COVER LETTER
THIS FILING IS A PRELIMINARY PROXY STATEMENT. THE HARD COPY OF THIS
REPORT IS SCHEDULED TO BE MAILED TO SHAREHOLDERS ON OR ABOUT MARCH 31,
1998.
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Community Bancorp.
(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)(1) and
0-11.
1) Title of each class of securities to which transaction applies:
______________________________________________________________
2) Aggregate number of securities to which transaction applies:
______________________________________________________________
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):
______________________________________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________________
5) Total fee paid:
______________________________________________________________
[ ] 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 statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
______________________________________________________________
2) Form, Schedule or Registration Statement No.:
______________________________________________________________
3) Filing Party:
______________________________________________________________
4) Date Filed:
COMMUNITY BANCORP.
Derby Road
Route 5
Derby, Vermont 05829
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 5, 1998
The Annual Meeting of Shareholders of Community Bancorp. will be held
at the Elks Club, Derby, Vermont, on Tuesday, May 5, 1998, at 5:30 p.m.,
for the following purposes:
1. To elect four directors to serve until the Annual Meeting
of Shareholders in 2001;
2. To ratify the selection of the independent public accounting
firm of A.M. Peisch & Company as the Corporation's external
auditor for the fiscal year ending December 31, 1998;
3. To consider and act upon a proposal to amend the Corporation's
Articles of Association to increase the number of authorized shares
of common stock from the current 2,000,000 to 6,000,000; and
4. To transact such other business as may properly be brought before
the meeting.
The close of business on March 10, 1998, has been fixed as the record
date for determining shareholders entitled to notice of, and to vote at,
the Annual Meeting.
By Order of the Board of Directors,
/s/ Rosemary M. Rowe
ROSEMARY M. ROWE
Secretary
Derby, Vermont
March 31, 1998
YOUR PROXY IS ENCLOSED. PLEASE FILL IN, DATE, SIGN AND RETURN YOUR PROXY
PROMPTLY IN THE ENCLOSED POSTAGE PAID ENVELOPE WHETHER OR NOT YOU PLAN TO BE
PRESENT AT THE MEETING. YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE
MEETING. IT IS IMPORTANT THAT YOU RETURN YOUR COMPLETED PROXY PROMPTLY.
COMMUNITY BANCORP.
Derby Road
Route 5
Derby, Vermont 05829
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 5, 1998
This proxy statement is furnished in connection with the solicitation
of proxies by or on behalf of the Board of Directors of Community Bancorp.
(the "Corporation") for use at the Annual Meeting of Shareholders to be held
on May 5, 1998, at 5:30 p.m. at the Elks Club in Derby, Vermont or at any
adjournment or adjournments thereof. The proxy statement and accompanying
proxy card are first being sent to shareholders on or about March 31, 1998.
Proxy cards duly executed and returned by a shareholder will be voted as
directed on the card. If no choice is specified, the proxy will be voted FOR
the election of the four nominees set forth in the proxy; FOR the proposal to
amend the Articles of Association; and FOR ratification of the selection of
A.M. Peisch & Company as the Corporation's external auditor for 1998. If
other matters are voted upon, persons named in the proxy and acting thereunder
will vote in accordance with the recommendations of management pursuant to the
discretionary authority conferred in the proxy. Any proxy may be revoked by
written notice to the Secretary of the Corporation prior to the voting of the
proxy.
Only holders of record of the Corporation's shares of common stock
outstanding as of the close of business on March 10, 1998, the record date for
the meeting, will be entitled to notice of and to vote at the meeting. As of
the record date, there were 1,519,034 shares of the Corporation's common stock
issued and outstanding. Each share is entitled to one vote on all matters
presented to the shareholders for vote.
