UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20459
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
COMMUNITY BANCORP, INC.
(Name of Issuer and Person Filing Statement)
COMMON STOCK, $2.50 PAR VALUE
(Title of Class of Securities)
203426101
(CUSIP Number of Class of Securities)
DONALD R. HUGHES, JR.
TREASURER AND CLERK
COMMUNITY BANCORP, INC.
17 POPE STREET
HUDSON, MA 01749
(978) 568-8321
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person Filing the Statement)
COPY TO:
DAVID F. HANNON, ESQUIRE
CRAIG AND MACAULEY
PROFESSIONAL CORPORATION
600 ATLANTIC AVENUE
BOSTON, MA 02210
SEPTEMBER 15, 1997
(Date Tender Offer First Published, Sent Or Given To Security Holders)
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CALCULATION OF FILING FEE
Transaction Valuation*: $1,500,000 Amount of Filing Fee*: $300.00
* Determined pursuant to Rule 0-11(b)(1). Assumes the purchase of
125,000 shares of $12.00 per share.
___
Check box if any part of the fee is offset as provided by /__/
Rule 0-11(a)(2) and identify the filing with which the
offsetting fee was previously paid. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of
its filing.
Amount Previously Paid: Not applicable.
Form or Registration No.: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
Item 1. SECURITY AND ISSUER.
(a) The name of the issuer is Community Bancorp, Inc., a
Massachusetts corporation (the "Company"), and the address of its
principal executive offices is 17 Pope Street, Hudson,
Massachusetts 01749.
(b) This Schedule relates to the offer by the Company to purchase up
to 125,000 shares (or such lesser number of shares as are
properly tendered) of its Common Stock, $2.50 par value, (the
"Shares") (including the associated preferred stock purchase
rights issued pursuant to the Rights Agreement, dated as of May
24, 1996, between the Company and Cambridge Trust Company, as
Rights Agent), at a price of $12.00 per Share, net to the seller
in cash, all upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated September 15, 1997 (the
"Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer"), copies of which are attached
hereto as Exhibits 99.(a)(1) and 99.(a)(2), respectively. As of
June 30, 1997, the Company had 2,950,558 Shares outstanding, which
includes the impact of a 1996 stock repurchase transaction in
which the Company repurchased 257,665 of its outstanding Shares.
Directors and executive officers of the Company and any of its
affiliates may participate in the Offer on the same basis as the
Company's other stockholders. The information set forth on the
cover page and under "Introduction" and "Certain Information About
the Company; Background and Purpose of the Offer" Section 10 of
the Offer to Purchase is incorporated herein by reference.
(c) The information set forth on the cover page, and under
"Introduction" and "Price Range of Shares" in Section 7 of the
Offer to Purchase is incorporated herein by reference.
(d) Not applicable.
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ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth under "Source and Amount of Funds" in
Section 9 and "Certain Information About the Company; Background
and Purpose of the Offer" in Section 10 of the Offer to Purchase
is incorporated herein by reference.
(b) Not applicable.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF
THE ISSUER OF AFFILIATE.
(a) through (j) - The information set forth under "Certain
Information About the Company; Background and Purpose of the
Offer" in Section 10; "Effects of the Offer on the Market for
Shares; Securities Law Issues" in Section 11 of the Offer to
Purchase is incorporated herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth under "Interest of Directors and Executive
Officers; Transactions and Arrangements Concerning Shares" in Section
8 of the Offer to Purchase is incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIP
WITH RESPECT TO THE ISSUER'S SECURITIES.
The information set forth under "Interest of Directors and Executive
Officers; Transactions and Arrangements Concerning Shares" in Section
8 of the Offer to Purchase is incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth under "Fees and Expenses" in Section 15 of
the Offer to Purchase is incorporated by reference.
ITEM 7. FINANCIAL INFORMATION.
(a) and (b) - The information set forth under "Certain Information
About the Company-Summary Consolidated Historical Financial
Information" and "Certain Information About the Company-Summary
Unaudited Pro Forma Consolidated Financial Information" in
Section 10 of the Offer to Purchase is incorporated herein by
reference, and the information set forth in the consolidated
financial statements contained in the Company's Annual Report
on Form 10-K for the year ended December 31, 1996, filed as
Exhibit 99.(g) hereto, is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) None.
(b) None.
(c) Not applicable.
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(d) None.
(e) The Information set forth in the Offer to Purchase and the Letter
of Transmittal is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
99.(a)(1) Form of Offer to Purchase, dated September 15, 1997.
99.(a)(2) Form of Letter of Transmittal together with Guidelines for
Certification of Taxpayer Identification Number on
Substitute Form W-9.
99.(a)(3) Form of Letter to Shareholders of the Company from James
A. Langway, President and Chief Executive Officer of the
Company, dated September 15, 1997.
99.(a)(4) Form of Notice of Guaranteed Delivery.
99.(a)(5) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees, dated September 15, 1997.
99.(a)(6) Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
99.(b) Not applicable.
99.(c) None.
99.(d) None.
99.(e) Not applicable.
99.(f) None.
99.(g) Consolidated financial statements contained in the
Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true,
complete and correct.
COMMUNITY BANCORP. INC.
By: /s/ James A. Langway
---------------------
Name: James A. Langway
Title: President and Chief Executive Officer
Dated: September 15, 1997
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INDEX TO EXHIBITS
-----------------
Exhibit
Number Description
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99.(a)(1) Form of Offer to Purchase, dated September 15, 1997.
99.(a)(2) Form of Letter of Transmittal together with Guidelines for
Certification of Taxpayer Identification Number on
Substitute Form W-9.
99.(a)(3) Form of Letter to Stockholders of the Company from James A.
Langway, President and Chief Executive Officer of the
Company, dated September 15, 1997.
99.(a)(4) Form of Notice of Guaranteed delivery.
99.(a)(5) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees, dated September 15, 1997.
99.(a)(6) Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and other Nominees.
99.(b) Not applicable.
99.(c) None.
99.(d) None.
99.(e) Not applicable.
99.(f) None.
99.(g) Consolidated financial statements contained in the
Company's Annual Report on Form 10-K for the year ended
December 31, 1996 (1).
(1) Incorporated herein by reference as filed as part of the
Company's December 31, 1996 Form 10-K (File No. 33-12756-B),
filed with the Commission on March 24, 1997.
<PAGE>
COMMUNITY BANCORP, INC.
OFFER TO PURCHASE FOR CASH UP TO 125,000
SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
AT A PURCHASE PRICE OF $12.00
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE
AT 5:00 P.M., E.D.T., ON OCTOBER 15, 1997,
UNLESS THE OFFER IS EXTENDED.
Community Bancorp, Inc., a Massachusetts corporation (the
"Company"), hereby invites its shareholders to tender shares (the
"Shares") of its common stock, par value $2.50 per share (including
the associated Preferred Share Purchase Rights (the "Rights") issued
pursuant to the Rights Agreement dated as of May 24, 1996 between
the Company and Cambridge Trust Company, a Massachusetts trust
company, to the Company at $12.00 per share (the "Purchase Price"),
upon the terms and subject to the conditions set forth in this Offer
to Purchase and in the related Letter of Transmittal (which together
constitute the "Offer"). The Company will purchase up to 125,000
Shares (or such lesser number as are validly tendered) validly
tendered pursuant to the Offer. All Shares validly tendered and not
withdrawn will be purchased at the Purchase Price, net to the seller
in cash, upon the terms and subject to the conditions of the Offer,
including the proration terms hereof.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. The Offer is, however, subject to certain other
conditions. See Section 6.
There is currently no established trading market for the Shares
(excluding limited or sporadic trading). During the first two
quarters of 1997, several trades of Shares took place at prices
between $9.00 and $10.00 per share. The most recent trades occurred
at a price of $10.00 per share.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE OFFER. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN
FROM TENDERING SHARES. SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS
WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND
THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. THE COMPANY
HAS BEEN ADVISED THAT NONE OF ITS EXECUTIVE OFFICERS OR DIRECTORS INTEND
TO TENDER ANY SHARES PURSUANT TO THIS OFFER.
