UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
COMMUNITY BANCORP, INC.
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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4. Proposed maximum aggregate value transaction:
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5. Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration number, or
the Form or Schedule and the date of its filing.
1. Amount previously paid:
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
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COMMUNITY BANCORP, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 10, 2001
________________________________________
NOTICE IS HEREBY GIVEN that the 2001 Annual Meeting of Shareholders of
Community Bancorp, Inc. ("Corporation") will be held at the Main Office
of the Corporation, 17 Pope Street, Hudson, Massachusetts, on Tuesday,
April 10, 2001 at 10 o'clock A.M., for the purpose of considering and
voting upon the following matters:
1. To fix the number of Directors who shall constitute the full
Board of Directors at eleven.
2. To elect as Directors the four individuals listed as nominees
in the Proxy Statement accompanying this Notice of Meeting,
who, together with the seven Directors whose terms of office do
not expire at this meeting, will constitute the full Board of
Directors.
3. To approve the 2001 Incentive Stock Option Plan for Key Employees.
4. Such other matters as may properly be brought before the meeting
and any adjournment thereof.
The record date and hour for determining shareholders entitled to notice
of, and to vote at, the meeting, has been fixed at 5 o'clock P.M., March 1,
2001.
By Order of the Board of Directors,
/s/ Donald R. Hughes, Jr.
----------------------------
Donald R. Hughes, Jr., Clerk
March 13, 2001
PLEASE SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN THE
ENVELOPE PROVIDED FOR THAT PURPOSE. YOU MAY NEVERTHELESS VOTE IN PERSON
IF YOU DO ATTEND THE MEETING.
COMMUNITY BANCORP, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 10, 2001
The following information is furnished in connection with the solicitation
of proxies by the management of Community Bancorp, Inc. ("Corporation"),
whose principal executive office is located at 17 Pope Street, Hudson,
Massachusetts, (Telephone: 978-568-8321), for use at the Annual Meeting
of Shareholders of the Corporation to be held on Tuesday, April 10, 2001.
As of March 1, 2001, 5,914,441 shares of common stock of the Corporation
were outstanding and entitled to be voted.
The record date and hour for determining shareholders entitled to vote has
been fixed at 5 o'clock P.M., March 1, 2001. Only shareholders of record
at such time will be entitled to notice of, and to vote at, the meeting.
Shareholders are urged to sign the enclosed form of proxy solicited on
behalf of the management of the Corporation and return it at once in the
envelope enclosed for that purpose. The proxy does not affect the right
to vote in person at the meeting and may be revoked prior to its exercise.
Proxies will be voted in accordance with the shareholder's directions.
If no directions are given, proxies will be voted to fix the number of
Directors of the Corporation at eleven; to elect Horst Huehmer, Donald R.
Hughes, Jr., Mark Poplin and David W. Webster to the Board of Directors of
the Corporation to serve until the Annual Meeting of Shareholders in the
year 2004 and until their successors are duly elected and qualified to serve;
and to approve the 2001 Incentive Stock Option Plan For Key Employees.
The financial statements of the Corporation for 2000 have been mailed to
the shareholders with the mailing of this Notice and Proxy Statement.
The cost of the solicitation of proxies is being paid by the Corporation.
The Proxy Statement will be mailed to shareholders of the Corporation on
or about March 13, 2001.
Determination of Number of Directors
and Election of Directors
------------------------------------
The persons named as proxies intend to vote to fix the number of Directors
for the ensuing year at eleven and vote for the election of the persons
named below as Nominees for Election at This Meeting as Directors, each
to hold office until the annual meeting held in the year indicated in the
column designated "Term of Office." If any nominee should not be available
for election at the time of the meeting, the persons named as proxies may
vote for another person in their discretion or may vote to fix the number
of Directors at less than eleven. The management does not anticipate that
any nominee will become unavailable.
The By-laws of the Corporation provide in substance that the Board of
Directors shall be divided into three classes as nearly equal in number
as possible, and that the term of office of one class shall expire and a
successor class be elected at each annual meeting of the shareholders.
The present number of Directors is eleven. It is proposed by the Board
that at the meeting the number of Directors who shall constitute the full
Board of Directors until the next annual meeting be fixed at eleven and
that the four nominees listed below be elected to serve until the date
indicated opposite their names. All of the nominees are currently
Directors.