In accordance with Securities and Exchange Commission ("SEC") rules, the
proxy card permits stockholders to designate whether they wish to vote "for",
"against", or "abstain" on any proposal, or to withhold authority to vote for
one or more of the nominees for Director. Under Vermont law, in order for
action to be taken on a matter, a quorum must exist as to that matter,
which is defined for this purpose as a majority of the outstanding shares
entitled to vote on the matter. While abstentions are counted in determining
whether a quorum has been reached on a particular matter, broker non-votes (as
defined below) are not counted as they are not deemed to be entitled to
vote on such matter. A broker non-vote will occur when a broker who holds
shares in street name for a customer does not have the authority under
applicable stock exchange or broker self-regulatory organization rules to cast
a vote on a particular matter because the matter is deemed non-discretionary
and the broker's customer has not furnished voting instructions. Abstentions
and broker non-votes are tabulated as follows: In matters requiring the
affirmative vote of at least a majority of the votes cast "for" and "against,"
abstentions and broker non-votes are not counted and will not affect the
outcome of the vote. In matters requiring the affirmative vote of at least a
majority of all of the Corporation's common stock, abstentions and broker non-
votes will have the effect of a vote against the proposal. In the election of
directors, which is by plurality of the votes cast, broker non-votes will not
affect the outcome of an uncontested election, but will have the effect of
aiding the challenger in a contested election.
All expenses of this solicitation will be paid by the Corporation. This
solicitation of proxies by mail may be followed by a solicitation either in
person, or by letter or telephone by officers of the Corporation or by officers
or employees of its wholly-owned subsidiary, Community National Bank (some-
times referred to in this proxy statement as the "Bank"). The Corporation has
requested banks, brokers and other similar agents or fiduciaries to forward
proxy materials to beneficial owners of stock and, if requested, will
reimburse them for their costs.
PRINCIPAL SECURITYHOLDERS
The following table shows the amount of common stock beneficially owned by
all directors, nominees for director and executive officers of the Corporation
as a group.
<TABLE>
<CAPTION>
Amount & Nature of Beneficial
Ownership of Common Stock
Sole Voting Shared Voting
& Investment & Investment Percent of
Power Power Class(1)
<S> <C> <C> <C>
All Directors, Nominees & Executive
Officers as a Group (12 in number)(2) 150,709 35,032 12.23%
<FN>
______________________
<F1> Percentages assume the exercise of conversion rights held pursuant to
the Corporation's 9% Convertible Subordinated Debentures.
Shareholdings are as of March 10, 1998, except for shares held through
the Corporation's Retirement Savings Plan, which are as of December 31,
1997, the date of the most recent Plan report.
<F2> Share information for the group includes 203 shares that such individuals
have the right to acquire upon conversion of Community Bancorp. 9%
Convertible Subordinated Debentures held by them and 18,817 shares held
indirectly by three of the members of the group by virtue of their
investment in the Community Bancorp. stock fund under the Corporation's
Retirement Savings Plan.
</FN>
</TABLE>
In addition, as of March 10, 1998, 93,501 shares representing 6.16% of the
Corporation's issued and outstanding shares of common stock were held by the
trust department of Community National Bank. It is the Bank's practice not to
vote such shares unless instructions are received from the beneficial owner.
The Corporation is not aware of any individual, group, corporation or
other entity owning beneficially more than 5% of the Corporation's outstanding
common stock. The Corporation has no other authorized class of stock.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers and directors to file reports of ownership and changes
in ownership with the Securities and Exchange Commission (SEC) and to furnish
the Corporation with copies of all such reports. The Corporation has reviewed
the copies of the Section 16 reports filed by the directors and officers, or
written representations from them that no Forms 5 were required to be filed
for 1997. Based solely on such review the Corporation believes that all
Section 16 filing requirements applicable to its officers and directors for
1997 were complied with.
ARTICLE 1
ELECTION OF DIRECTORS
The Articles of Association and the By-laws of the Corporation provide
for a Board of no fewer than nine and no more than twenty-five directors, to
be divided into three classes, as nearly equal in number as possible, each
class serving for a period of three years. The Board of Directors presently
consists of 9 members. This year the Board has voted to increase the number
of directors to 10 for the ensuing year. The directors in the class whose
term will expire at the 1998 Annual Meeting of Shareholders are Francis P.