IMPORTANT
- ---------
Any shareholder desiring to tender all or any portion of his Shares
should either (1) complete and sign the Letter of Transmittal or a
facsimile copy thereof in accordance with the instructions in the
<PAGE>
Letter of Transmittal, mail or deliver it and any other required
documents to the Company, and either mail or deliver his stock
certificates for such Shares to the Company or (2) request his
broker, dealer, commercial bank, trust company other nominee to
effect the transaction for him. A shareholder having Shares
registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact that broker, dealer,
commercial bank, trust company or other nominee if such shareholder
desires to tender such Shares. Shareholders who desire to tender
Shares and whose certificates for such Shares are not immediately
available must tender such Shares by following the procedures for
guaranteed delivery set forth in Section 3.
SHAREHOLDERS MUST PROPERLY COMPLETE THE LETTER OF TRANSMITTAL IN
ORDER TO EFFECT A VALID TENDER OF THEIR SHARES.
Questions and requests for assistance or for additional copies of
this Offer to Purchase, the Letter of Transmittal or the Notice of
Guaranteed Delivery may be directed to James A. Langway, President,
or Donald R. Hughes, Jr., Treasurer and Clerk, at the Company.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF
OF THE COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN
FROM TENDERING SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN
CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH
RECOMMENDATION, INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
(ii)
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TABLE OF CONTENTS
-----------------
SECTION PAGE
- ------- ----
Introduction 1
1. Number of Shares; Proration 2
2. Tenders by Owners of Fewer than 100 Shares 4
3. Procedure for Tendering Shares 4
4. Withdrawal Rights 7
5. Purchase of Shares and Payment of Purchase Price 8
6. Certain Conditions of the Offer 8
7. Price Range of Shares 11
8. Interest of Directors and Executive Officers;
Transactions and Arrangements Concerning the Shares 11
9. Source and Amount of Funds 12
10. Certain Information About the Company; Background,
Purpose of the Offer, and Financial Information 12
11. Effects of the Offer on the Market for Shares;
Securities Law Issues 17
12. Regulatory Approvals 17
13. Certain Federal Income Tax Consequences 18
14. Extension of the Offer; Termination; Amendments 22
15. Fees and Expenses 23
16. Miscellaneous 23
(iii)
<PAGE>
INTRODUCTION
------------
TO THE HOLDERS OF COMMON STOCK OF COMMUNITY BANCORP, INC.
The Company hereby invites its shareholders to tender Shares to the
Company at a price of $12.00 per share, upon the terms and subject to
the conditions set forth in the Offer. The Company will purchase up
to 125,000 Shares (or such lesser number as are validly tendered)
validly tendered pursuant to the Offer. All Shares validly tendered
and not withdrawn will be purchased at the Purchase Price, net to
the seller in cash, upon the terms and subject to the conditions of
the Offer, including the proration terms described below.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER
CONDITIONS. SEE SECTION 6.
If, before the Expiration Date (as defined in Section 1), more than
125,000 Shares are validly tendered, the Company will accept Shares
for purchase first from all Odd Lot Owners (as defined in Section 2)
who validly tender all their Shares and then on a pro rata basis
from all other shareholders who validly tender Shares. See Sections
1 and 2. The Company will return all Shares not purchased under the
Offer, including Shares not purchased because of proration.
Tendering shareholders will not be obligated to pay brokerage fees
or commissions, solicitation fees or, stock transfer taxes on the
Company's purchase of Shares pursuant to this offer.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN
FROM TENDERING SHARES.
Shareholders must make their own decisions whether to tender Shares
and, if so, how many Shares to tender and the price or prices at
which Shares should be tendered.
The Company is making the Offer as part of a plan to employ excess
capital and to enhance shareholder value. As discussed in "Section
10. Certain Information About the Company; Background and Purpose
of the Offer," the restructuring is intended to enhance shareholder
value by redeploying the portion of the Company's equity capital
that is not necessary for the Company's core banking business.
Following completion of the Offer, the Company and Community National
Bank, a national banking association and the Company's operating
subsidiary ("CNB"), will continue to have strong capital positions.
CNB will continue to qualify as a "well capitalized" institution
under the prompt corrective action scheme enacted by the Federal
Deposit Insurance Corporation Improvement Act of 1991. On a pro
forma basis as of June 30, 1997, giving effect to the Offer, and
assuming acceptance of the maximum number of Shares in the Offer,
the Company would have had an equity to asset ratio of 7.59%, a
total risk-based capital ratio of 14.62% and a leverage ratio of
7.59%. See Section 10.
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The Offer will enable shareholders to sell a portion of their Shares
while retaining a continuing equity interest in the Company if they
so desire. The Offer will increase the Company's leverage, with an
attendant increase in the risks and rewards for shareholders who
retain a continuing equity interest in the Company. In addition,
shareholders who determine not to accept the Offer will realize a
proportionate increase in their relative equity interest in the
Company, and thus in the Company's future earnings and assets,
subject to increased risks resulting from higher leverage and to the
Company's ability to issue additional Shares or other equity
securities in the future.
As of June 30, 1997, there were 2,950,558 Shares outstanding. The
Shares that the Company is offering to purchase represent
approximately 4.2% of the Shares outstanding as of June 30, 1997.
The Company plans to obtain the funds needed for the Offer from cash
on hand and from a special cash dividend to be declared by Community
National Bank on its Common Stock, which is wholly owned by the
Company. See Section 9.
1. NUMBER OF SHARES; PRORATION.
Upon the terms and subject to the conditions of the Offer, the
Company will accept for payment and purchase 125,000 Shares or such
lesser number of Shares as are validly tendered on or prior to the
Expiration Date. The term "Expiration Date" means 5:00 p.m.,
E.D.T., on October 15, 1997, unless the Company, in its sole
discretion, shall have extended the period of time during which the
Offer is open, in which event the term "Expiration Date" shall refer
to the latest time and date at which the Offer, as so extended by
the Company, shall expire. See Section 14 for a description of the
Company's right to extend the time during which the Offer is open
and to delay, terminate or amend the Offer. See also Section 6.
Subject to Section 2, if the Offer is oversubscribed, tendered
Shares will be subject to proration. The proration period also
expires on the Expiration Date.
The Company reserves the right, in its sole discretion, to purchase
more than 125,000 Shares pursuant to the Offer.
If (i) the Company increases or decreases the price to be paid for
Shares, increases the number of Shares being sought and any such
increase in the number of Shares being sought exceeds 2% of the
outstanding Shares, or decreases the number of Shares being sought,
and (ii) the Offer is scheduled to expire less than ten business
days from and including the date that notice of such increase or
decrease if first published, sent or given in the manner specified
in Section 14, the Offer will be extended for ten business days from
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and including the date of such notice. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or
federal holiday and consists of the time period from 12:01 a.m.
through 12:00 midnight, E.D.T.
All Shares purchased pursuant to the Offer will be purchased at the
Purchase Price. All Shares not purchased pursuant to the Offer,
including Shares not purchased because of proration, will be
returned to the tendering shareholders at the Company's expense as
promptly as practicable following the Expiration Date.
If the number of Shares validly tendered prior to the Expiration
Date is less than or equal to 125,000 Shares (or such greater number
of Shares as the Company may elect to purchase pursuant to the
Offer), the Company will, upon the terms and subject to the
conditions of the Offer, purchase at the Purchase Price all Shares
so tendered.
Upon the terms and subject to the conditions of the Offer, in the
event that prior to the Expiration Date more than 125,000 Shares (or
such greater number of Shares as the Company elects to purchase) are
validly tendered at the Purchase Price, the Company will accept
Shares for purchase in the following order of priority;
(a) first, all Shares validly tendered prior to the Expiration
Date by any Odd Lot Owner (as defined in Section 2) who:
(1) tenders all Shares beneficially owned by such Odd Lot
Owner (partial tenders will not qualify for this
preference); and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of
Guaranteed Deliver; and
(b) then, after purchase of all of the foregoing Shares, all
other Shares validly tendered before the Expiration Date on
a pro rata basis, if necessary (with adjustments to avoid
purchases of fractional shares).