Opposite the name of each nominee and each continuing Director in the
following table is shown: (1) the number of shares of stock of the
Corporation owned beneficially by each such person; (2) for those persons
serving as Directors of the Corporation, the date on which such person's
term of office as Director began; (3) the term of office for which such
person will serve; and (4) such person's current principal occupation or
employment.
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Nominees For Election at This Meeting
-------------------------------------
Has Served
on Board of
Shares of Directors
Stock Owned of the
Beneficially Corporation
as of or Its Term
March 1, Predecessor of Principal
Name 2001 (1) Since Office Occupation
---- ------------ ------------ ------ ----------
Horst Huehmer 45,264 1980 2004 Director of
Corporation
and Community
National Bank;
Retired.
Donald R. Hughes, Jr. 235,088 1995 2004 Director of
(2) Corporation
and Community
National Bank;
Treasurer &
Clerk of the
Corporation;
Executive Vice
President &
Cashier of
Community
National Bank
Mark Poplin 307,108 1967 2004 Director of
Corporation
and Community
National Bank;
President and
Treasurer,
Poplin Supply
Co.; Secretary,
Poplin
Furniture Co.
David W. Webster 141,668 1995 2004 Director of
Corporation
and Community
National Bank;
President,
Knight Fuel
Co., Inc.
Directors Continuing In Office
------------------------------
Has Served
on Board of
Shares of Directors
Stock Owned of the
Beneficially Corporation
as of or Its Term
March 1, Predecessor of Principal
Name 2001 (1) Since Office Occupation
---- ------------ ------------ ------ ----------
Alfred A. Cardoza 45,172 1971 2003 Director of
Corporation
and Community
National Bank;
Retired
Jennie Lee Colosi 4,372 1999 2003 Director of
Corporation
and Community
National Bank;
President &
Treasurer, ET&L
Construction, Inc.
Antonio Frias 72,001 1985 2003 Director of
Corporation
and Community
National Bank;
President and
Treasurer,
S & F Concrete
Contractors, Inc.
I. George Gould 213,052 1962 2002 Director of
(2) Corporation
and Community
National Bank;
Chairman,
Gould's, Inc.
James A. Langway 358,878 1976 2002 Director of
(2) Corporation
and Community
National Bank;
President and
CEO of the
Corporation;
President &
CEO of Community
National Bank
Dennis F. Murphy, Jr. 865,616 1984 2003 Chairman of
the Board of
Corporation
and Community
National Bank;
Director of
Corporation
and Community
National Bank;
President and
Treasurer,
D. Francis
Murphy Insurance
Agency, Inc.
David L. Parker 68,848 1986 2002 Director of
Corporation
and Community
National Bank;
Chairman,
Larkin Lumber Co.
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Notes:
- -----
1. Beneficial ownership of stock for the purpose of this statement includes
securities owned by the spouse and minor children and any relative with the
same address. Certain Directors may disclaim beneficial ownership of
certain of the shares listed beside their names.
2. Includes 171,088 shares held by CBI ESOP as to which Messrs. Gould,
Hughes and Langway are co-trustees.
The affirmative vote of the holders of a majority of the common stock of
the Corporation present or represented and voting at the meeting is required
to fix the number of Directors. The affirmative vote of a plurality of the
votes cast by shareholders is required to elect Directors.
2001 Incentive Stock Option Plan For Key Employees
--------------------------------------------------
At the Annual Meeting, the shareholders are being asked to approve the
2001 Incentive Stock Option Plan For Key Employees (the "Stock Option Plan")
for key employees of the Corporation and its subsidiaries including Community
National Bank (the "Bank"). The Board of Directors of the Corporation has
unanimously approved the Stock Option Plan, subject to the approval by the
shareholders of the Corporation.
Purpose of Stock Option Plan
The Stock Option Plan is designed to reward key employees on a long-term
basis by granting them options to purchase shares of the Corporation's common
stock. Its purpose is to facilitate the achievement of the Corporation's and
the Bank's financial goals. The achievement of these goals is facilitated in
two ways. First, key employees will have substantial incentives to provide
exceptional services and thereby cause the Corporation and Bank to meet the
financial performance goals set by the Board of Directors and to increase the
Corporation's stock price. Second, the Stock Option Plan will assist the
Corporation and Bank in hiring and retaining key employees. Attracting and
retaining key employees is critical to the long-term performance of the
Corporation and the Bank.