Allard, Marcel M. Locke and Dale Wells. Mr. Allard will retire from the
Board at the Annual Meeting and will not stand for re-election. Incumbent
directors Marcel Locke and Dale Wells will stand for re-election. In addition,
the Board has nominated for election to the Board Messrs. Michael H. Dunn and
Stephen P. Marsh.
Unless authority is withheld, proxies solicited hereby will be voted in
favor of the four nominees, to hold office until the 2001 Annual Meeting of
Shareholders or until their successors are elected and qualify. If for any
reason not now known by the Corporation, any of such nominees should not be
able to serve, proxies will be voted for a substitute nominee or nominees
designated by the Board of Directors, or to fix the number of directors at
fewer than ten, as the directors in their discretion may deem advisable.
The following table sets forth certain information concerning each of the
nominees and other incumbent directors:
<TABLE>
<CAPTION>
Community Bancorp.
Director of Common Stock
Community Beneficially Owned
Principal Bancorp. and Percent of
Name and Age Employment Since (1) Class (2)
<S> <S> <C> <C> <C>
Nominees to serve (if elected) until 2001 Annual Meeting:
Michael H. Dunn Book Dealer 27,309(3) 1.80%
Age 56 Derby, VT
Marcel M. Locke Proprietor, 1986 3,290(4) .21%
Age 59 Parkview Garage
Orleans, VT
Stephen P. Marsh Vice President and 25,707(5) 1.69%
Age 50 Treasurer, Community
Bancorp.; and Senior
Vice President and
Cashier,
Community National Bank
Derby, VT
Dale Wells President, 1996 1,962 .13%
Age 52 Dale Wells Building
Contractor, Inc.
St. Johnsbury, VT
Incumbent Directors to serve until 2000 Annual Meeting:
Elwood Duckless Past President, 1987 50,580(6) 3.33%
Age 57 Newport Electric Co.
Newport, VT
Rosemary M. Lalime Principal Broker 1985 20,525(7) 1.35%
Age 51 and Owner,
All Seasons Realty
Newport, VT
Anne T. Moore Principal Real 1993 18,284(8) 1.20%
Age 54 Estate Broker,
Taylor Moore
Agency, Inc.
Derby, VT
(insurance and
real estate)
Incumbent Directors to serve until 1999 Annual Meeting:
Thomas E. Adams Owner, NPC 1986 10,867(9) .72%
Age 51 Realty, Inc.
Holland, VT
Jacques R. Couture Dairy Farmer/ 1992 1,403(10) .09%
Age 47 Maple Producer
Westfield, VT
Richard C. White President, Chief 1983 29,318(11) 1.93%
Age 52 Executive Officer
and Director,
Community Bancorp.
and Community
National Bank
Derby, VT
<FN>
__________________
<F1> Except for Michael H. Dunn and Stephen P. March, each nominee and
incumbent director is also a director of Community National Bank.
The dates indicated in the table reflect only service on the Board
of Directors of the Corporation and not Community National Bank.
<F2> Except as otherwise indicated in the footnotes to the table, the
named individuals possess sole voting and investment power over the
shares listed. Shareholdings are as of March 10, 1998, except for
shares held by Mr. Marsh and Mr. White indirectly through participation
in the Community Bancorp. stock fund under the Corporation's Retirement
Savings Plan, which are as of December 31, 1997, the date of the most
recent Plan report.
<F3> Includes 3,574 shares held by a holding company of which Mr. Dunn is
President and has sole voting power.
<F4> Includes 1,456 shares held by Mr. Locke jointly with his wife, as to
which voting and investment power is shared.
<F5> Includes 20,089 shares held by Mr. Marsh jointly with his wife, as to
which voting and investment power is shared; and 5,618 shares indirectly
owned by Mr. Marsh by virtue of his participation in the Community
Bancorp. stock fund under the Corporation's Retirement Savings Plan.
