SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Commission Only (as permitted
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[_] Definitive Additional Materials
SALISBURY BANCORP, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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SALISBURY BANCORP, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 27, 2002
TABLE OF CONTENTS
Page
NOTICE OF
MEETING.................................................................3
INTRODUCTION............................................................4
OUTSTANDING STOCK AND VOTING RIGHTS.....................................4
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT..........................6
MANAGEMENT OF THE COMPANY...............................................7
Principal Shareholders of the
Company.................................................................8
PROPOSAL I- ELECTION OF DIRECTORS.......................................8
Committees of the Board of
Directors.......................................................9
Fees............................................................10
Director Attendance.............................................10
Certain Business Relationships..................................10
Audit Committee Report..........................................11
Indebtedness of Management and Others...........................11
EXECUTIVE COMPENSATION OF PRINCIPAL OFFICERS............................12
Summary Compensation Table......................................12
Insurance.......................................................12
Pension Plan....................................................12
Supplemental Retirement Arrangement.............................14
Directors Stock Retainer Plan...................................14
Change in Control Agreements....................................14
401(k) Plan.....................................................14
Section 16(a) Beneficial Ownership Reporting Compliance.........15
PROPOSAL II - RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT AUDITORS...............................................15
PROPOSAL III - OTHER BUSINESS...........................................16
SHAREHOLDER PROPOSALS...................................................17
SHAREHOLDER INFORMATION.................................................17
2
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 27, 2002
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Salisbury
Bancorp, Inc. (the "Company"), will be held at 10:00 a.m. on Saturday, April 27,
2002 at the Main Office of Salisbury Bank and Trust Company (the "Bank"), 5
Bissell Street, Lakeville, Connecticut, for the following purposes:
1. To elect three (3) Directors for a three (3) year term; who, with the six
(6) directors whose terms do not expire at this meeting, will constitute
the full Board of Directors of the Company.
2. To ratify the appointment by the Board of Directors of Shatswell, MacLeod &
Company, P.C. as independent auditors for the Company for the year ending
December 31, 2002.
3. To transact such other business as may properly come before the meeting, or
any adjournment(s) thereof.
Only those Shareholders of record at the close of business on the 8th day
of March, 2002 are entitled to notice of, and to vote at this Annual Meeting or
any adjournment thereof. In order that you may be represented at the meeting,
please complete, date, sign and mail promptly the enclosed proxy for which a
postage-prepaid return envelope is provided.
BY ORDER OF THE BOARD OF DIRECTORS OF
SALISBURY BANCORP., INC.
/s/Richard J. Cantele, Jr.
--------------------------
Richard J. Cantele, Jr.
Secretary
March 29, 2002
SHAREHOLDERS ARE REQUESTED TO MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY AS
SOON AS POSSIBLE REGARDLESS OF WHETHER THEY PLAN TO ATTEND THE MEETING. ANY
PROXY GIVEN BY A SHAREHOLDER MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED,
AND ANY SHAREHOLDER WHO EXECUTES AND RETURNS A PROXY AND WHO ATTENDS THE ANNUAL
MEETING MAY WITHDRAW THE PROXY AT ANY TIME BEFORE IT IS VOTED AND VOTE HIS OR
HER SHARES IN PERSON. A PROXY MAY BE REVOKED BY GIVING NOTICE TO RICHARD J.
CANTELE, JR., SECRETARY OF THE COMPANY, IN WRITING PRIOR TO THE TAKING OF A
VOTE.
3
SALISBURY BANCORP, INC.
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
April 27, 2002
INTRODUCTION
The enclosed proxy (the "Proxy") is solicited by the Board of Directors
(the "Board of Directors") of Salisbury Bancorp, Inc. (the "Company"), 5 Bissell
Street, Lakeville, Connecticut 06039, for use at the Annual Meeting of
Shareholders, to be held on Saturday, April 27, 2002, at 10:00 a.m., at the Main
Office of its subsidiary, Salisbury Bank and Trust Company (the "Bank"), 5
Bissell Street, Lakeville, Connecticut, and at any and all adjournments thereof.