-4-
Summary of Stock Option Plan
Under the Stock Option Plan, the Board of Directors may grant to key employees
of the Corporation and the Bank who the Board determines to be capable of
making substantial contributions to the management and operations of the
Corporation and the Bank, options to purchase shares of the Corporation's
common stock. The Board of Directors shall administer the Stock Option Plan
and will determine which employees shall be granted options, the number of
options granted, the times when the options will vest, and the exercise price
of the options. The aggregate number of shares of the Corporation's common
stock for which options may be granted under the Plan is 384,000 subject to
adjustments in the event of stock splits, stock dividends or reclassification,
recapitalization or other possible future changes. The Stock Option Plan
shall terminate on February 21, 2011 and no options may be granted thereafter.
The Board of Directors may at any time modify, amend or terminate the Stock
Option Plan, except that approval of the holders of at least a majority of
stock of the Corporation is required in certain circumstances described in
Section 8.2 of the Stock Option Plan.
The options being granted are incentive stock options. They are entitled to
favorable tax treatment if certain conditions are satisfied. These conditions
include approval of the Stock Option Plan by the Corporation's shareholders,
the exercise price may not be less than the fair market value of the
Corporation's common stock at the time the option is granted, the option must
be exercised within 10 years after it is granted or within 3 months after the
employee is no longer employed by the Corporation or the Bank, the option is
generally nontransferable, the value of the shares subject to the option which
vest in any one year cannot exceed $100,000 as determined at the time the
option is granted, and the employee has not sold the common stock acquired by
the exercise of any option during the periods two (2) years after the date of
grant or one (1) year from the date of exercise. An option may be exercised
by the payment in full of the option price for the shares to be purchased. If
an option expires or terminates for any reason without being exercised, the
shares represented by the option will again be available for grant under the
Stock Option Plan.
The grant of stock options and the exercise of the options will not result in
any deduction or expense to the Corporation. However, the pro forma impact of
the options, if any, must be disclosed in the footnotes to the Corporation's
financial statements.
-5-
If the Stock Option Plan is approved, the Corporation intends initially to
issue to the officers of the Corporation and Bank approximately 110,470
options. The exercise price of these initial options shall be $10 per share.
These options shall generally vest over four (4) years. However, upon death,
disability, retirement, or a change in control of the Corporation, the options
shall become fully vested. The Board of Directors currently intends to make
future grants of options based on the achievement of financial performance
goals established by the Board of Directors including achieving a targeted
return on equity by the Corporation. The Corporation is also adopting a 2001
Directors Plan for the issuance of non-qualified options to the Corporation's
directors.
Other Matters
-------------
The management knows of no business which will be presented for
consideration at the meeting other than that set forth in this Proxy
Statement. However, if any such business comes before the meeting, the
persons named as proxies will vote thereon according to their best
judgment.
By order of the Board of Directors
/s/ James A. Langway
--------------------
James A. Langway
President
Hudson, Massachusetts
March 13, 2001
COMMUNITY BANCORP, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
APRIL 10, 2001
KNOW ALL MEN BY THESE PRESENTS, that the undersigned shareholder of
Community Bancorp, Inc. ("Corporation") hereby nominates, constitutes and
appoints I. George Gould, David L. Parker, and Jennie Lee Colosi, and each of
them (with full power to act alone), true and lawful attorneys, agents and
proxies, with power of substitution to each, to attend the Annual Meeting
of the Shareholders of said Corporation to be held at the Main Office of
the Corporation at 17 Pope Street, Hudson, Massachusetts on Tuesday, April
10, 2001 at 10 o'clock A.M., and any adjournments thereof, and thereat to
vote or otherwise act in respect of all the shares of capital stock of said
Corporation that the undersigned shall be entitled to vote, with all powers
the undersigned would posses if personally present, upon the following
matters:
1. To fix the number of Directors For [ ]
who shall constitute the full
Board of Directors at eleven. Withheld [ ]
2. To elect as Directors the four For [ ]
individuals listed as nominees
in the Proxy Statement accompanying Withheld [ ]
this Proxy, who, together with the
seven Directors whose terms of office
do not expire at this meeting, will
constitute the full Board of Directors.
