UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
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Salisbury Bancorp, Inc.
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SALISBURY BANCORP, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 1999APRIL 29, 2000
TABLE OF CONTENTS
Page
NOTICE OF MEETING.....................................................................1
INTRODUCTION..........................................................................2
OUTSTANDING STOCK AND VOTING RIGHTS...................................................2
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT........................................3
MANAGEMENT OF THE COMPANY.............................................................4
Principal Shareholders of the Company........................................5
PROPOSAL I- ELECTION OF DIRECTORS.....................................................5
Committees of the Board of Directors.........................................7
Fees.........................................................................7
Director Attendance..........................................................8
Certain Business Relationships...............................................8
Report on Executive Compensation.............................................8
Indebtedness of Management and Others........................................9
EXECUTIVE COMPENSATION OF PRINCIPAL OFFICERS..........................................9
Summary Compensation Table...................................................9
Aggregated Options/SAR Exercises in Last Fiscal Year........................10
Insurance...................................................................10
Pension Plan................................................................10
Supplemental Retirement Arrangement.........................................12
Section 16(a) Beneficial Ownership Reporting Compliance.....................12
Stock Performance Graph.....................................................13
PROPOSAL II - RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT AUDITORS.........................................................14
PROPOSAL III - OTHER BUSINESS........................................................14
SHAREHOLDER PROPOSALS ...............................................................15
SHAREHOLDER INFORMATION .............................................................15
Page
NOTICE OF MEETING.............................................................1
INTRODUCTION..................................................................2
OUTSTANDING STOCK AND VOTING RIGHTS........................................ . 2
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT............................... 3
MANAGEMENT OF THE COMPANY.....................................................4
Principal Shareholders of the Company............................... 5
PROPOSAL I- ELECTION OF DIRECTORS.............................................5
Committees of the Board of Directors................................ 7
Fees.................................................................7
Director Attendance..................................................8
Certain Business Relationships.......................................8
Report on Executive Compensation.................................... 8
Indebtedness of Management and Others................................9
EXECUTIVE COMPENSATION OF PRINCIPAL OFFICERS..................................9
Summary Compensation Table...........................................9
Insurance...........................................................10
Pension Plan........................................................10
401(k) Profit Sharing Plan..........................................11
Supplemental Retirement Arrangement.................................11
Section 16(a) Beneficial Ownership Reporting Compliance.............11
Stock Performance Graph.............................................12
PROPOSAL II - RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT AUDITORS.....................................................13
PROPOSAL III - OTHER BUSINESS................................................13
SHAREHOLDER PROPOSALS........................................................14
SHAREHOLDER INFORMATION......................................................14
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 22, 1999APRIL 29, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Salisbury
Bancorp, Inc. (the "Company"), will be held at 10:00 a.m. on May 22, 1999April 29, 2000 at
the Main Office of Salisbury Bank and Trust Company (the "Bank"), 5 Bissell
Street, in Lakeville, Connecticut, for the following purposes:
1. To elect two (2)four (4) Directors for a three year term; who with the seven (7)five
(5) directors whose terms do not expire at this meeting, will
constitute the full Board of Directors of the Company and the Bank.Company.
2. To ratify the appointment by the Board of Directors of Shatswell,
MacLeod & Company, P.C. as independent auditors for the Company for the
year ending December 31, 1999.2000.
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 6th3rd
day of April, 1999March, 2000 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,BANCORP., INC.
/s/ Craig E. Toensing,
----------------------
Craig E. Toensing,
Secretary
April 15, 1999March 31, 2000
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 CRAIG E.
TOENSING, SECRETARY OF THE COMPANY, IN WRITING PRIOR TO THE TAKING OF A VOTE.
1
SALISBURY BANCORP, INC.
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
May 22, 1999April 29, 2000
INTRODUCTION
The enclosed proxy (the "Proxy") is solicited by the Board of Directors
(the "Board of Directors") of Salisbury Bancorp, Inc. (the "Company"), 5 Bissell
Street, Lakeville, Connecticut 06039, for use at the Annual Meeting of
Shareholders, to be held on May 22, 1999,April 29, 2000, at 10:00 a.m., at the Main Office of
its subsidiary, Salisbury Bank and Trust Company (the "Bank"), 5 Bissell Street,
Lakeville, Connecticut, and at any and all adjournments thereof. Any Proxy given
may be revoked at any time before it is actually voted on any matter in
accordance with the procedures set forth on the Notice of Annual Meeting. This
Proxy Statement and the enclosed form of Proxy are being mailed to shareholders
(the "Shareholders") on or about April 15, 1999.March 31, 2000. The cost of preparing,
assembling and mailing this Proxy Statement and the material enclosed herewith
is being borne by the Company. In addition, proxies may be solicited by
directors, officers and employees of the Company and the Bank personally by
telephone or other means. The Company will reimburse banks, brokers, and other
custodians, nominees, and fiduciaries for their reasonable and actual costs in
sending the proxy materials to the beneficial owners of the Company's common
stock (the "Common Stock").