Any Proxy given may be revoked at any time before it is actually voted on any
matter in accordance with the procedures set forth on the Notice of Annual
Meeting. This Proxy Statement and the enclosed form of Proxy are being mailed to
shareholders (the "Shareholders") on or about March 29, 2002. The cost of
preparing, assembling and mailing this Proxy Statement and the material enclosed
herewith is being borne by the Company. In addition, proxies may be solicited by
directors, officers and employees of the Company and the Bank personally by
telephone or other means. The Company will reimburse banks, brokers, and other
custodians, nominees, and fiduciaries for their reasonable and actual costs in
sending the proxy materials to the beneficial owners of the Company's common
stock (the "Common Stock").
OUTSTANDING STOCK AND VOTING RIGHTS
The Board of Directors has fixed the close of business on March 8, 2002 as
the record date (the "Record Date") for the determination of Shareholders
entitled to notice of and to vote at this Annual Meeting. As of the Record Date,
1,422,358 shares of the Company's Common Stock (par value $.10 per share) were
outstanding and entitled to vote and held of record by approximately 519
Shareholders, each of which shares is entitled to one vote on all matters to be
presented at this Annual Meeting. Votes withheld, abstentions and broker
non-votes are not treated as having voted in favor of any proposal are counted
only for purposes of determining whether a quorum is present at the Annual
Meeting.
A proxy card is enclosed for your use. YOU ARE SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS TO COMPLETE, DATE, SIGN AND RETURN THE PROXY CARD IN THE
ACCOMPANYING ENVELOPE, which is postage-prepaid if mailed in the United States.
If the enclosed form of Proxy is properly executed and received by the
Company in time to be voted at the Annual Meeting, the shares represented
thereby will be voted in accordance with the instructions marked thereon.
Executed, but unmarked proxies will be voted "FOR" each of Proposals I and II
discussed in this Proxy Statement. As of the date of this Proxy Statement, the
Board of Directors and management do not know of any matters other than those
described in the Notice of Annual Meeting that are to come before the Annual
Meeting. If any other matters are
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properly brought before the Annual Meeting, the persons named in the proxy will
vote the shares represented by such proxy upon such matters as determined by a
majority of the Board of Directors.
A copy of the 2001 Annual Report to Shareholders, which includes the
consolidated financial statements of the Company for the year ended December 31,
2001, is being mailed with this proxy statement to all shareholders entitled to
vote at the Annual Meeting.
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SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth certain information as of March 8, 2002
regarding the number of shares of Common Stock beneficially owned by each
director and officer and by all directors and officers as a group.
Number of Shares (1) Percentage of Class (2)
John R. H. Blum 15,336(3) 1.08%
Louise F. Brown 3,156(4) .22%
Richard J. Cantele, Jr 2,868(5) .20%
John F. Foley 3,696(6) .26%
Nancy F. Humphreys 1,000(7) .07%
Gordon C. Johnson 1,502(8) .11%
Holly J. Nelson 1,048(9) .07%
John F. Perotti 10,839(10) .76%
Walter C. Shannon, Jr 3,604(11) .25%
Craig E. Toensing 3,000(12) .21%
Michael A. Varet 65,646(13) 4.62%
(All Directors and Officers 111,695 7.85%
as a group of (11) persons)
(1) The shareholdings also include, in certain cases, shares owned by or in
trust for a director"s spouse and/or children or grandchildren, and in
which all beneficial interest has been disclaimed by the director.
(2) Percentages are based upon the 1,422,358 shares of the Company's Common
Stock outstanding and entitled to vote on March 8, 2002. The definition of
beneficial owner includes any person who, directly or indirectly, through
any contract, agreement or understanding, relationship or otherwise has or
shares voting power or investment power with respect to such security.
(3) Includes 2,100 shares owned by John R. H. Blum's wife.
(4) Includes 1,068 shares owned by Louise F. Brown as custodian for her
daughter.
(footnotes continued on following page)
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(footnotes continued from previous page)
(5) Includes 1,182 shares owned jointly by Richard J. Cantele, Jr. and his wife
and 6 shares owned by Richard J. Cantele, Jr. as custodian for his
daughter.
(6) Includes 1,518 shares owned jointly by John F. Foley and his wife and 66
shares owned by John F. Foley as custodian for his children.
(7) Includes 1,000 shares owned jointly by Nancy F. Humphreys and her husband.
(8) Includes 660 shares which are owned by Gordon C. Johnson's wife and for
which Mr. Johnson has disclaimed beneficial ownership.