On May 21, 1996, the Company's Board of Directors declared a
dividend distribution of one Right for each Share outstanding on
that date (the "Record Date"). Shares issued subsequent to the
Record Date automatically receive the Rights. The Rights expire on
May 20, 2006 unless redeemed earlier by the Company. Each Right
entitles the registered holder to purchase from the Company a unit
consisting of one one-thousandth of a share of Series A
Participating Cumulative Preferred Stock of the Company at an
exercise price of $22.50, subject to adjustment to prevent dilution.
The Rights are not currently exercisable and trade together with the
Shares associated therewith. The Rights will not become exercisable
or separately tradeable as a result of the Offer. Absent
circumstances causing the Rights to become exercisable or separately
tradeable prior to the Expiration Date, the tender of any Shares
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pursuant to the Offer will include the tender of the associated
Rights. No separate consideration will be paid for such Rights.
Upon the purchase of Shares by the Company pursuant to the Offer,
the sellers of the Shares so purchased will no longer own the Rights
associated with such Shares.
As described in Section 13, the number of Shares that the Company
will purchase from a shareholder may affect the federal income tax
consequences to the shareholder of such purchase and therefore may
be relevant to a shareholder's decision whether to tender Shares.
2. TENDERS BY OWNERS OF FEWER THAN 100 SHARES.
The Company, upon the terms and subject to the conditions of the
Offer, will accept for payment, without proration, all Shares
validly tendered on or prior to the Expiration Date by or on behalf
of shareholders who beneficially held, as of the close of business
on September 14, 1997, and continue to own beneficially as of the
Expiration Date, an aggregate of fewer than 100 Shares ("Odd Lot
Owners"). To avoid proration, however, an Odd Lot Owner must
validly tender all Shares that such Odd Lot Owner beneficially owns;
partial tenders will not qualify for this preference. This
preference is not available to holders of 100 or more Shares, even
if such holders have separate stock certificates for fewer than 100
Shares. Any Odd Lot Owner wishing to tender all Shares beneficially
owned by him free of proration pursuant to this Offer must complete
the section captioned "Odd Lots" in the Letter of Transmittal and,
if applicable, on the Notice of Guaranteed Delivery.
The special Odd Lot purchase rules described above do not apply to
any Shares held in the Company's Employee Stock Ownership Plan.
3. PROCEDURE FOR TENDERING SHARES.
PROPER TENDER OF SHARES. For Shares to be validly tendered pursuant
to the Offer:
(a) the certificates for such Shares, together with a properly
completed and duly executed Letter of Transmittal (or
facsimile thereof) with any required signature guarantees,
and any other documents required by the Letter of
Transmittal, must be received on or before the Expiration
Date by the Company; or
(b) the tendering shareholder must comply with the guaranteed
delivery procedure set forth below.
In addition, Odd Lot Owners who tender all their Shares must
complete the section entitled "Odd Lots" in the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery
in order to qualify for the preferential treatment available to Odd
Lot Owners as set forth in Section 1.
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SIGNATURE GUARANTEES AND METHOD OF DELIVERY. No signature guarantee
is required on the Letter of Transmittal (i) if the Letter of
Transmittal is signed by the registered holder of the Shares exactly
as the name of the registered holder appears on the certificate
tendered therewith, and payment and delivery are to be made directly
to such registered holder, or (ii) if Shares are tendered for the
account of a member firm of a registered national securities
exchange, a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an
office, branch or agency in the United States (each such entity, an
"Eligible Institution"). In all other cases, all signatures on the
Letter of Transmittal must be guaranteed by an Eligible Institution.
See Instruction 1 of the Letter of Transmittal. If a certificate
representing Shares is registered in the name of a person other than
the signer of a Letter of Transmittal, or if payment is to be made,
or Shares not purchased or tendered are to be issued, to a person
other than the registered holder, the certificate must be endorsed
or accompanied by an appropriate stock power, in either case signed
exactly as the name of the registered holder appears on the
certificate, with the signature on the certificate or stock power
guaranteed by an Eligible Institution.
In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the
Company of certificates for such Shares, a properly completed and
duly executed Letter of Transmittal (or facsimile thereof) with any
required signature guarantees and any other documents required by
the Letter of Transmittal.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING STOCK
CERTIFICATES, THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED
DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER.
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
FEDERAL INCOME TAX BACKUP WITHHOLDING. To prevent federal income
tax backup withholding equal to 31% of the gross payments made
pursuant to the Offer, each shareholder who does not otherwise
establish an exemption from such withholding must notify the Company
of such shareholder's correct taxpayer identification number (or
certify that such taxpayer is awaiting a taxpayer identification
number) and provide certain other information by completing a
Substitute Form W-9 (included in the Letter of Transmittal). See
Instruction of the Letter of Transmittal.
EACH SHAREHOLDER SHOULD CONSULT HIS OWN TAX ADVISOR AS TO WHETHER
SUCH SHAREHOLDER IS SUBJECT TO OR EXEMPT FROM FEDERAL INCOME TAX
WITHHOLDING.
For a discussion of certain other federal income tax consequences to
tendering shareholders, see Section 13.
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GUARANTEED DELIVERY. If a shareholder desires to tender Shares
pursuant to the Offer and such shareholder's certificates are not
immediately available or time will not permit all required documents
to reach the Company by the Expiration Date, such Shares may
nevertheless be tendered provided that all of the following
conditions are satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Company receives (by hand, mail, telegram or facsimile
transmission), on or prior to the Expiration Date, a
properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form the Company has provided
with this Offer to Purchase and includes a guarantee by an
Eligible Institution in the form set forth in such Notice;
and
(c) the certificates for all tendered shares in proper form for
transfer, together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) and
any other documents required by the Letter of Transmittal,
are received by the Company within five business days after
the date the Company receives such Notice of Guaranteed
Delivery.
DETERMINATION OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS;
NO OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the
number of Shares to be accepted, the form of documents and the
validity, form, eligibility (including the time of receipt) and
acceptance for payment of any tender of Shares will be determined by
the Company, in its sole discretion, which determination shall be
final and binding on all parties. The Company reserves the absolute
right to reject any or all tenders it determines not to be in proper
form or the acceptance of or payment for which may be unlawful. The
Company also reserves the absolute right to waive any of the
conditions of the Offer or any defect or irregularity in the tender
of any particular Shares. No tender of Shares will be deemed to be
validly made until all defects and irregularities have been cured or
waived. Neither the Company nor any other person is or will be
obligated to give notice of any defects or irregularities in
tenders, and neither the Company nor any other person will incur any
liability for failure to give such notice.
RULE 14E-4. It is a violation of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
for a person (directly or indirectly) to tender shares for his own
account unless, at the time of tender and at the end of the
proration period (including any extension thereof), the person so
tendering (i) has a net long position equal to or greater than the
amount of (x) Shares tendered or (y) other securities immediately
convertible into, exercisable, or exchangeable for the amount of
Shares tendered and will acquire such Shares for tender by
conversion, exercise of exchange of such other securities, and (ii)
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will cause such Shares to be delivered in accordance with the terms
of the Offer. Rule 14e-4 provides a similar restriction applicable
to the tender or guarantee of a tender on behalf of another person.
The tender of Shares pursuant to any one of the procedures described
above will constitute the tendering shareholder's acceptance of the
terms and conditions of the Offer as well as the tendering
shareholders' representation and warranty that (i) such shareholder
has a net long position in the Shares being tendered within the
meaning of Rule 14e-4, and (ii) the tender of such Shares complies
with Rule 14e-4. The Company's acceptance for payment of Shares
tendered pursuant to the Offer will constitute a binding agreement
between the tendering shareholder and the Company upon the terms and
subject to the conditions of the Offer.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, the tender of Shares
pursuant to the Offer is irrevocable. Shares tendered pursuant to
the Offer may be withdrawn at any time prior to the Expiration Date
and, unless theretofore accepted for payment by the Company, may
also be withdrawn after 5:00 p.m., E.D.T., on October 24, 1997.