OUTSTANDING STOCK AND VOTING RIGHTS
The Board of Directors has fixed the close of business on April 6, 1999March 3, 2000
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,
1,509,7921,498,179 shares of the Company's Common Stock (par value $.10 per share) were
outstanding and entitled to vote and held of record by approximately 600550
Shareholders, each of which shares is entitled to one vote on all matters to be
presented at this Annual Meeting. Votes withheld, abstentions and broker
non-votes are not treated as having voted in favor of any proposal and 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.
A copy of the 19981999 Annual Report to Shareholders, which includes the
consolidated financial statements of the Company for the year ended December 31,
1998,1999, is being mailed with this proxy statement to all shareholders entitled to
vote at the Annual Meeting.
2
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth certain information as of April 6, 1999March 3, 2000
regarding the number of shares of Common Stock beneficially owned by each
director and officer and by all directors and officers as a group.
Number of Shares (1) Percentage of Class(2)
-------------------- ----------------------
John R.H. Blum 15,336 (3) 1.02%
Louise F. Brown 4,224 (4) .28%
John F. Foley 3,696 (5) .24%
Gordon C. Johnson 1,002 (6) .07%
Holly J. Nelson 798 (7) .05%
John F. Perotti 10,642 (8) .70%
John E. Rogers 28,715 (9) 1.90%
Walter C. Shannon, Jr 3,444 (10) .23%
Craig E. Toensing 3,000 (11) .20%
Michael A. Varet 65,646 (12) 4.35%
- --------------------- ------- -----
(All Directors and Officers 136,503 9.04%Number of Shares (1) Percentage of Class (2)
-------------------- -----------------------
John R. H. Blum 15,336 (3) 1.02%
Louise F. Brown 4,224 (4) .28%
John F. Foley 3,696 (5) .25%
Gordon C. Johnson 1,502 (6) .10%
Holly J. Nelson 848 (7) .06%
John F. Perotti 10,839 (8) .72%
John E. Rogers 28,595 (9) 1.91%
Walter C. Shannon, Jr. 3,604 (10) .24%
Craig E. Toensing 3,000 (11) .20%
Michael A. Varet 65,646 (12) 4.38%
(All Directors and Officers 137,290 9.16%
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 his children or grandchildren, and
in which all beneficial interest has been disclaimed by the director.
(2) Percentages are based upon the 1,509,7921,498,179 shares of the Company's Common
Stock outstanding and entitled to vote on April 6, 1999.March 3, 2000. The definition
of beneficial owner includes any person who, directly or indirectly,
through any contract, agreement or understanding, relationship or
otherwise has or shares voting power or investment power with respect
to such security.
(3) Includes 2,100 shares owned by John R. H. Blum's wife.
(4) Includes 2,136 shares owned by Louise F. Brown as custodian for her
children.
3
(5) Includes 1,518 shares owned jointly by John F. Foley and his wife and
66 shares owned by John F. Foley as custodian for his children.
(6) Includes 660 shares which are owned by Gordon C. Johnson's wife and for
which Mr. Johnson has disclaimed beneficial ownership.
(7) Includes 6 shares owned by Holly J. Nelson as guardian for a minor
child.
(8) Includes 9,514 shares owned jointly by John F. Perotti and his wife,
761 shares owned by his wife and 1,128564 shares in trust for his children.son.
(9) Includes 11,370 shares owned by John E. Rogers'Roger's wife.
(10) All shares are owned individually by Walter C. Shannon, Jr.
(11) Includes 42 shares owned by Craig E. Toensing as custodian for his son.
(12) Includes 18,540 shares which are owned by Michael A. Varet's wife,
6,186 shares which are owned by his son, 6,180 shares owned by his
daughter and 12,3606,180 shares owned by Michael A. Varet as custodian for
his children.son. 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 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 52 President and 1998 (1)
Chief Executive Officer
Craig E. Toensing 61 Secretary 1998 (2)
John F. Foley 48Executive Officer
Name Age Position of the Company since:
---- --- -------- ---------------------
John F. Perotti 53 President and 1998 (1)
Chief Executive Officer
Craig E. Toensing 62 Secretary 1998 (2)
John F. Foley 49 Chief Financial Officer 1998 (3)
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(1) Mr. Perotti is the President and Chief Executive Officer of the Bank
and has been an Executive Officer of the Bank since 1982.
