SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.)
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
COMMUNITY BANCORP.
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(Name of Registrant as Specified in Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing party:
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(4) Date Filed:
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COMMUNITY BANCORP.
Derby Road
Route 5
Derby, Vermont 05829
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 4, 1999
The Annual Meeting of Shareholders of Community Bancorp. will be held
at the Elks Club, Derby, Vermont, on Tuesday, May 4, 1999, at 5:30 p.m.,
for the following purposes:
1. To elect three directors to serve until the Annual Meeting of
Shareholders in 2002;
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, 1999; and
3. To transact such other business as may properly be brought
before the meeting.
The close of business on March 9, 1999, 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
April 2, 1999
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 4, 1999
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 Tuesday, May 4, 1999, 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 April 2, 1999.
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 three nominees set forth in the proxy; and FOR
ratification of the selection of A.M. Peisch & Company as the Corporation's
external auditor for 1999. 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 9, 1999, 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 3,289,069 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 (sometimes 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) 329,441 60,065 11.84%
- --------------------
<F1> Shareholdings are as of March 9, 1999, except for shares held through
the Corporation's Retirement Savings Plan, which are as of June 30,
1998, the date of the most recent Plan report.
<F2> Share information for the group includes 44,679 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.
</TABLE>
In addition, as of March 9, 1999, 216,359 shares (6.58% of the
Corporation's issued and outstanding 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.
Except as set forth above, 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 1998. Based solely on such review, and except as
otherwise disclosed below, the Corporation believes that all Section 16
filing requirements applicable to its officers and directors for 1998 were
complied with. Executive Vice President Alan Wing inadvertently failed to
file a report on Form 4 relating to a sale of shares of the Corporation's
common stock in April, 1998. The sale was reported on Mr. Wing's annual
report on Form 5 for 1998.
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 10 members and the Board has voted to
maintain the number of directors at 10 for the ensuing year. The directors
in the class whose term will expire at the 1999 Annual Meeting of
Shareholders are Thomas E. Adams, Jacques R. Couture and Richard C. White.
Unless authority is withheld, proxies solicited hereby will be voted
in favor of the three nominees, to hold office until the 2002 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 incumbent directors and other nominees:
<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> <C> <C> <C> <C>
Nominees to serve (if elected) until 2002 Annual Meeting:
Thomas E. Adams Owner, NPC Realty, Inc. 1986 22,820(3) .69%
Age 52 Holland, VT
Jacques R. Couture Dairy Farmer/Maple Producer 1992 3,104(4) .09%
Age 48 Westfield, VT
Richard C. White President, Chief Executive Officer 1983 62,729(5) 1.91%
Age 53 and Director, Community Bancorp.;
and Community National Bank
Derby, VT
Incumbent Directors to serve until 2001 Annual Meeting:
Michael H. Dunn Book Dealer 1998 60,056(6) 1.83%
Age 57 Derby, VT
Marcel M. Locke Proprietor, Parkview Garage 1986 7,282(7) .22%
Age 60 Orleans, VT
Stephen P. Marsh Vice President, Treasurer and 1998 42,735(8) 1.30%
Age 51 Director, Community Bancorp.;
and Senior Vice President and
Cashier, Community National
Bank Derby, VT
Dale Wells President, 1996 4,120 .13%
Age 53 Dale Wells Building Contractor, Inc.
St. Johnsbury, VT
Incumbent Directors to serve until 2000 Annual Meeting:
Elwood Duckless Past President, 1987 111,940(9) 3.40%
Age 58 Newport Electric Co.
Newport, VT
Rosemary M. Lalime Principal Broker and Owner, 1985 43,257(10) 1.32%
Age 52 All Seasons Realty
Newport, VT
Anne T. Moore Principal Real Estate Broker, 1993 38,395(11) 1.17%
Age 55 Taylor Moore Agency, Inc.
Derby, VT
(insurance and real estate)
- --------------------
<F1> 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 9, 1999, except for
shares held by Messrs. Marsh and White indirectly through
participation in the Community Bancorp. stock fund under the
Corporation's Retirement Savings Plan, which are as of June 30,
1998, the date of the most recent Plan report.
<F3> Includes 9,500 shares held in an IRA for Mr. Adams' benefit.
<F4> Includes 1,617 shares held by Mr. Couture jointly with his wife, as
to which voting and investment power is shared, and 44 shares held
in a custodial account for Mr. Couture's minor child.
<F5> Includes 27,329 shares indirectly owned by Mr. White by virtue of
his participation in the Community Bancorp. stock fund under the
Corporation's Retirement Savings Plan; 1,600 shares held by Mr.