For a withdrawal to be effective, the Company must receive in a timely
manner (at the address set forth on the last page of this Offer to
Purchase) a written, telegraphic or facsimile transmission notice of
withdrawal. Such notice of withdrawal must specify the name of the
person who tendered the Shares to be withdrawn, the number of Shares
to be withdrawn and the name of the registered holder, if different
from that of the person who tendered such Shares. If the
certificates have been delivered or otherwise identified to the
Company, then, prior to the release of such certificates, the
tendering shareholder must also submit the serial numbers shown on
the particular certificates evidencing the Shares to be withdrawn
and the signature on the notice of withdrawal must be guaranteed by
an Eligible Institution (except in the case of Shares tendered by an
Eligible Institution). All questions as to the form and validity
(including time of receipt) of notices of withdrawal will be
determined by the Company, in its sole discretion, which
determination shall be final and binding on all parties. Neither
the Company nor any other person is or will be obligated to give
notice of any defects or irregularities in any notice of withdrawal,
and neither the Company nor any other person will incur any
liability for failure to give such notice. Any Shares properly
withdrawn will thereafter be deemed not validly tendered for
purposes of the Offer. Withdrawn Shares may, however, be retendered
by the Expiration Date by again following any of the procedures
described in Section 3.
If the Company extends the Offer, is delayed in its purchase of
Shares or is unable to purchase Shares pursuant to the Offer for any
reason, then without prejudice to the Company's rights under the
Offer, the Company may, subject to applicable law, retain all
<PAGE>
-8-
tendered Shares, and the Shares may not be withdrawn except to the
extent tendering shareholders are entitled to withdrawal rights as
described in this Section 4.
5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE.
Upon the terms and subject to the conditions of the Offer, the
Company will purchase and pay the Purchase Price for 125,000 Shares
(subject to increase or decrease as provided in Section 1 and
Section 14) or such lesser number of Shares as are validly tendered,
as promptly as practicable after the Expiration Date.
Payment for Shares purchased pursuant to the Offer will be made by
the Company. In the event of proration, the Company will determine
the proration factor and pay for those tendered Shares accepted for
payment as soon as practicable after the Expiration Date; however,
the Company does not expect to be able to announce the final results
of any such proration until approximately ten business days after
the Expiration Date. Certificates for all Shares not purchased,
including all Shares not purchased due to proration, will be
returned as soon as practicable after the Expiration Date or
termination of the Offer without expense to the tendering
shareholder. Under no circumstances will the Company pay interest
on the Purchase Price. In addition, if certain events occur, the
Company may not be obligated to purchase Shares pursuant to the
Offer. See Section 6.
The Company will pay all stock transfer taxes, if any, payable on
the transfer to it of Shares purchased pursuant to the offer;
provided, however, that (i) if payment of the Purchase Price is to
be made to, or (ii) (in the circumstances permitted by the Offer) if
unpurchased Shares are to be registered in the name of, any person
other than the registered owner, or if tendered certificates are
registered in the name of any person other than the person signing
the Letter of Transmittal, the amount of all stock transfer taxes,
if any (whether imposed on the registered owner or such other
person), payable on account of the transfer to such person will be
deducted from the Purchase Price unless evidence satisfactory to the
Company of the payment of such taxes or exemption therefrom is
submitted. See Instruction 6 of the Letter of Transmittal.
THE COMPANY MAY BE REQUIRED TO WITHHOLD AND REMIT TO THE INTERNAL
REVENUE SERVICE (THE "IRS"), 31% OF THE GROSS PROCEEDS PAID TO ANY
TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY AND
SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL.
SEE SECTION 3.
6. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Company shall
not be required to accept for payment, purchase or pay for any
Shares tendered, and may terminate or amend the Offer or may
<PAGE>
-9-
postpone the acceptance for payment of, the purchase of and the
payment for, Shares tendered, subject to Rule 13e-4(f) under the
Exchange Act (see Section 14), if, in the sole judgment of the
Company, at any time on or after September 15, 1997, and at or before
the time of purchase of any such Shares, any of the following events
shall have occurred (or shall have been determined by the Company to
have occurred) which, regardless of the circumstances (including any
action or omission to act by the Company), makes it inadvisable to
proceed with the Offer or with such purchase or payment:
(a) there shall have been threatened, instituted or pending any
action or proceeding by any government or governmental,
regulatory or administrative agency or authority or
tribunal or any other person, domestic or foreign, or
before any court or governmental, regulatory or
administrative authority or agency or tribunal, domestic or
foreign, which: (a) challenges the making of the Offer,
the acquisition of Shares pursuant to the Offer or
otherwise relates in any manner to the Offer or (2) in the
Company's sole judgment, could materially affect the
business, condition (financial or other), income,
operations or prospects of the Company and its
subsidiaries, taken as a whole, or otherwise materially
impair in any way the contemplated future conduct of the
business of the Company or any of its subsidiaries or
materially impair the Offer's contemplated benefits to the
Company; or
(b) there shall have been any action threatened or taken, or
approval withheld, or any statute, rule, regulation,
judgment, order or injunction threatened, proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed
to be applicable to the Offer or the Company or any of its
subsidiaries, by any court or any government or
governmental, regulatory or administrative authority or
agency or tribunal, domestic or foreign, which, in the
Company's sole judgment, would or might directly or
indirectly: (1) make the acceptance for payment of, or
payment for, some or all of the Shares illegal or otherwise
restrict or prohibit consummation of the Offer, (2) delay
or restrict the ability of the Company, or render the
Company unable, to accept for payment or pay for some or
all of the Shares, (3) materially impair the contemplated
benefits of the Offer to the Company or (4) materially
affect the business, condition (financial or other),
income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or otherwise materially
impair in any way the contemplated future conduct of the
business of the Company or any of its subsidiaries; or
(c) there shall have occurred: (1) the declaration of any
banking moratorium or suspension of payments in respect of
<PAGE>
-10-
banks in the United States, (2) any general suspension of
trading in, or limitation on prices for, securities on any
United States national securities exchange or in the
over-the-counter market, (3) the commencement or escalation
of a war, armed hostilities or any other national or
international crisis directly or indirectly involving the
United States, (4) any limitation (whether or not
mandatory) by any governmental, regulatory or
administrative agency or authority on, or any event which,
in the Company's sole judgment, might affect, the extension
of credit by banks or other lending institutions in the
United States, (5) any significant decrease in the market
price of the Shares or in the general level of market
prices of equity securities in the United States or abroad
or any change in the general political, market, economic or
financial conditions in the United States or abroad that
could have a material adverse effect on the Company's
business, operations or prospects or the trading in the
Shares or that, in the sole judgment of the Company, makes
it inadvisable to proceed with the Offer or (6) in the case
of any of the foregoing existing at the time of the
commencement of the Offer, in the Company's sole judgment,
a material acceleration or worsening thereof; or
(d) any change shall have occurred or be threatened in the
business, condition (financial or other), income,
operations, Share ownership or prospects of the Company and
its subsidiary, taken as a whole, which, in the Company's
sole judgment, is or may be material to the Company or any
other event shall have occurred which, in the Company's
sole judgment, materially impairs the Offer's contemplated
benefits; or
(e) a tender or exchange offer for any or all of the Shares
(other than the Offer), or any merger, business combination
or other similar transaction with or involving the Company
or any subsidiary, shall have been proposed, announced or
made by any person; or
(f) any entity or person shall have acquired or proposed to
acquire beneficial ownership of more than 5% of the
outstanding Shares (other than any such entity or person
which has acquired beneficial ownership of more than 5% of
the outstanding shares prior to September 15, 1997.
The foregoing conditions are for the Company's sole benefit and may
be asserted by the Company regardless of the circumstances giving
rise to any such condition (including any action or inaction by the
Company) or may be waived by the Company in whole or in part. The
Company's failure at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any
<PAGE>
-11-
time and from time to time. Any determination by the Company
concerning the events described in this Section 6 shall be final and
shall be binding on all parties.
7. PRICE RANGE OF SHARES.
There is currently no established trading market for the Shares
(excluding limited or sporadic trading). During the first two
quarters of 1997, several trades of Shares took place at prices
between $9.00 and $10.00 per share. The most recent trades occurred
at a price of $10.00 per share.
8. INTEREST OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND
ARRANGEMENTS CONCERNING THE SHARES.
