a compensation program that is competitive with its Peer Group (see Peer Group and Benchmark Targets on page 27)19). The purpose of the compensation program is to promote and reward individual and collective performance tied to the achievement of Company objectives. The following objectives are considered in setting the compensation programs for the executive officers:

Compensation Consultant

In 2018,2019, the Compensation Committee, engaged McLagan, a business unit of AON plc.Blanchard Consulting (“McLagan”Blanchard”), a compensation and benefits consulting firm, to evaluate executive officer compensation for 2019. McLagan2020. Blanchard served as an independent compensation consultant to advise the Compensation Committee on all matters related to the executive officers’ compensation. McLaganBlanchard also provided guidance on industry best practices and assisted the Compensation Committee by providing comparative market data on compensation practices and programs for the executive officers based on an analysis of peer competitors. McLaganBlanchard advised the Compensation Committee in (1) determining base salaries, (2) setting performance goals and award levels for the Company’s Executive Incentive Compensation Plan (the “Incentive Compensation Plan”), (3) determining the appropriateness of individual grant levels for equity awards, (4) evaluating the retirement plans and benefit amounts, (5) evaluating the perquisite program and allowances provided, (6) determining the appropriateness of the change in control and termination benefits, and (7) establishing that its executive compensation practices and plans were reasonable in the market and when compared to industry peers.

Other than compensation related consulting, McLaganBlanchard did not provide any other services. The Board of Directors and management do not believe the services provided by McLaganBlanchard created a conflict of interest.

In June 2019,During 2020, the Compensation Committee engaged Blanchard Consulting Group to review the Company’s prior compensation practices and programs for executive officers and to make recommendations regarding such compensation programs for 2020.2021.

Peer Group and Benchmark Targets

For the analysis of the 20192020 executive officer compensation, the Compensation Committee, with the help of McLagan,Blanchard, selected and approved twentytwenty-four publicly-traded banking companies headquartered on the West Coast (the “Peer Group”). The Peer Group was used to benchmark executive officer compensation levels against companies that have executive officer positions with responsibilities similar in breadth and scope to the Company and that compete with the Company for executive officer talent. The following twentytwenty-four companies had assets between $250$350 million and $1.5 billion as of MarchDecember 31, 2018 and comprise the Peer Group: 1st CapitalAmerican Riviera Bank, Bancorp 34, Inc., Bank of Commerce Holdings, BayCom Corp, Broadway Financial Corp., Central Valley Community Bancorp,Corporation, California BanCorp, Coastal Financial Corporation, Communities First Financial Corporation, Community West Bancshares, First Capital Bank, First Financial Northwest, Inc,Inc., First Northern Community Bancorp, FSFirst Northwest Bancorp, Inc., Idaho Independent Bank, Lighthouse Bank, Oak Valley Bancorp, OP Bancorp, Pacific Mercantile Bancorp, Plumas Bancorp, Provident Financial Holdings, Inc., Riverview Bancorp, Inc., Sound Financial Bancorp, Inc., Summit State Bank, Timberland Bancorp, Inc., United Security Bancshares, and Valley Republic Bancorp,Bancorp.

The Compensation Committee reviewed data obtained from McLaganBlanchard which concluded that the total executive officer compensation program continues to be fair to the shareholders, productive for the Company and provides competitive compensation for the executive officers.

Compensation Benchmarking Relative to Market

Using the data provided by McLagan,Blanchard, the Compensation Committee considered “market” to be the median for each element of compensation provided by the companies in the Peer Group. The Compensation Committee targets total compensation at-market, tied to attainment of clearly stated measures of Company and individual performance. Base compensation, annual incentive compensation, long-term incentive compensation, retirement and other benefits are designed to be close to market when the executive officer and the Company meet performance goals.

Decisions by the Compensation Committee about the compensation elements are based on data provided by McLaganBlanchard as well as Company performance and the executive officers level of responsibility, skill level, experience, performance and contributions to the Company.

Review of Executive Officer Performance

The Compensation Committee reviews, on an annual basis, each compensation element for the executive officers. In each case, the Compensation Committee takes into account the scope of responsibilities, attainment of individual and collective goals, and years of experience. The Compensation Committee then balances these against competitive pay and benefit levels provided by the compensation consultant(s). The Compensation Committee has the opportunity to interact with the executive officers at various times during the year, which allows the Compensation Committee to form its own assessment of each individual’s performance.

