SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Salisbury Bancorp, Inc.
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SALISBURY BANCORP, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 10, 2006
TABLE OF CONTENTS
Page
NOTICE OF
MEETING...................................................................... 3
INTRODUCTION................................................................. 4
OUTSTANDING STOCK AND VOTING RIGHTS.......................................... 4
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS......................................... 5
Management of the Company....................................... 6
Principal Stockholders of the Company............................... 6
PROPOSAL 1 - ELECTION OF DIRECTORS........................................... 6
Nominees and Board of Directors..................................... 7
Committees of the Board of Directors................................ 8
Directors
Fees................................................................ 10
Directors Stock Retainer Plan....................................... 10
Directors
Attendance................................................................... 11
Board of Directors'Communications with Stockholders................. 11
Human Resources and Compensation Committee Report................... 11
Audit Committee Report.............................................. 12
Certain Business Relationships...................................... 13
Indebtedness of Management and Others............................... 13
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS............................. 13
Summary Compensation Table.......................................... 13
Insurance.................................................................... 14
Pension
Plan......................................................................... 14
Supplemental Retirement
Arrangement.................................................................. 14
Change in Control Agreements........................................ 15
401(k) Plan......................................................... 15
Section 16(a) Beneficial Ownership Reporting Compliance ............ 15
Stock Price Performance Graph....................................... 16
PROPOSAL 2 - RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT AUDITORS.................................................... 17
PROPOSAL 3 - OTHER BUSINESS.................................................. 18
STOCKHOLDER PROPOSALS........................................................ 18
STOCKHOLDER INFORMATION...................................................... 19
Appendix A - Audit Committee Charter......................................... 20
2
SALISBURY BANCORP, INC.
5 BISSELL STREET
P. O. BOX 1868
LAKEVILLE, CONNECTICUT 06039
(860) 435-9801
NOTICE OF 2006 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 10, 2006
NOTICE IS HEREBY GIVEN that the 2006 Annual Meeting of Stockholders of Salisbury
Bancorp, Inc. (the "Company"), will be held at 4:00 p.m. on Wednesday, May 10,
2006 at the Interlaken Inn, 74 Interlaken Road, in 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 of Shatswell, MacLeod & Company, P.C. as
independent auditors for the Company for the year ending December 31,
2006.
3. To transact such other business as may properly come before the
meeting, or any adjournment(s) thereof.
Only those Stockholders of record at the close of business on the 17th
day of March, 2006 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
April 10, 2006
Lakeville, CT
STOCKHOLDERS 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 STOCKHOLDER MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED,
AND ANY STOCKHOLDER 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.
5 BISSELL STREET
LAKEVILLE, CT 06039
(860) 435-9801
PROXY STATEMENT
FOR 2006 ANNUAL MEETING OF STOCKHOLDERS
May 10, 2006
INTRODUCTION
The enclosed proxy card (the "Proxy") is solicited by the Board of
Directors (the "Board of Directors") of Salisbury Bancorp, Inc. (the "Company"),
for use at the 2006 Annual Meeting of Stockholders (the "Annual Meeting") to be
held on Wednesday, May 10, 2006, at 4:00 p.m., at the Interlaken Inn, 74
Interlaken Road, Lakeville, Connecticut 06039, 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 stockholders (the "Stockholders") on or about April 10, 2006. 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 Salisbury Bank
and Trust Company (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").
If your shares are in a brokerage or fiduciary account, your broker or
bank will send you a voting instruction form instead of a Proxy. Please follow
the instructions on such form to instruct your broker or bank how to vote your
shares. If you wish to attend the meeting and vote your shares in person, you
must follow the instructions on the voting instructions form to obtain a legal
proxy from your broker or bank.
OUTSTANDING STOCK AND VOTING RIGHTS
The Board of Directors has fixed the close of business on March 17,
2006 as the record date (the "Record Date") for the determination of
Stockholders entitled to notice of and to vote at the Annual Meeting. As of the
Record Date, 1,683,341 shares of the Company's Common Stock (par value $.10 per
share) were outstanding and entitled to vote and held of record by approximately
743 Stockholders of Record. Each share of Common Stock is entitled to one vote
on all matters to be presented at the Annual Meeting. Votes withheld,
abstentions and broker non-votes are not treated as having voted in favor of any
proposal and 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.
4
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 1 and 2
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 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.
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth certain information as of March 3, 2006
regarding the number of shares of Common Stock beneficially owned by each
director and executive officer of the Company and by all directors and executive
officers of the Company as a group.
Number of Shares (1) Percentage of Class (2)
-------------------- -----------------------
Louis E. Allyn, II 1,106 (3) .06%
John R. H. Blum 15,855 (4) .94%
Louise F. Brown 2,568 (5) .15%
Richard J. Cantele, Jr. 3,006 (6) .18%
Robert S. Drucker 7,258 (7) .43%
John F. Foley 7,193 (8) .43%
Nancy F. Humphreys 1,480 (9) .09%
Holly J. Nelson 1,528 (10) .09%
John F. Perotti 11,211 (11) .67%
Michael A. Varet 66,126 (12) 3.93%
----------------------- ---------------- -----
(All Directors and Executive 117,331 6.97%
Officers of the Company
as a group of (10) 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 1,683,341 shares of the Company's Common
Stock outstanding and entitled to vote on March 17, 2006. 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) All shares are owned individually by Louis E. Allyn, II.