As of June 30, 1997, the directors and executive officers of the
Company and the Bank as a group beneficially owned an aggregate of
1,130,493 Shares (approximately 38.3% of the outstanding Shares),
including the shares held by the Company's ESOP, for which three
directors are co-trustees, and the shares held by the Company's
401(k), for which two executive officers are co-trustees. As of
June 30, 1997, the Company's ESOP and 401(k) Savings Plan owned
73,075 Shares and 64,508 Shares, respectively, representing
approximately 2.5% and 2.2%, respectively of the outstanding Shares.
The Company has been advised that none of its executive officers or
directors intend to tender any Shares pursuant to the Offer. If the
Company purchases 125,000 Shares (or approximately 4.2% of the Shares
outstanding at June 30, 1997) pursuant to the Offer and no executive
officer or director tenders any Shares pursuant to the Offer, then after
the purchase of Shares the Company's executive officers and directors as
a group would beneficially own approximately 40.0% of the outstanding
Shares, and the ESOP and the 401(k) Plan would own approximately 2.6%
and 2.3% of the outstanding Shares, respectively. In the event that
more than 125,000 Shares are validly tendered, the Company will accept
Shares on a pro rata basis.
Except as set forth on Schedule A, based upon the Company's records
and upon information provided to the Company by its directors,
executive officers and affiliates, neither the Company nor any of
its subsidiaries nor, to the best of the Company's knowledge, any of
the executive officers or directors of the Company, nor any
associates of any of the foregoing, has effected any transactions in
the Shares during the forty (40) business day period prior to the
date hereof.
Except as set forth in this Offer to Purchase, neither the Company
nor, to the best of the Company's knowledge, any of its affiliates,
executive officers or directors, or any of the executive officers or
directors of its subsidiaries, is a party to any contract,
arrangement, understanding or relationship with any other person
relating, directly or indirectly, to the Offer with respect to any
<PAGE>
-12-
securities of the Company (including, but not limited to, any
contract, arrangement, understanding or relationship concerning the
transfer or the voting of any such securities, joint ventures, loan
or option arrangements, puts or calls, guaranties of loans,
guaranties against loss or the giving or withholding of proxies,
consents or authorizations).
9. SOURCE AND AMOUNT OF FUNDS.
Assuming that the Company purchases 125,000 Shares pursuant to the
Offer at a Purchase Price of $12.00 per Share, the Company expects
the maximum aggregate cost, including all fees and expenses
applicable to the Offer, to be approximately $1,510,500.
The Company plans to obtain the funds needed for the Offer from cash
on hand of approximately $150,000 and from a special cash dividend
to be declared by Community National Bank on its Common Stock, which is
wholly owned by the Company.
See "Pro Forma Financial Information" under Section 10 for
information concerning the assumed cost of funds for the Offer.
10. CERTAIN INFORMATION ABOUT THE COMPANY; BACKGROUND, PURPOSE
OF THE OFFER, AND FINANCIAL INFORMATION.
THE COMPANY. Community Bancorp, Inc., a Massachusetts corporation,
owns 100% of Community National Bank, a national banking association
and the Company's principal operating subsidiary. As of June 30,
1997, the Company had total assets of $261,074,610, total deposits
of $218,188,324, and shareholders' equity of $21,199,083. As of
June 30, 1997, CNB constituted 100.0% of the consolidated assets of the Company.
As a bank holding company registered under the Bank Holding Company
Act of 1956, as amended, the Company is subject to supervision and
regulation by the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board").
The Company's principal executive offices are located at 17 Pope
Street, Hudson, Massachusetts 01749, and the Company's telephone
number is (978) 568-8321.
PURPOSE OF THE OFFER. As of June 30, 1997, the Company had
accumulated equity capital of $21,199,083, representing 8.12% of
its total assets. The Offer is designed to reposition the Company's
balance sheet to increase return on equity by redeploying that portion
of the Company's equity capital that is not necessary for the Company's
Massachusetts-based, core banking business. Following completion of
the Offer, the Company and CNB will continue to have strong capital
positions. CNB will continue to qualify as a "well capitalized"
institution under the prompt corrective action program enacted by the
Federal Deposit Insurance Corporation Improvement Act of 1991. On a
pro forma basis as of June 30, 1997, giving effect to the Offer, and
assuming acceptance of the maximum number of Shares in the Offer, the
<PAGE>
-13-
Company would have had an equity to asset ratio of 7.59%, a total risk
based capital ratio of 14.62% and a leverage ratio of 7.59%.
As described above, the Offer is part of a plan intended to enhance
shareholder value. The Offer will enable shareholders to sell a
portion of their Shares while retaining a continuing equity interest
in the Company if they so desire. The Offer will increase the
Company's leverage, with an attendant increase in the risks and
rewards for persons who retain a continuing equity interest in the
Company. In addition, persons who determine not to accept the Offer
will realize a proportionate increase in their relative equity
interest in the Company, and thus in the Company's future earnings
and assets, subject to increased risks resulting from higher
leverage and to the Company's ability to issue additional Shares or
other equity securities in the future.
The Offer may provide shareholders who are considering a sale of all
or a portion of their Shares the opportunity to sell those Shares
for cash without the usual transaction costs associated with
open-market sales. To the extent the purchase of Shares in the
Offer results in a reduction in the number of shareholders of
record, the costs of the Company for services to shareholders may be
reduced.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE OFFER. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN
FROM TENDERING ANY OR ALL OF SUCH SHAREHOLDER'S SHARES AND HAS NOT
AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION. SHAREHOLDERS
ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER,
CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN
DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO
TENDER.
Following completion of the Offer, the Company may repurchase
additional Shares in the open market, in privately negotiated
transactions or otherwise. Any such purchases may be on the same
terms or on terms which are more or less favorable to shareholders
than the terms of the Offer. Rule 13e-4 under the Exchange Act
prohibits the Company and its affiliates from purchasing any Shares,
other than pursuant to the Offer, until at least ten business days
after the Expiration Date. Any possible future purchases by the
Company will depend on many factors, including the market price of
the Shares, the results of the Offer, the Company's business and
financial position and general economic and market conditions.
Shares the Company acquires pursuant to the Offer will be held in
the Company's treasury and will be available for the Company
to issue without further shareholder action (except as required by
applicable law). Such Shares could be issued without shareholder
approval for such purposes as, among others, the raising of
additional capital for use in the Company's business.
<PAGE>
-14-
COMMUNITY BANCORP, INC.
SUMMARY CONSOLIDATED HISTORICAL FINANCIAL INFORMATION
Set forth below is certain summary historical consolidated financial
information of the Company. The summary financial information is
derived from the audited consolidated financial statements as
reported in the Company's Annual Report and Form 10-K for the years
ended December 31, 1996 and December 31, 1995 and the unaudited
consolidated financial statements as reported in the Company's
Quarterly Report on Form 10-Q for the periods ended June 30, 1997
and June 30, 1996. More comprehensive financial information is
included in such reports, and the financial information that follows
is qualified by reference to such documents and all of the financial
statements and related notes contained therein.
<TABLE>
<CAPTION>
At or for the years ended
-------------------------------
December 31, December 31,
1996 1995
------------ ------------
<S> <C> <C>
Summary Income Data:
- -------------------
Interest income $ 17,761,102 $ 16,917,624
Interest expense 6,367,758 6,284,750
---------- ----------
Net interest income 11,393,344 10,632,874
Provision for loan losses 0 120,000
---------- ----------
Net interest income after
provision for loan losses 11,393,344 10,512,874
Noninterest income 2,415,058 2,083,964
Noninterest expense 8,629,644 8,273,412
---------- ----------
Income before income taxes 5,178,758 4,323,426
Income taxes 2,026,660 1,679,549
---------- ----------
Net income $ 3,152,098 $ 2,643,877
========== ==========
Summary Balance Sheet Data:
- --------------------------
Total deposits $217,181,869 $207,039,865
Total loans 131,570,430 128,072,061
Total assets 250,002,458 237,580,796
Shareholders' equity 19,841,134 19,540,673
Per Share Data:
- --------------
Net income $ 1.01 $ .84
Book value 6.76 6.19
Weighted average number of
common shares outstanding 3,113,388 3,148,306
Other Data:
- ----------
Earnings to fixed charges (1) 1.60x 1.52x
<FN>
(1) The ratio of earnings to fixed charges is calculated by dividing
(i) net interest income plus noninterest income by (ii) provision
for loan losses plus noninterest expense.