In addition, each year the CEO presents to the Compensation Committee an evaluation of each executive officer, which includes a review of individual contributions, performance against specific targets, and strengths and weaknesses. Following this presentation and discussions with the compensation consultant, the Compensation Committee makes its own assessments and approves the compensation for each executive officer.

At the 2017 Annual Meetings of Shareholders, the Board of Directors recommended and shareholders approved proposals for an advisory vote to (a) approve the compensation of the executive officers and (b) establish an annual frequency for future advisory votes on compensation for the executive officers. At the 20192020 Annual Meeting of Shareholders, the shareholders of the Company approved the advisory vote proposal to approve the compensation of the executive officers with 55%70% of our shareholders present and eligible to vote at the meeting, voting in favor of the proposal. This proxy statement also includes “Proposal No. 4,3, Advisory (Non-binding) Vote to Approve Named Executive Officer Compensation” at page 4639 of this proxy statement. The Compensation Committee, as well as the Board of Directors, reviews and considers the results of these shareholder advisory votes on the compensation for the executive officers in connection with the implementation of Company compensation programs for executive officers.

In 2018,2019, based on review of the data provided by McLagan,Blanchard, the Compensation Committee recommended to the Board of Directors increases to the base salary effective April 1, 2019,2020, but no changes were recommended to the long-term incentive compensation or retirement benefits nor were any modifications made to the award opportunities for the executive officers under the Company’s Annual Cash Incentive Compensation Plan. See also the “Long-Term Incentive Compensation” on page 3225 of this proxy statement for more information regarding the restricted stock awards.

Overview of Executive Officers Compensation Elements

The Company’s compensation program for executive officers consists of several compensation elements, as illustrated in the table below.

The use of the above compensation elements enables the Company to reinforce its pay for performance philosophy, as well as strengthen the ability to attract and retain highly qualified executive officers. The Compensation Committee believes that this combination of the compensation elements provides an appropriate mix of fixed and variable pay, balances short-term operational performance with long-term shareholder value, and encourages recruitment and maximizes retention of the executive officers.

Detail of Executive Officer Compensation Elements

The Compensation Committee believes the total compensation and benefits program for the executive officers should consist of the following: base salary, annual cash incentive compensation, long-term incentive compensation, retirement plans, health and welfare benefits, perquisite allowance payments and change in control benefits, as more fully described below.In 2017, Mr. Ritchie was hired to the position of Chief Executive Officer. At that time, the Compensation Committee, based on market data and guidance provided by McLagan, negotiated an employment agreement with Mr. Ritchie. The employment agreement was structured to encourage Mr. Ritchie to join the Company as its new CEO. The employment agreement included a competitive market based annual salary of $265,000, a guaranteed bonus for 2017 and 2018 of $160,000 each year, a grant of restricted stock having a market value of $109,700 that vests over a three year period, and other benefits, including the use of a Company owned vehicle, reimbursement of expenses associated with his relocation and vacation and medical and retirement benefits similar to what is made available to other executive officers. While Mr. Ritchie was only employed by the Company for a portion of 2017, the Compensation Committee believed it was necessary to provide Mr. Ritchie with a guaranteed bonus and an initial restricted stock grant to compensate him for joining the team and assuming the role and responsibilities of the Company’s CEO.below.

Base Salary

Increases to base salaries, if any, are driven primarily by individual performance, roles and responsibilities and compensation information provided by McLaganBlanchard to the Compensation Committee, including an analysis of the data from the Peer Group identified on page 2720 of this proxy statement. Individual performance is evaluated by reviewing each executive officer’s contributions and success in achieving business results, promoting core values, focusing on the keys to business success and demonstrating leadership abilities.