(4) Includes 2,100 shares owned by John R. H. Blum's wife.
(5) All shares are owned individually by Louise F. Brown.
(6) Includes 1,320 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.
(7) Includes 1,500 shares owned by Robert S. Drucker's wife.
(8) Includes 3,222 shares owned jointly by John F. Foley and his wife,
1,543 owned by his wife and 100 shares owned by John F. Foley as
custodian for his children.
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(9) Includes 1,000 shares owned jointly by Nancy F. Humphreys and her
husband.
(10) Includes 6 shares owned by Holly J. Nelson as guardian for a minor
child.
(11) Includes 9,514 shares owned jointly by John F. Perotti and his wife,
1,000 shares owned by his wife and 564 shares owned by his son.
(12) Includes 18,540 shares which are owned by Michael A. Varet's wife and
18,546 shares which are owned by his children. 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 59 Chairman and 1998 (1)
Chief Executive Officer
Richard J. Cantele, Jr. 46 President, Chief Operating 2001 (2)
Officer and Secretary
John F. Foley 55 Chief Financial Officer 1998 (3)
and Treasurer
(1) Mr. Perotti is also the Chairman and Chief Executive Officer of the
Bank and has been an Executive Officer of the Bank since 1982.
(2) Mr. Cantele is also the President and Chief Operating Officer of the
Bank and has been an Executive Officer of the Bank since 1989.
(3) Mr. Foley is also the Chief Financial Officer and Treasurer of the Bank
and has been an Executive Officer of the Bank since 1986.
Principal Stockholders of the Company
-------------------------------------
Management is not aware of any person (including any "group" as that
term is used in Section 13(d)(3) of the Securities Exchange Act of 1934 (the
"Exchange Act") who owns beneficially more than 5% of the Company's Common Stock
as of the Record Date.
PROPOSAL 1
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 stockholders 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. A plurality of votes cast in favor is necessary
for the election of directors.
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Nominees and Board of Directors
-------------------------------
There are three (3) directorships on the Board of Directors which are
up for election this year. The following individuals have been nominated to
serve for a three (3) year term: John R. H. Blum, Holly J. Nelson and John F.
Perotti. The three (3) nominees are presently members of the 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 3,
2006, with respect to the directors of the Company.
NOMINEES FOR ELECTION FOR TERMS EXPIRING IN 2009
------------------------------------------------
Positions Held Director
Name Age with the Company Since
John R. H. Blum 76 Presiding Director 1998
Holly J. Nelson 52 Director 1998
John F. Perotti 59 Chairman, 1998
Chief Executive Officer
and Director
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 2007
-----------------------------------------------
Louis E. Allyn, II 58 Director 2004
Robert S. Drucker 64 Director 2004
Michael A. Varet 63 Director 1998
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 2008
-----------------------------------------------
Louise F. Brown 62 Director 1998
Richard J. Cantele, Jr. 46 President, Chief 2005
Operating Officer,
Secretary and Director
Nancy F. Humphreys 64 Director 2001
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.
Louis E. Allyn, II has been a director of the Bank since 2004. He is
President of Allyndale Corporation. Allyndale Corporation mines and processes
limestone into a variety of agricultural and lawn and garden products that are
distributed throughout southern New England and New York state.
7
John R. H. Blum is a retired attorney and former Commissioner of
Agriculture for the State of Connecticut. He has been a director of the Bank
since 1995 and was elected Presiding Director in 2005. Prior to that, he was
Chairman of the Board of Directors of the Company and the Bank since 1998.
Louise F. Brown has been a director of the Bank since 1992 and is a
partner in the law firm of Ackerly Brown, LLP.
Richard J. Cantele, Jr. is Secretary of the Company and President and
Chief Operating Officer of the Company and the Bank. Prior to that he served as
Executive Vice President, Treasurer and Chief Operating Officer of the Bank and
Secretary of the Company. He has been a director of the Bank since 2005.
Robert S. Drucker has been a director of the Bank since 2004. He is
proprietor of Bob's Clothing and Barrington Outfitters.
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.
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 member in Oblong Property
Management, LLC.
John F. Perotti is Chairman and Chief Executive Officer of the Company
and the Bank. Prior to that he served as President and Chief Executive Officer
of the Company and the Bank, 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.
Michael A. Varet is a partner in the law firm of DLA Piper Rudnick Gray
Cary US LLP. Mr. Varet has been a director of the Bank since 1997.
Committees of the Board of Directors
------------------------------------
The Board of Directors met thirteen (13) times during the year 2005,
and has various committees including an Executive Committee, Human Resources and
Compensation Committee, Nominating and Governance Committee and an Audit
Committee. The members of the committees are appointed by the Board of
Directors.