<F6> Includes 315 shares held by Mrs. Duckless; and 8,266 shares held by Mr.
Duckless jointly with his wife. Mr. Duckless has voting and investment
power over the shares held by Mrs. Duckless and the shares held jointly.
<F7> Includes 1,343 shares held by Mrs. Lalime jointly with her husband, as
to which voting and investment power is shared.
<F8> Includes 8,487 shares held by Mrs. Moore's husband.
<F9> Includes 4,524 shares held in an IRA for Mr. Adams' benefit.
<F10> Includes 730 shares held by Mr. Couture jointly with his wife, as to
which voting and investment power is shared, and 20 shares held in a
custodial account for Mr. Couture's minor child.
<F11> Includes 11,242 shares indirectly owned by Mr. White by virtue of his
participation in the Community Bancorp. stock fund under the
Corporation's Retirement Savings Plan; 620 shares held by Mr. White's
children; 966 shares held by Mr. White jointly with his wife; and 1,970
shares held in an IRA for Mr. White's benefit. Mr. White has shared
voting and investment power over the shares held by his children and
the shares that he owns jointly with his wife.
</F>
</TABLE>
-----------------------------------------
Meeting Attendance
The Corporation's Board of Directors held four regular meetings and five
special meetings during 1997. Each incumbent director attended at least 75%
of the aggregate of all such meetings. In addition, all of the Corporation's
directors serve on the Bank's Board of Directors (which meets monthly) and on
various Board committees. Each of the directors attended at least 75% of the
scheduled Board and committee meetings.
The entire board of Directors of the Corporation, rather than a committee
of the Board, nominates candidates for election to the Corporation's Board of
Directors. The Board will consider recommendations by shareholders for
nomination as director. Recommendations should be sent, in writing, to the
President of the Corporation on or before January 1 next preceding the Annual
Meeting for which such nomination is sought.
The Corporation's Board of Directors does not have a standing executive
committee. Although the Board of Directors of the Corporation has no standing
audit or personnel committees, similar functions are performed by the Bank's
Board of Directors or its committees. The Bank's Board of Directors and its
audit committee (also known as its Risk Management Committee) review the
findings and recommendations of the Bank's independent public accountants, as
well as the Bank's internal audit procedures, examinations by regulatory
authorities and matters having a material effect on the Bank's financial
position. The present members of the Bank's audit committee are Thomas Adams
(Chairman), Jacques Couture, Elwood Duckless and Rosemary Lalime.
During 1997 the Bank's audit committee met four times.
The functions of the Bank's personnel committee (also known as its Human
Resources Committee) include reviewing and making recommendations to the Board
concerning the compensation of the Bank's officers and employees. The present
members of the Bank's personnel committee are Thomas Adams, Jacques Couture,
Ann Moore, Dale Wells and Richard White, as well as two officers of the Bank
who serve as non-voting members of the committee. Mr. White does not vote on
matters affecting his own compensation. The Bank's personnel committee met
two times during 1997.
Transactions with Management
Some of the incumbent directors, nominees and executive officers of the
Corporation, and some of the corporations and firms with which these
individuals are associated, are customers of Community National Bank in the
ordinary course of business, or have loans outstanding from the Bank, and it
is anticipated that they will continue to be customers of and indebted to the
Bank in the future. All such loans were made in the ordinary course of
business, do not involve more than normal risk of collectibility or present
other unfavorable features, and were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the same time
for comparable Bank transactions with unaffiliated persons, although directors
were generally allowed the lowest interest rate given to others on comparable
loans.
Directors' Fees
Directors of the Corporation who are not salaried employees of the Bank
receive an annual retainer of $3,000 for serving on the Board and a fee of
$250 per Board meeting. Each director of the Corporation also serves as a
director of the Bank. Bank directors who are not salaried employees of the
Bank receive an annual retainer of $3,500, a fee of $250 per Board meeting
and a fee of $250 per committee meeting. This fee structure is intended to
compensate the Bank's directors for attendance at Board meetings as well as
for the time spent by them in activities directly related to their service on
the Board for which they receive no additional compensation, including but
not limited to attendance at the annual directors' retreat and attendance at
educational seminars or programs on pertinent banking topics. In addition to
the fees for meetings of the Bank's Board of Directors and its committees,
each Bank director attends at least six meetings per year of the Bank's local
advisory boards and receives a fee of $250 per meeting, except for Mr. White,
who does not receive any fees for such attendance.