In setting the base salary of the executive officers for fiscal year 2019,2020, the Compensation Committee reviewed the compensation information provided by McLagan.Blanchard. The Compensation Committee also considered the Company’s level of success in its short- and long-term goals to:

The Compensation Committee based its compensation decisions on the Company’s performance related to the objectives listed above. The Compensation Committee does not rely solely on predetermined formulas or a limited set of criteria when it evaluates the performance of the executive officers. The Compensation Committee reviews the information provided by the compensation consultant, general economic conditions and marketplace compensation trends. The Compensation Committee usually adjusts base salaries for executive officers when:

The base salaries paid to the executive officers during fiscal year 20192020 are shown in the “Summary Compensation Table” on page 3730 of this proxy statement.

Annual Cash Incentive Compensation

The annual cash incentive compensation is administered under the Incentive Compensation Plan and provides executive officers with the opportunity to earn cash incentive compensation based on the achievement of specific Company-wide, division, and individual performance goals. The Compensation Committee designs the annual cash incentive compensation component to align executive officers’ compensation with the achievement of annual (short-term) performance results. Annual cash incentive compensation payments are generally paid in cash in March of each year for the prior fiscal year’s performance, provided that the executive officer remains in the Company’s employ at the time of payment.

The Compensation Committee approves a target cash incentive compensation payout as a percentage of the base salary earned during the annual incentive compensation period for each executive officer. These targets are based on competitive practices for each comparable position and the compensation information provided by the consultant to the Compensation Committee. The incentive compensation target percentage in the table below represents the executive officer’s annual cash incentive compensation opportunity if the annual performance goals are achieved.

The Compensation Committee establishes and approves a set of metrics for the Incentive Compensation Plan that are selected to drive annual performance. Each metric has a weight assigned to it within the Incentive Compensation Plan, and the sum of the weightings is 100%.

Several financial metrics are commonly referenced in defining Company performance for executive officer compensation. These metrics and their use in the Incentive Compensation Plan are further described below.

Overall profitability is a key measure of the Company’s performance. Both income before taxes and loan loss provision and net income are metrics in the Incentive Plan that allows the Company to reward Executives for meeting targets related to profitability achieved each year. The Company believes that pretax/pre-provision for loan and lease losses and net income are key drivers for earnings per share.

To promote compensation proportional to the return on investment earned by shareholders, we use a return on equity target as a metric in the Incentive Compensation Plan. The return on equity is measured against an internal target set each year. Return on equity is a key driver for earnings per share.

The Company believes that the quality of its loans and the level of nonperforming assets such as other real estate owned (“OREO”) is a key to the Company’s overall future success. Poor asset quality will deteriorate the Company’s future earning capacity. The nonperforming assets to total assets metric of the Incentive Plan measures the amount of problem loans and OREO as a percentage of the Company’s assets.

To ensure long-term growth of the Company, the quality of bank performance is essential. The Incentive Compensation Plan metrics for quality of bank performance are based upon how well the Company performs during independent examinations of key risk management areas.

Incentive Compensation Plan Weightings for 20192020

The following chart indicates the weight of each metric as a percent of the total annual cash incentive compensation opportunity.

The amount of cash incentive compensation paid to each executive officer under the Incentive Compensation Plan is adjusted based on how well the Company performs against the approved performance goal of each metric. The Incentive Compensation Plan also establishes minimum funding thresholds. If performance on any metric falls below 85%, no cash incentive compensation will be paid for that metric and if the results of the Quality of Bank Performance metric is not met then no cash incentive compensation will be earned for any of the metrics. If the Company results exceed the target by 115%, the award opportunity increases to 75% of base salary for Mr. Ritchie and 45% of base salary in the case of Messrs. Derenzo, Bender, McGregor, and Raymond.McGregor. If the Company attains 85% of the target goals, the amount available decreases to 25% of base salary for Mr. Ritchie and 15% of base salary in the case of Messrs. Derenzo, Bender, McGregor, and Raymond.McGregor. The Incentive Compensation Plan requires the executive officer to be employed by the Company on the date of payment. Mr. Raymond left the Company on October 3, 2019 and was, therefore, not eligible for any cash incentive compensation for 2019.