White jointly with his wife; and 4,363 shares held in an IRA for Mr.
White's benefit. Mr. White has shared voting and investment power
over the shares held jointly with his wife.
<F6> Includes 7,505 shares held by a corporation of which Mr. Dunn is
President and over which he has sole voting power.
<F7> Includes 3,223 shares held by Mr. Locke jointly with his wife, as to
which voting and investment power is shared.
<F8> Includes 29,378 shares held by Mr. Marsh jointly with his wife, as
to which voting and investment power is shared; and 12,517 shares
indirectly owned by Mr. Marsh by virtue of his participation in the
Community Bancorp. stock fund under the Corporation's Retirement
Savings Plan.
<F9> Includes 787 shares held by Mrs. Duckless; and 18,300 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.
<F10> Includes 2,975 shares held by Mrs. Lalime jointly with Charles
Brown, as to which voting and investment power is shared.
<F11> Includes 17,826 shares held in a trust for the benefit of Mrs.
Moore's husband, as to which Mrs. Moore does not have voting or
investment power and disclaims beneficial ownership.
</TABLE>
Meeting Attendance
The Corporation's Board of Directors held four regular meetings and
four special meetings during 1998. 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 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 compensation 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), Rosemary Lalime,
Elwood Duckless and Jacques Couture. During 1998 the Bank's audit committee
met three times.
The functions of the Bank's compensation committee (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 Human Resources Committee are Michael
Dunn, Marcel Locke, Stephen Marsh, Anne Moore, Dale Wells and Richard
White. In addition, the Bank's Human Resources Officer attends meetings of
the Committee but is not a member and does not vote on matters considered
by the Committee. Mr. White and Mr. Marsh do not vote on matters affecting
their own compensation. The Bank's Human Resources Committee met three
times during 1998. A Report of the Human Resources Committee regarding
executive compensation is set forth on pages 8-9 of this proxy statement.
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 and Other Compensation
Directors of the Corporation who are not salaried employees of the
Bank receive an annual retainer of $4,000 for serving on the Board and a
fee of $250 per Board meeting. During 1998, each director of the
Corporation also served as a director of the Bank. Bank directors who are
not salaried employees of the Bank receive an annual retainer of $4,000, a
fee of $250 per Board meeting and a fee of $250 per committee meeting. 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 and Mr. Marsh, who do not receive any fees for such
attendance. 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.
Directors who have served on the Board of the Corporation and/or the Bank
for at least five years are entitled to receive upon retirement from the
Board a lump sum payment of $1,000 for each year of Board service. For this
purpose, service rendered as a director of the Corporation and of the Bank
is not compensated separately. The retirement benefits under this
arrangement represent a general unsecured obligation of the Corporation and
no assets of the Corporation or the Bank have been segregated to satisfy
the Corporation's obligations under the arrangement.
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.
Directors' Deferred Compensation Plan
Under the terms of the Corporation's Deferred Compensation Plan for
Directors, directors of the Corporation and/or the Bank may elect to defer
current receipt of some or all of their director fees. Deferrals are
credited to a cash account which bears interest at the rate in effect for
the Bank's three-year certificate of deposit, as adjusted from time to
time. Payments are deferred until the participant's retirement, death or
disability, or at an earlier or later date elected by the participant.
Amounts deferred and accumulated interest represent a general unsecured
obligation of the Corporation and no assets of the Corporation or the Bank
have been segregated to satisfy the Corporation's obligations under the
Plan.
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.
REPORT OF HUMAN RESOURCES COMMITTEE
The Bank's Human Resources Committee reviews and makes
recommendations to the full Board on all compensation and benefits issues
relating to the President and Chief Executive Officer ("CEO") and other
executives of the Bank. The recommendations relating to the CEO are
formulated at the time of Mr. White's annual performance evaluation, which
usually occurs in June. Mr. White makes recommendations to the Committee
with respect to the compensation of the other executive officers, which are
then acted on by the Committee and recommended to the full Board.
The Committee and Board believe they have designed a compensation
package for the executive officers that will attract and retain competent
senior management for the Bank and provide for appropriate rewards for both
personal and Bank performance.
To reach these objectives, the Bank provides for a base salary which
is reviewed annually in relation to each individual's performance and a
cash bonus as a short term incentive, the amount of which depends upon the
Bank's performance. (The Bank's Officer Incentive Plan is described
elsewhere in this proxy statement.) The Bank does not currently provide for
long term incentives, such as stock options or similar benefits.
