SALISBURY BANCORP, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 27, 2005
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 Shareholders of the Company ................................ 6
PROPOSAL I- ELECTION OF DIRECTORS ......................................... 6
Nominees and Board of Directors ...................................... 7
Committees of the Board of Directors ................................. 8
Fees ................................................................. 10
Director Attendance .................................................. 10
Board of Directors'Communications with Shareholders .................. 10
Compensation Committee Report ........................................ 11
Audit Committee Report ............................................... 12
Certain Business Relationships ....................................... 12
Indebtedness of Management and Others ................................ 12
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS .......................... 13
Summary Compensation Table ........................................... 13
Insurance ............................................................ 13
Pension Plan ......................................................... 13
Supplemental Retirement Arrangement .................................. 14
Directors Stock Retainer Plan ........................................ 14
Change in Control Agreements ......................................... 15
401(k) Plan .......................................................... 15
Stock Price Performance Graph ........................................ 15
Section 16(a) Beneficial Ownership Reporting Compliance .............. 16
PROPOSAL II - RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT AUDITORS .................................................... 17
PROPOSAL III - OTHER BUSINESS ............................................. 18
SHAREHOLDER PROPOSALS ..................................................... 18
SHAREHOLDER 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 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 27, 2005
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Salisbury
Bancorp, Inc. (the "Company"), will be held at 4:00 p.m. on Wednesday, April 27,
2005 at the Interlaken Inn, 74 Interlaken Road, in Lakeville, Connecticut, for
the following purposes:
1. To elect four (4) Directors for a three (3) year term; to elect two (2)
Directors for a two (2) year term; to elect one (1) Director for a one (1)
year term; who, with the four (4) 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,
2005.
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 4th day
of March, 2005 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.
Richard J. Cantele, Jr.
Secretary
April 4, 2005
Lakeville, CT
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.
5 BISSELL STREET
LAKEVILLE, CT 06039
(860) 435-9801
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
April 27, 2005
INTRODUCTION
The enclosed proxy (the "Proxy") is solicited by the Board of Directors
(the "Board of Directors") of Salisbury Bancorp, Inc. (the "Company"), for use
at the Annual Meeting of Shareholders, to be held on Wednesday, April 27, 2005,
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 shareholders (the "Shareholders")
on or about April 4, 2005. 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").
If your shares are in a brokerage or fiduciary account, your broker or
bank will send you a voting instructions form instead of a proxy card. 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 4, 2005 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,
1,682,401 shares of the Company's Common Stock (par value $.10 per share) were
outstanding and entitled to vote and held of record by approximately 742
Shareholders of Record, 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 and
are counted only for purposes of determining whether a quorum is present at the
Annual Meeting. Once a quorum is achieved, a plurality of votes cast is all that
is necessary for the election of Directors.
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 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 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 4, 2005
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 1,026(3) .06%
Dana A. Bartholomew 2,339(4) .14%
John R. H. Blum 15,696(5) .93%
Louise F. Brown 2,448(6) .15%
Richard J. Cantele, Jr 2,883(7) .17%
Robert S. Drucker 5,979(8) .36%
John F. Foley 5,650(9) .34%
Nancy F. Humphreys 1,360(10) .08%
Holly J. Nelson 1,408(11) .08%
John F. Perotti 10,972(12) .65%
Walter C. Shannon, Jr 3,964(13) .24%
Michael A. Varet 66,006(14) 3.92%
---------------------------- --------------- ------
(All Directors and Executive 119,731 7.12%
Officers of the Company
as a group of (12) 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 1,682,401 shares of the Company's Common
Stock outstanding and entitled to vote on March 4, 2005. 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 2,005 shares owned jointly by Dana A. Bartholomew and his wife.
(5) Includes 2,100 shares owned by John R. H. Blum's wife.
(6) All shares are owned individually by Louise F. Brown.
(7) Includes 1,197 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.
(8) Includes 1,500 shares owned by Robert S. Drucker's wife.
(9) Includes 1,852 shares owned jointly by John F. Foley and his wife, 1,370
owned by his wife and 100 shares owned by John F. Foley as custodian for
his children.
5
(10) Includes 1,000 shares owned jointly by Nancy F. Humphreys and her husband.