(9) Includes 6 shares owned by Holly J. Nelson as guardian for a minor child.
(10) Includes 9,514 shares owned jointly by John F. Perotti and his wife, 761
shares owned by his wife and 564 shares in trust for his son.
(11) All shares are owned individually by Walter C. Shannon, Jr.
(12) Includes 42 shares owned by Craig E. Toensing as custodian for his son.
(13) Includes 18,540 shares which are owned by Michael A. Varet's wife, 12,366
shares which are owned by his son and 6,180 shares owned by his daughter.
Michael A. Varet has disclaimed beneficial ownership for all of these
shares.
MANAGEMENT OF THE COMPANY
The following table sets forth the name and age of each Executive Officer,
his principal occupation for the last five (5) years and the year in which he
was first appointed an Executive Officer of the Company.
Executive Officer
Name Age Position of the Company since:
---- --- -------- ---------------------
John F. Perotti 55 President and 1998(1)
Chief Executive Officer
Richard J. Cantele, Jr. 42 Secretary 2001 (2)
John F. Foley 51 Chief Financial Officer 1998(3)
(1) Mr. Perotti is also the President and Chief Executive Officer of the Bank
and has been an Executive Officer of the Bank since 1982.
(2) Mr. Cantele is also the Executive Vice President, Treasurer and Chief
Operating Officer of the Bank and has been an Executive Officer of the Bank
since 1989.
(3) Mr. Foley is also the Senior Vice President, Comptroller and Principal
Financial Officer of the Bank and has been an Executive Officer of the Bank
since 1986.
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Principal Shareholders of the Company
-------------------------------------
As of March 8, 2002, management was not aware of any person (including any
"group" as that term is used in Section 13 (d)(3) of the Exchange Act) who owns
beneficially more than 5% of the Company's Common Stock.
PROPOSAL I
ELECTION OF DIRECTORS
The Certificate of Incorporation and Bylaws of the Company provide for a
Board of Directors of not less than seven (7) members, as determined from time
to time by resolution of the Board of Directors. The Board of Directors has set
the number of directorships at nine (9). The Board of Directors of the Company
is divided into three (3) classes as nearly equal in number as possible. Classes
of directors serve for staggered three (3) year terms. A successor class is to
be elected at each annual meeting of shareholders when the terms of office of
the members of one class expire. Vacant directorships may be filled, until the
expiration of the term of the vacated directorship, by the vote of a majority of
the directors then in office. The Company does not have a nominating committee
but has a prescribed procedure for shareholders to make a nomination set forth
in the Company's Bylaws.
There are three (3) directorships on the Board of Directors which are up
for election this year. The following individuals have been nominated by the
Board of Directors to serve for a three (3) year term: John R. H. Blum, Louise
F. Brown and Nancy F. Humphreys. The three (3) nominees are members of the
present Board of Directors. Unless otherwise directed, the enclosed proxy will
be voted "FOR" such nominees. In the event any one or more nominees is unable or
declines to serve (events which are not anticipated), the persons named in the
proxy may vote for some other person or persons.
The following table sets forth certain information, as of March 8, 2002,
with respect to the directors of the Company.
NOMINEES FOR ELECTION
Positions Held Director Term
Name Age with the Company Since Expiring
---- --- ---------------- ----- --------
John R. H. Blum 72 Chairman 1998 2002
Louise F. Brown 58 Director 1998 2002
Nancy F. Humphreys 60 Director 2001 2002
CONTINUING DIRECTORS
Gordon C. Johnson 67 Director 1998 2003
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Holly J. Nelson 48 Director 1998 2003
Positions Held Director Term
Name Age with the Company Since Expiring
---- --- ---------------- ----- --------
Walter C. Shannon, Jr. 66 Director 1998 2003
John F. Perotti 55 President, 1998 2004
Chief Executive Officer
and Director
Craig E. Toensing 64 Director 1998 2004
Michael A. Varet 59 Director 1998 2004
Presented below is additional information concerning the directors of the
Company. Unless otherwise stated, all directors have held the position described
for at least five (5) years.
John R. H. Blum is an attorney in private practice and former Commissioner
of Agriculture for the State of Connecticut. He has been a director of the Bank
since 1995 and was elected Chairman of the Board of Directors of the Company and
the Bank in 1998.