For 2019,2020, the Company’s actual results compared to target are as follows:

As a result of meeting or exceeding certain of the Company targets, cash incentive compensation was earned in 20192020 for each of the executive officers as listed below. The table below represents the 20192020 target amount of cash compensation available for each metric and the amount earned by Messrs. Ritchie, Derenzo, Bender, and McGregor. Mr. Raymond leftMcGregor was awarded the Company on October 3, 2019target payout and was, therefore, not eligible for any cash incentivethe additional amount available under the compensation for 2019.plan based upon the results of his individual performance evaluation.

Effective January 1, 2020, the Incentive Compensation Plan includes a clawback provision whereby The Company may recoup certain incentive compensation previously paid (or due) to plan participants in instances where: (i) the Company issues a material restatement of its financial statements: (ii) a subsequent finding that the financial information or performance metrics used to determine the amount of the incentive compensation are materially inaccurate, in each case regardless of individual fault; (iii) a plan participant engages in intentional misconduct; or (iv) the plan participant has committed ethical or criminal violations. In addition, the Company may recover any incentive compensation awarded or paid based on a participant’s conduct which is not in good faith and which materially disrupts, damages, impairs or interferes with the business of the Company and its affiliates.

Long-Term Incentive Compensation

An important objective of the long-term incentive compensation program is to incentivize the executive officers to strive to increase the value of the Company’s stock performance by allowing them to share in the enhanced stock value that their efforts produce. The Compensation Committee has granted executive officers a combination of stock options and restricted stock to share in such value. These forms of equity grants create potential added value for the executive officers, as for shareholders, when the Company’s common stock value increases. The Compensation Committee believes that this creates strong alignment between the interests of the executive officers and shareholders because both benefit when the value of the Company’s common stock increases. The stock options and restricted stock help the Company attract and retain talented executive officers.

Stock options provide the executive officers with the opportunity to purchase the Company’s common stock at a price fixed on the date of award regardless of future market prices by exercising vested options. Restricted stock provides the executive officers with shares of stock subject to meeting vesting requirements. The Compensation Committee’s objective is to provide the executive officers with awards that are consistent with the market data and compensation information provided by the compensation consultant and based on each executive officer’s individual performance and contributions to the Company’s success. Restricted stock delivers value to executives when the shares vest. Restricted stock serves as a strong retention toolstool and provideprovides an incentive for the executive officer to remain employed by the Company. In addition, restricted stock potentially becomes more valuable as share prices rise. Such grants thus incentivize the executive officers to lead the success of the Company. Shareholders’ interests are promoted in the same way by providing the executive officers an incentive to deliver increased shareholder value.

Additional information on restricted stock awards is shown in the “Summary Compensation Table,” in the “Grants of Plan-Based Awards Table” and in the “Outstanding Equity Awards at Fiscal Year-End Table” on pages 37, 3830, 31 and 39,32, respectively, in this proxy statement.

The executive officers are eligible to receive awards of equity compensation annually. Award recommendations are made at Compensation Committee meetings scheduled to meet appropriate deadlines for compensation related decisions. The Company’s practice is that the Compensation Committee approves all equity compensation awards to executive officers at regularly scheduled meetings. The meetings are held after the close of the U.S. stock markets and the Compensation Committee sets the exercise price for each stock option, or in the case of restricted stock, the total value of the award, using the closing price per share of the Company’s common stock on the date of the award.

Typically, restricted stock will vest over a three to five-year period. Holders of restricted stock generally forfeit any unvested awards if their employment with the Company terminates.

Exercisability and vesting of stock options and restricted stock may accelerate as the result of a change in control of the Company if either (I) the Company is not the surviving corporation following a change in control, and the surviving corporation or the acquiring corporation (such surviving corporation or acquiring corporation, the “Acquiror”) does not assume the outstanding stock options or restricted stock and does not substitute equivalent equity awards relating to the securities of such Acquiror or its affiliates for such awards, or (II) the employment of an executive officer is terminated (A) without cause or (B) by the executive officer for good reason, in either case within twelve (12) months in the case of Mr. Ritchie, and twenty-four (24) months followingin the case of Messrs. Derenzo, Bender, and McGregor, after a change in control, and (ii) the Company is the surviving corporation following such change in control, or the Acquiror assumes the outstanding stock options and restricted stock, or substitutes equivalent equity awards relating to the securities of such Acquiror or its affiliates for such awards.control.