(2) Mr. Toensing is the Senior Vice President and Trust Officer of the Bank
and has been an Executive Officer of the Bank since 1982.
(3) Mr. Foley is Vice President, Comptroller and Principal Financial
Officer of the Bank and has been an Executive Officer of the Bank since
1986.
4
Principal Shareholders of the Company
As of April 6, 1999,March 3, 2000, management was not aware of any person (including
any "group" as that term is used in Section 13(d)13 (d)(3) of the Exchange Act) who
owns beneficially more than 5% of the Company's Common Stock.
PROPOSAL I
ELECTION OF DIRECTORS
The Certificate of Incorporation and Bylaws of the Company provide for
a Board of Directors of not less than seven (7) members, as determined from time
to time by resolution of the Board of Directors. The Board of Directors of the
Company is divided into three (3) classes as nearly equal in number as possible.
Classes of directors serve for staggered three (3) year terms. A successor class
is to be elected at each annual meeting of shareholders when the terms of office
of the members of one class expire. Vacant directorships may be filled, until
the expiration of the term of the vacated directorship, by the vote of a
majority of the directors then in office. The Company does not have a nominating
committee but has a prescribed procedure for shareholders to make a nomination
set forth in the Company's Bylaws.
There are two (2)four (4) directorships on the Board of Directors which are up
for election this year and the following individuals have been nominated by the
Board of Directors to serve for a three (3) year term: Gordon C. Johnson, Holly
J. Nelson, John R. H. BlumE. Rogers and Louise F. Brown.Walter C. Shannon, Jr. The two (2)four (4) 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 April 6, 1999,March 3,
2000, with respect to the directors of the Company.
NOMINEES FOR ELECTION
---------------------
Positions Held Director Term
Name Age with the Company and the Bank.
Positions Held Director Term
Name Age with the Company Since Expiring
---- --- ---------------- ----- --------
John R. H. Blum 69 Chairman 1998 1999
Louise F. Brown 55 Director 1998 1999
Gordon C. Johnson 64 Director 1998 2000
Holly J. Nelson 45 Director 1998 2000
John E. Rogers 69 Director 1998 2000
Walter C. Shannon, Jr. 63Since Expiring
---- --- ---------------- ----- --------
Gordon C. Johnson 65 Director 1998 2000
Holly J. Nelson 46 Director 1998 2000
John E. Rogers 70 Director 1998 2000
Walter C. Shannon, Jr. 64 Director 1998 2000
5
Positions Held Director Term
Name Age with the Company Since Expiring
---- --- ---------------- ----- --------
John F. Perotti 52 President,
Chief Executive Officer
and Director 1998 2001
Craig E. Toensing 61CONTINUING DIRECTORS
--------------------
Positions Held Director Term
Name Age with the Company Since Expiring
---- --- ---------------- ----- --------
John F. Perotti 53 President, 1998 2001
Chief Executive Officer
and Director
Craig E. Toensing 62 Secretary and Director 1998 2001
Michael A. Varet 57 Director 1998 2001
Michael A. Varet 58 Director 1998 2001
John R. H. Blum 70 Chairman 1998 2002
Louise F. Brown 56 Director 1998 2002
Presented below is additional information concerning the directors of
the Company. Unless otherwise stated, all directors have held the positionsposition
described for at least five years.
John R. H. Blum is an attorney in private practice and former
Commissioner of Agriculture for the State of Connecticut. He has been a director
of the Bank since 1995 and was elected Chairman of the Board of Directors of the
Company and the Bank in 1998.
Louise F. Brown has been a director of the Bank since 1992 and is a
partner at the Sharon office in the law firm of Gager & Peterson.
Gordon C. Johnson has been a director of the Bank since 1994 and is a
Doctor of Veterinary Medicine.
Holly J. Nelson has been a director of the Bank since 1995 and is a
partner in the store Oblong Books and Music, LLC.LLC, a book and music store.
John E. Rogers has been a director of the Bank since 1964 and retired
as Chairman of the Board of the Bank in 1984. He also served as President of the
Bank from 1969 to 1981.
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.