Louise F. Brown has been a director of the Bank since 1992 and is a partner
at the Sharon office in the law firm of Gager & Peterson, LLP.
Nancy F. Humphreys has been a director of the Bank since 2001. She retired
from Citigroup New York, Citibank in February of 2000, as Managing Director and
Treasurer of Global Corporate Investment Bank North America.
Gordon C. Johnson has been a director of the Bank since 1994 and is a
Doctor of Veterinary Medicine.
Holly J. Nelson has been a director of the Bank since 1995. She is a member
of Horses North, LLC, a tour operator, and is a partner in Oblong Property
Management, LLC.
John F. Perotti is President and Chief Executive Officer of the Company and
the Bank. Prior to that he served as Executive Vice President and Chief
Operating Officer of the Bank and prior to that, he was Vice President and
Treasurer of the Bank. He has been a director of the Bank since 1985.
Walter C. Shannon, Jr. is President Emeritus of Wagner McNeil, Inc. and
President of William J. Cole Agency, Inc. He has been a director of the Bank
since 1993.
Craig E. Toensing has been a director of the Bank since 1995 and retired in
December 2001 as Senior Vice President and Trust Officer of the Bank.
Michael A. Varet is a partner in the law firm of Piper Marbury Rudnick &
Wolfe LLP. Mr. Varet has been a director of the Bank since 1997.
Committees of the Board of Directors
------------------------------------
The Board of Directors of the Company met fifteen (15) times during the
year 2001, and has various committees including an Executive Committee and an
Audit Committee. The members of
9
the committees are appointed by the Board of Directors. The full Board of
Directors performs the function of a nominating committee.
The Executive Committee has general supervision over the affairs of the
Company between meetings of the Board of Directors. In addition, while the
Company does not have a compensation committee, the Executive Committee performs
this task. All executive officers are excused from meetings of the Executive
Committee when votes are taken on their compensation packages. The members of
the Executive Committee include John R. H. Blum, Gordon C. Johnson, John F.
Perotti, Walter C. Shannon, Jr., Craig E. Toensing and Michael A. Varet. The
Executive Committee met four (4) times during the year 2001.
The Audit Committee provides assistance to the Board of Directors in
fulfilling its responsibility to the shareholders, potential shareholders, and
investment community relating to corporate accounting, reporting practices of
the Corporation, and the quality and integrity of the financial reports of the
Corporation. In so doing, it is the responsibility of the Audit Committee to
maintain free and open means of communication between the directors, the
independent auditors, the internal auditors, and the financial management of the
Corporation.
The responsibilities of the Audit Committee are governed by the Company's
Audit Committee Charter which was adopted by the Company's Board of Directors.
Its members are Louise F. Brown, Nancy F. Humphreys, Gordon C. Johnson, Holly J.
Nelson and Michael A. Varet. The Audit Committee met six (6) times during the
year 2001. As of the date of this Proxy Statement, each of the members of the
Audit Committee is an "independent director" in accordance with the listing
standards of the American Stock Exchange.
Fees
----
During 2001, each director received an annual retainer of $2,000. In
addition, directors received $500 for each Board of Directors meeting attended
and $200 for each committee meeting attended. Directors Perotti and Toensing
received no additional compensation for their services as directors or members
of any board committee during 2001.
Director Attendance
-------------------
During 2001 no director attended fewer than 75% of the aggregate of (1) the
total number of meetings of the Company's Board of Directors which he/she was
entitled to attend, and (2) the total number of meetings held by all committees
of the Company's Board of Directors on which he/she served.
Certain Business Relationships
------------------------------
The Company and the Bank have had, and expect to have in the future,
transactions in the ordinary course of business with directors, officers,
principle shareholders and their associates on substantially the same terms as
those available for comparable transactions with others.
John R. H. Blum is Chairman of the Board of Directors and an attorney
engaged in the private practice of law. The Company has engaged Mr. Blum in past
years and even though his services were not used in 2001, the Company may engage
his services in 2002 in connection with certain legal matters.
10
Louise F. Brown is a director of the Company and a partner in the law firm
of Gager & Peterson, LLP. The Company has engaged Ms. Brown in past years and
even though her services were not used in 2001, the Company may engage her
services in 2002 in connection with certain legal matters. Walter C. Shannon,
Jr. is a director of the Company and President Emeritus of Wagner McNeil, Inc.
which serves as the insurance agent for many of the Company's insurance needs.