From time to time directors perform evaluations of loan collateral for
the Bank and are reimbursed for such services at the rate of $25 per hour.
Vote Required
Election of a nominee for director will require a plurality of the votes
cast in the election.
The Board of Directors recommends a vote FOR Article 1.
EXECUTIVE COMPENSATION
The officers of the Corporation did not receive any compensation for
services rendered to the Corporation in 1997, but did receive compensation
for services rendered in their capacities as officers of the Bank.
The following table sets forth the compensation paid to the President
and Chief Executive Officer for services rendered to the Corporation and its
subsidiaries, in all capacities during 1997 and in each of the preceding two
years.
SUMMARY COMPENSATION TABLE
Annual Compensation
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Name and
Principal All Other
Position Year Salary(1) Bonus(2) Compensation(3)
Richard C. White, 1997 $ 117,662 $ 21,490 $ 23,138
President, CEO & 1996 $ 109,000 $ 13,635 $ 23,868
Director 1995 $ 102,100 $ 13,182 $ 13,092
<FN>
_________________
<F1> Includes voluntary salary deferrals by Mr. White pursuant to the
Corporation's Retirement Savings (401(k)) Plan, as follows: 1997,
$6,862; 1996, $6,132; and 1995, $5,764.
<F2> All bonuses were paid under the Corporation's Officer Incentive Plan
(described below) in the year indicated, for services rendered in the
prior year. Bonuses for services rendered in 1997 will be calculated
and paid in the second quarter of 1998.
<F3> Includes the following: (i) discretionary contributions made by the
Corporation for Mr. White's account under the Corporation's Retirement
Savings Plan, described below, as follows: 1997, $19,707; 1996, $20,802;
and 1995, $10,210; and (ii) matching employer contributions made under
the Retirement Savings Plan for Mr. White's account, as follows: 1997,
$3,431; 1996, $3,066; and 1995, $2,882.
</FN>
</TABLE>
Except for the use of vehicles owned by the Bank by certain officers, no
director or executive officer received any special personal benefits during
1997. In policy and practice, the Bank does not provide special personal
benefits to directors or officers.
Retirement Savings Plan
Employees who are age 21 or over and who have completed at least one year
of service (as defined in the plan) are eligible to participate in the
Community Bancorp. and Designated Subsidiaries' Retirement Savings Plan (the
"Plan"). The Plan contains features of a so-called 401(k) plan which permit
participants to make voluntary compensation deferrals on a tax-deferred basis
of up to 15% of their pre-tax compensation. For 1998 the Plan limits the
maximum annual deferral to $10,000 per participant. This maximum is adjusted
annually for inflation by the Internal Revenue Service. The Corporation will
make a discretionary matching contribution to the account of participants
equal to a percentage of the amount deferred. The matching contribution
percentage is established from time to time by the Corporation in its sole
discretion. The matching contribution percentage for 1998 has been set at
50% of the amount deferred for deferrals of up to 5% of compensation.
Deferrals in excess of 5% of compensation were not matched by the Corporation.
In addition to voluntary compensation deferrals and matching employer
contributions, the Corporation may make a discretionary profit sharing
contribution each year. All employees who meet the eligibility requirements
of the Plan receive this contribution, regardless of whether they have made
any compensation deferrals. The contribution is allocated to participants
based on their total eligible compensation.