In February 2019,2020, the Compensation Committee, based on data provided by McLagan,Blanchard awarded time-vested restricted stock to the executive officers. Mr. Ritchie received an award of 4,7154,752 shares of common stock equivalent to 25% of his annual salary. Messrs. Derenzo and Bender each received an award of 3,2173,279 shares of common stock equivalent to 20% of their respective annual salary. Mr. McGregor received an award of 1,7792,938 shares of common stock equivalent to 20% of his annual salary, prorated for his service in 2018. Mr. Raymond received an award of 2,989 shares of common stock equivalent to 20% of his annual salary, which was forfeited when he left the Company in October 2019.salary. The restricted stock awarded to these executive officers vests in equal annual installments over a three-year period.

In March 2020, the Board, with guidance from Blanchard Consulting Group, approved a performance based restricted stock program that replaces the current equity-based incentive program for the executive officers. Under this program the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and Chief Credit Officer would all beare eligible to participate. The performance based restricted stock program would be subject to the shareholders’ approval of the 2020 Equity Incentive Plan and would beis governed by the provisions of the 2020 Equity Incentive Plan, including the claw-back provisions. The program would beis based on performance of the Company and would resultresults in awards being earned if the metrics set by the Compensation Committee wereare attained. The target awards for the Chief Executive Officer are to be 25% of base salary and the target awards for the Chief Financial Officer, Chief Operating Officer and Chief Credit Officer are to be 20% of their base salary. Restricted stock is earned annually if the Company meets or exceeds the performance targets. Once earned, the restricted stock then vests over three years based upon the executive’s continued employment with the Company. If the minimum targets are not met, no awards would be granted. In addition, no awards will be granted unless an asset-quality standard is met. Awards are adjusted for achievement between minimum and maximum levels. If the Company attains the minimum target, the awards for the executive officers are earned at 50% of the targeted award, attaining 100% of the target would earn 100% of the targeted award and attaining the maximum target would earn 150% of the targeted award. The Compensation Committee will reset the metrics annually. The metrics for 2020 arewere net income and loan growth, with the target levels set at budget. If those targets are attained, in 2020, restricted stock will be awarded in the first quarter of 2021the following year and would vest ratably in 2022, 2023, and 2024.the three subsequent years. The performance based program allows the Compensation Committee to make adjustments to annual performance metrics in the event the Compensation Committee determines that an extraordinary occurrence totally outside of management’s influence, be it a windfall or a shortfall, has occurred during the year and that such metrics should be adjusted to neutralize the effects of such event.

As a result of meeting or exceeding certain of the Company targets, equity compensation was earned in 2020, under the performance based restricted stock program, for each of the executive officers as listed below. The table below represents the 2020 target amount of equity compensation available for each metric and the amount earned by Messrs. Ritchie, Derenzo, Bender, and McGregor. The amount of equity compensation is converted to shares by dividing the equity compensation by the Company’s share price on the date of the award.

Retirement Benefits

The Company offers retirement programs that are intended to supplement the employee’s retirement savings and social security benefits. The programs include the American River Bankshares 401(k) Plan (“401(k) Plan”) and the American River Bankshares Deferred Compensation Plan (“Deferred Compensation Plan”); Messrs. Derenzo and Bender are covered under Salary Continuation Agreements (“SCAs”). All employees working at least twenty (20) hours per week, including the executive officers, are generally eligible to participate in the 401(k) Plan. Only the executive officers and a limited number of selected senior managers are eligible for the Deferred Compensation Plan. The SCAs are intended to provide retirement benefits for certain executive officers and certain other key employees.