John F. Perotti is President and Chief Executive Officer of the Company
and the Bank. Prior to that he served as Executive Vice President and Chief
Operating Officer of the Bank, and prior to that he was Vice President and
Treasurer of the Bank. He has been a director of the Bank since 1985.
Craig E. Toensing has been a director of the Bank since 1995 and is
Senior Vice President and Trust Officer of the Bank.
Michael A. Varet has been a partner in the law firm of Piper and Marbury
L.L.P.Rudnick & Wolfe LLP since 1995. Prior to 1995, Mr. Varet was a member and
Chairman of Varet & Fink P.C., formerly Milgrim, Thomajan & Lee P.C. Mr. Varet
has been a director of the Bank since 1997.
6
Committees of the Board of Directors
The Board of Directors of the Company currently has five (5)six (6) standing
committees: Executive, Loan, Trust Investment, Audit, ALCO/Investment and ALCO/Investment.Human
Resources. The members of the committees are appointed by the Board of
Directors.
The Executive Committee has general supervision over the affairs of the
Company between meetings of the Board of Directors. In addition, while the
Company does not have a compensation committee, the Executive Committee performs
this task. All executive officers are excused from meetings of the Executive
Committee when votes are taken on their compensation packages. The members of
the Executive Committee include John R. H. Blum, John F. Perotti, John E.
Rogers, Walter C. Shannon, Jr. and Craig E. Toensing.
The Loan Committee has full authority over all loans and loan related
transactions. Its members are John R. H. Blum, John F. Perotti, John E. Rogers,
Walter C. Shannon, Jr. and Craig E. Toensing. In addition, Louise F. Brown,
Gordon C. Johnson, Holly J. Nelson and Michael A. Varet are alternates.
The Trust Investment Committee reviews the administration of and
investments made by the Bank in all of its trust accounts. Its members are Louise F.
Brown, John F. Perotti, John E. Rogers, Walter C. Shannon, Jr. and Craig E.
Toensing.
The Audit Committee reviews the internal auditor's report of the
operating staff's compliance with operating policies and procedures. Its members
are Louise F. Brown, Gordon C. Johnson, Holly J. Nelson and Michael A. Varet.
The ALCO/Investment Committee implements and monitors compliance
regarding asset and liability management practices with regard to interest rate
risk, liquidity, capital and investments as set in accordance with policies
established by the Board of Directors. Its members are John R. H. Blum, Holly J.
Nelson, John F. Perotti, Walter C. Shannon, Jr. and Craig E. Toensing.
The Human Resource Committee identifies and provides information about
emerging human resource issues and human resource practices. Its members are
Louise F. Brown, Gordon C. Johnson, Holly J. Nelson and John E. Rogers.
The Board of Directors met thirteen (13) times during 1998.1999. The
Executive Committee met ten (10)eight (8) times, the Loan Committee met twenty-eight (28)twenty-four (24)
times, the Trust Investment Committee met twelve (12)eleven (11) times, the Audit Committee
met six (6) times, the ALCO/Investment Committee met seven (7) times and the
ALCO/InvestmentHuman Resource Committee met six (6)two (2) times in 1998.1999.
Fees
During 1998,1999, directors received $300$500 for each Board of Directors
meeting attended and $100$200 for each committee meeting attended. Beginning January
1999, each director will receivereceived an annual retainer of $2,000 and $500 for each
meeting of the Board of Directors attended. In addition, members of various
committees of the Company's Board of Directors will receive a fee of $200 for
each committee meeting attended.$2,000. Directors Perotti and
Toensing received no additional compensation for their services as directors or
members of any board committee during 1998 and in 1999 will not receive any additional compensation for their
services as directors.1999.
7
Director Attendance
During 19981999 no director attended fewer than 75% of the aggregate of (1)
the total number of meetings of the Company's Board of Directors which he/she
was entitled to attend, and (2) the total number of meetings held by all
committees of the Company's Board of Directors on which he/she served.
Certain Business Relationships
John R. H. Blum is Chairman of the Board of Directors and an attorney
engaged in the private practice of law who represented the Company during 19981999
and whichwhom the Company proposes to engage in 19992000 in connection with certain legal
matters.
Louise F. Brown is a director of the Company and a partner in the law
firm of Gager & Peterson, which represented the Company during 19981999 and which
the Company proposes to engage in 19992000 in connection with certain legal matters.
Walter C. Shannon, Jr. is a director of the Company and the President
Emeritus of Wagner McNeil, Inc. which serves as the insurance agent for many of
the Company's insurance needs.