3. To approve the 2001 Incentive Stock For [ ]
Option Plan For Key Employees.
Withheld [ ]
4. Such other matters as may properly For [ ]
be brought before the meeting
and any adjournments thereof. Withheld [ ]
THIS PROXY CONFERS AUTHORITY TO VOTE "FOR" THE PROPOSITIONS LISTED ABOVE
UNLESS "WITHHELD" IS INDICATED. IF ANY OF THE INDIVIDUALS LISTED AS
NOMINEES FOR DIRECTOR IN THE PROXY STATEMENT DATED MARCH 13, 2001
ACCOMPANYING NOTICE OF SAID MEETING IS UNAVAILABLE AS A CANDIDATE, OR
ANY OTHER NOMINATION IS MADE OR ANY OTHER BUSINESS IS PRESENTED AT SAID
MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE JUDGEMENT OF
THE PERSONS ACTING HEREUNDER UNLESS "WITHHELD" IS INDICATED IN RESPONSE
TO ITEM 4 ABOVE.
THIS PROXY IS SOLICITED ON BEHALF OF MANAGEMENT.
Dated: _____________________, 2001
___________________________________
(Signature of Shareholder)
___________________________________
(Signature of Shareholder)
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title
Number of Shares___________________
COMMUNITY BANCORP, INC.
2001 INCENTIVE STOCK OPTION PLAN FOR KEY EMPLOYEES
--------------------------------------------------
1. Purpose.
1.1 The purpose of the Community Bancorp, Inc. 2001 Incentive Stock
Option Plan for Key Employees (hereinafter referred to as the "Plan") is
to provide incentives to present and future employees of Community Bancorp,
Inc., a Massachusetts corporation (this "Corporation"), and any of its
present and future subsidiaries at least fifty percent (50%) owned by this
Corporation ("Subsidiaries") (such employees being hereinafter referred
to as "Employees" and each of them individually as an "Employee") in order
that they may provide exceptional services to this Corporation and its
Subsidiaries, and to offer inducements to Employees to accept and continue
employment with this Corporation and its Subsidiaries by offering Employees
options to purchase shares of this Corporation's common stock which may
qualify for treatment as incentive stock options under the Internal Revenue
Code of 1986, as amended (the "Code") upon the approval of the Plan by the
shareholders of this Corporation and upon the satisfaction by such Employees
of the requirements for such qualification. This Plan is an "incentive stock
option plan" described in Section 422 of the Code.
2. Administration of Plan.
2.1 The Plan shall be administered by the Board of Directors of this
Corporation (the "Board of Directors") which shall: (1) determine which
Employees shall be granted options to purchase shares of this Corporation's
Common Stock ($2.50 par value) ("Stock") pursuant to the Plan (which options
shall hereinafter be referred to as "Options," or in the singular as an
"Option"); (2) determine the time or times when Options shall be granted
and the number of shares of Stock to be subject to each Option; (3)
determine the option price at which the shares of Stock subject to each
Option may be purchased pursuant to the Plan and the forms of the
instruments evidencing any Options granted under the Plan or any other
instrument to be used in connection with the Plan; (4) adopt, amend and
rescind, in its discretion, rules and regulations for the administration
of the Plan; (5) interpret the Plan and decide all
questions and settle all controversies and disputes which may arise in
connection with the Plan, which decisions and interpretations shall be
binding upon all persons; and (6) exercise such other powers as may be
necessary or desirable to implement the provisions of this Plan.
2.2 Members of the Board of Directors who are Employees shall be
eligible to receive Options pursuant to the Plan. The grant of an Option
to an Employee who is also a director of this Corporation shall not be
affected or invalidated by reason of the fact that such director voted to
approve the grant of such Option.
2.3 No member of the Board of Directors shall be liable for any
action taken or determination made in good faith and in a manner reasonably
believed to be in the best interests of this Corporation with respect to
the Plan or any Option granted pursuant thereto. The Board of Directors
may indemnify any person against expenses reasonably incurred or the amount
of any damages, fine, or settlement assessed against or agreed to by such
person, in connection with any action, suit or proceeding in which such
person may be involved in connection with any Option or this Plan to the
same extent that the Board of Directors may indemnify such person under
the By-laws of this Corporation.