Executive Committee
The Executive Committee has general supervision over the affairs of the
Company between meetings of the Board of Directors. The members of the Executive
Committee include John R. H. Blum, Louise F. Brown, John F. Perotti, and Michael
A. Varet. The Executive Committee met once separately from the Board during the
year 2005.
Human Resources and Compensation Committee
The Human Resources and Compensation Committee is responsible for
reviewing the Company's general compensation strategy; establishing salaries and
reviewing benefit programs, including pensions and incentive compensation plans;
and advising the Board of Directors and making recommendations with respect to
such plans. The members of the Committee include Nancy F. Humphreys, Holly J.
Nelson and Michael A. Varet. The Committee met six (6) times during the year
2005.
8
Nominating and Governance Committee
The Nominating and Governance Committee is responsible for assisting
the Board of Directors in identifying and evaluating potential nominees for
director and recommending qualified nominees to the Board for consideration. The
Nominating and Governance Committee selects the director nominees to stand for
election at the Company's annual meetings of stockholders. The Nominating and
Governance Committee's process for identifying and evaluating nominees for
director, including nominees recommended by stockholders, has historically
operated informally and without any differences in the manner in which nominees
recommended by stockholders are evaluated. However, the Company's Bylaws provide
that if the Committee or Board proposes a nominee age 72 or greater, then such
nomination requires two-thirds approval by the full Board.
The Nominating and Governance Committee and the Board of Directors
consider factors such as those summarized below in evaluating director
candidates and believe that the Company's Bylaws, Nominating and Governance
Committee Charter and the qualifications and considerations such as those
enumerated below provide adequate guidance and flexibility in evaluating
candidates.
o Sound business judgment and financial sophistication in order to
understand the Company's financial and operating performance and to
provide strategic guidance to management.
o Business management experience.
o Integrity, commitment, honesty and objectivity.
o A general familiarity with (i) prudent banking principles; (ii) bank
operations/technology; (iii) pertinent laws, policies and regulations;
(iv) markets and trends affecting the financial services industries;
and (v) local economic and business opportunities.
o Strong communication skills in order to function effectively with the
Company's constituencies.
o A financial interest in the Company as a stockholder. However,
generally, candidates should not have relationships with the Company or
the Bank which would disqualify the candidate from being considered
independent.
o Generally, candidates should be involved in philanthropic, education,
business or civic leadership positions.
o Generally, candidates should be familiar with the geographic areas
served by the Company.
o Candidates should evidence a willingness and commitment to devote
sufficient time and energy to prepare for and attend Board and
Committee meetings and to diligently perform the duties and
responsibilities of service as a director.
o Candidates should not have interests which conflict with those of the
Company or the Bank.
The Company has not paid a fee to any third party or parties to
identify or assist in identifying or evaluating potential nominees. The Board
and Nominating and Governance Committee does not discriminate on the basis of
sex, race, color, gender, national origin, religion or disability in the
evaluation of candidates.
A copy of the Company's written Nominating and Governance Committee
Charter is available on the Company's website at www.salisburybank.com.
---------------------
The members of the Nominating and Governance Committee are Louis E.
Allyn, II, John R. H. Blum and Louise F. Brown. All such members are
"independent" in accordance with the independence
9
standards of the American Stock Exchange (the "AMEX"). The Committee did not
meet during the year 2005. All nominees for elections as directors at the 2006
Annual Meeting were nominated by the Nominating and Governance Committee and the
Board of Directors.
Audit Committee
Subject to the Audit Committee Charter, attached hereto as Appendix A,
----------
the Audit Committee provides assistance to the Board of Directors in fulfilling
its responsibility to the stockholders, potential stockholders and investment
community relating to corporate accounting, reporting practices of the Company,
and the quality and integrity of the financial reports of the Company. In so
doing, it is the responsibility of the Audit Committee to appoint the
independent auditors for the Company and to maintain free and open means of
communication between the directors, the independent auditors, the internal
auditors and the financial management of the Company.
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 Louis E. Allyn, II, Louise F. Brown, Nancy F.
Humphreys, Holly J. Nelson and Michael A. Varet. The Audit Committee met eight
(8) times during the year 2005. 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 AMEX. While no member of the Audit Committee
qualifies as an "audit committee financial expert" as such term is defined by
federal securities laws and regulations, the Board of Directors believes the
members of the Audit Committee bring diverse educational, business and
professional experience that is beneficial to the audit committee function of
the Company and the Bank and enables the Audit Committee to fulfill its
responsibility.
Directors Fees
--------------
During 2005, each director received an annual retainer of $4,000. In
addition, directors received $500 for each Board of Directors meeting attended
and $350 for each committee meeting attended. Directors Cantele and Perotti
received no additional compensation for their service as directors or members of
any Board committee during 2005.
