Filed pursuant to Rule 424(b)(3)
PROSPECTUS
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COMMUNITY BANCORP.
Derby Road
Derby, VT 05829
(802) 334-7915
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DIVIDEND REINVESTMENT PLAN
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The Dividend Reinvestment Plan (the "Plan") of Community Bancorp. (the
"Company") provides a convenient way for the Company's shareholders to
purchase additional shares of the Company's $2.50 par value Common Stock (the
"Common Stock") without payment of brokerage commissions or service charges.
Shares purchased under the Plan are purchased at the greater of (1) a
10% discount from the book value of the Company's stock as of the end of the
preceding fiscal quarter, or (2) a 10% discount from the weighted average
purchase price in trades of the Company's stock made during the preceding
fiscal quarter through the brokerage firm of First Albany Corp. (See
"DESCRIPTION OF THE PLAN," Question 10).
There is no active public trading market in the Company's Common Stock,
nor can any assurance be given that such a market will develop in the future.
The brokerage firm of First Albany Corp. attempts to match buyers and sellers
of the Company's stock when it receives buy or sell orders from its customers,
but trading is infrequent. If a public trading market in the Company's Common
Stock should later develop, the purchase price of the shares under the Plan
will be based upon the market value of the stock.
Community National Bank (the "Bank"), a wholly-owned subsidiary of the
Company, has been designated as the agent for participants in the Plan.
Participants may vote all shares of Common Stock purchased for them under the
Plan.
This Prospectus relates to 200,000 shares of $2.50 par value Common
Stock of the Company registered for purchase under the Plan. It is suggested
that this Prospectus be retained for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is January 10, 1996.
AVAILABLE INFORMATION AND REPORTS TO SECURITY HOLDERS
Community Bancorp. is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith files proxy statements, reports and other information with the
Securities and Exchange Commission (the "Commission"). Such proxy statements,
reports and other information filed with the Commission may be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices in Chicago (Room 1204, Everett McKinley Dirksen Building, 219 South
Dearborn, Chicago, Illinois 60604) and New York (26 Federal Plaza, New York,
New York, 10007). Copies of such material can be obtained from the Public
Reference Section of the Commission, at its principal office, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
Community Bancorp. furnishes to its shareholders annual audited
consolidated financial statements and quarterly unaudited consolidated
statements.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents on file with the Commission contain additional
information about the Company and its operations and are incorporated by
reference in this Prospectus:
1. The Company's Annual Report on Form 10-KSB for the year ended
December 31, 1994; and
2. The Company's Quarterly Reports on Form 10-QSB for the quarters
ended March 31, June 30 and September 30, 1995.
3. The description of the Company's Common Stock set forth in the
Company's Registration Statement on Form 8-A, as amended on Form 8 dated
May 25, 1988, and Form 8-A/A dated April 29, 1994, and as amended from
time to time subsequent to the date of this Prospectus.
All documents subsequently filed by the Company with the Commission,
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to
the termination of this offering shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the date of filing
of such documents.
Any person receiving a copy of this Prospectus may obtain, upon request,
a copy of any of the documents incorporated by reference herein, other than
exhibits to such documents. Requests for such copies should be directed to
Community Bancorp., P.O. Box 259, Derby, Vermont 05829, (802) 334-7915,
Attention: Stephen P. Marsh.
DESCRIPTION OF THE DIVIDEND REINVESTMENT PLAN
The following is a question and answer description of the Dividend
Reinvestment Plan being offered to the shareholders of Community Bancorp.
Purpose
1. What is the purpose of the Plan?
The purpose of the Plan is to encourage the Company's shareholders to
increase their investment in the Company by providing them with a simple and
convenient way to invest cash dividends in additional shares of the Company's
Common Stock without payment of brokerage commissions or service charges.
Shares of Common Stock purchased under the Plan will consist of newly-issued
or treasury shares, thereby providing additional funds for the Company's
continuing operations and general corporate purposes.