3. Authority to Grant Options.
3.1 Subject to the terms and conditions of this Plan, the Board of
Directors may from time to time grant to such Employees as it may determine
to be capable of making substantial contributions to the management or
development of this Corporation and its Subsidiaries Options, upon such
terms and conditions as it may deem appropriate, subject to applicable
provisions of this Plan. Without limiting the foregoing, the Board of
Directors may establish performance goals and base the grant of options
under the Stock Option Plan on whether such performance goals are achieved.
Such performance goals may include but are not limited to achieving a
certain Corporation return on equity.
3.2 The Board of Directors may authorize the grant of Options to
Employees by action taken with or without a meeting. The effective date of
the grant of an Option pursuant hereto shall be the date specified by the
Board of Directors in the Stock
-2-
Option Agreement, as hereinafter defined.
3.3 The number of shares of Stock subject to an Option shall in each
case be determined by the Board of Directors, subject to the applicable
provisions of this Plan. More than one Option may be granted to the same
Employee.
3.4 Nothing contained in this Plan or in any resolution adopted by
the Board of Directors or the shareholders of this Corporation shall
constitute the grant of an Option hereunder, and no Employee shall be
entitled to the grant of an Option unless action granting an Option to
such Employee shall have been taken by the Board of Directors and unless
the recipient of an Option shall have executed an agreement in form and
substance satisfactory to the Board of Directors containing terms,
restrictions and conditions imposed upon the exercise of the Option and
the transfer of any Stock pursuant thereto ("Stock Option Agreement").
3.5 Any purported disposition of shares of Stock acquired pursuant
to an Option which shall be in contravention of the terms, restrictions
and conditions contained in the Stock Option Agreement executed in
connection with such Option shall be ineffective, and such disposition
shall not be registered upon the stock transfer books of this Corporation.
3.6 The aggregate fair market value of Stock with respect to which
Options issued hereunder are exercisable for the first time during any
calendar year, when aggregated with the fair market value of stock subject
to other incentive stock options then outstanding under all plans of this
Corporation and its parent and subsidiary corporations and exercisable for
the first time during such calendar year, shall not exceed $100,000 or such
other amount as shall be permitted for options intended to qualify for
incentive stock option treatment. For purposes of this section the fair
market value of Stock subject to Options shall be determined at the time
the Options are issued.
4. Stock Subject to the Plan.
4.1 Stock to be issued upon the exercise of an Option shall be made
available, in the discretion of the Board of Directors, from authorized
but unissued shares of Stock or from shares of Stock held in the treasury
of this Corporation,
-3-
however acquired.
4.2 The aggregate number of shares of Stock for which Options may
be granted under the Plan shall be 384,000. If an Option shall expire,
terminate, or be canceled or surrendered in whole or in part prior to the
exercise thereof, the shares of Stock not acquired under such Option shall
revert to the Plan and again shall become available for issuance under the
Plan.
4.3 Appropriate adjustments in the number of shares of Stock subject
to Options previously issued hereunder and in the number of shares of Stock
for which Options have not yet been granted under this Plan shall be made by
the Board of Directors if at any time after the effective date of this Plan
this Corporation shall increase or decrease the number of outstanding shares
of Stock, whether by stock split, combination, stock dividend or
reclassification, or merger, consolidation, recapitalization, or
reorganization.
4.4 No provision of this Plan, nor any Option granted pursuant hereto
or Stock Option Agreement entered into in connection therewith shall confer
upon any Employee or any other person any preemptive right to acquire any
stock of this Corporation.
5. Eligibility.
5.1 The Board of Directors may grant Options pursuant hereto to such
Employees as it may designate from time to time pursuant to Section 3.1
hereof regardless of whether such Employees are also officers or directors
of this Corporation.
5.2 No officer or director of this Corporation shall be eligible to
receive any Option pursuant to this Plan unless such officer or director is
also an Employee.