</TABLE>
<PAGE>
-15-
COMMUNITY BANCORP, INC.
SUMMARY CONSOLIDATED HISTORICAL FINANCIAL INFORMATION (cont.)
<TABLE>
<CAPTION>
At or for the six months ended
-------------------------------
June 30, June 30,
1997 1996
(Unaudited) (Unaudited)
------------ ------------
<S> <C> <C>
Summary Income Data:
- -------------------
Interest income $ 9,285,307 $ 8,778,816
Interest expense 3,330,100 3,171,272
--------- ---------
Net interest income 5,955,207 5,607,544
Provision for loan losses 0 0
--------- ---------
Net interest income after
provision for loan losses 5,955,207 5,607,544
Noninterest income 1,291,417 1,217,534
Noninterest expense 4,671,677 4,270,266
--------- ---------
Income before income taxes 2,574,947 2,554,812
Income taxes 974,374 998,002
--------- ---------
Net income $ 1,600,573 $ 1,556,810
========= =========
Summary Balance Sheet Data:
- --------------------------
Total deposits $218,188,324 $210,323,582
Total loans 137,554,263 128,908,753
Total assets 261,074,610 242,715,129
Shareholders' equity 21,199,083 20,845,280
Per Share Data:
- --------------
Net income $ .55 $ .49
Book value 7.18 6.53
Weighted average number of
common shares outstanding 2,938,448 3,169,139
Other Data:
- ----------
Earnings to fixed charges (1) 1.55x 1.60x
<FN>
(1) The ratio of earnings to fixed charges is calculated by dividing
(i) net interest income plus noninterest income by (ii) provision
for loan losses plus noninterest expense.
</TABLE>
<PAGE>
-16-
COMMUNITY BANCORP, INC.
SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited Pro Forma financial information reflects
transactions regarding the consummation of the Offer on the basis of a
Purchase Price of $12.00 per Share, assuming acceptance of the maximum
number of Shares in the Offer to Purchase. The unaudited Pro Forma
summary income data give effect to such transactions as if they had
occurred at the beginning of the periods presented. The unaudited Pro
Forma summary balance sheet data give effect to the transactions as if
they had occurred on the respective dates indicated. The Pro Forma
information should be read in conjunction with the summary historical
financial information and does not purport to be indicative of the
results which may be obtained in the future or which would actually
have been obtained had the Offer occurred as of the dates indicated.
<TABLE>
<CAPTION>
At or for the six months or year ended
--------------------------------------
June 30, December 31,
1997 1996
(Unaudited) (Unaudited)
----------- -----------
<S> <C> <C>
Summary Income Data:
- -------------------
Interest income (1) $ 9,245,557 $ 17,683,102
Interest expense 3,330,100 6,367,758
---------- ----------
Net interest income 5,915,457 11,315,344
Provision for loan losses 0 0
---------- ----------
Net interest income after
provision for loan losses 5,915,457 11,315,344
Noninterest income 1,291,417 2,415,058
Noninterest expense (2) 4,682,177 8,640,144
---------- ----------
Income before income taxes 2,524,697 5,090,258
Income taxes 955,345 1,991,818
---------- ----------
Net income $ 1,569,352 $ 3,098,440
========== ==========
Summary Balance Sheet Data:
- --------------------------
Total deposits $218,188,324 $217,181,869
Total loans 137,554,263 131,570,430
Total assets 259,574,610 248,502,458
Shareholders' equity 19,699,083 18,341,134
Per Share Data:
- --------------
Net income $ .56 $ 1.04
Book value 6.97 6.53
Weighted average number of
common shares outstanding 2,813,448 2,988,388
Other Data:
- ----------
Earnings to fixed charges (3) 1.55x 1.59x
<FN>
(1) Pro forma interest income reflects the assumed cost, calculated at
the average Federal Funds rate for the respective periods, of
funding a stock repurchase cash amount of $1,500,000.
<PAGE>
-17-
(2) Pro forma noninterest expense reflects $10,500 in assumed costs
associated with the Offer.
(3) The ratio of earnings to fixed charges is calculated by
dividing (i) net interest income plus noninterest income by
(ii) provision for loan losses plus noninterest expense.
</TABLE>
ADDITIONAL INFORMATION. The Company is subject to the informational
requirements of the Exchange Act and in accordance therewith files
periodic reports, proxy statements and other information with the
Commission relating to its business, financial condition and other
matters. The Company is required to disclose in such proxy
statements and reports certain information, as of particular dates,
concerning the Company's directors and officers, their remuneration,
the principal owners of the Company's securities and any material
interest of such persons in transactions with the Company. The
Company has also filed an Issuer Tender Offer Statement on Schedule
13E-4 (the "Schedule 13E-4") with the Commission, which includes
certain additional information relating to the Offer.
Such material may be inspected at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and also should be available for inspection
and copying at the following regional offices of the Commission:
Seven World Trade Center, New York, New York 10048 and Northwestern
Atrium Center, 500 West Madison, Suite 1400, Chicago, Illinois
60661. Copies may also be obtained by mail for prescribed rates
from the Commission's Public Reference Room, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Schedule 13E-4 will not be available at
the Commission's regional offices.
11. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; SECURITIES LAW
ISSUES.
There is currently no established trading market for the Shares
(excluding limited or sporadic trading).
The Shares are registered under the Securities Act of 1933 which
requires, among other things, that the Company furnish certain
information to its shareholders and to the Commission and comply
with the Commission's proxy rules in connection with meetings of the
Company's shareholders. The Company believes that its purchase of
Shares pursuant to the Offer will not result in the Shares being
held of record by less than 300 persons so as to negate the
Company's duty to furnish the foregoing information to the
Commission and its shareholders.
12. REGULATORY APPROVALS.
As a registered bank holding company, the Company is subject to the
supervision of the Federal Reserve Board.
CNB is a member of the Federal Deposit Insurance Corporation and, as a
nationally chartered commercial bank, is subject to the supervision of
the Office of the Comptroller of the Currency. The electronic funds
<PAGE>
-18-
transfer services of CNB are governed by both state and federal laws.
The Company does not require prior regulatory approval to consummate
the Offer.
The Bank Holding Company Act of 1956 and the Change in Bank Control
Act each set forth thresholds with respect to the ownership of
voting shares of a bank holding company of 5% and 10%, respectively,
over which the owner of such voting shares may be determined to
control such bank holding company. If, as a result of the Offer,
the ownership interest of any shareholder in the Company is
increased over these thresholds, such shareholder may be required to
reduce its ownership interest in the Company. Each shareholder
whose ownership interest may be so increased is urged to consult the
shareholder's own legal counsel with respect to the consequences to
the shareholder of the offer.
13. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following summary is a general discussion of certain of the
United States federal income tax consequences of the Offer. This
summary is based upon laws, regulations, rulings and decisions now
in effect, all of which are subject to change, possibly
retroactively. No ruling as to any matter discussed in this summary
has been requested or received from the IRS.
EACH SHAREHOLDER IS URGED TO CONSULT AND RELY ON THE SHAREHOLDER'S
OWN TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO THE
SHAREHOLDER OF TENDING SHARES PURSUANT TO THE OFFER.
IN GENERAL. A shareholder's exchange of Shares for cash pursuant to
the Offer will be a taxable transaction for federal income tax
purposes, and may also be a taxable transaction under applicable
state, local, foreign or other tax laws. This summary does not
discuss any aspects of state, local, foreign or other tax laws.
Certain shareholders (including insurance companies, tax-exempt
organizations, financial institutions, broker dealers and
shareholders who have acquired their Shares upon the exercise of
options or otherwise as compensation) may be subject to special
rules not discussed below. For purposes of this discussion,
shareholders are assumed to hold their Shares as capital assets.