Participants are at all times fully vested in any rollover contributions
from other plans and in their own compensation deferrals. Vesting in any
discretionary employer contribution and in any matching employer contribution
begins after three years of service, with full vesting upon seven years of
service. Participants may direct the investment of their Plan account
among four funds maintained by the Plan trustee, including a Community Bancorp.
stock fund. Generally distribution of Plan accounts is deferred until the
participant's death, disability, retirement or other termination of employment,
except in cases of financial hardship (as defined in the Plan). Benefits are
subject to income tax upon distribution and certain early withdrawals may be
subject to an additional 10% penalty tax. Distribution of Plan benefits may
be in the form of an annuity, a lump sum in cash, or in certain circumstances,
common stock of the Company.
Officer Incentive Plan
The Bank maintains an Officer Incentive Plan (the "Plan") for its
executive officers and vice presidents. Each executive officer or vice
president having at least one year of service is eligible to participate in
the Plan. Under the Plan, two separate incentive pools are established, one
for the four executive officers and another for all vice presidents. The
incentive bonus pool for executive officers is determined by the Bank's annual
rating issued by IDC Financial Publishing, Inc., an industry-wide recognized
ranking service, and a weighted average return on equity over the preceding
four year period. The bonus pool under the Plan is determined according to
the following schedule:
<TABLE>
<CAPTION>
IDC Rating Percent of After-Tax Earnings
<S> <C>
Below Average 0
Average 1.00%
Excellent 2.75%
Superior 4.50%
Top 3 in State
and Superior 6.00%
<CAPTION>
Average Return on Equity(1) Percent of After-Tax Earnings
<S> <C>
less than 9.06% 0
9.06 to 10.55% 1.25%
10.56 to 12.05% 2.75%
12.06 to 13.55% 3.75%
13.56 to 15.05% 4.75%
15.06 to 16.55% 5.75%
16.56% and over 6.50%
(Average return on equity is based on five year average return on
equity for other Vermont banks as listed in the IDC Report.)
<FN>
___________________
<F1> For calculation of 1997 bonuses, weighted average return on
equity gives 40% weight to 1997, 30% to 1996, 20% to 1995 and 10%
to 1994.
</FN>
</TABLE>
The results determined under the formulas in the above two tables are
averaged to determine the amount of the incentive pool for the Bank's executive
officers. The pool is divided into units and these units are distributed to
the four executive officers. The return on equity targets, the applicable
percentages of after-tax earnings and the allocation of the incentive units
among the executive officers are determined by the Human Resources Committee
of the Bank's Board of Directors, subject to the approval of the full Board.
Because the amount of the incentive pool for executive officers depends
in part on the Bank's annual rating by IDC Financial Publishing, Inc., which
is not issued until the second quarter of the following year, 1997 bonus
information for such officers was not yet available as of the date of
preparation of this proxy statement.
The incentive pools for Vice Presidents are determined by the following
schedule:
<TABLE>
<CAPTION>
After-Tax Return
on Average Assets Percent of Salary
<S> <C>
less than 1.00% 0
1.00% to 1.49% 8% of salary
1.50% and over 10% of salary
</TABLE>
Distributions under the Plan to Vice Presidents (other than executive
officers) are ordinarily payable in January for services rendered during the
preceding fiscal year.
Although the Board of Directors of the Bank presently intends to maintain
an officer incentive plan, it may revise or replace the Plan at any time with
a new one. As a matter of policy, the Board views incentive compensation as
an important component of officer compensation since it appropriately links
the Bank's performance with the compensation of those employees in the best
position to contribute significantly to the Bank's profitability.
ARTICLE 2
AMENDMENT TO ARTICLES OF ASSOCIATION
At a meeting held on March 10, 1998, the Board of Directors voted to
recommend to the shareholders that the number of authorized shares of the
Corporation's common stock, $2.50 par value per share, be increased from
2,000,000 shares to 6,000,000 shares. At the same meeting the Board voted to
split the outstanding shares of the Corporations' common stock on a two-for-
one basis, subject to shareholder approval at the Annual Meeting of the
proposal to increase the authorized common stock. The increase in the
authorized common stock is necessary to implement the stock split, as the
Corporation does not have sufficient remaining authorized but unissued shares.