Directors Stock Retainer Plan
-----------------------------
The stockholders of the Company voted to approve the Directors Stock
Retainer Plan of Salisbury Bancorp, Inc. (the "Plan") at the 2001 Annual Meeting
of Stockholders. The Plan provides non-employee directors of the Company with
shares of Common Stock as a component of their compensation for services as
non-employee directors. The maximum number of shares of Common Stock that may be
issued pursuant to the Plan is 15,000. Each year a grant under the Plan
consisting of 120 shares of Common Stock for each non-employee director who
served for twelve months and a prorated number of shares to reflect the number
of months served for any new non-employee director. The total number of shares
of Common Stock issued in 2005 was 940. The next grant date under the Plan will
immediately precede the Annual Meeting and will be in the amount of 120 shares
per director. The shares of Common Stock issued under the Plan are not
registered under the Securities Act of 1933 and therefore are subject to certain
restrictions on their transfer unless the requirements of the Securities Act or
an exemption therefrom are met.
10
Directors Attendance
--------------------
During 2005 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. The
Company does not maintain an attendance policy for directors at the Company's
annual meetings. All Directors of the Company attended the Company's annual
meeting on April 27, 2005.
Board of Directors' Communications with Stockholders
----------------------------------------------------
The Company's Board of Directors does not have a formal process for
stockholders to send communications to the Board. However, the volume of such
communications has historically been de minimus. Accordingly, the Board
considers the Company's informal process to be adequate to address the Company's
needs. Historically, such informal process has functioned as follows: the
recipient of a stockholder communication would forward it to the Chairman and
Chief Executive Officer for appropriate discussion by the Board and the
formulation of an appropriate response. Stockholders may forward written
communications to the Board by addressing such comments to the Board of
Directors of Salisbury Bancorp, Inc., 5 Bissell Street, P. O. Box 1868,
Lakeville, Connecticut 06039.
Human Resources and Compensation Committee Report
-------------------------------------------------
The Human Resources and Compensation Committee (the "Compensation
Committee") consists solely of independent Directors, in accordance with the
AMEX Independence Standards. The full Board of Directors of the Company reviews
and approves the Compensation Committee's recommendations.
The goal of the Compensation Committee is to more closely align
performance with compensation. Recognizing that recruiting, retaining and
rewarding top talent is essential to the ultimate success of the Company, the
Compensation Committee is working on designing an incentive program that
incorporates Bank-wide and individual goals and objectives.
A rigorous budget process setting clearly defined targets for Bank-wide
performance and return for stockholder equity was the first task of the
Compensation Committee. In addition, goals were established for Bank-wide and
individual performance with methodology pre-determined for base salary increases
and annual incentives in the form of a cash bonus (short term incentives).
Developing appropriate long term incentives for key executive officers was also
a task before the Compensation Committee during 2005.
The Company utilizes the services of a compensation consulting firm to
assist the Compensation Committee in the development of this plan; to help
establish clearly defined goals; to perform peer group analysis on different
forms of compensation to ensure that the Bank's compensation levels remain
competitive; and to inform the Compensation Committee of the myriad of long term
incentives that are available in the Bank's peer group market place.
In establishing levels of remuneration, the Compensation Committee
takes into consideration an individual's performance, level of expertise,
responsibilities, length of service to the Company and comparable levels of
remuneration paid to executives of other companies of comparable size and
development within the industry. The individual interested executive does not
participate in the review, discussion or decisions of the Compensation Committee
regarding this remuneration.
The Compensation Committee reviews the Chief Executive Officer's and
President's performance annually and adjusts their compensation based on the
previously mentioned factors, the
11
Bank's performance, and a comparison of their salaries and the salaries paid to
officers at a similar level of peer companies in the banking industry. The Board
has historically used the payment of bonus to reward the Chief Executive
Officer's and President's performance, which is based on an assessment of
various factors such as the Bank's financial performance, attainment of
objectives and individual and Company-wide performance. The Chief Executive
Officer and/or President do not participate in the review, discussion or
decision of the Compensation Committee regarding their remuneration.
Salisbury Bancorp, Inc. H.R./Compensation Committee
Holly J. Nelson, Chair
Louis E. Allyn, II
Nancy F. Humphreys
Michael A. Varet
The foregoing Report of the Company's Compensation 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 Exchange Act.
Audit Committee Report
----------------------
The Audit Committee has reviewed and discussed the Company's audited
financial statements for the fiscal year ended December 31, 2005 with management
and has discussed the matters that are required to be discussed by SAS 61 with
Shatswell, MacLeod & Company, P.C. (the Company's independent auditors)
("Shatswell").
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 above, the Audit
Committee recommended to the Board that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2005 for filing with the SEC.
Salisbury Bancorp, Inc. Audit Committee
Michael A. Varet, Chairman
Louis E. Allyn, II
Louise F. Brown
Nancy F. Humphreys
Holly J. Nelson
The foregoing Report of the Company's Audit Committee is provided in
accordance with the rules and regulations of 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.
12
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 certain directors,
officers, principal stockholders and their associates on substantially the same
terms as those available for comparable transactions with others.
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.