The Company adopted the 401(k) Plan to enable employees to save for retirement through a tax-advantaged combination of employee and Company contributions and to provide employees the opportunity to directly manage their retirement plan assets through a variety of investment options. The 401(k) Plan allows eligible employees, including the executive officers, to elect to contribute from 1% to 100% of their eligible compensation to an investment trust. Eligible compensation generally means all wages, salaries and fees for services from the Company. Employee contributions are matched in cash by the Company at the rate of $1.00 per $1.00 of employee contribution for the first 3% of the employee’s compensation and $0.50 per $1.00 of employee contribution for the next 2% of the employee’s salary.compensation. Both employee contributions and Company matching contributions vest immediately. The 401(k) Plan provides for multiple investment options, for which the participant has sole discretion in determining how both the employer and employee contributions are invested. The 401(k) Plan does not provide the employees the option to invest directly in the Company’s common stock. The 401(k) Plan offers in-service withdrawals in the form of loans, hardship distributions, after-tax account distributions and age 59.5 distributions. The 401(k) Plan benefits are payable in a lump sum or installments pursuant to the participant’s election in the form, of a single lump sum.and if installments are elected, can be either annually, quarterly or monthly.

The American River Bankshares Deferred Compensation Plan was established for the purpose of providing the executive officers and selected senior managers, an opportunity to defer compensation. Participants in the Plan may elect to defer annually a minimum of $5,000 or up to a maximum of eighty percent80% of their base salary and all of their annual cash incentive compensation. At the time of election to defer compensation, the participants must also elect a distribution method as described in the Plan. The Plan permits distributions upon reaching a specified age; upon passage of a specified number of years; upon separation from service, or upon the earlier or later to occur of (A) separation from service or (B) passage of a specified number of years, in each case as elected by the participant. The participant must elect to receive all amounts payable to him or her in a lump sum or in equal monthly installments over a designated period of sixty (60), one hundred twenty (120) or one hundred eighty (180) months. The Company bears all administration costs but does not make contributions to the Deferred Compensation Plan. The Deferred Compensation Plan requires the Company to credit interest on the deferred balances at a rate equal to the five-year U.S. Treasury Bond plus 4.0%, set annually at the beginning of each year. For 2019,2020, the rate credited was 6.51%5.69%. The amounts deferred and the earnings thereon are unfunded and unsecured and subject to the claims of the Company’s general creditors.

In 2003, a Salary Continuation Agreement was entered into to provide nonqualified retirement benefits to Mr. Derenzo. The terms of the agreement include the amounts Mr. Derenzo will receive upon the occurrence of certain specified events, including formal retirement on or after normal retirement age. The agreement generally provides for annual normal retirement benefit payments of Fifty Thousand Dollars ($50,000) to Mr. Derenzo, or reduced retirement benefit payments upon earlier termination of employment, including termination in connection with a change in control of the Company. The annual retirement benefit amount is payable in equal monthly installments over a fifteen (15) year period following retirement or earlier termination of employment. In the event of death, the normal retirement benefit payments are to be paid to Mr. Derenzo’s designated beneficiaries over fifteen (15) years, if payments have not commenced, or the remaining payout period if payments have commenced. In 2007, the Company modified the agreement to include an annual vesting provision whereby the annual retirement benefit described above vests at a rate of 5% per year for Mr. Derenzo, effective January 1, 2007. On December 31, 20192020 the vested annual benefit was $32,500.$35,000.

In 2007, the Company entered into a Salary Continuation Agreement to provide nonqualified retirement benefits to Mr. Bender. The terms of the agreement include the amounts Mr. Bender will receive upon the occurrence of certain specified events, including formal retirement on or after normal retirement age. The agreement generally provides for annual normal retirement benefit payments of Fifty Thousand Dollars ($50,000) to Mr. Bender, or reduced retirement benefit payments upon earlier termination of employment, including termination in connection with a change in control of the Company. On December 31, 2012, Mr. Bender’s agreement was modified to increase the annual retirement benefit period from equal monthly installments payable over a ten (10) year period to equal monthly installments payable over fifteen (15) years following retirement or earlier termination of employment. The annual benefit described above vests at a rate of 5% per year. In the event of Mr. Bender’s death, the normal retirement benefit payments are to be paid to Mr. Bender’s designated beneficiary over fifteen (15) years, if payments have not commenced, or the remaining payout period if payments have commenced. On December 31, 20192020 the vested annual benefit was $32,500.$35,000.

Health and Welfare Benefits

The Company offers a variety of health and welfare programs to all eligible employees. The executive officers generally are eligible for the same benefit programs on the same basis as the rest of the broad-based employees. The health and welfare programs are intended to protect employees against catastrophic loss and encourage a healthy lifestyle. The health and welfare programs include medical, pharmacy, dental, vision, life insurance, accidental death and disability, paid vacation and personal absence time. Coverage under the life and accidental death and disability programs offer benefit amounts specific to each executive officer.