If the amendment is approved, the two-for-one stock split would be accomplished
as a 100% stock dividend, with one share of common stock issued on June 1,
1998 as a dividend for each share of common stock outstanding on the record
date for the stock dividend (May 15, 1998). The par value of the Corporation's
common stock would not be affected by the amendment to the Articles of
Association or the stock split.
In addition to the shares which would be utilized to implement the stock
split, the Company has reserved for issuance 92,335 shares (184,670 shares on
a post-split basis) for issuance pursuant to the Corporation's Dividend
Reinvestment and Stock Purchase Plan. The Corporation has also reserved an
aggregate of 17,831 shares (35,662 shares on a post-split basis) for issuance
upon exercise of conversion privileges by the holders of the Corporation's 11%
Convertible Subordinated Debentures due 2004 and its 9% Convertible
Subordinated Debentures due 1998.
Except as described above, the Corporation has no plans, understandings or
arrangements for issuance of any unissued or unreserved shares. However, the
Board of Directors believes that it is desirable to have a sufficient number of
authorized shares of common stock available to meet future contingencies and
opportunities, such as for possible future financing and acquisition
transactions, future stock dividends or splits, issuance pursuant to employee
benefit or similar plans, or for other corporate purposes. Having additional
shares available for issuance would give the Corporation greater flexibility
by allowing shares to be issued without incurring the delay and expense of a
special shareholders' meeting.
If the amendment is approved the additional shares may be issued from time
to time by the Board of Directors without further shareholder authorization,
subject to applicable law and regulation. Shareholders do not have preemptive
rights under applicable law or the Corporation's Articles of Association.
Accordingly, the Corporation is not required to offer newly-issued shares to
the shareholders.
Although the Board has no present intention of doing so, shares of
authorized and unissued common stock could be issued in one or more
transactions that would make takeover of the Corporation more difficult. For
example, additional shares could be issued to dilute the stock ownership of a
person seeking to obtain control of the Corporation or could be privately
placed with purchasers who would support the Board in opposing a hostile
takeover attempt. Issuance of common stock in such a manner could have the
possible effect of deterring an offer for the Corporation at a substantial
premium over the current market price of the Corporation's common stock. The
Corporation's Articles of Association and By-laws currently contain provisions
that may have such an effect, including provisions dividing the Board of
Directors into three classes, limiting the ability of shareholders to remove
Directors and to create vacancies on the Board and requiring an 80% vote of
shareholders to amend certain provisions of the Articles of Association.
The text of Article Six of the Corporation's Articles of Association, as
now in effect and as proposed to be amended, is set forth as Exhibit A to this
proxy statement.
Vote Required
The affirmative vote of the holders of at least a majority of the
Corporation's issued and outstanding shares of common stock is required in
order to approve the amendment to the Articles of Association.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ARTICLE 2.
ARTICLE 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed the firm of A.M. Peisch & Company to
continue as independent public accountants for the Corporation for the fiscal
year ending December 31, 1998, subject to ratification of the appointment by
the Corporation's shareholders. A.M. Peisch & Company were first appointed as
independent public accountants of the Corporation for the 1985 fiscal year.
Unless otherwise indicated, properly executed proxies will be voted in favor
of ratifying the appointment of A.M. Peisch & Company as the Corporation's
independent certified public accountants for the fiscal year ending December
31, 1998. No determination has been made as to what action the Board of
Directors will take if the shareholders do not ratify the appointment.
A representative of A.M. Peisch & Company will be present at the Annual
Meeting. He will be given an opportunity to make a statement if he so desires
and will be available to respond to appropriate questions.
Vote Required
Ratification of the selection of the Corporation's independent accountants
for the ensuing year will require the affirmative vote of a majority of the
votes cast "for" and "against."
The Board of Directors recommends a vote FOR Article 3.
ANNUAL REPORT
The Corporation's Annual Report to Shareholders for the fiscal year ended
December 31, 1997, including consolidated financial statements and the report
of A.M. Peisch & Company thereon, accompanies this proxy statement.