Since January 1, 2005, 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 $1,618,406, representing an
aggregate principal amount equal to 3.97% of the equity capital accounts of the
Bank.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table provides certain information regarding the
compensation paid to the Executive Officers of the Company for services rendered
in all capacities during the fiscal years ended December 31, 2005, 2004, and
2003. All compensation expense was paid by the Bank.
Summary Compensation Table
Annual Compensation(1)
Name and Principal ---------------------- All Other
Position Year Salary($) Bonus($) Compensation($)(2)
-------------------------------------------------------------------------------------
John F. Perotti 2005 $208,774 $66,042 $5,496
Chairman and 2004 209,474 66,042 4,100
Chief Executive Officer 2003 195,178 28,101 4,000
of the Company and the Bank
Richard J. Cantele, Jr. 2005 $144,581 $40,000 $3,692
Secretary of the Company 2004 139,750 40,000 3,595
President and Chief Operating 2003 124,237 18,857 2,862
Officer of the Company and the Bank
John F. Foley 2005 $100,664 $20,000 $2,413
Chief Financial Officer and Treasurer 2004 100,460 14,759 2,304
of the Company and the Bank 2003 87,235 12,476 1,994
(1) Compensation does not include accrual of benefits under the Bank's defined
pension plan or supplemental retirement arrangements described below.
(2) The Bank's matching contribution to the 401(k) plan.
13
Insurance
---------
In addition to the cash compensation paid to the Executive Officers of
the Company, 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 the Executive Officers of the Company 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.
PENSION PLAN TABLE
================================================================================
ESTIMATED ANNUAL RETIREMENT BENEFIT WITH
YEARS OF SERVICE AT RETIREMENT
================================================================================
Average Total
Compensation 15 20 25 30 35
at Retirement
--------------------------------------------------------------------------------
$ 75,000 $17,752 $23,670 $29,587 $31,462 $33,337
--------------------------------------------------------------------------------
$100,000 $25,252 $33,670 $42,087 $44,587 $47,087
--------------------------------------------------------------------------------
$125,000 $32,752 $43,670 $54,587 $57,712 $60,837
--------------------------------------------------------------------------------
$150,000 $40,252 $53,670 $67,087 $70,837 $74,587
--------------------------------------------------------------------------------
$175,000 $47,752 $63,670 $79,587 $83,962 $88,337
--------------------------------------------------------------------------------
$200,000 $55,252 $73,670 $92,087 $97,087 $102,087
--------------------------------------------------------------------------------
$225,000 $58,252 $77,670 $97,087 $102,337 $107,587
--------------------------------------------------------------------------------
$250,000 $58,252 $77,670 $97,087 $102,337 $107,587
--------------------------------------------------------------------------------
Pension benefits are based upon the annual average of an employee's
total compensation for the five (5) consecutive plan years of employment during
which the employee's compensation was the greatest and during which he or she
was a participant. The amount of the annual benefit is 2% of Average Salary
offset by .65% of the Social Security wage base per year of service (to a
maximum of 25 years) plus one-half of 1% of Average Salary for each year of
service over 25 years (to a maximum of ten years). This benefit formula may be
modified to conform with changes in the pension laws. Internal Revenue Code
Section 401(a)(17) limits earnings used to calculate qualified plan benefits to
$210,000 for 2005. This limit was used in the preparation of this table.
The present annual average total compensation (using last five years of
compensation only) and years of service to date of Messrs. Perotti, Cantele and
Foley are: Mr. Perotti: $239,878 with 33 years of service; Mr. Cantele: $149,181
with 25 years of service; and Mr. Foley: $104,241 with 24 years of service. The
above table shows estimated annual retirement benefits payable at normal
retirement date as a straight life annuity for various average salary and
service categories. The offset of social security was included in the table
based on a participant being 65 years of age in 2005.
Supplemental Retirement Arrangement
-----------------------------------
In 1994, the Bank entered into a supplemental retirement arrangement
(the "Supplemental Retirement Agreement") with John F. Perotti. Following his
disability or retirement, 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
pension plan. The Supplemental Retirement Agreement includes provisions that
would prevent Mr. Perotti from working for a competitor in the proximity of the
Bank.
14
Change in Control Agreements
----------------------------
The Bank entered into change in control agreements in 2003 with the
Executive Officers. The agreements provide that if following a
"change-in-control" of the Company or Bank, the Executive Officer is terminated
under certain defined circumstances, or is reassigned, within a period of twelve
(12) months following the change in control, such Executive Officer will be
entitled to a lump sum payment equal to his or her twelve (12) month
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 any 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, 2005, 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 $5,496. The Plan expense was $91,212 for 2005.
Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------
Section 16(a) of the Exchange Act requires the Company's executive
officers, directors and other persons who own more than ten percent (10%) of the
Company's Common Stock to file with the SEC reports of ownership and changes in
ownership of the Company's Common Stock. Executive officers, directors and any
stockholders 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, 2005 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
except as follows: Mr. Perotti failed to timely file one Form 4 to report the
acquisition of shares and Mr. Foley failed to timely file one Form 4 to report
the distribution of shares to his wife from the Employee Stock Ownership Plan
and the 401(k) Plan of Canaan National Bancorp, Inc. upon its merger with the
Company, which distribution occurred after the filing deadline.