TREATMENT AS A SALE OR EXCHANGE. Under Section 302 of the Internal
Revenue Code of 1986, as amended (the "Code"), a transfer of Shares
to the Company pursuant to the Offer will, as a general rule, be
treated as a sale or exchange of the Shares (rather than as a
corporate distribution) if the receipt of cash upon the sale (a) is
"substantially disproportionate" with respect to the shareholder,
(b) results in a "complete termination" of the shareholder's
interest in the Company or (c) is "not essentially equivalent to a
dividend" with respect to the shareholder. These tests (the
"Section 302 tests") are explained more fully below.
If any of the Section 302 tests is satisfied, a tendering shareholder
will recognize capital gain or loss equal to the difference between
the amount of cash received by the shareholder pursuant to the Offer and
<PAGE>
-19-
the shareholder's basis in the Shares sold pursuant to the Offer. If
the Shares have been held for more than one year, the gain or loss will
be long-term capital gain or loss. Net long-term capital gain from the
sale of Shares held more than one year and less than eighteen months is
taxed at not more than 28 percent for Federal purposes. If the Shares
have been held for more than eighteen months, the maximum Federal rate
of tax is 20 percent. Therefore, a tendering Shareholder may wish to
take the various bases and holding periods of his Shares, if such
characteristics are not uniform, into account in determining which
Shares to tender.
CONSTRUCTIVE OWNERSHIP OF STOCK. In determining whether any of the
Section 302 tests is satisfied, a shareholder must take into account
not only Shares actually owned by the shareholder, but also Shares
that are constructively owned pursuant to Section 318 of the Code.
Under Section 318, a shareholder may constructively own Shares
actually owned, and in some cases constructively owned, by certain
related individuals and entities in which the shareholder has an
interest, or, in the case of shareholders that are entities, by
certain individuals or entities that have an interest in the
shareholder, as well as any Shares the shareholder has a right to
acquire by exercise of an option or by the conversion or exchange of
a security, such as the Convertible Securities. With respect to
option and convertible security attribution, the IRS takes the
position that Shares constructively owned by a shareholder by reason
of a right on the shareholder's part to acquire the Shares from the
Company are not to be considered outstanding for purposes of
applying the Section 302 tests to other shareholders; however, there
are both contrary and supporting judicial decisions with respect to
this issue.
THE SECTION 302 TESTS. One of the following tests must be satisfied
in order for the exchange of shares pursuant to the Offer to be
treated as a sale rather than as a dividend distribution.
(a) Substantially Disproportionate Test. The receipt of cash
by a shareholder will be substantially disproportionate
with respect to the shareholder if the percentage of the
outstanding Shares actually and constructively owned by the
shareholder immediately following the exchange of Shares
pursuant to the Offer (treating Shares exchanged pursuant
to the Offer as not outstanding) is less than 80% of the
percentage of the outstanding Shares actually and
constructively owned by the shareholder immediately before
the exchange (treating Shares exchanged pursuant to the
Offer as outstanding).
(b) Complete Termination Test. The receipt of cash by a
shareholder will be a complete termination of the
shareholder's interest if either (i) all of the Shares
actually and constructively owned by the shareholder are
sold pursuant to the Offer or (ii) all of the Shares
actually owned by the shareholder are sold pursuant to the
Offer and the shareholder is eligible to waive, and
effectively waives, the attribution of Shares constructively
owned by the shareholder in accordance with the procedures
<PAGE>
-20-
described in Section 302(c)(2) of the Code. Shareholders
considering making such an election should do so in
consultation with their own tax advisors.
(c) Not Essentially Equivalent to a Dividend Test. The receipt
of cash by a shareholder will not be essentially equivalent
to a dividend if the shareholder's exchange of Shares
pursuant to the Offer results in a "meaningful reduction"
of the shareholder's proportionate interest in the Company.
Whether the receipt of cash by a shareholder will result in
a meaningful reduction of the shareholder's proportionate
interest will depend on the shareholder's particular facts
and circumstances. However, in the case of a small
minority shareholder, even a small reduction may satisfy
this test where, as expected in the case of the Offer,
payments will not be pro rata with respect to all
outstanding Shares. The IRS has indicated in a published
ruling that, in the case of a small minority shareholder of
a publicly held corporation who exercises no meaningful
control over corporate affairs, a reduction in the
shareholder's proportionate interest in the corporation
from .0001118% to .0001081% would constitute a meaningful
reduction.
Although the issue is not free from doubt, a shareholder may be able
to take into account acquisitions or dispositions of Shares
(including market purchases and sales) substantially contemporaneous
with the Offer in determining whether any of the Section 302 tests
is satisfied.
In the event that the Offer is oversubscribed, the Company's
purchase of Shares pursuant to the Offer will be prorated. Thus, in
such case even if all the Shares actually and constructively owned
by a shareholder are tendered pursuant to the Offer, not all of the
Shares will be purchased by the Company, which in turn may affect
the shareholder's ability to satisfy the Section 302 tests.
TREATMENT AS A DIVIDEND. If none of the Section 302 tests is
satisfied and, as anticipated (although there can be no assurances),
the Company has sufficient earnings and profits, a tendering
shareholder will be treated as having received a dividend includible
in gross income in an amount equal to the entire amount of cash
received by the shareholder pursuant to the Offer. This amount will
not be reduced by the shareholder's basis in the Shares exchanged
pursuant to the Offer, and (except as described below for corporate
shareholders eligible for the dividends-received deduction) the
shareholder's basis in those Shares will be added to the
shareholder's basis in his remaining Shares. No assurance can be
given that any of the Section 302 tests will be satisfied as to any
particular shareholder, and thus no assurance can be given that any
particular shareholder will not be treated as having received a
dividend taxable as ordinary income. Any cash received for Shares
pursuant to the Offer in excess of the Company's earnings and
profits will be treated, first, as a non-taxable return of capital to
the extent of the shareholder's basis for such shareholder's Shares,
and, thereafter, as a capital gain to the extent it exceeds such basis.
<PAGE>
-21-
SPECIAL RULES FOR CORPORATE SHAREHOLDERS. To the extent that the
exchange of Shares by a corporate shareholder is treated as a
dividend, the shareholder generally will be entitled to a
dividends-received deduction equal to 70% of the dividend, subject
to applicable limitations, including those relating to
"debt-financed portfolio stock" under Section 246A of the Code and
to the 45-day holding period requirement of Section 246(c) of the
Code. Also, since it is expected that purchases pursuant to the
Offer will not be pro rata as to all shareholders, any amount
treated as a dividend to a corporate shareholder generally is
expected to constitute an "extraordinary dividend" subject to the
provisions of Section 1059 of the Code (except as may otherwise be
provided in regulations yet to be promulgated by the Treasury
Department). Under Section 1059 of the Code, a corporate
shareholder must reduce the tax basis of all such shareholder's
stock (but not below zero) by the portion of any "extraordinary
dividend" that is equal to the deduction allowable under the
dividends received deduction rules, and, if such portion exceeds the
shareholder's tax basis for the stock, must treat any such excess as
additional gain on the subsequent sale or other disposition of such
stock.
BACKUP WITHHOLDING. See Section 3 concerning the potential
application of federal backup withholding.
FOREIGN SHAREHOLDERS. The Company will assume that the exchange is
a dividend as to foreign shareholders and will therefore withhold
federal income tax at a rate equal to 30% of the gross proceeds paid
to a foreign shareholder or his agent pursuant to the Offer, unless
the Company determines that a reduced rate of withholding is
available pursuant to a tax treaty or that an exemption from
withholding is applicable because the gross proceeds are effectively
connected with the conduct of a trade or business by the foreign
shareholder within the United States. For this purpose, a foreign
shareholder is any shareholder that is not (a) a citizen or resident
of the United States, (b) a corporation, partnership or other entity
created or organized in or under the laws of the United States or
any political subdivision thereof, or (c) any estate or trust the
income of which is subject to United States federal income taxation
regardless of the source of such income.