Benefits
2. What are the benefits of the Plan?
The Plan offers participants a number of benefits. Participants in the
Plan may reinvest their cash dividends automatically in shares of the
Company's Common Stock, at a discount (see question 10) and without payment of
any brokerage commissions or service charges. Participants obtain full
investment use of funds, as the Plan provides for the purchase of fractions of
shares and for reinvestment of dividends on fractional, as well as whole,
shares. Because shares purchased under the Plan are held in book entry (see
question 13), participants thereby avoid the risk of theft, loss or accidental
destruction of stock certificates. In addition, the regular statement of
account furnished to participants (see question 11) will facilitate simplified
record keeping.
Participation
3. Who is eligible to participate?
All holders of record of the Company's Common Stock who are residents of
jurisdictions in which the Plan is qualified under applicable securities law*
are eligible to participate in the Plan. Beneficial owners of shares of the
Company's Common Stock held in a retirement account or registered in the name
of a broker or nominee may also participate in the Plan through their
retirement account trustee, broker or nominee, as the case may be. Beneficial
owners who wish to participate in the Plan (to the extent permitted above)
must make appropriate arrangements for their broker or nominee to participate
in the Plan. Employees of the Company or its subsidiaries who participate in
the Company's Retirement Savings Plan and who have invested in the Company
Stock Fund under that Plan will be enrolled in the Dividend Reinvestment Plan
automatically, through the Trustee of the Retirement Savings Plan as the
shareholder of record.
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<F*> Due to variations from jurisdiction to jurisdiction in applicable
securities laws, participation in the Plan may not be offered to
shareholders of the Company who reside in certain jurisdictions.
4. Who administers the Plan for participants?
Community National Bank, as plan administrator and agent for the
participants, keeps Plan records, sends statements of account to participants
or their nominee holders and performs other administrative duties relating to
the Plan.
5. How does an eligible shareholder participate?
An eligible holder of Common Stock may join the Plan at any time by
completing and signing an Authorization Card and returning it to Community
National Bank, Derby Road, Derby, Vermont 05829, Attention: Trust Department.
An Authorization Card is enclosed for your convenience. Additional
Authorization Cards may be obtained at any time by written or telephone
request to the Bank.
As stated above at question 3, employees of the Company or its
subsidiaries who participate in the Company Stock Fund portion of the
Company's Retirement Savings Plan will be enrolled in the Dividend
Reinvestment Plan automatically through the Trustee of the Retirement Savings
Plan and no Authorization Card is necessary in order for dividends to be
reinvested on shares held in their Retirement Savings Plan accounts.
6. When may a shareholder join the Plan?
An eligible shareholder of record may join the Plan at any time. In
general, if an Authorization Card directing reinvestment of dividends is
received by the Bank at least ten (10) days before the record date established
for a particular dividend, reinvestment will commence with that dividend. If
the Authorization Card is received after the time prescribed, unless otherwise
waived by the Bank, reinvestment of dividends will not begin until the
dividend payment date following the next record date, as applicable. The
record dates for determining shareholders entitled to payment of quarterly
dividends on the Company's Common Stock generally fall on the fifteenth day of
the months of January, April, July and October. Enrollment in the Plan for
residents of certain jurisdictions may, however, be delayed pending compliance
with applicable state or foreign securities laws.
7. Are there any expenses to participants in connection with purchases under
the Plan?
No. Participants will incur no brokerage commissions or service charges
for purchases made under the Plan. All costs of administration of the Plan
will be paid by the Company. However, any participant who directs the Plan
administrator to sell shares of Common Stock held in his or her Plan account
will be responsible for any brokerage fees incurred in connection with such
sale.
8. How many shares of Common Stock will be purchased for participants?
The number of shares purchased for a participant depends on the amount
of the dividends reinvested and the purchase price of the Common Stock. Each
participant's account will be credited with that number of shares, including
fractions computed to four decimal places, equal to the total amount to be
invested divided by the purchase price per share. In the case of those foreign
holders whose dividends are subject to United States income tax withholdings
or in the case of those participants who are subject to withholding of payment
of dividends because of (1) failure to provide proper taxpayer identification
numbers or (2) under-reporting of income on tax filings with the Internal
Revenue Service, the amount of dividends invested will be less the amount
required to be withheld.