15
Stock Price Performance Graph
-----------------------------
Set forth below is a line graph with an explanatory table comparing the
yearly percentage change in the cumulative total stockholder return on the
Company's Common Stock, based on the market price of the Company's Common Stock
and assuming reinvestment of dividends, with the total return of the AMEX Major
Market Index and the SNL Bank Index for Banks with total assets more than $250
million and less than $500 million. The calculation of total cumulative return
assumes a $100 investment in the Company's Common Stock and each of the other
indices on December 31, 2000.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
AMONG SALISBURY BANCORP, INC., THE AMEX MAJOR MARKET INDEX
AND THE SNL $250M-$500M BANK INDEX
[GRAPH OMITTED]
As of
-----------------------------------------------------
Index 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05
--------------------------------------------------------------------------------
Salisbury Bancorp, Inc. $100.00 $127.34 $161.67 $234.74 $268.79 $240.93
AMEX Major Market Index 100.00 97.48 85.56 106.13 116.78 112.86
SNL $250M-$500M Bank Index 100.00 142.07 183.20 264.70 300.43 318.97
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO ELECT
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 STOCKHOLDERS SPECIFY A CONTRARY CHOICE ON THE PROXY CARD.
16
PROPOSAL 2
RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT AUDITORS
Stockholders are asked to consider and ratify the appointment of
Shatswell, MacLeod & Company, P.C. ("Shatswell") as independent auditors to
audit the consolidated financial statements of the Company for the fiscal year
ending December 31, 2006. If stockholders do not ratify the appointment of
Shatswell, the Audit Committee will consider the vote of stockholders in
selecting the independent auditors in the future. Shatswell has served as the
independent auditors for the Company for the fiscal year ended December 31,
2005. Representatives of Shatswell are not expected to attend the Annual
Meeting. However, should a representative of Shatswell 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 last two (2) fiscal
years and the reviews of the financial statements included in the Company's Form
10-Q for the quarters of the fiscal years ended December 31, 2005 and December
31, 2004 were $115,145 and $86,980, respectively.
2. Audit-Related Fees
------------------
The aggregate fees billed for services rendered in each of the last two
(2) years for assurance and related services by Shatswell that are reasonably
related to regulatory audit requirements of the Trust Department were $5,925 for
the fiscal year ended December 31, 2005 and $17,942 for the fiscal year ended
December 31, 2004.
3. Tax Fees
--------
The aggregate fees billed in each of the last two (2) years for
professional services rendered by Shatswell for tax preparation for the fiscal
years ended December 31, 2005 and December 31, 2004 were $15,026 and $8,100,
respectively.
4. All Other Fees
--------------
There were no aggregate fees billed for services rendered by Shatswell,
other than the services covered above, for the fiscal years ended December 31,
2005 and December 31, 2004.
Independence
------------
The Audit Committee of the Board of Directors of the Company has
considered and determined that the provision of services rendered by Shatswell
relating to matters 2 through 4 above, is compatible with maintaining the
independence of such auditors.
The Audit Committee's policy is to pre-approve all audit and non-audit
services provided by the independent auditors, other than those listed under the
de minimus exception. These services may include audit services, audit-related
services, tax services and other services. Pre-approval is detailed as to a
particular service or category of services, and is generally subject to a
specific budget. The Audit Committee has delegated pre-approval authority to its
Chairman when expeditious delivery of services is necessary. The independent
auditors and management are required to report to the full Audit
17
Committee regarding the extent of services provided by independent auditors in
accordance with this pre-approval, and the fees for the services performed to
date.
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
STOCKHOLDERS 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 3
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 Stockholders 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.
A copy of the 2005 Annual Report to Stockholders, which includes the
consolidated financial statements of the Company for the year ended December 31,
2005, is being mailed with this proxy statement to all stockholders entitled to
vote at the Annual Meeting on or about April 10, 2006.
STOCKHOLDER PROPOSALS
Any proposal that a Company stockholder wishes to have included in the
Company's Proxy Statement and form of Proxy relating to the Company's 2007
Annual Meeting of Stockholders under Rule 14a-8 of the SEC must be received by
the Company's Secretary at 5 Bissell Street, Lakeville, CT 06039 by December 11,
2006. 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
stockholder proposal which does not meet the requirements of the SEC in effect
at the time. In addition, under the Company's Bylaws, stockholders who wish to
nominate a director or bring other business before an annual meeting must comply
with the following:
o You must be a stockholder of record and must have given notice in writing
to the Secretary of the Company (a) not less than twenty (20) days nor more
than one hundred thirty (130) days prior to the meeting with respect to
matters other than the nomination of directors and (b) not less than thirty
(30) days nor more than fifty (50) days prior to the meeting with respect
to the nomination of directors.
o Your notice must contain specific information required in the Company's
Bylaws.
18
STOCKHOLDER INFORMATION
The Company's Annual Report on Form 10-K for the year ended December
31, 2005 is filed with the SEC and may be obtained without charge by any
stockholder upon written request to:
John F. Foley, Chief Financial Officer
Salisbury Bancorp, Inc.
P. O. Box 1868
Lakeville, Connecticut 06039-1868
The Company's 2005 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
April 10, 2006
19
Appendix A
October 24, 2005
SALISBURY BANCORP, INC.
AUDIT COMMITTEE CHARTER
-----------------------
Organization
There shall be a committee of the Board of Directors of Salisbury Bancorp, Inc.