5.3 No Employee may exercise any part of an Option unless he or she
has been continuously employed by this Corporation from the date the Option
was granted until no more than three (3) months prior to the time of such
exercise, provided, that in the case of a deceased employee or an employee
whose employment terminates for reason of Total and Permanent Disability, no
Option may be exercised unless the optionee was continuously employed by
this Corporation from the date the Option was granted until no more than
twelve (12) months prior to the time of such exercise. An Employee shall be
deemed to have a "Total and Permanent Disability" if (i) the
-4-
Employee has been so totally and permanently disabled by bodily injury or
disease as to be prevented thereby from engaging in any substantial gainful
activity, and (ii) the total and permanent disability shall have continued
for a period of five (5) consecutive months and, in the opinion of a qualified
physician selected by the Corporation, can be expected to result in death
or to be of long-continued duration. An Employee shall not be deemed to have
a "Total and Permanent Disability" if the Employee incurred the total and
permanent disability while the Employee was engaged in, or as a result of
the Employee engaging in, the commission of a felony, or if the total and
permanent disability was a result of (i) the Employee's addiction to alcohol
or narcotics, (ii) a self-inflicted injury, or (iii) the Employee's service
in the armed forces of any country.
5.4 If an Employee or former Employee eligible to exercise an Option
granted pursuant to this Plan dies prior to such exercise, such Option may
be exercised to the extent permitted herein by his estate or a person who
acquires the right to exercise such Option by bequest or inheritance.
5.5 No Option granted pursuant to this Plan may be transferred by
the holder thereof other than by will or the laws of descent and distribution
of the state in which such holder is domiciled at the time of his death.
6. Terms of Options.
6.1 The price at which shares of Stock may be purchased pursuant to
an Option shall be the fair market value of the Stock on the date of the
grant of such Option, provided, that in the case of Options granted to an
Employee who at the date of the grant of such Option owns 10% or more of the
combined voting stock of the Corporation (a "10% Employee"), such price shall
be equal to 110% of the fair market value of the Stock on the date of the
grant of such Option. For purposes of determining the percentage of stock
of the Corporation owned by an Employee, attribution rules made applicable
by the Code and related regulations shall apply. The fair market value of any
Stock shall be determined by the Board of Directors in good faith.
notwithstanding the foregoing, an Option may be granted with an exercise price
lower than the fair market value if such Option is granted pursuant to an
assumption or substitution for another Option in a manner satisfying the
provisions of Section 424(a)
-5-
of the Code.
6.2 Each Option granted under this Plan shall expire, and may not
be exercised to any extent, upon the earliest to occur of the following:
(a) Each Option shall expire ten (10) years after the date of
grant of such Option, or on such date prior thereto as may be fixed by the
Board of Directors, provided, however, that each Option granted to a 10%
Employee shall expire five (5) years after the date of grant of such Option,
or such date prior thereto as may be fixed by the Board of Directors.
(b) Each Option shall expire not later than three (3) months
after termination of the optionee's employment with this Corporation or any
of its Subsidiaries (with or without Cause, voluntary or involuntary) for
reasons other than death or Total and Permanent Disability, during which
3-month period the Option may be exercised only to the extent that it was
exercisable upon termination. If the optionee's employment with this
Corporation or any of its Subsidiaries terminates for reasons of death or
Total and Permanent Disability, then the Option shall expire twelve (12)
months after such termination of employment, and during that 12-month period
the Option may be exercised only to the extent it was exercisable upon
termination. If an optionee whose employment terminates for reasons other
than death or Total and Permanent Disability dies during the 3-month period
described above, such optionee's Options shall expire one year from the date
of termination of employment, during which time they may be exercised to the
extent exercisable on the date of termination.
6.3 If any Employee who has been granted Options under this Plan is
terminated for Cause by either the Corporation or any of its Subsidiaries,
all unexercised Options granted to the Employee (whether vested or not)
shall immediately terminate and be of no further force and effect. An
Employee shall be terminated for Cause only if (i) the Employee has been
convicted by a court of competent jurisdiction of any criminal offense
involving dishonesty or breach of trust; (ii) the Employee has committed
an act of fraud against the Corporation, its Subsidiaries or any of them;
(iii) the Employee has willfully refused to perform the duties reasonably
assigned to the Employee by the Board of Directors of the Corporation or
of any of its Subsidiaries,
-6-
which failure or breach has continued for more than ten (10) days after
written notice given to the Employee pursuant to a vote of the Board of
Directors of the Corporation or of any of its subsidiaries (exclusive of
the Employee if the Employee then is a Director) at a meeting duly called
for such purpose, such vote to set forth in reasonable details the nature of
such refusal; or (iv) the Employee has engaged in willful misconduct
materially injurious to the Corporation, its Subsidiaries or any of them,
monetarily or otherwise.