9. When will shares of Common Stock be purchased under the Plan?
Purchases under the Plan will be made on the dividend payment date or as
soon thereafter as practicable, but no later than thirty (30) days thereafter,
unless necessary to comply with applicable securities laws. Cash dividends on
the Company's Common Stock are ordinarily paid on or about the first day of
the months of February, May, August and November.
10. At what price will shares of Common Stock be purchased under the Plan?
As of the date of this Prospectus, there is no established public
trading market for the Common Stock of the Company. Shares of the Company's
Common Stock are not traded on any national or regional exchange or in the
over-the-counter market. The brokerage firm of First Albany Corp. ordinarily
attempts to match buyers and sellers of the Company's stock when it receives
buy or sell orders from its customers, but trading is not active. In addition,
there are occasional trades through other brokerage firms or as a result of
private transactions not involving any broker or dealer. (See "NATURE OF
TRADING MARKET; BOOK VALUE," page 11.)
The price at which shares will be purchased under the Plan will be the
greater of (1) the book value of the Company's Common Stock as of the end of
the preceding fiscal quarter, less 10%, or (2) the weighted average purchase
price of the Company's shares in trades effected during the preceding fiscal
quarter through the brokerage firm of First Albany Corp., less 10%. (A
"weighted average" purchase price takes into account the number of shares
purchased at a particular price.) If a public trading market in the Company's
Common Stock should later develop, the purchase price of the Common Stock
under the Plan will be the market value of the Common Stock as of the trading
day next preceding the investment date, less 10%. (See "NATURE OF TRADING
MARKET; BOOK VALUE," page 11.)
Reports to Participants
11. What kind of reports will be sent to participants in the Plan?
Shareholders of record who participate in the Plan will receive a
statement of account for each quarter in which a purchase or reinvestment is
made. Each statement will contain the date of the purchase, the amount
purchased, the purchase price per share, the number of shares acquired and the
total number of shares held after such acquisition. These statements will
provide a record of the cost of purchases of shares under the Plan and should
be retained for tax purposes.
Employees who participate in the Plan through investment in the Common
Stock fund under the Company's Retirement Savings Plan will receive reports of
their Retirement Savings Plan accounts from the Trustee of such Plan,
including dividend reinvestment allocations, as provided by the terms of the
Retirement Savings Plan.
Shareholders of record who participate in the Plan will receive copies
of the Company's annual and quarterly reports to shareholders, proxy
statements and other shareholder information. Because statements of account
under the Plan and reports, proxy statements and other information about the
Company are furnished to shareholders of record, beneficial owners should make
appropriate arrangements with their nominee holders for forwarding such
materials to them.
Employees who participate in the Plan through investment in the Common
Stock fund under the Company's Retirement Savings Plan will be furnished with
copies of such reports, proxy statements and other information by the Trustee
of the Retirement Savings Plan. (See also question 20.)
Dividends
12. Will a participant be credited with dividends on all whole and fractional
shares held in his or her account under the Plan?
Yes. As the agent for participants under the Plan, the Bank will receive
dividends for all shares held by Plan participants on the dividend record
date, will credit such dividends to such accounts on the basis of full and
fractional shares held and will automatically reinvest such dividends to
purchase additional shares of Common Stock for the account of participants.
Certificates for Shares
13. Will certificates be issued for shares of Common Stock purchased under the
Plan?
Unless requested, certificates for shares of Common Stock purchased
under the Plan will not ordinarily be issued but shares purchased under the
Plan will be registered in the name in which the Plan account is maintained
and will be credited to that account. The number of shares credited to the
account of a participant under the Plan will be shown on his or her statement
of account. This feature protects against loss, theft or destruction of stock
certificates.