Report on Executive Compensation
The Executive Committee determinesevaluates and makes recommendations to the
amountBoard of Directors regarding annual compensation to be paid to the Company's
executive officers. One of the ways by which compensation of executive officers
is determined is by evaluating the individual officer's performance in relation
to meeting the Company's strategic goals.
The Executive Committee reviewed John F. Perotti's performance and
determined that he either met or exceeded each of the Company's strategic
objectives. Additionally, Mr. Perotti's salary was compared against the
Company's competitors'with salaries for
chief executive officers based uponof comparable and competing financial institutions, and
evaluated in light of performance growth.and growth comparisons. Mr. Perotti's annual
cash compensation for the fiscal year ended December 31, 19981999 included a base
salary of $141,984,$163,200 and a bonus of $19,700
and total director's fees of $4,500.$30,243. Mr. Perotti was not present during
the discussions which took place by the Executive Committee concerning his
compensation. The Executive Committee presented its recommendation regarding
salary for executive officers and the determinative factors used by it in its
evaluations to the full Board of Directors, without the executive officers
present. The non executive officer members of the Board of Directors unanimously
accepted the Executive Committee's decision regarding executive compensation.
This report is respectfully submitted by the members of the Executive
Committee.
John R. H. Blum
John F. Perotti
John E. Rogers
Walter C. Shannon, Jr.
Craig E. Toensing
8
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, 1998,1999, 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 $2,029,564$2,475,686 or an aggregate
principal amount equal to 9.13%12.44% of the equity capital accounts of the Bank.
EXECUTIVE COMPENSATION OF PRINCIPAL OFFICERS
The following table provides certain information regarding the
compensation paid to certain executive officers of the Company for services
rendered in all capacities during the fiscal years ended December 31, 1999, 1998
1997 and 1996.1997. No other current executive officer of the Company received cash
compensation in excess of $100,000.
Summary Compensation Table
Annual
Compensation Long-Term
Compensation
Compensation
Securities Underlying
Options/ All Other
Name and Principal SARsSAR's Compensation
Position Year Salary($) Bonus($) (#)(1) ($)(2)
- --------------------------- ---------- --------------- -------------- -------------------------- ------------------------------------------------------------------------------------------------------------------------
John F. Perotti 1998 $141,984 $19,700 _____ $4,500(3)1999 $163,200 $30,243 ----- -----
President and 1998 141,984 19,700 ----- $4,500(3)
Chief Executive Officer 1997 135,864 25,092 1,710 6,000(3)
Chief Executive Officer 1996 128,760 3,247 1,782 3,900(3)of the Company and the Bank
Craig E. Toensing 1998 $104,856 $15,249 _____ $4,500(3)1999 $122,808 $24,641 ----- -----
Secretary of the Company 1998 104,856 15,249 ----- $4,500(3)
Senior Vice President 1997 100,320 19,297 1,266 5,700(3)
Senior Vice President 1996 96,000 2,435 1,344 3,300(3)
and Trust Officer of the Bank
- ------------------------------------------------
(1) The number of shares presented representrepresented options to acquire shares of
common stock of the Company.
(2) Compensation above does not include accrual of benefits under the Bank's
defined pension plan or supplemental retirement arrangementarrangements described below.
(3) Directors fees paid.
9
In 1988, the Bank adopted an Employee Stock Purchase Plan under Section 423
of the Internal Revenue Code of 1986 for the benefit of its eligible employees.
It was designed to provide employees with an opportunity to have a stake in the
long term future of the Bank by purchasing its stock. Under the plan, the Bank
could grant options to employees and the Bank received no cash payments in
connection with the grant of options under the plan. The grant of stock options
could be made to all employees who had completed one year of service. The
exercise price of the options on the date of the grant was equal to 85% of the
fair market value of the stock on the date of the grant. All employees granted
options had the same rights and privileges. Each option provided that the
employee could purchase a number of shares of Common Stock for an aggregate
purchase price equal to a percentage of compensation as determined by the
Compensation Committee (which was uniform for all employees and could not exceed
10%). The Employee Stock Purchase Plan was terminated effective December 31,
1997.
Aggregated Options/SAR Exercises in Last Fiscal Year
Shares Acquired Value Realized
Name on Exercise (#) (1) ($)(2)
---- ------------------- ------
John F. Perotti 1,710 $ 2,394.00
Craig E. Toensing 1,266 $ 1,772.40
- -------------------------
(1) The number of shares presented represent options to acquire shares of
common stock of the Company.