SHAREHOLDER PROPOSALS
In order to be included in the proxy material for the 1999 Annual Meeting,
shareholder proposals must be submitted in writing to the Secretary of the
Corporation not later than December 3, 1998, and must comply in all respects
with applicable rules and regulations of the Securities and Exchange Commission
relating to such inclusion. Any such proposal will be omitted from or included
in the proxy material at the discretion of the Board of Directors of the
Corporation, in accordance with such rules and regulations.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors knows of
no business that may come before the meeting except as set forth above. If
any other matters should properly come before the meeting, it is expected that
proxies will be voted on such matters in accordance with the recommendations
of management.
EXHIBIT A
Text of Article Six*
ARTICLE SIX
STOCK
The aggregate number of shares the Corporation shall have authority to
issue is (2,000,000) 6,000,000 shares, common, with a par value of $2.50 per
share.
__________________
* Proposed deletions shown by strike through, and additions by underlining,
but for the purpose of this filing, deletion is shown in brackets followed
by additions.
(Side 1)
PROXY COMMUNITY BANCORP.
Proxy for Annual Meeting of Shareholders
May 5, 1998
The undersigned hereby appoints Robert W. Darby, Leonard E. Lippens and
Roger D. Whitcomb, or any one or more of them, attorney with full power of
substitution in each, to vote the common stock of Community Bancorp. that the
undersigned is (are) entitled to vote at the Annual Meeting of Shareholders
to be held at the Elks Club, Derby, Vermont, on Tuesday, May 5, 1998 at
5:30 p.m. and at any adjournment thereof.
1. ELECTION OF FOUR DIRECTORS (Class expiring in 2001)
__ FOR ALL NOMINEES LISTED BELOW __ WITHHOLD AUTHORITY to vote (except
as marked to the contrary) for all nominees listed below
To serve until the Annual Meeting in 2001: MICHAEL H. DUNN, MARCEL M. LOCKE,
STEPHEN P. MARSH AND DALE WELLS.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list above.)
2. To amend Article Six of the Corporation's Articles of Association to
increase the authorized common stock to 6,000,000 shares.
3. To ratify the selection of the independent public accounting firm of A.M.
Peisch & Company as the Corporation's external auditors for the fiscal year
ending December 31, 1998.
___ FOR ___ AGAINST ___ ABSTAIN
In their discretion, to act upon such other business as may properly come
before the meeting or any adjournment thereof. If any such business is
presented, it is the intention of the proxies to vote the shares represented
hereby in accordance with the recommendations of management.
------------------
(Side 2)
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholders. If no direction is made, this Proxy
will be voted FOR Items 1, 2 and 3.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED
AT ANY TIME BEFORE IT IS EXERCISED.
Dated: ___________________________, 1998
_________________________________________
Signature(s) of Shareholder(s)
_________________________________________
Signature(s) of Shareholder(s)
Please sign exactly as name is printed on
this proxy. When signing as attorney,
executor, administrator, trustee,
guardian, or in any other representative
capacity, please so indicate. All joint
owners must sign.
NOT A PROXY COMMUNITY BANCORP.
ANNUAL MEETING OF SHAREHOLDERS
May 5, 1998
DINNER RESERVATION
Immediately following the Annual Meeting to be held at the Elks Club
in Derby, Vermont, on Tuesday, May 5, 1998, at 5:30 p.m., a dinner will
be served for all registered shareholders. Please indicate below whether
you plan to attend the dinner.
I/We __ will __ will not attend the dinner. If stock is held jointly,
indicate the number attending the dinner. __ One __ Two
If you are voting by proxy, please complete and return this card, along
with your fully-executed proxy card, in the enclosed postage paid envelope.
You should also complete and return this dinner reservation card in the
enclosed postage paid envelope even if you plan to vote your shares in person
rather than by proxy.
Dated: ____________________________, 1998
__________________________________________
Signature
__________________________________________
Signature