Audit Committee Report
----------------------
The following Report of the Company's Audit Committee is provided in
accordance with the rules and regulations of the Securities and Exchange
Commission (the "SEC"). Pursuant to such rules and regulations, this report
shall not be deemed "soliciting material," filed with the SEC, subject to
Regulation 14A and 14C of the SEC or subject to the liabilities of Section 18 of
the Securities Exchange Act of 1934.
SALISBURY BANCORP, INC. AUDIT COMMITTEE REPORT
The Audit Committee has reviewed and discussed the Company's audited
financial statements for the fiscal year ended December 31, 2001 with
management. The Audit Committee has also reviewed and discussed with Shatswell,
MacLeod & Company, P.C. ("Shatswell"), the Company's independent auditors, the
matters required to be discussed by SAS 61.
The Audit Committee has received the written disclosures and the letter
from Shatswell required by Independence Standards Board Standard No. 1, and has
discussed Shatswell's independence with respect to the Company with Shatswell.
Based on the review and discussions referred to in this Audit Committee
Report, the Audit Committee recommended to the Board of Directors that the
audited financial statements be included in the Company's Annual Report on Form
10-KSB for the year ended December 31, 2001 for filing with the SEC.
Salisbury Bancorp, Inc. Audit Committee
Gordon C. Johnson
Louise F. Brown
Nancy F. Humphreys
Holly J. Nelson
Michael A. Varet
Indebtedness of Management and Others
-------------------------------------
Some of the directors and executive officers of the Company and the Bank,
as well as firms and companies with which they are associated, are or have been
customers of the Bank and as such have had banking transactions with the Bank.
As a matter of policy, loans to directors and executive officers are made in the
ordinary course of business on substantially the same terms, including interest
rates, collateral and repayment terms, as those prevailing at the time for
comparable transactions with other persons and do not involve more than the
normal risk of collectibility or present other unfavorable features.
11
Since January 1, 2001, the highest aggregate outstanding principal amount
of all loans extended by the Bank to its directors, executive officers and all
associates of such persons as a group was $1,487,466, representing an aggregate
principal amount equal to 5.81% of the equity capital accounts of the Bank.
EXECUTIVE COMPENSATION OF PRINCIPAL OFFICERS
The following table provides certain information regarding the compensation
paid to certain executive officers of the Company and the Bank for services
rendered in all capacities during the fiscal years ended December 31, 2001, 2000
and 1999. No other current executive officer of the Company or the Bank received
cash compensation in excess of $100,000 during the year ended December 31, 2001.
All compensation expense was paid by the Bank.
Summary Compensation Table
Annual
Compensation
All Other
Name and Principal Compensation
Position Year Salary($) Bonus($) ($) (2) (3)
John F. Perotti 2001 $179,920 $ 25,949 $ 3,400(3)
President and 2000 172,992 38,515 3,400(2)
Chief Executive Officer 1999 163,200 30,243 --
of the Company and the Bank
Craig E. Toensing (4) 2001 $134,108 $ 19,530 $ 2,985(3)
Senior Vice President 2000 130,200 30,825 3,221(2)
and Trust Officer of the Bank 1999 122,808 24,641 --
Richard J. Cantele, Jr. (5) 2001 $ 93,652 $ 17,063 $ 2,145(3)
Secretary of the Company 2000 87,504 17,700 2,104(2)
Executive Vice President, Treasurer 1999 75,000 13,191 --
and Chief Operating Officer of the Bank
(1) Compensation above does not include accrual of benefits under the Bank"s
defined pension plan or supplemental arrangements described below.
(2) The Bank's matching contribution to the 401(k) plan for 2000.
(3) The Bank's matching contribution to the 401(k) plan for 2001.
(4) Craig Toensing retired as Senior Vice President and Trust Officer of the
Bank on December 31, 2001.
(5) Richard J. Cantele, Jr. was appointed Secretary of the Company on December
27, 2001.
Insurance
---------
In addition to the cash compensation paid to the executive officers of the
Company and the Bank, the executive officers receive group life, health,
hospitalization and medical insurance coverage. However, these plans do not
discriminate in scope, term, or operation, in favor of officers or directors of
the Company and the Bank and are available generally to all full-time employees.