(11) Includes 6 shares owned by Holly J. Nelson as guardian for a minor child.
(12) 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.
(13) All shares are owned individually by Walter C. Shannon, Jr.
(14) 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 58 Chairman and 1998(1)
Chief Executive Officer
Richard J. Cantele, Jr. 45 President, Chief Operating 2001(2)
Officer and Secretary
John F. Foley 54 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 Shareholders 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 Exchange Act) who owns beneficially more
than 5% of the Company's Common Stock as of the Record Date.
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 eleven (11). 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.
6
There are seven (7) 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, Louise F. Brown, Richard J. Cantele,
Jr., and Nancy F. Humphreys. The following individuals have been nominated to
serve for a two (2) year term: Louis E. Allyn, II and Robert S. Drucker. The
following individual has been nominated to serve for a one (1) year term: Dana
A. Bartholomew. The seven (7) 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 4, 2005,
with respect to the directors of the Company.
NOMINEES FOR ELECTION
---------------------
Positions Held Director Term
Name Age with the Company Since Expiring
Louis E. Allyn, II 57 Director 2004 2005
Dana A. Bartholomew 65 Director 2004 2005
John R. H. Blum 75 Presiding Director 1998 2005
Richard J. Cantele, Jr. 45 President, Chief 2005 2005
Operating Officer,
Secretary and Director
Robert S. Drucker 63 Director 2004 2005
Louise F. Brown 61 Director 1998 2005
Nancy F. Humphreys 63 Director 2001 2005
CONTINUING DIRECTORS
--------------------
Holly J. Nelson 51 Director 1998 2006
Walter C. Shannon, Jr. 69 Director 1998 2006
John F. Perotti 58 Chairman 1998 2007
Chief Executive Officer
and Director
Michael A. Varet 62 Director 1998 2007
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.
7
Dana A. Bartholomew has been a director of the Bank since 2004, when he
was elected by the Board to fill a vacancy created by the resignation of Gordon
C. Johnson, D.V.M. He is President of Sheffield Water Company.
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 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.
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.
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 of the Company met twelve (12) times during the
year 2004, 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, Walter C.
Shannon, Jr., and Michael A. Varet. The Executive Committee did not meet
separately from the Board during the year 2004.
Human Resources and Compensation Committee
The Company established the Human Resources and Compensation Committee
during the year
8
2002, which 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 Dana A. Bartholomew, Nancy F. Humphreys, Holly J. Nelson and
Michael A. Varet. The Committee met five (5) times during the year 2004.
Nominating and Governance Committee
The Company established a Nominating and Governance Committee during the
year 2002, which is responsible for assisting the Board of Directors in
identifying and evaluating potential nominees for a Directorship, 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 Shareholders. A copy of the Company's written
Nominating Committee Charter is available on the Company's web site at
www.salisburybank.com. In addition, the Nominating and Governance Committee's
process for identifying and evaluating nominees for director, including nominees
recommended by shareholders, has historically operated informally and without
any differences in the manner in nominees recommended by shareholders 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 and Nominating 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 shareholder, 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.
9
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 standards of the American Stock Exchange. The
Committee met once (1) during the year 2004. All nominees for elections as
directors at the 2005 Annual Meeting were nominated by the Nominating Committee
and 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 shareholders, potential shareholders, 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 seven (7) times during
the year 2004. 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. 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 enable the Audit Committee to fulfill its
responsibility.
Fees
----
During 2004, each director received an annual retainer of $4,000. This
amount was prorated in cases involving new Directors. In addition, directors
received $500 for each Board of Directors meeting attended and $250 for each
committee meeting attended. Director Perotti received no additional compensation
for his service as director or member of any Board committee during 2004. During
2001, the Board of Directors and Shareholders approved a Directors Stock
Retainer Plan which, beginning in 2002, provides each non-employee director with
up to 120 shares of restricted common stock as a component of their
compensation.
Director Attendance
-------------------
During 2004 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 but one Director of the Company attended the Company's
Annual Meeting on April 27, 2004.
Board of Directors' Communications with Shareholders
----------------------------------------------------
The Company's Board of Directors does not have a formal process for
shareholders 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
10
the Company's needs. Historically, such informal process has functioned as
follows: A Board recipient of a shareholder communication would forward same to
the Chairman and Chief Executive Officer for appropriate discussion by the Board
and the formulation of an appropriate response. Shareholders 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 this Committee's recommendations.