(the "Corporation") to be known as the Audit Committee. Such Committee shall
serve as the Audit Committee for the Corporation and its subsidiaries. The Audit
Committee shall be composed of at least three (3) directors.
All Audit Committee members shall be "independent directors" within the meaning
of Section 121A of the American Stock Exchange Company Guide ("Amex Rules") and
Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the "1934
Act"), including but not limited to that no member of the Audit Committee may,
other than in his or her capacity as a member of the Audit Committee, the Board
of Directors, or any other Board committee, accept directly or indirectly any
consulting, advisory, or other compensatory fee from the Corporation or any of
its subsidiaries or be an "affiliated person" of the Corporation or any of its
subsidiaries.
All members of the Audit Committee shall at the time of their appointment be
able to read and understand fundamental financial statements, including a
company's balance sheet, income statement, and cash flow statement. At least one
member of the Audit Committee shall be "financially sophisticated," that is,
have employment experience in finance or accounting, requisite professional
certification in accounting, or other comparable experience or background which
results in the individual's financial sophistication, including but not limited
to being or having been a chief executive officer, chief financial officer or
other senior officer with financial oversight responsibilities.
In addition, at least one member of the Audit Committee may be an "Audit
Committee Financial Expert" as defined in Item 401(h)(2) of Regulation S-K under
the rules and regulations of the Securities and Exchange Commission to mean a
person who has the following attributes acquired in the manner specified in Item
401(h)(3): (i) an understanding of generally accepted accounting principles and
financial statements; (ii) the ability to assess the general application of such
principles in connection with the accounting for estimates, accruals and
reserves; (iii) experience preparing, auditing, analyzing or evaluating
financial statements that present a breadth and level of complexity of
accounting issues that are generally comparable to the breadth and complexity of
issues that can reasonably be expected to be raised by the registrant's
financial statements, or experience actively supervising one or more persons
engaged in such activities; (iv) an understanding of internal controls and
procedures for financial reporting; and (v) an understanding of audit committee
functions. In compliance with Item 401(h)(1), the Corporation will disclose
whether it has any Audit Committee Financial Experts, and if so, the names(s) of
such person(s) and whether they are independent under the AMEX standard for
audit committee independence. If at least one member is not an Audit Committee
Financial Expert, the Corporation will disclose why it does not consider it
necessary to have an Audit Committee Financial Expert.
20
Statement of Policy
The Audit Committee shall provide 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.
Responsibilities
In carrying out its responsibilities, the Audit Committee believes its policies
and procedures should remain flexible in order to best react to changing
conditions and to ensure to the directors and shareholders that the corporate
accounting and reporting practices of the Corporation are in accordance with all
requirements and are of the highest quality.
The Audit Committee in its capacity as a committee of the Board of Directors
shall be directly responsible for the appointment, compensation and oversight of
the work of any registered public accounting firm employed by the Company
(including resolution of disagreements between management and the auditor
regarding financial reporting) for the purpose of preparing or issuing an audit
report or related work, and each such accounting firm shall report directly to
the Audit Committee.
The Audit Committee is responsible for ensuring its receipt from the outside
auditor a formal written statement detailing all relationships between the
auditor and the Corporation and its subsidiaries and affiliates consistent with
Independence Standards Board Standard Number 1, Independence Discussions with
Audit Committees (January 1999).
The Audit Committee shall be responsible for actively engaging in a dialogue
with respect to any disclosed relationships or services that may impact the
objectivity and independence of the auditor and for taking or recommending that
the full board take appropriate action to oversee the independence of the
outside auditor.
The Audit Committee shall meet with the independent auditors and financial
management of the Corporation to review the scope of the proposed audit for the
current year and the audit procedures to be utilized, and at the conclusion
thereof review such audit, including any comments or recommendations of the
independent auditors.
The Audit Committee shall review with the independent auditors, the
Corporation's internal auditor(s), and financial and accounting personnel, the
adequacy and effectiveness of the accounting and financial controls of the
Corporation, and elicit any recommendations for the improvement of such internal
control procedures or particular areas where new or more detailed controls or
procedures are desirable. Particular emphasis should be given to the adequacy of
such internal controls to expose any payments, transactions, or procedures that
might be deemed illegal or otherwise improper. Further, the Committee
periodically should review company policy statements to determine their
adherence to the code of conduct.
The Audit Committee shall review the internal audit function of the Corporation
including the independence and authority of its reporting obligations, the
proposed audit plans for the coming year, and the coordination of such plans
with the independent auditors.
The Audit Committee shall review summaries of findings from completed internal
audits and progress reports on the proposed internal audit plan, with
explanations for any deviations from the original plan.
21
The Audit Committee shall review the financial statements contained in the
annual report to shareholders with management and the independent auditors to
determine that the independent auditors are satisfied with the disclosure and
content of the financial statements to be presented to the shareholders.
The Audit Committee shall review and discuss with management and the independent
auditors any changes in accounting principles.
The Audit Committee shall provide sufficient opportunity for the internal and
independent auditors to meet with the members of the audit committee without
members of management present. Among the items to be discussed in these meetings
are the independent auditors' evaluation of the Corporation's financial,
accounting, and auditing personnel, and the cooperation that the independent
auditors received during the course of the audit.