Pension Plan
------------
The Bank maintains a non-contributory defined pension plan for officers and
other salaried employees of the Bank who become participants after attaining age
21 and completing one (1) year of service.
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PENSION PLAN TABLE
Average
Base Salary Estimated Annual Retirement Benefit With
at Retirement Years of Service at Retirement Indicated
------------- ----------------------------------------
10 Years 20 Years 25 Years 35 Years
-------- -------- -------- --------
$ 80,000 16,000 32,000 40,000 44,000
90,000 18,000 36,000 45.000 49,500
100,000 20,000 40,000 50,000 55,000
110,000 22,000 44,000 55,000 60,500
120,000 24,000 48,000 60,000 66,000
130,000 26,000 52,000 65,000 71,500
140,000 28,000 56,000 70,000 77,000
150,000 30,000 60,000 75,000 82,500
160,000 32,000 64,000 80,000 88,000
170,000 34,000 68,000 85,000 93,500
180,000 36,000 72,000 90,000 99,000
190,000 38,000 76,000 95,000 104,500
200,000 40,000 80,000 100,000 110,000
$ 210,000 $42,000 $84,000 $105,000 $115,500
Pension benefits are based upon average base salary (determined as of each
January 1st) during the highest five (5) consecutive years of service prior to
attaining normal retirement date. The amount of annual benefit is fifty percent
(50%) of average base salary less fifty percent (50%) of the primary Social
Security benefit, pro rated for less than 25 years of service, plus one-half of
one percent (.5%) of average base salary for each of up to ten (10) additional
years of service. This benefit formula may be modified to conform with changes
in the pension laws.
The present average base salary and years of service to date of Messrs.
Perotti, Toensing and Cantele are: Mr. Perotti: $186,692; 29 years; Mr.
Toensing: $140,331; 21 years and Mr. Cantele: $90,126; 20 years. The above table
shows estimated annual retirement benefits payable at normal retirement date as
a straight life annuity for various average base salary and service categories
before the offset of a portion of the primary Social Security benefit.
13
Supplemental Retirement Arrangement
-----------------------------------
In 1994, the Bank entered into a supplemental retirement arrangement (the
"Supplemental Retirement Agreement") with John F. Perotti. Following disability
or retirement at the earlier of the age of 65, or after thirty (30) years of
service to the Bank, Mr. Perotti will receive monthly payments of $1,250
(adjusted annually to reflect the lesser of a five percent (5%) increase or "The
Monthly Consumer Price Index for All Urban Consumers, United States City
Average, All Items" published by the Bureau of Labor Statistics) for a period of
ten (10) years. These payments are in addition to any payments under the Bank's
retirement plan. The Supplemental Retirement Agreement includes provisions which
would prevent Mr. Perotti from working for a competitor in the proximity of the
Bank.
Directors Stock Retainer Plan
-----------------------------
At the 2001 Annual Meeting, the shareholders of the Company voted to
approve the "Directors Stock Retainer Plan of Salisbury Bancorp, Inc. (the
Plan)." The Plan provides non-employee directors of the Company with shares of
restricted stock of the Company as a component of their compensation for
services as non-employee directors. The maximum number of shares of stock that
may be issued pursuant to the Plan shall not exceed 15,000. The first grant date
under this plan will immediately precede the 2002 Annual Meeting of
Shareholders. Each non-employee director will be issued an "annual stock
retainer" consisting of 120 shares of restricted common stock of the Company.
The number of shares to be issued to any new non-employee director will be
prorated to reflect the number of months which they served as a non-employee
director prior to any grant date.
Change in Control Agreements
----------------------------
During 2001, the Bank entered into change in control agreements with the
following Executive Officers of the Bank: John F. Perotti, Richard J. Cantele,
Jr., John F. Foley, Todd M. Clinton and Diane E. R. Johnstone. The agreements
provide that, in the event of a change in control of the Company or Bank, each
Executive Officer will be entitled to a lump sum payment equal to his or her
annual compensation based upon the most recent aggregate base salary paid to the
Executive Officer in the twelve (12) month period immediately preceding the date
of change in control. In no event shall such payments be made in an amount which
would cause them to be deemed non-deductible to the Bank by reason of the
operation of Section 280G of the Internal Revenue Code.
401(k) Plan
-----------
The Bank offers a 401(k) profit sharing plan. This plan began in the year 2000.