In determining appropriate salary levels, the Committee and the Board
review not only various individual and corporate performance indicators,
but also annual salaries and short term incentives provided by similar
companies to their senior officers. This data is obtained through salary
surveys conducted by Sheehan & Company (Vermont Bankers' Association,
Northern New England, and New England community banks with assets from $100
million to $249 million), Watson Wyatt & Company (national data, community
banks with assets from $200 million to $500 million), the Bank
Administration Institute (New England community banks with assets of $100
million to $499 million) and the Sheshunoff Company (national data,
community banks with assets from $100 million to $249 million).
In Mr. White's case, the Board's annual review process includes
consideration of his self-evaluation covering certain key elements of his
written job description, including strategic planning, establishment and
overall implementation of operating policies, management of shareholder and
community relations and regulatory matters. The Board also undertakes its
own evaluation of Mr. White reviewing various matters, including
leadership, planning and organization abilities, creativity and problem
solving, CRA (community reinvestment) and compliance.
Mr. White's strong performance in each of these areas resulted in the
adjustment (effective July 1, 1998) of his annual base salary rate from
$117,500 to $123,000, representing a 4.7% increase.
The table below shows Mr. White's cash compensation (base salary and
cash bonus) for 1997 and 1998 in relation to his peers at comparable
companies, as indicated in the above-referenced surveys of 1997 executive
compensation:
<TABLE>
<S> <C>
Mr. White
1997 $139,152
1998 $132,097
Sheehan & Company
Vermont Bankers' Assoc. $127,400
Northern New England $156,592
New England $172,417
Sheshunoff & Company $173,591
Bank Administration Institute $202,900
Watson Wyatt & Company $210,100
Average $177,283
</TABLE>
The Committee also reviews, and makes recommendations to the full
Board relating to, major personnel policies including compensation and
benefit programs for other officers and staff. The Committee oversees the
administration of the Bank's Officer incentive Plan and the Corporation's
401(k) plan, including the investment performance of the trustee.
The Committee comprises four non-employee directors plus the CEO and
the Chief Financial Officer ("CFO"). Neither the CEO nor the CFO
participates in recommendations or decisions pertaining to their own salary
and benefits although CEO White does participate in recommendations and
decisions regarding the CFO's compensation.
Community National Bank Human Resources Committee
<TABLE>
<S> <C>
Thomas Adams * Stephen Marsh
Jacques Couture * Anne Moore
Michael Dunn * Dale Wells
Marcel Locke * Richard White
- --------------------
<F*> Messrs. Adams and Couture served on the Committee until November,
1998. Messrs. Dunn and Locke were appointed to the Committee at that
time.
</TABLE>
Pursuant to Item 402(a)(9) of Regulation S-K promulgated by the SEC,
neither the foregoing report nor the material set forth below under the
caption "STOCK PERFORMANCE GRAPH" shall be deemed to be filed with the SEC
for purposes of the Securities Exchange Act of 1934, nor shall such Report
or such material be deemed to be incorporated by reference in any past or
future filing by the Corporation under the Securities Exchange Act of 1934
or the Securities Act of 1933, as amended.
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return
(stock price appreciation plus reinvested dividends) on the Corporation's
common stock with the cumulative total return of the NASDAQ Composite Index
and the NASDAQ Bank Stock Index for the five years ended December 31, 1998.
Both indices are unmanaged indices maintained by NASDAQ.
Comparative Five-Year Stock Performance*
<TABLE>
<CAPTION>
Quarter/ Community NASDAQ NASDAQ
Year Bancorp. Composite Banks
- -------- --------- --------- ------
<S> <C> <C> <C>
Dec-93 $100.00 $100.00 $100.00
Mar-94 $106.27 $ 95.71 $ 97.85
Jun-94 $112.62 $ 90.88 $109.85
Sep-94 $116.36 $ 98.39 $111.97
Dec-94 $109.44 $ 96.80 $101.11
Mar-95 $115.84 $105.20 $ 63.70
Jun-95 $119.68 $120.17 $ 77.75
Sep-95 $122.11 $134.34 $ 84.84
Dec-95 $122.94 $135.44 $ 82.56
Mar-96 $122.86 $141.79 $ 88.20
Jun-96 $131.15 $152.55 $ 97.44
Sep-96 $138.01 $157.95 $106.91
Dec-96 $144.15 $166.20 $118.98
Mar-97 $156.38 $157.27 $115.51
Jun-97 $163.71 $190.57 $131.58
Sep-97 $175.08 $219.22 $159.84
Dec-97 $195.69 $202.16 $143.62
Mar-98 $240.24 $227.92 $173.20
Jun-98 $231.31 $243.92 $191.92
Sep-98 $246.93 $207.56 $183.69
Dec-98 $213.71 $282.27 $262.52
<F*> Cumulative total return assumes reinvestment of dividends
</TABLE>
Assumes $100 invested at the close of trading day preceeding the first day
of the fifth preceeding fiscal year in Community Bancorp. common stock,
NASDAQ Composite, and NASDAQ Banks.