Certificates for any number of whole shares credited to the account of a
participant (other than employees who participate through the Retirement
Savings Plan) will be issued without charge within thirty (30) days of receipt
of a written request. Fractional shares will be settled in cash and
certificates representing fractional shares will not be issued under any
circumstances. Cash settlement of fractional shares will be based on the
purchase price of the Company's Common Stock under the Plan for Plan purchases
made during the immediately preceding quarter.
Dividend Reinvestment Plan accounts for employees who participate
through the Company's Retirement Savings Plan are subject to the applicable
withdrawal restrictions of that Plan.
14. May a participant reinvest dividends on less than all shares owned?
A shareholder may not elect to have dividends reinvested on less than
all of his shares registered in the same name. If a shareholder, however, owns
shares in more than one name (such as, for example, shares registered in the
name "John Doe" and others registered in the name "J. Doe") then the
shareholder may elect to participate in the Plan as to the shares registered
in one name but not in the other. Shareholders are reminded that dividends on
all shares registered in the name in which their Plan account is maintained
will be reinvested, even shares purchased outside the Plan and regardless of
whether the Bank has possession of the certificates representing those shares.
Sale and Withdrawal of Shares
15. How may a participant withdraw shares purchased under the Plan?
A participant (other than an employee who participates through the
Company's Retirement Savings Plan) may withdraw all or a portion of the whole
shares credited to his or her account under the Plan by notifying the Bank in
writing that he or she wishes to withdraw shares and specifying the number of
whole shares to be withdrawn. Certificates for the whole shares of Common
Stock so withdrawn will be registered in the name of and issued to the
participant. Fractional shares will be settled in cash and in no case will
certificates representing fractional shares be issued. Future dividends on
shares for which certificates have been furnished will continue to be
reinvested for so long as the shares remain registered in the same name in
which the shareholder's Plan account is maintained. (See question 14.)
If a participant directs the Bank to sell shares of Common Stock held in
his or her account, the participant will be responsible for any brokerage
commissions and charges incurred in connection with that sale.
As stated above at question 13, Dividend Reinvestment Plan accounts for
participants in the Company's Retirement Savings Plan are subject to the
applicable withdrawal restrictions of that Plan.
16. What happens to a participant's Plan account if a participant sells all of
his shares of Common Stock that are registered in the name in which his
Plan account is maintained?
If a participant disposes of all of his whole shares of Common Stock
registered in the name in which his Plan account is maintained, his Plan
account will be terminated and he will be paid in cash for any fractional
share remaining in his Plan account. Cash settlement of fractional shares will
be based upon the purchase price of the Company's Common Stock under the Plan
for the immediately preceding quarter. In the case of an employee of the
Company or its subsidiaries who participates in this Plan through his
participation in the Company's Retirement Savings Plan, such participation
will continue unless the employee either (i) terminates his investment in the
Retirement Savings Plan Stock Fund or (ii) terminates his participation in
this Plan as provided in Section 17 below.
Termination of Participation
17. How does a participant terminate his participation in the Plan?
A participant (other than an employee who participates through the
Retirement Savings Plan) may terminate his participation in the Plan at any
time by notifying the Bank in writing to that effect. To prevent further
reinvestment of dividends under the Plan, written notice of termination must
be received at least ten (10) days prior to the dividend record date for the
next dividend to be paid. Employees who participate in the Dividend
Reinvestment Plan through their investment in the Company Stock Fund under the
Retirement Savings Plan may terminate their participation in the Dividend
Reinvestment Plan, effective as of the following January 1 or July 1, by
terminating their participation in the Company Stock Fund. The procedures for
such notification, including the due date for receipt of the notice, will be
governed by the terms of the Retirement Savings Plan.
Following the effective date of termination of participation in the
Plan, dividends on shares previously subject to the Plan will be paid in cash
to the shareholder of record.
Other Information
18. What shares will be offered under the Plan?
The Company has registered 200,000 shares of the Company's $2.50 par
value Common Stock with the Securities and Exchange Commission for issuance
under the Plan. The shares issued from time to time under the Plan will be
newly-issued shares of the Company or so-called treasury shares; that is,
shares previously issued and later reacquired by the Company.