The goal of this 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 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 shareholder equity was the first task of the
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 Committee for 2004.
The Company utilizes the services of a compensation consulting firm to
assist the 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 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 Committee reviews the Chief Executive Officer's performance annually
and adjusts his compensation based on the previously mentioned factors, the
Bank's performance, and a comparison of the Chief Executive Officer's salary and
the salaries paid to chief executive officers of peer companies in the banking
industry. The Board has historically used the payment of bonus to reward the
Chief Executive Officer's performance, which is based on an assessment of
various factors such as financial performance, attainment of objectives and
individual and Company-wide performance. The Chief Executive Officer does not
participate in the review, discussion or decision of the Committee regarding his
remuneration.
Salisbury Bancorp, Inc. Compensation Committee
Holly J. Nelson, Chairman
Dana A. Bartholomew
Nancy F. Humphreys
Michael A. Varet
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.
11
Audit Committee Report
----------------------
The Audit Committee has reviewed and discussed the Company's audited
financial statements for the fiscal year ended December 31, 2004 and also the
matters that are required to be discussed by SAS 61 with both Shatswell MacLeod
& Company, (the Company's independent auditors) and management.
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, 2004
for filing with the Securities and Exchange Commission (the "SEC").
Salisbury Bancorp, Inc. Audit Committee
Michael A. Varet, Chairman
Louis E. Allyn, II
Louise F. Brown
Nancy F. Humphreys
Holly J. Nelson
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 shareholders and their associates on substantially the same
terms as those available for comparable transactions with others.
John R. H. Blum is a member 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 2004, the Company may engage
his services in 2005 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.
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, 2004, 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 $709,118, representing an aggregate
principal amount equal to 1.71% of the equity capital accounts of the Bank.
12
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table provides certain information regarding the
compensation paid to certain executive officers of the Company and the Bank for
services rendered in all capacities during the fiscal years ended December 31,
2004, 2003, and 2002. All compensation expense was paid by the Bank.
Summary Compensation Table
Annual
Name and Principal Compensation(1) Other
Position Year Salary($) Bonus($) Compensation($)
John F. Perotti 2004 $209,474 $66,042 $4,100(4)
Chairman and 2003 195,178 28,101 4,000(3)
Chief Executive Officer 2002 187,816 32,092 4,000(2)
of the Company and the Bank
Richard J. Cantele, Jr 2004 $139,750 $40,000 $3,595(4)
Secretary of the Company 2003 124,237 18,857 2,862(3)
President and Chief Operating 2002 109,434 18,332 2,553(2)
Officer of the Company and the Bank
John F. Foley 2004 $100,460 $14,759 $2,304(4)
Chief Financial Officer and Treasurer 2003 87,235 12,476 1,994(3)
of the Company and the Bank 2002 83,174 14,785 1,704(2)
Diane E. R. Johnstone 2004 $128,870 $16,206 $2,902(4)
Sr. Vice President & Trust Officer 2003 119,734 16,412 2,723(3)
of the Bank 2002 109,321 16,690 2,522(2)
William C. Lambert 2004 $125,395 $16,260 $2,833(4)
Vice President & Trust Officer 2003 115,333 14,521 2,597(3)
of the Bank 2002 110,522 2,200(2)
(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 for 2002.
(3) The Bank's matching contribution to the 401(k) plan for 2003.
(4) The Bank's matching contribution to the 401(k) plan for 2004.
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.
13
PENSION PLAN TABLE
================================================================================
ESTIMATED ANNUAL RETIREMENT BENEFIT WITH
YEARS OF SERVICE AT RETIREMENT
================================================================================
Average Base
Salary at
Retirement 15 20 25 30 35
--------------------------------------------------------------------------------
$ 75,000 $17,987 $23,983 $29,979 $ 31,854 $ 33,729
--------------------------------------------------------------------------------
$100,000 $25,487 $33,983 $42,479 $ 44,979 $ 47,478
--------------------------------------------------------------------------------
$125,000 $32,987 $43,983 $54,979 $ 58,104 $ 61,229
--------------------------------------------------------------------------------
$150,000 $40,487 $53,983 $67,479 $ 71,229 $ 74,979
--------------------------------------------------------------------------------
$175,000 $47,987 $63,983 $79,979 $ 84,354 $ 88,729
--------------------------------------------------------------------------------
$200,000 $55,487 $73,983 $92,979 $ 97,479 $102,479
--------------------------------------------------------------------------------
$225,000 $56,987 $75,983 $94,979 $100,104 $105,229
--------------------------------------------------------------------------------
$250,000 $56,987 $75,983 $94,979 $100,104 $105,225
--------------------------------------------------------------------------------
Pension benefits are based upon average salary (determined as of each
January 1st) during the highest five (5) consecutive years of services prior to
attaining normal retirement age. 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 $205,000 for 2004. This limit was used in the preparation of
this table.