(2) Value realized is the difference between the fair market value of the
Company's common stock on the date exercised and the exercise price of the
options exercised.
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 year of service.
PENSION PLAN TABLE
Average
Base Salary Estimated Annual Retirement Benefit With
at Retirement Years of Service at Retirement Indicated
- ------------- ----------------------------------------
10
PENSION PLAN TABLE
Average
Base Salary Estimated Annual Retirement Benefit With
at Retirement Years of Service at Retirement Indicated
- ------------- ----------------------------------------
15 Years 20 Years 25 Years 30 Years 35 Years
-------- --------- -------- -------- --------
80,000Years 20 Years 25 Years 35 Years
-------- -------- -------- --------
$100,000 $20,000 $40,000 $50,000 $ 55,000
110,000 22,000 44,000 55,000 60,500
120,000 24,000 48,000 60,000 66,000
130,000 26,000 52,000 65,000 71,500
140,000 28,000 56,000 70,000 77,000
150,000 30,000 60,000 75,000 82,500
160,000 32,000 40,000 42,000 44,000
90,000 27,000 36,000 45,000 47,250 49,500
100,000 30,000 40,000 50,000 52,500 55,000
110,000 33,000 44,000 55,000 57,750 60,500
120,000 36,000 48,000 60,000 63,000 66,000
130,000 39,000 52,000 65,000 68,250 71,500
140,000 42,000 56,000 70,000 73,500 77,000
150,000 45,000 60,000 75,000 78,750 82,500
160,000 48,000 64,000 80,000 84,000 88,000
170,000 34,000 68,000 85,000 93,500
180,000 36,000 72,000 90,000 99,000
$190,000 $38,000 $76,000 $95,000 $104,500
Pension benefits are based upon average base salary (determined as of
each January 1st) during the highest five consecutive years of service prior to
attaining normal retirement date. The amount of annual benefit is fifty percent
(50%) of average base salary less fifty percent (50%) of the primary Social
Security benefit, pro rated for less than 25 years of service, plus one-half of
one percent (.5%) of average base salary for each of up to ten additional years
of service. This benefit formula may be modified to conform with changes in the
pension laws.
10
The present average base salary and years of service to date of Messrs.
Perotti and Toensing are: Mr. Perotti: $141,507; 26$156,236; 27 years; Mr. Toensing:
$106,481; 18$116,689; 19 years. The above table shows estimated annual retirement benefits
payable at normal retirement date as a straight life annuity for various average
base salary and service categories before the offset of a portion of the primary
Social Security benefit.
11
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 5% increase or "The Monthly
Consumer Price Index for All Urban Consumers, United States City Average, All
Items" published by the Bureau of Labor Statistics) for a period of ten (10)
years. These payments are in addition to any payments under the Bank's
retirement plan. The Supplemental Retirement Agreement includes provisions which
would prevent Mr. Perotti from working for a competitor in the proximity of the
Bank.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers, directors and persons who own more
than ten percent (10%) of the Company's Common Stock, to file with the
Securities and Exchange Commission (the "SEC") reports of ownership and changes
in ownership of the Company's Common Stock. Executive officers, directors and
any shareholders owning greater than ten percent (10%) of the Company's Common
Stock are required by the SEC's regulations to furnish the Company with copies
of all such reports that they file.
Based solely on a review of copies of reports filed with the SEC since
August 24, 1998 and of written representations by certain executive officers and
directors, all persons subject to the reporting requirements of Section 16(a)
filed the required reports on a timely basis.
1211
Stock Performance Graph
Prior to August 24, 1998, the Common Stock of the Bank was traded only
infrequently and no substantial public market for the stock existed. The Bank
Common Stock was not quoted on the Nasdaq Inter-dealer Quotation System. Some
trading did take place however, in the over-the-counter market, where the stock
was traded as a non-Nasdaq issue. The stock had several market makers who listed
the issue in the National Bureau "Pink Sheets", an inter-dealer quotation
system. The Bank had the bulletin board quotation symbol "SBTL." Those trades
which occurred may not provide a reliable indication of the market value of the
Bank Common Stock, as only a limited trading market existed, and the market
price may be substantially affected by the relatively insubstantial volume of
transactions. On August 24, 1998 each share of Bank Common Stock was exchanged
for six shares of Company Common Stock and the stock began trading on the
American Stock Exchange under the symbol "SAL".