Perquisites and Perquisite Allowance Payments

The Compensation Committee annually reviews the perquisite program and allowances provided to each executive officer to determine if adjustments are appropriate. Mr. Ritchie is provided a Company owned vehicle for his use to attend various events in the Company’s market area, for business development purposes on behalf of the Company, and for incidental personal use, including commuting to and from his home. The perquisites do not exceed $10,000 per year individually or in the aggregate.

Employment Agreements

In October 2017, the Company entered into an employment agreement with Mr. Ritchie’s, employment agreementwhich provided for an initial term of two years subject to automatic one-year extensions thereafter unless terminated in accordance with the terms of the agreement. The agreement provides for a base salary which is disclosed in the “Summary Compensation Table” on page 3730 of this proxy statement and a guaranteed bonus of $160,000 per year for each of the fiscal yearsyear ending December 31, 2017 and December 31, 2018. Commencing in 2019, Mr. Ritchie was eligible to receive an annual incentive pursuant to the Incentive Compensation Plan. The amount of the incentive and the performance goals applicable to the incentive will be determined by the Board upon recommendation of the Compensation Committee.

Mr. Ritchie’s employment agreement may be terminated with or without cause, but if the Company terminates the agreement is terminated without cause including, without limitation, automatic termination due toor Mr. Ritchie terminates the occurrence of circumstances that make it impossible or impracticalagreement for the Company to conduct or continue its business, or the Company’s breach of the terms of the agreement,good reason, Mr. Ritchie is entitled to receive severance compensation equal to twelve (12) months of the existinghis then current base salary, less applicable withholding deductions (in addition to salary, incentive compensation, or other payments, if any, due to Mr. Ritchie), a pro-rated portion of his prior year’s incentive compensation, and reimbursement for health insurance coverage for a period of eighteen (18) months. The agreement further provides that in the event of a “change in control” as defined therein and within a period of two yearstwelve (12) months following consummation of such change in control (i) his employment is terminated; or (ii) any adverse change occurs in the nature and scope of his salary or benefits; or (iii) any event occurs which reasonably constitutes a constructive termination of employment, by resignation or otherwise, then he will be entitled to receive severance compensation in an amount equal to twenty-four (24) months of his annual base salary, less applicable withholding deductions (in addition to salary, incentive compensation, or other payments, if any, due to him), an incentive compensation payment in an amount equal to two (2) times the average of the previous three year incentive compensation amounts, and reimbursement for health insurance coverage for a period of eighteen (18) months. If Mr. Ritchie’s employment were to be terminated in the case of disability or death, he, or his beneficiaries would be entitled to a prorated share of his prior year bonus. In order to receive such severance compensation and benefits, in each case, Mr. Ritchie must provide the Company a general release of claims.

In September 2006, the Company entered into employment agreements with Messrs. Derenzo and Bender. The agreements have no stated term and can be terminated at any time by the Company or by the employee, with or without cause. The agreements provide a base salary which is disclosed in the “Summary Compensation Table” on page 3730 of this proxy statement. The agreements may be terminated with or without cause, but if an agreement is terminated without cause, including, without limitation, automatic termination due to the occurrence of circumstances that make it impossible or impractical for the Company to conduct or continue its business, or the Company’s breach of the terms of an agreement, Messrs. Derenzo and Bender each would be entitled to receive severance compensation equal to six (6) months of their existing base salary. The agreements further provide that in the event of a “change in control” as defined therein and within a period of two years following consummation of such change in control (i) their employment is terminated; or (ii) any adverse change occurs in the nature and scope of their salary or benefits; or (iii) any event occurs which reasonably constitutes a constructive termination of employment, by resignation or otherwise, then they would be entitled to receive severance compensation in an amount equal to twelve (12) months of their annual base salary, less applicable withholding deductions (in addition to salary, incentive compensation, or other payments, if any, due the employee).