The present average salary (using last five years of salary only) and
years of service to date of Messrs. Perotti, Cantele, Foley, Lambert and Ms.
Johnstone are: Mr. Perotti: $227,216 with 32 years of service; Mr. Cantele:
$133,306 with 24 years of service; Mr. Foley: $97,091 with 23 years of service;
Mr. Lambert: $123,369 with 3 years of service; and Ms. Johnstone: $116,789 with
17 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 2004.
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 that
would prevent Mr. Perotti from working for a competitor in the proximity of the
Bank.
Directors Stock Retainer Plan
-----------------------------
The shareholders of the Company voted to approve the "Directors Stock
Retainer Plan of Salisbury Bancorp, Inc." (the "Plan") at the 2001 Annual
Meeting of Shareholders. 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 the plan was April 26, 2002. The "annual stock
retainer" consisted of 120 shares of restricted 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 restricted shares
14
issued was 840. The next grant date under this plan will immediately precede the
2005 Annual Meeting of Shareholders.
Change in Control Agreements
----------------------------
The Bank entered into change in control agreements in 2003 with the
following Officers of the Bank: John F. Perotti, Richard J. Cantele, Jr., John
F. Foley, Todd M. Clinton, Diane E. R. Johnstone, Joseph C. Law, Lana J.
Morrison, William C. Lambert, Sharon A. Pilz and Geoffrey A. Talcott. The
agreements provide that if following a "change-in-control" of the Company or
Bank, an Officer is terminated under certain defined circumstances, or is
reassigned, within a period of twelve (12) months following the change in
control, such 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 Officer in the twelve (12) month period immediately preceding the
date of change in control. In addition, the Bank entered into a change in
control agreement in 2003 with Elizabeth Summerville, which provides that if
following a "change in control" of the Company or Bank, the Officer is
terminated under certain defined circumstances, or is reassigned, within a
period of twelve (12) months following the change in control, such Officer will
be entitled to a lump sum payment equal to her six (6) month compensation based
upon the most recent aggregate base salary paid to the Officer in the twelve
(12) month period immediately preceding the date of the 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, 2002, 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 $4,100. The Plan expense was $67,126 for 2004.
Stock Price Performance Graph
-----------------------------
Set forth below is a line graph with an explanatory table comparing the
yearly percentage change in the cumulative total shareholder 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, 1999.
15
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
AMONG SALISBURY BANCORP, INC., THE AMEX MAJOR MARKET INDEX
AND THE SNL $250M-$500M BANK INDEX
[LINE GRAPH OMITTED]
Period Ending
-------------------------------------------------------------------
Index 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
-------------------------------------------------------------------------------------------------
Salisbury Bancorp, Inc. 100.00 99.64 126.88 161.09 233.89 267.82
AMEX Major Market Index 100.00 94.27 91.81 80.57 99.97 110.02
SNL $250M-$500M Bank Index 100.00 96.28 136.80 176.39 254.86 289.27
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 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, 2004 and of written representations by certain executive officers and
directors, with the exception of the following, 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: Mr. Perotti filed one Form 4 late to
reflect one transaction and Mr. Foley filed one Form 4 late to reflect one
transaction.
16
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO ELECT FOUR
(4) NOMINEES TO THE BOARD OF DIRECTORS FOR A TERM OF THREE (3) YEARS; TO ELECT
TWO (2) NOMINEES TO THE BOARD OF DIRECTORS FOR A TERMS OF TWO YEARS; AND TO
ELECT ONE (1) NOMINEE TO THE BOARD OF DIRECTORS FOR A TERM OF ONE YEAR.