The Stock Performance Graph compares the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock against
both a broad-market index ("AMEX") and an industry index (SNL< $250M Bank Asset-Size
Index), for the five year period from December 31, 1993 through December 31,
1998. The graph assumes that on December 31, 1993 $100.00 was invested in Common
Stock of the Company and that dividends were reinvested. The following Stock
Performance Graph reflects the six for one stock exchange:
[GRAPH OMITTED]
Period Ending
--------------------------------------------------------------------------------------
Index 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- ---------------------------------------- -------------- ------------- ------------- ------------ ------------- -------------
Salisbury Bancorp, Inc. 100.00 123.18 131.50 194.06 263.28 414.96<$250M Bank
Asset-Size Index), for the five year period from December 31, 1994 through
December 31, 1999. The graph assumes that on December 31, 1994 $100.00 was
invested in Common Stock of the Company and that dividends were reinvested. The
following Stock Performance Graph reflects the six for one stock exchange:
[GRAPHIC-GRAPH PLOTTED POINTS LISTED BELOW]
Period Ending
------------------------------------------------------------
Index 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- -----------------------------------------------------------------------------------------------
Salisbury Bancorp, Inc. 100.00 106.75 157.52 213.69 336.79 319.82
Amex Major Market Index 100.00 133.92 166.97 209.24 247.56 291.53
SNL <$250M Bank Asset-Size Indes 100.00 140.62 177.67 289.92 275.60 242.00
12
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO ELECT
THE FOUR (4) NOMINEES TO THE BOARD OF DIRECTORS FOR A TERM OF THREE (3) YEARS.
DIRECTORS ARE ELECTED BY A PLURALITY OF THE VOTES CAST BY THE SHARES ENTITLED TO
VOTE AT THE MEETING. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS SHAREHOLDERS SPECIFY A CONTRARY CHOICE ON THE PROXY CARD.
PROPOSAL II
RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT AUDITORS
Shareholders are asked to consider and ratify the appointment by the
Board of Directors of Shatswell, MacLeod & Company, P.C. as independent auditors
to audit the consolidated financial statements of the Company for the fiscal
year ending December 31, 2000. Shatswell, MacLeod & Company, P.C. has served as
the accountants for the Company for the fiscal year ended December 31, 1999.
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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
PROPOSAL (2). PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED
UNLESS SHAREHOLDERS SPECIFY A CONTRARY CHOICE ON THE PROXY CARD. THE PROPOSAL TO
RATIFY THE APPOINTMENT OF SHATSWELL, MACLEOD & COMPANY, P.C. WILL BE APPROVED IF
THE AFFIRMATIVE VOTES CAST EXCEED THE VOTES CAST OPPOSING THE TRANSACTION.
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.
13
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO ELECT
THE TWO (2) NOMINEES TO THE BOARD OF DIRECTORS FOR A TERM OF THREE (3) YEARS.
DIRECTORS ARE ELECTED BY A PLURALITY OF THE VOTES CAST BY THE SHARES ENTITLED TO
VOTE AT THE MEETING. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS SHAREHOLDERS SPECIFY A CONTRARY CHOICE ON THE PROXY CARD.
PROPOSAL II
RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT AUDITORS
Shareholders are asked to consider and ratify the appointment by the Board
of Directors of Shatswell, MacLeod & Company, P.C. as independent auditors to
audit the consolidated financial statements of the Company for the fiscal year
ending December 31, 1999. Representatives of the firm Shatswell, MacLeod &
Company, P.C. are not expected to attend the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF PROPOSAL
(2). PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
SHAREHOLDERS SPECIFY A CONTRARY CHOICE ON THE PROXY CARD. THE PROPOSAL TO RATIFY
THE APPOINTMENT OF SHATSWELL, MACLEOD & COMPANY, P.C. WILL BE APPROVED IF THE
AFFIRMATIVE VOTES CAST EXCEED THE VOTES CAST OPPOSING THE TRANSACTION.
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.
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.
14
SHAREHOLDER PROPOSALS
Shareholders of the Company who desire to present a proposal for action
at the 2001 Annual Meeting of the Company, must present the proposal to the
Company at its principal executive offices on or before January 3, 2001 for
inclusion in the Company's proxy statement and form of proxy relating to that
meeting.
SHAREHOLDER INFORMATION
The Company's Annual Report on Form 10-K for the year ended December
31, 1999 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 1999 Annual Report accompanies this document and is not
incorporated by reference.