19. What happens if the Company has a rights offering, issues a stock dividend
or declares a stock split?
In the event that the Company should make available to its shareholders
rights to purchase additional shares or other securities, the Bank, as the
Plan administrator, may in its sole discretion either (i) seek instructions
from the participants as to exercise of such rights or (ii) sell or direct the
sale of the rights accruing to shares held in participant accounts and apply
the net proceeds of such sales to the purchase of additional shares of Common
Stock for the account of the participants.
Any stock dividend or shares resulting from stock splits with respect to
full shares and fractional shares credited to a participant's account will be
added to the account.
20. How will a participant's shares in the Plan be voted at meetings of the
Company's shareholders?
Each shareholder of record who participates in the Plan will be
furnished a proxy card and proxy statement for each shareholders' meeting and
will be entitled to vote any shares held in his Plan account, including
fractional shares.
Beneficial owners should make appropriate arrangements with their
nominees to vote their shares indirectly, through the nominee as the
shareholder of record. Similarly, employees who participate in the Plan
through the Retirement Savings Plan will have the opportunity to vote,
indirectly, the shares allocated to their account by furnishing written voting
instructions to the Retirement Savings Plan Trustee, as the shareholder of
record.
21. What are the federal income tax consequences of participation in the Plan?
As of the date of this Prospectus, the federal income tax consequences
of participation in the Plan for shareholders (other than employees of the
Company or its subsidiaries who participate through their investment in the
Company Stock Fund under the Retirement Savings Plan) may be summarized as
follows:
A participant in the Plan will be treated as having received a
distribution equal to the full fair market value of the stock purchased
for his account with reinvested dividends. In the case of corporate
shareholders, the amount of dividends received will be eligible for the
dividends received deduction available under the Internal Revenue Code.
The tax basis of any shares acquired through the Plan will be the
purchase price of the shares on the purchase date. The holding period for
shares acquired through the Plan will begin on the day after the dividend
payment date. A participant will not realize taxable income upon receipt
of certificates for whole shares credited to his Plan account, either
upon request for such certificates or upon withdrawal from the Plan. A
participant will, however, recognize gain or loss upon the sale or
exchange of whole shares measured by the difference between the amount he
receives for the shares and his tax basis in such shares. In addition,
the receipt of cash for a fractional share upon withdrawal from the Plan
will be treated as a redemption of such fraction. In general, this means
that a participant will recognize gain or loss measured by the difference
between the amount of cash received in redemption of the fractional share
and the participant's tax basis in such fractional share.
Employees of the Company or its subsidiaries who participate in the
Dividend Reinvestment Plan through their investment in the Company Stock Fund
will not recognize taxable income on reinvested dividends until such amounts
are distributed to the employee in cash or stock. Distributions under the
Retirement Savings Plan are generally prohibited until termination of
employment or retirement or earlier death or disability.
All participants are urged to consult their own tax advisors for further
information as to the particular tax consequences--federal, state and local--
which may result from their participation in the Plan and subsequent
disposition of shares purchased under the Plan. The income tax consequences
for participants who do not reside in the United States will vary from
jurisdiction to jurisdiction.
22. What is the responsibility of the Plan Administrator?
Neither the Company nor its agents, in administering the Plan, will be
liable for any act done in good faith or for any good faith omission to act,
including, without limitation, any claim of liability arising out of failure
to terminate a participant's account upon such participant's death or
adjudicated incompetency prior to receipt of written notice thereof, the
prices at which shares are purchased for the participant's account, the times
when purchases are made, or fluctuations in (1) the average selling price of
the stock in trades effected through the brokerage firm of First Albany Corp.,
(2) in the book value of the Common Stock, or (3) if a market later develops,
in the market value of the Common Stock.