In December 2017, the Company entered into an employment agreement with Mr. Raymond. The agreement has no stated term and can be terminated at any time by the Company or Mr. Raymond, with or without cause. The agreement provides a base salary which is disclosed in the “Summary Compensation Table” on page 37 of this proxy statement. Mr. Raymond’s employment with the Company was terminated on October 3, 2019 at which time he was paid six month’s base salary ($112,500) and his accrued vacation ($24,324).

In May 2018, the Company entered into an employment agreement with Mr. McGregor. The agreement has no stated term and can be terminated at any time by the Company or Mr. McGregor, with or without cause. The agreement provides a base salary which is disclosed in the “Summary Compensation Table” on page 3730 of this proxy statement. The agreement may be terminated with or without cause, but if the agreement is terminated without cause, including, without limitation, automatic termination due to the occurrence of circumstances that make it impossible or impractical for the Company to conduct or continue its business, or the Company’s breach of the terms of an agreement, Mr. McGregor is entitled to receive severance compensation equal to six (6) months of his existing base salary. The agreement further provides that in the event of a “change in control” as defined therein and within a period of two years following consummation of such change in control (i) his employment is terminated; or (ii) any adverse change occurs in the nature and scope of his salary or benefits; or (iii) any event occurs which reasonably constitutes a constructive termination of his employment, by resignation or otherwise, then he will be entitled to receive severance compensation in an amount equal to twelve (12) months of his annual base salary, less applicable withholding deductions (in addition to salary, incentive compensation, or other payments, if any, due to him).

In February 2021, the employment agreements with Messrs. Derenzo, Bender, and McGregor were amended to increase the change in control benefit from twelve (12) months to eighteen (18) months.

Tax Deductibility and Executive Compensation

Section 162(m) of the Internal Revenue Code generally limits the corporate tax deduction for compensation paid to our named executive officers in any fiscal year to $1 million per individual. Since 2018, this limitation applies to compensation paid to or with respect to anyone who had been a named executive officer in fiscal year 2017 or any later fiscal year, even if the individual is not an executive officer in the year for which deduction would be taken. Prior to 2018, this deduction limitation did not apply to compensation that met certain requirements to be considered performance-based. As a result of amendments made to Section 162(m) by the Tax Cuts and Jobs Act of 2017, performance-based compensation is now included in compensation subject to the $1 million annual deduction limitation, unless provided pursuant to a written binding contract in effect on November 2, 2017, and not materially modified thereafter. Although the Company historically has not paid any executive officers compensation in excess of the $1 million annual deduction limitation, the Compensation Committee believes that shareholder interests are best served if it has discretion and flexibility to award compensation to our executive officers that is not restricted to $1 million annually, even though some compensation awards, including equity awards that may increase in value prior to the time that they would become tax deductible, may result in non-deductible compensation expenses. The Compensation Committee will continue to review and modify our compensation practices and programs as necessary to maintain our ability to attract and retain key executives while taking into account the deductibility of compensation programs.

COMPENSATION COMMITTEE REPORT

NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY’S PREVIOUS OR FUTURE FILINGS UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934 THAT MIGHT INCORPORATE THIS PROXY STATEMENT OR FUTURE FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, IN WHOLE OR IN PART, THE FOLLOWING REPORT SHALL NOT BE DEEMED TO BE INCORPORATED BY REFERENCE INTO ANY SUCH FILING.

The Compensation Committee reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement with management. Based on such review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and the Company’s Annual Report on Form 10-K for filing with the Securities and Exchange Commission.

Submitted by the Compensation Committee of American River Bankshares Board of Directors:

Michael A. Ziegler
Charles D. Fite	Jeffrey Owensby
Chairman		Chairman

Julie A. Raney	William A. Robotham

EXECUTIVE COMPENSATION

The following table shows the cash and non-cash compensation for the years indicated awarded to or earned by individuals who served as our chief executive officer, chief financial officer and each of our other most highly compensated executive officers.

Summary Compensation Table

GRANTS OF PLAN-BASED AWARDS

The following table summarizes the non-equity and equity incentive plan awards and stock awards that were made to the Company’s executive officers named in the “Summary Compensation Table” on page 3730 of this proxy statement in the fiscal year ended December 31, 2019.2020.

Grants of Plan-Based Awards Table