March 31, 2000
14
PROXY FOR ANNUAL MEETING OF 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 Louise F. Brown and
Michael A. Varet, Jr., 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 3, 2000 at the
Annual Meeting of its Shareholders to be held at the Main Office of the Company,
5 Bissell Street, Lakeville, Connecticut on April 29, 2000 at 10:00 a.m. or at
any adjournment thereof with all the powers the undersigned would possess if
personally present, as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS (1) THROUGH (3)
(1) ELECT THE FOLLOWING FOUR (4) PERSONS (GORDON C. JOHNSON, HOLLY J, NELSON,
JOHN E. ROGERS AND WALTER C. SHANNON, JR.)TO SERVE AS DIRECTORS OF THE
COMPANY WHO ALONG WITH SEVEN DIRECTORS WHOSE TERMS DO NOT EXPIRE AT THIS
MEETING (THE "CONTINUING DIRECTORS") SHALL CONSTITUTE THE BOARD OF
DIRECTORS OF THE COMPANY:
With- FOR ALL
[ ] FOR [ ] hold [ ] EXCEPT*
*INSTRUCTION: To withhold authority to vote any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
================================================================================
(2) RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS: Proposal to ratify
the resolution adopted by the Board of Directors appointing the independent
public accounting firm of Shatswell, MacLeod & Company, P.C. as independent
auditors of the Company for the fiscal year ending December 31, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) OTHER BUSINESS: Proposal to conduct whatever other business may properly be
brought before the meeting or any adjournment thereof. Management at
present knows of no other business to be presented by or on behalf of the
Company or its Management at the meeting. In the event that any other
business requiring a vote of shareholders is properly presented at the
meeting, the holders of the proxies will vote your shares in accordance
with their best judgment and the recommendations of a majority of the Board
of Directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATION INDICATED. IF NO
SPECIFICATION IS INDICATED, THIS PROXY WILL BE VOTED "FOR" PROPOSALS (1) THROUGH
(3)
Dated Dated
- ------------------------- ---------- ------------------------ ----------
(Signature) (Signature)
- ------------------------- ---------- ------------------------ ----------
(Please print your name here) (Please print your name here)
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 check below if you plan to attend the Annual Meeting.
[ ] I plan to attend the Annual Meeting
April 29, 2000 Annual Meeting of the Company, must present the proposal to the Company
at its principal executive offices on or before January 3, 2000 for inclusion in
the Company's proxy statement and form of proxy relating to that meeting.
SHAREHOLDER INFORMATION
The Company's Annual Report on Form 10-K for the year ended December 31,
1998 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 1998 Annual Report accompanies this document and is not
incorporated by reference.
April 15, 1999
15
PROXY FOR ANNUAL MEETING OF 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 Gordon C. Johnson and
Walter C. Shannon, Jr., 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 April 6, 1999 at the
Annual Meeting of its Shareholders to be held at the Main Office of the Company,
5 Bissell Street, Lakeville, Connecticut on May 22, 1999 at 10:00 a.m. or at any
adjournment thereof with all the powers the undersigned would possess if
personally present, as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS (1) THROUGH (3)
(1) ELECT THE FOLLOWING TWO (2) PERSONS TO SERVE AS DIRECTORS OF THE COMPANY
WHO ALONG WITH SEVEN DIRECTORS WHOSE TERMS DO NOT EXPIRE AT THIS MEETING
(THE "CONTINUING DIRECTORS") SHALL CONSTITUTE THE BOARD OF DIRECTORS OF THE
COMPANY: John R. H. Blum and Louise F. Brown.
[ ]For both nominees [ ] Vote withheld from both nominees [ ] Vote withheld from
nominees listed below
=================================================+==============================
(2) RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS: Proposal to ratify
the resolution adopted by the Board of Directors appointing the independent
public accounting firm of Shatswell, MacLeod & Company, P.C. as independent
auditors of the Company for the fiscal year ending December 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) OTHER BUSINESS: Proposal to conduct whatever other business may properly be
brought before the meeting or any adjournment thereof. Management at
present knows of no other business to be presented by or on behalf of the
Company or its Management at the meeting. However, if any other matters are
properly brought before the meeting, the persons named in this proxy or
their substitutes will vote in accordance with their best judgment.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATION INDICATED. IF NO
SPECIFICATION IS INDICATED, THIS PROXY WILL BE VOTED "FOR" PROPOSALS (1) THROUGH
(3)
Dated Dated
- ------------------------- ---------- ------------------------ ----------
(Signature) (Signature)
- ------------------------- ---------- ------------------------ ----------
(Please print your name here) (Please print your name here)
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 check below if you plan to attend the Annual Meeting.
[ ] I plan to attend the Annual Meeting
May 22, 1999