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.
-2-
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.
-3-
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.
-7-
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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