PARTICIPANTS SHOULD RECOGNIZE THAT THE COMPANY CANNOT ASSURE A PROFIT OR
PROTECT AGAINST A LOSS ON THE COMMON STOCK PURCHASED UNDER THE PLAN.
WHILE THE COMPANY HAS HISTORICALLY PAID CASH DIVIDENDS TO ITS
SHAREHOLDERS, THE COMPANY CANNOT GUARANTEE THAT DIVIDENDS ON SHARES OF ITS
COMMON STOCK MIGHT NOT BE REDUCED OR ELIMINATED IN THE FUTURE.
23. Who bears the risk of fluctuations in the price or value of the Common
Stock?
A participant's investment in shares acquired under the Plan is no
different from investment in directly-held shares in this regard. The
participant bears the risk of loss and realizes the benefits of any gain from
changes in the price or value of shares held by him in the Plan or otherwise.
24. May the Plan be changed or discontinued?
While the Company hopes to continue the Plan indefinitely, the Company
reserves the right to suspend or terminate or amend the Plan at any time,
including the period between a dividend record date and the related dividend
payment date. Participants will be notified in writing of any such suspension,
termination or amendment to the Plan. The Company also reserves the right to
terminate, upon written notice, any participant's Plan account at any time.
25. Who interprets the Plan?
Any question of interpretation arising under the Plan will be determined
by the Company and any such determination will be final. Employees who
participate in this Plan by virtue of their participation in the Company Stock
Fund under the Company's Retirement Savings Plan should be aware that in the
event of a conflict between the terms of this Plan and those of the Retirement
Savings Plan, the terms of the Retirement Savings Plan shall control.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
Common Stock offered under the Plan will be added to the general funds of the
Company and will be used for its continuing operations and general corporate
purposes. The Company has no basis for estimating either the number of shares
of Common Stock that will ultimately be sold pursuant to the Plan or the
prices at which such shares will be sold.
NATURE OF TRADING MARKET; BOOK VALUE
As explained in question 10 of the Description of the Plan, absent an
established public trading market in the Company's Common Stock, shares of
stock purchased under the Plan will be purchased at the greater of (1) the
book value of the Common Stock at the end of the preceding fiscal quarter,
less 10%, or (2) the weighted average purchase price of the Company's shares
in trades made during the preceding fiscal quarter through the brokerage firm
of First Albany Corp., less 10%. If a public trading market in the Company's
Common Stock should later develop, the price of shares purchased under the
Plan will be the market price of the Common Stock as of the trading day next
preceding the investment date, less 10%.
Trading Market
There is at present no established public trading market for the
Company's Common Stock and no assurance can be given that a market will
develop in the future. While the brokerage firm of First Albany Corp.
generally attempts to match buyers and sellers of the Company's stock when it
receives buy or sell orders from its customers, trading is not active. A
public trading market having the desirable characteristics of depth, liquidity
and orderliness depends upon the presence in the marketplace of both willing
buyers and willing sellers of the stock at any given time and such presence
is, in turn, dependent upon the individual decisions of the purchasers and
sellers over which neither the Company nor any broker or market maker has
control.
The table below sets forth the ranges of prices paid per share for the
Company's Common Stock in trades effected through First Albany Corp. during
the last four calendar years.
<TABLE>
<CAPTION>
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
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<S> <C> <C> <C> <C>
1992
Trade Price
High $10.50 $10.25 $11.00 $12.00
Low $ 9.25 $ 9.25 $ 9.25 $11.00
1993
Trade Price
High $14.50 $15.00 $15.50 $16.75
Low $13.50 $13.63 $14.50 $15.50
1994
Trade Price
High $18.00 $18.50 $19.00 $18.50
Low $16.50 $17.00 $17.91 $16.25
1995
Trade Price
High $17.00 $17.50 $17.50 $17.50
Low $16.50 $16.75 $17.00 $17.00
</TABLE>
Management of the Company does not know the price at which all trades
were conducted during the periods indicated and the prices set forth above may
not be indicative of the true market value of the Company's Common Stock. In
addition, past trading prices are not necessarily indicative of future trading
prices.