7. Exercise of Options.
7.1 Each Option granted hereunder shall be exercisable in such
installment or installments as may be determined by the Board of Directors
at the time of the grant. The right to purchase shares shall be cumulative
so that when the right to purchase any shares has vested, such shares or any
part thereof may be purchased at any time thereafter until the expiration or
termination of the Option.
7.2 A person entitled to exercise an Option may, subject to the terms
and conditions of the Stock Option Agreement executed in connection therewith,
exercise such Option from time to time by delivery to this Corporation at its
principal office of written notice of his or her intention to exercise such
Option setting forth the number of shares with respect to which the Option is
to be exercised and accompanied by (1) payment in full of the purchase price
of the shares to be purchased, (2) payment in full of all local, state or
federal taxes due on account of the exercise of such Option, and (3) such
other documents and materials as may be required by this Corporation under
the terms of this Plan, the Stock Option Agreement, or otherwise. As promptly
as practicable thereafter, this Corporation shall deliver to the purchaser
certificates for the number of shares purchased.
7.3 The date of actual receipt by this Corporation of notice of
intention to exercise an Option shall be deemed the date of exercise of the
Option with respect to the shares then purchased. Delivery of shares
purchased shall be deemed effective when a stock transfer agent shall have
deposited certificates therefor with the United States mail for delivery to
the purchaser at the address specified in the notice of exercise provided to
this Corporation.
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7.4 During the life of a holder of an Option issued pursuant to this
Plan, such Option may be exercised only by the holder.
7.5 No person, estate or other entity shall have any of the rights of
a shareholder of this Corporation with respect to shares subject to an
Option until a certificate or certificates for such shares shall have been
delivered by this Corporation to such person or entity. Upon delivery of
such a certificate to the purchaser thereof for the number of shares of Stock
purchased, the owner thereof shall have all the rights of a shareholder of
such shares of Stock, including the right to vote the same and receive
dividends thereon, subject, however, to the terms, conditions and
restrictions contained in this Plan and in the Stock Option Agreement
executed in connection with the Option exercised with respect to such
shares.
8. Miscellaneous.
8.1 The grant of an Option to an Employee pursuant hereto shall
not confer upon such Employee a right to continued employment, nor shall
it limit the right of this Corporation or any Subsidiary to terminate the
employment of any such Employee.
8.2 The Board of Directors may modify, amend or terminate this Plan
or any provision thereof at any time and from time to time, provided
however, that no amendment to this Plan shall be made which shall:
(1) increase the total number of shares of Stock for which Options under
this Plan may be issued, except as provided in Section 4.3 hereof,
(2) increase the total number of shares of Stock which may be acquired by an
Employee pursuant to Options issued under this Plan except as provided in
Section 4.3 hereof, (3) extend the maximum period during which any Option
may be exercised as set forth in Section 6.2 hereof, (4) change the class
of employees entitled to receive awards, (5) reduce the purchase price of
Stock subject to any Option, or (6) extend the termination date of this
Plan, without in each case the prior approval of the holders of at least
a majority of the Stock of this Corporation of all classes voting
together. No amendment to this Plan shall alter or impair any Option
previously granted pursuant hereto without the consent of the holder thereof.
8.3 The effective date of this Plan shall be April 10, 2001. No Option
may be granted pursuant hereto subsequent to the date which is ten years after
the date on
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which the Plan shall be adopted by the Board of Directors.
8.4 This Plan, and all rights and obligations hereunder, including
matters of construction, validity and performance, shall be governed by the
laws of the Commonwealth of Massachusetts.
8.5 Notice to this Corporation pursuant to Sections 7.2 or 8.5 hereof
or for any other purpose may be given by delivery in hand or first class mail,
postage prepaid, and addressed as follows:
Community Bancorp, Inc.
17 Pope Street
Hudson, Massachusetts 01749
Attention: President
Notice to an Employee to whom an Option shall be granted hereunder may
be given by delivery in hand or first class mail, postage prepaid, to the
address listed by such Employee in the Stock Option Agreement executed by
such Employee.
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