Each Plan Year, the Bank will announce the amount of the matching contributions,
if any. The amount of the matching contributions is directly related to the
employees' 401(k) salary deferral contribution. For the Plan Year that began
January 1, 2001, all eligible participants received a matching contribution
equal to fifty percent (50%) of their 401(k) salary deferral contribution to the
Plan; however, it is limited to two percent (2%) of the plan compensation not to
exceed $3,400. The Plan expense was $42,874 for 2001.
14
Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers, directors and persons who own more than ten
percent (10%) of the Company's Common Stock, to file with the Securities and
Exchange Commission (the "SEC") reports of ownership and changes in ownership of
the Company's Common Stock. Executive officers, directors and any shareholders
owning greater than ten percent (10%) of the Company's Common Stock are required
by the SEC's regulations to furnish the Company with copies of all such reports
that they file.
Based solely on a review of copies of reports filed with the SEC since
January 1, 2001 and of written representations by certain executive officers and
directors, all persons subject to the reporting requirements of Section 16(a)
are believed by management to have filed the required reports on a timely basis.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO ELECT THE
THREE (3) NOMINEES TO THE BOARD OF DIRECTORS FOR A TERM OF THREE (3) YEARS.
DIRECTORS ARE ELECTED BY A PLURALITY OF THE VOTES CAST BY THE SHARES ENTITLED TO
VOTE AT THE MEETING. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS SHAREHOLDERS SPECIFY A CONTRARY CHOICE ON THE PROXY CARD.
PROPOSAL II
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
Shareholders are asked to consider and ratify the appointment by the Board
of Directors of Shatswell, MacLeod & Company, P.C. as independent auditors to
audit the consolidated financial statements of the Company for the fiscal year
ending December 31, 2002. Shatswell, MacLeod & Company, P.C. has served as the
accountants for the Company for the fiscal year ended December 31, 2001.
Representatives of the firm Shatswell, MacLeod & Company, P.C. are not expected
to attend the Annual Meeting. However, should a representative of Shatswell,
MacLeod & Company, P.C. attend the meeting, they will be provided an opportunity
to make a statement if they desire to do so and would be available to respond to
appropriate questions.
1. Audit Fees
----------
The aggregate fees billed for professional services rendered for the audit
of the Company's annual financial statements for the most recent fiscal year and
the reviews of the financial statements included in the Company's Form 10-KSB
for December 31, 2001 were $81,896.
2. Financial Information Systems Design and Implementation Fees
------------------------------------------------------------
The aggregate fees billed for the professional services described in
Paragraph (c)(4)(ii) of Rule 2-01 of Regulation S-X rendered by Shatswell,
MacLeod & Company, P.C. for the fiscal year ended December 31, 2001 were $-0-.
15
3. All Other Fees
--------------
The aggregate fees billed for services rendered by Shatswell, MacLeod &
Company, P.C., other than the services covered above, for the fiscal year ended
December 31, 2001 were $13,875.
Independence
------------
The Audit Committee of the Board of Directors of the Company has considered
and determined that the provision of services rendered by Shatswell, MacLeod &
Company, P.C. relating to matters 2 and 3 above, is compatible with maintaining
the independence of such accountants.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF PROPOSAL
(2). PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
SHAREHOLDERS SPECIFY A CONTRARY CHOICE ON THE PROXY CARD. THE PROPOSAL TO RATIFY
THE APPOINTMENT OF SHATSWELL, MACLEOD & COMPANY, P.C. WILL BE APPROVED IF THE
AFFIRMATIVE VOTES CAST EXCEED THE VOTES CAST OPPOSING THE PROPOSAL.
PROPOSAL III
OTHER BUSINESS
The Company is not aware of any business to be acted upon at the Annual
Meeting other than that which is discussed in this Proxy Statement. In the event
that any other business requiring a vote of the Shareholders is properly
presented at the meeting, the holders of the proxies will vote your shares in
accordance with their best judgment and the recommendations of a majority of the
Board of Directors.
You are encouraged to exercise your right to vote by marking the
appropriate boxes and dating and signing the enclosed proxy card. The proxy card
may be returned in the enclosed envelope, postage-prepaid if mailed in the
United States. In the event that you are later able to attend the Annual
Meeting, you may revoke your proxy and vote your shares in person. A prompt
response will be helpful and your cooperation is appreciated.