Book Value
The table below shows the per share book value of the Common Stock
outstanding as of the dates indicated. Except for year-end figures, which are
based on audited financial information, the book values below are based on
unaudited financial information.
<TABLE>
<CAPTION>
1992 1993 1994 1995
------------------------------------
<S> <C> <C> <C> <C>
March 31 $ 9.75 $10.81 $12.03 $12.44
June 30 $ 9.95 $11.29 $12.04 $12.66
September 30 $10.24 $11.45 $12.14 $12.82
December 31 $10.64 $11.90 $12.27 $13.21
</TABLE>
DESCRIPTION OF COMMON STOCK
The Company has authorized capital stock consisting of 2,000,000 shares
of $2.50 par value Common Stock. The Company hereby incorporates by reference
the description of the Common Stock set forth in the Company's Registration
Statement on Form 8-A as amended on Form 8 dated May 25, 1988 and Form 8-A/A
dated April 19, 1994, and as amended from time to time subsequent to the date
of this Prospectus in filings with the Commission. The Board of Directors has
authorized 200,000 shares of the Company's Common Stock for issuance under the
Plan.
INDEMNIFICATION
The officers, directors, agents and employees of the Company and persons
serving as directors, officers, agents or employees of another entity at the
request of the Company are entitled to indemnification under the Articles of
Association of the Company. Generally, such persons are entitled to
indemnification against expenses incurred in connection with any suit, action
or proceeding to which they are made a party by reason of their position with
the Company. Under the Company's Articles of Association the standard for
indemnification is that the individual must have acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company.
The Company is not currently involved in any pending or threatened
litigation which might result in claims for indemnification against the
Company.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to the officers or directors of the Company
pursuant to the foregoing provisions, the Company has been informed that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is therefore unenforceable.
INTERESTS OF EXPERTS AND COUNSEL
Neither any expert named in this registration statement nor counsel for
Community Bancorp. was employed for such purpose on a contingent basis, or
will receive in connection with this offering of securities any direct or
indirect substantial interest in Community Bancorp. or any of its parents or
subsidiaries, nor is any such expert or counsel connected with Community
Bancorp. or any of its parents or subsidiaries as a promoter, underwriter,
voting trustee, director, officer or employee.
EXPERTS
The consolidated financial statements and schedules of Community
Bancorp. and its subsidiary for the year ended December 31, 1994, incorporated
herein by reference to its Annual Report on Form 10-KSB for the year then
ended, have been audited by A.M. Peisch & Company, independent public
accountants, as indicated in their report with respect thereto dated January
18, 1995, and are incorporated herein in reliance upon the authority of said
firm as experts in accounting and auditing.
LEGAL OPINION
The validity of the shares of Common Stock offered under the Plan will
be passed upon for Community Bancorp. by Primmer & Piper, Professional
Corporation, St. Johnsbury, Vermont.
CORRESPONDENCE
All correspondence concerning the Plan should be addressed to:
Community National Bank
Shareholder Services
P.O. Box 259
Derby, VT 05829
ATTN: Chris Bumps, Executive Secretary
(802) 334-7915
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
Available Information and Reports to
Security Holders 2
Incorporation of Certain Documents by
Reference 2
Description of the Dividend Reinvestment
Plan 3
Purpose 3
Benefits 3
Participation 3
Reports to Participants 6
Dividends 6
Certificates for Shares 7
Sale and Withdrawal of Shares 7
Termination of Participation 8
Other Information 9
Use of Proceeds 11
Nature of Trading Market; Book Value 11
Trading Market 12
Book Value 13
Description of Common Stock 13
Indemnification 13
Interests of Experts and Counsel 14
Experts 14
Legal Opinion 14
Correspondence 14
</TABLE>
COMMUNITY BANCORP.
Derby Road
Derby, VT 05829
(802) 334-7915
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DIVIDEND REINVESTMENT PLAN
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PROSPECTUS
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Dated January 10, 1996