All auditing services and non-audit services, other than those which are subject
to the de minimus exception of the applicable rules of the Securities and
Exchange Commission (the "Commission"), which an auditor provides to the
Corporation shall be authorized and pre-approved in advance by the Audit
Committee. The Audit Committee must document all non-audit services performed by
the auditor which the Audit Committee pre-approves. The Audit Committee may
delegate to one or more of its members the authority to grant such required
pre-approvals. The decisions of any member to whom authority is delegated to
pre-approve an activity requiring pre-approval shall be presented to the full
Audit Committee at each of its meetings.
The Audit Committee shall review human resources and succession planning within
the accounting, financial reporting and audit functions of the Corporation.
The Audit Committee shall submit the minutes of all meetings of the Audit
Committee to, or discuss the matters discussed at each committee meeting with,
the Board of Directors.
The Audit Committee shall investigate any matter brought to its attention within
the scope of its duties, with the power to engage independent counsel and other
advisors as it determines necessary to carry out is duties.
The Audit Committee shall determine the appropriate funding to be provided by
the Corporation for payment of compensation to the registered public accounting
firm employed by the Corporation for purposes of rendering an audit report and
to any advisors employed by the Audit Committee.
The Audit Committee shall have the authority and funding to engage independent
counsel and any other advisors as the Audit Committee may determine to be
necessary to carry out its duties and responsibilities.
The Audit Committee shall receive, and act upon as appropriate, the disclosures
made by the Chief Executive Officer and the Chief Financial Officer concerning
internal controls and fraud required by Rule 13a-14 of the 1934 Act.
Reports of the Audit Committee
The Audit Committee shall prepare a report suitable for appropriate disclosure
as may be required in the Corporation's annual meeting proxy statement
concerning the Audit Committee's review of the Corporation's financial
statements and disclosing whether the Audit Committee recommended to the Board
of Directors that the audited financial statements be included in the
Corporation's annual report and addressing such other issues as may be required
by the Amex Rules or the 1934 Act, or the regulations of the Commission
promulgated pursuant thereto including Item 7(d)(3) of Regulation 14A of the
Commission.
22
In addition, the Audit Committee shall report to the Board of Directors which
will make appropriate disclosures regarding whether each member of the Audit
Committee is an "independent director", whether each member is "financially
sophisticated" and whether any member is an "Audit Committee Financial Expert"
under Item 401(h) of Regulation S-K of the Commission.
Annual Review and Appropriate Disclosure by the Board of Directors of the
Charter of the Audit Committee
The Board of Directors will review the charter of the Audit Committee on an
annual basis and will cause the Corporation to make appropriate disclosure of
and regarding same in accordance with applicable law.
Whistle-blower Procedures
The Audit Committee shall establish procedures for the receipt, retention, and
treatment of complaints received by the Corporation regarding accounting,
internal accounting controls, or auditing matters; and the confidential
anonymous submission by employees of the Corporation of concerns regarding
questionable accounting or auditing matters.
23
[X] PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE SALISBURY BANCORP, INC.
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 Louis E. Allyn, II
and Nancy F. Humphreys 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 17, 2006 at the
Annual Meeting of its Stockholders to be held at the Interlaken Inn, 74
Interlaken Road, Lakeville, Connecticut on Wednesday, May 10, 2006 at 4:00 p.m.
or at any adjournment thereof with all the power the undersigned would possess
if personally present, as follows:
With- For All
For hold Except*
(1) ELECT THE FOLLOWING PERSONS (John R.H. Blum, [_] [_] [_]
Holly J. Nelson, and John F. Perotti, for three (3) year terms and Louis
E. Allyn, II and Robert S. Drucker for two (2) year terms and Dana A.
Bartholomew for a one (1) year term) TO SERVE AS DIRECTORS OF THE COMPANY
WHO ALONG WITH SIX DIRECTORS WHOSE TERMS DO NOT EXPIRE AT THIS MEETING
SHALL CONSTITUTE THE FULL BOARD OF DIRECTORS OF THE COMPANY.
*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.
--------------------------------------------------------------------------------
For Against Abstain
(2) RATIFICATION OF THE APPOINT MENT OF INDEPENDENT [_] [_] [_]
AUDITORS: Proposal to ratify the appointment of
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, 2006.
(3) other Business: 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 Stockholders 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.
PLEASE CHECK BOX IF YOU PLAN TO [_]
ATTEND THE MEETING.
------------------------
Please be sure to sign and date | Date |
this Proxy in the box below. | |
--------------------------------------------------------------------------------
| |
| |
-----------Stockholder sign above----------Co-holder (if any) sign above-------
--------------------------------------------------------------------------------
Detach above card, date, sign and mail in postage-prepaid envelope provided.
SALISBURY BANCORP, INC.
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS (1) AND (2).
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATION INDICATED.
IF NO SPECIFICATION IS INDICATED, THIS PROXY WILL BE VOTED "FOR" PROPOSALS (1)
AND (2).
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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