16
SHAREHOLDER PROPOSALS
Any proposal which a Company shareholder wishes to have included in the
Company's Proxy Statement and form of Proxy relating to the Company's 2003
Annual Meeting of Shareholders under Rule 14a-8 of the SEC must be received by
the Company's Secretary at 5 Bissell Street, Lakeville, CT 06039 by December 28,
2002. Nothing in this paragraph shall be deemed to require the Company to
include in its Proxy Statement and form of Proxy for such meeting any
shareholder proposal which does not meet the requirements of the SEC in effect
at the time. In addition, under the Company's Bylaws, shareholders who wish to
nominate a director or bring other business before an annual meeting must comply
with the following:
o You must be a shareholder of record and must have given timely notice in
writing to the Secretary of the Company.
o Your notice must contain specific information required in the Company's
Bylaws.
SHAREHOLDER INFORMATION
The Company's Annual Report on Form 10-KSB for the year ended December 31,
2001 is filed with the SEC and may be obtained without charge by any shareholder
upon written request to:
John F. Foley, Chief Financial Officer
Salisbury Bancorp, Inc.
P. O. Box 1868
Lakeville, Connecticut 06039-1868
The Company's 2001 Annual Report accompanies this document and is not
incorporated by reference.
By Order of the Board of Directors
/s/Richard J. Cantele, Jr.
--------------------------
Richard J. Cantele, Jr.
Secretary
Lakeville, Connecticut
March 29, 2002
17
REVOCABLE PROXY
Salisbury Bancorp, Inc.
[ X ] PLEASE MARK VOTES
AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF SALISBURY BANCORP, INC.
The undersigned holder(s) of the Common Stock of Salisbury Bancorp, Inc. (the
"Company") do hereby nominate, constitute and appoint Gordon C. Johnson and
Craig E. Toensing, jointly and severally, proxies with full power of
substitution, for us and in our name, place and stead to vote all the Common
Stock of the Company, standing in our name on its books on March 8, 2002 at the
Annual Meeting of its Shareholders to be held at the Main Office of the Company,
5 Bissell Street, Lakeville, Connecticut on Saturday, April 27, 2002 at 10:00
a.m. or at any adjournment thereof with all the power the undersigned would
possess if personally present, as follows:
(1) Elect the following persons (John R.H. Blum, Louise F. Brown and Nancy F.
Humphreys for three (3) year terms) to serve as directors of the company
who along with six directors whose terms do not expire at this meeting (the
"continuing directors") shall constitute the Board of Directors of the
Company.
For All
For Withhold Except
[_] [_] [_]
*INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"For All Except" and write that nominee's name in the space provided below.
(2) Ratification of the Appointment of Independent Auditors: Proposal to ratify
the resolution adopted by the Board of Directors appointing the independent
public accounting firm of Shatswell, MacLeod & Company, P.C. as the
independent auditors of the Company for the fiscal year ending December 31,
2002.
For Againts Abstain
[_] [_] [_]
(3) other Business: Proposal to conduct whatever other business may properly be
brought before the meeting or any adjournment thereof. Management at
present knows of no other business to be presented by or on behalf of the
Company or its Management at the meeting. In the event that any other
business requiring a vote of the Shareholders is properly presented at the
meeting, the holders of the proxies will vote your shares in accordance
with their best judgment and the recommendations of a majority of the Board
of Directors.
For Againts Abstain
[_] [_] [_]
PLEASE CHECK BOX IF YOU PLAN TO ATTEND
THE MEETING. [_]
Please be sure to sign and date this Proxy in the box below.
___________________________________________
Date
___________________________________________
Stockholder sign above
___________________________________________
Co-holder (if any) sign above
=> Detach above card, sign, date and mail in postage paid envelope provided. =>
SALISBURY BANCORP, INC.
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS (1) THROUGH (3).
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATION INDICATED. IF
NO SPECIFICATION IS INDICATED, THIS PROXY WILL BE VOTED "FOR" PROPOSALS (1)
THROUGH (3).
All joint owners must sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title. If more than one trustee, all must
sign.
This proxy may be revoked at any time prior to the meeting by written notice to
the company or may be withdrawn and you may vote in person should you attend the
annual meeting.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
--------------------------------------------------------------------------------
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
____________________________________________________
____________________________________________________
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