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 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, 2005. If shareholders do not ratify the appointment of Shatswell,
MacLeod & Company, P.C., the Audit Committee will consider the vote of
shareholders in selecting the independent auditors in the future. Shatswell,
MacLeod & Company, P.C. has served as the accountants for the Company for the
fiscal year ended December 31, 2004. 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 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, 2004 and December 31,
2003 were $86,980 and $76,625, 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, MacLeod & Company,
P.C. that are reasonably related to regulatory audit requirements of the Trust
Department were $17,942 for the fiscal year ended December 31, 2004 and $11,590
for the fiscal year ended December 31, 2003.
3. Tax Fees
--------
The aggregate fees billed in each of the last two (2) years for
professional services rendered by Shatswell, MacLeod & Company, P.C. for tax
compliance, tax advice and tax planning for the fiscal years ended December 31,
2004 and December 31, 2003 were $8,100 each year.
4. All Other Fees
--------------
There were no aggregate fees billed for services rendered by Shatswell,
MacLeod & Company, P.C., other than the services covered above, for the fiscal
years ended December 31, 2004 and December 31, 2003.
17
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 through 4 above, is compatible
with maintaining the independence of such accountants.
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 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. None of
the audited-related fees, tax fees or other fees paid in 2004 and 2003 were
approved per the Audit Committee's pre-approval policies.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
PROPOSAL (II). 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.
A copy of the 2004 Annual Report to Shareholders, which includes the
consolidated financial statements of the Company for the year ended December 31,
2004, is being mailed with this proxy statement to all shareholders entitled to
vote at the Annual Meeting on or about April 4, 2005.
SHAREHOLDER PROPOSALS
Any proposal that a Company shareholder wishes to have included in the
Company's Proxy Statement and form of Proxy relating to the Company's 2006
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 November 26,
2005. 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:
18
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-K for the year ended December 31,
2004 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 2004 Annual Report accompanies this document and is not
incorporated by reference.
By Order of the Board of Directors
-----------------------------
Richard J. Cantele, Jr.
Secretary
Lakeville, Connecticut
April 4, 2005
19
Appendix A
June 28, 2004
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 must be "independent directors" within the meaning of the Listing
Standards and Rules of the American Stock Exchange ("Amex Rules") and Item
7(d)(3)(iv) of Schedule 14A, 17 C.F.R. 240.101.
All members of the Audit Committee must be financially literate at the time of
their appointments and at least one member of the audit committee shall have
employment experience in finance or accounting, requisite professional
certification in accounting, or other comparable experience or background,
including current or past service as a chief executive, chief financial or other
senior officer with financial oversight responsibilities. A member of the Audit
Committee may not other than in his or her capacity as a member of the Audit
Committee, the Board of Directors, or any other Board committee accept any
consulting, advisory, or other compensatory fee from the Corporation. Members of
the Audit Committee are also prohibited from being an affiliated person of the
Corporation or any of its subsidiaries.
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 of 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
20
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.
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, 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 accounting and financial human resources and
succession planning within 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.
21
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 its 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 Securities Exchange
Act of 1934, as amended.
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 Securities Exchange Act of 1934, as amended, or the
regulations of the Regulations of the Securities Exchange Commission promulgated
pursuant thereto.
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 within the meaning of the Amex Rules,
whether each member is financially literate.
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.
22
[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 Holly J. Nelson and
Walter C. Shannon, 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 4, 2005 at the
Annual Meeting of its Shareholders to be held at the Interlaken Inn, 74
Interlaken Road, Lakeville, Connecticut on Wednesday, April 27, 2005 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, [_] [_] [_]
Louise F. Brown, Richard J. Cantele, Jr. and Nancy
F. Humphreys 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 FOUR DIRECTORS
WHOSE TERMS DO NOT EXPIRE AT THIS MEETING (THE"CONTINUING DIRECTORS")
SHALL CONSTITUTE THE 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, 2005.
(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 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.
PLEASE CHECK BOX IF YOU PLAN TO [_]
ATTEND THE MEETING.
------------------------
Please be sure to sign and date | Date |
this Proxy in the box below. | |
--------------------------------------------------------------------------------
| |
| |
-----------Shareholder 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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