EXECUTIVE COMPENSATION
The officers of the Corporation did not receive any compensation for
services rendered to the Corporation in 1998, 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 1998 and in each of the
preceding two years.
Summary Compensation Table
Annual Compensation
<TABLE>
<CAPTION>
Name and Principal All Other
Position Year Salary(1) Bonus(2) Compensation(3)
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard C. White, 1998 $122,266 $11,831 $23,396
President, CEO & Director 1997 117,662 21,490 23,138
1996 109,000 13,635 23,868
- --------------------
<F1> Includes voluntary salary deferrals by Mr. White pursuant to the
Corporation's Retirement Savings (401(k)) Plan, as follows: 1998,
6,604; 1997, $6,862; and 1996, $6,132.
<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 1998 will be calculated
and paid in the second quarter of 1999.
<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: 1998, 20,094;
1997, $19,707; and 1996, $20,802; and (ii) matching employer
contributions made under the Retirement Savings Plan for Mr. White's
account, as follows: 1998, 3,302; 1997, $3,431; and 1996, $3,066.
</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 1998. 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 1999 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 1999 has been set at 50% of the amount deferred for deferrals of up to
5% of compensation. Deferrals in excess of 5% of compensation are 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.)
- --------------------
<F1> For calculation of 1998 bonuses, weighted average return on equity
gives 40% weight to 1998, 30% weight to 1997, 20% to 1996 and 10% to
1995.
</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,
1998 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.
Supplemental Retirement Plan
In 1998 the Board of Directors authorized the adoption of a
Supplemental Retirement Plan for Mr. White and the other Executive Officers
of the Bank to replace estimated benefits lost as a result of the previous
termination of the Bank's defined benefit pension plan. The plan is
intended to provide an annual benefit at retirement approximating 75% of
the average annual bonus received by the officer. It is estimated that this
benefit, combined with the projected benefits under the Bank's 401(k) plan,
will be approximately equal to the benefit that would have been provided to
the Executive Officers under the terminated defined benefit pension plan.
Benefit payments will be funded by annual contributions to a rabbi trust.
ARTICLE 2
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, 1999, 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, 1999. 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 2.
ANNUAL REPORT
The Corporation's Annual Report to Shareholders for the fiscal year
ended December 31, 1998, including consolidated financial statements and
the report of A.M. Peisch & Company thereon, accompanies this proxy
statement.
SHAREHOLDER PROPOSALS
Under the rules and regulations of the Securities and Exchange
Commission, the Corporation will be permitted to use its discretionary
authority conferred in the proxy card for the annual meeting to vote on a
shareholder proposal or director nominee even if the proposal or nominee
has not been discussed in the Corporation's proxy statement, unless the
shareholder-proponent has given timely notice to the Corporation of his or
her intention to present the proposal or nominee for vote at the meeting.
In order to be considered timely for consideration at the annual meeting,
the shareholder-proponent must have furnished written notice to the
Corporation of the proposal or nominee no later than February 18, 2000.
If a shareholder seeks to have his or her proposal included in the
Corporation's proxy materials for the annual meeting, the notification
deadline is earlier than noted in the preceding paragraph. In order to be
included in the proxy material for the 2000 annual meeting, shareholder
proposals must be submitted in writing to the Secretary of the Corporation
not later than December 4, 1999, 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 1999 Annual 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.
PROXY COMMUNITY BANCORP.
Proxy for Annual Meeting of Shareholders
May 4, 1999
The undersigned hereby appoints Robert Darby, Leonard Lippens and
Roger Whitcomb, or any one or more of them, attorney with full power of
substitution in each, to vote all of 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
4, 1999 at 5:30 p.m. and at any adjournment thereof.
1. ELECTION OF THREE DIRECTORS (Class expiring in 2002)
[ ] 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 2002: THOMAS E. ADAMS, JACQUES R.
COUTURE and RICHARD C. WHITE.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list above.)
2. 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, 1999.
[ ] 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.
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 and 2.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE
REVOKED AT ANY TIME BEFORE IT IS EXERCISED.
Dated: , 1999
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---------------------------------------------
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 should
sign.
NOT A PROXY COMMUNITY BANCORP.
ANNUAL MEETING OF SHAREHOLDERS
May 4, 1999
DINNER RESERVATION
Immediately following the Annual Meeting to be held at the Elks Club
in Derby, Vermont, on Tuesday, May 4, 1999, 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: , 1999
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Signature
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Signature