Generally, the determination of whether a reduced rate of
withholding is applicable is made by reference to a foreign
shareholder's address or to a properly completed Form 1001 furnished
by the shareholder, and the determination of whether an exemption
from withholding is available on the grounds that gross proceeds
paid to a foreign shareholder are effectively connected with a
United States trade or business is made on the basis of a properly
completed Form 4224 furnished by the shareholder. The Company will
determine a foreign shareholder's eligibility for a reduced rate of,
or exemption from, withholding by reference to the shareholder's
address and any Forms 1001 or 4224 submitted to the Company by a
foreign shareholder unless facts and circumstances indicate that
such reliance is not warranted or unless applicable law requires
some other method for determining whether a reduced rate of
withholding is applicable. These forms can be obtained from the
<PAGE>
-22-
Company. See the instructions to the Letter of Transmittal. A
foreign shareholder with respect to whom tax has been withheld may
be eligible to obtain a refund of all or a portion of the withheld
tax if the shareholder satisfies one of the Section 302 tests for
capital gain treatment or is otherwise able to establish that no tax
or a reduced amount of tax was due. Foreign shareholders are urged
to consult their own tax advisors regarding the application of
federal income tax withholding, including eligibility for a
withholding tax reduction or exemption and the refund procedure.
14. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS.
The Company expressly reserves the right, at any time or from time
to time, in its sole discretion, to extend the period of time during
which the Offer is open by making a public announcement thereof.
The Company also expressly reserves the right, in its sole
discretion, to terminate the Offer and not accept for payment or pay
for any Shares not theretofore accepted for payment or paid for or,
subject to applicable law, to postpone payment for Shares upon the
occurrence of any of the conditions specified in Section 6 by making
a public announcement of such termination or postponement. The
Company's reservation of the right to delay payment for Shares which
it has accepted for payment is limited by Rules 13e-4(f)(2) and
13e-4(f)(5) promulgated under the Exchange Act. Rule 13e-4(f)(2)
requires that the Company permit Shares tendered pursuant to the
Offer to be withdrawn: (i) at any time during the period the Offer
remains open; and (ii) if not yet accepted for payment, after the
expiration of forty business days from the commencement of the
Offer. Rule 13e-4(f)(5) requires that the Company must either pay
the consideration offered or return the Shares tendered promptly
after the termination or withdrawal of the Offer. Subject to
compliance with applicable law, the Company further reserves the
right, in its sole discretion, at any time or from time to time to
amend the Offer in any respect, including increasing or decreasing
the number of Shares the Company may purchase or the price it may
pay pursuant to the Offer. Amendments to the Offer may be made at
any time or from time to time effected by public announcement
thereof, such announcement, in the case of an extension, to be
issued no later than 9:00 a.m., E.D.T., on the next business day
after the previously scheduled Expiration Date. Any public
announcement made pursuant to the Offer will be disseminated
promptly to shareholders in a manner reasonably designed to inform
shareholders of such change.
If the Company materially changes the terms of the Offer or the
information concerning the Offer, or if it waives a material
condition of the Offer, the Company will extend the Offer to the
extent required by Rule 13e-4 promulgated under the Exchange Act.
These rules require that the minimum period during which an offer
must remain open following material changes in the terms of the
offer or information concerning the offer (other than a change in
price or a change in percentage of securities sought) will depend on
the facts and circumstances, including the relative materiality of
such terms of information. If (i) the Company increases or
decreases the price to be paid for Shares, or the Company increases
the number of Shares being sought and any such increase in the
<PAGE>
-23-
number of Shares being sought exceeds 2% of the outstanding Shares,
or the Company decreases the number of Shares being sought and (ii)
the Offer is scheduled to expire at any time earlier than the
expiration of a period ending on the tenth business day from, and
including, the date that notice of such increase of decrease is
first published, sent or given, the Offer will be extended until the
expiration of such period of ten business days.
15. FEES AND EXPENSES.
The Company has retained Craig and Macauley Professional Corporation
("C&M") as legal counsel in connection with the Offer. C&M will
receive customary compensation for their services including
reimbursement for their reasonable out-of-pocket expenses relating
to the Offer. C&M has rendered various other legal services to the
Company in the past, for which they have received customary
compensation. The Company has also retained Arthur Andersen LLP
("A/A") as independent accountants in connection with the Offer.
A/A will receive customary compensation for their services including
reimbursement for their reasonable out-of-pocket expenses related to
the Offer. A/A has rendered various other accounting and audit
services to the Company in the past, for which they have received
customary compensation.
The Company will not pay fees or commissions to any broker, dealer,
commercial bank, trust company or other person for soliciting any
Shares pursuant to the Offer. The Company will, however, on
request, reimburse such persons for customary handling and mailing
expenses incurred in forwarding materials in respect of the Offer to
the beneficial owners for which they act as nominees. No such
broker, dealer, commercial bank or trust company has been authorized
to act as the Company's agent for purposes of this Offer. The
Company will pay (or cause to be paid) any stock transfer taxes on
its purchase of Shares, except as otherwise provided in Instruction
6 of the Letter of Transmittal.
16. MISCELLANEOUS.
The Offer is not being made to, nor will the Company accept tenders
from, holders of Shares in any jurisdiction in which the Offer or
its acceptance would not comply with the securities or Blue Sky laws
of such jurisdiction. The Company is not aware of any jurisdiction
in which the making of the Offer or the tender of Shares would not
be in compliance with the laws of such jurisdiction. However, the
Company reserves the right to exclude holders in any jurisdiction in
which it is asserted that the Offer cannot lawfully be made. So
long as the Company makes a good faith effort to comply with any
state law deemed applicable to the Offer, if it cannot do so, the
Company believes that the exclusion of holders residing in such
jurisdiction is permitted under Rule 13e-4(f)(9) promulgated under
the Exchange Act.
COMMUNITY BANCORP, INC.
September 15, 1997
<PAGE>
-24-
SCHEDULE A
- ----------
TRANSACTIONS EFFECTED BY DIRECTORS OR OFFICERS
- ----------------------------------------------
There have been no transactions in the Shares effected by, or for
the benefit of, directors or officers since June 20, 1997.
<PAGE>
-25-
Facsimile copies of the Letter of Transmittal will be accepted. The
Letter of Transmittal and certificates for the Shares and any other
required documents should be sent or delivered by each shareholder
or his broker, dealer, commercial bank, trust company or their
nominee to the Company at the following address:
COMMUNITY BANCORP, INC.
17 Pope Street
Hudson, MA 01749
(978) 568-8321
(978) 562-7129 FAX
You are directed to contact the Company at the telephone number and
address above with any questions or requests for assistance or for
additional copies of this Offer to Purchase, the Letter of
Transmittal or the Notice of Guaranteed Delivery, or to confirm
delivery of your Shares.
<PAGE>
LETTER OF TRANSMITTAL
TO ACCOMPANY SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
COMMUNITY BANCORP, INC.
TENDERED PURSUANT TO THE OFFER TO PURCHASE
DATED SEPTEMBER 15, 1997
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE
AT 5:00 P.M., E.D.T. ON OCTOBER 15, 1997,
UNLESS THE OFFER IS EXTENDED.
TO: COMMUNITY BANCORP, INC.
17 POPE STREET
HUDSON, MASSACHUSETTS 01749
Description of Shares Tendered (See instructions 3 and 4)
- ------------------------------
Names(s) and Addresses(es) of Registered Owner(s) (please fill in
exactly as name(s) appears(s) on certificate(s) - attach signed list if
additional space needed)
_______________________________ _______________________________
_______________________________ _______________________________
_______________________________ _______________________________
Number
Of Shares Number
Certificate Represented By Of Shares
Number(s) Certificates(s) Tendered*
----------- --------------- ----------
___________ ___________ __________
___________ ___________ __________
___________ ___________ __________
___________ ___________ __________
___________ ___________ __________
TOTAL SHARES
TENDERED __________
* If you desire to tender fewer than all Shares evidenced by any
certificates listed above, please indicate in this column the number
of Shares you wish to tender. Otherwise, all Shares evidenced by such
certificates will be deemed to have been tendered. See Instruction 4.
<PAGE>
-2-
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THAT SHOWN ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY.
THIS LETTER OF TRANSMITTAL IS TO BE USED ONLY IF CERTIFICATES FOR SHARES
(AS DEFINED BELOW) ARE TO BE FORWARDED WITH IT. ABSENT CIRCUMSTANCES
CAUSING THE RIGHTS (AS DEFINED BELOW) TO BECOME EXERCISABLE OR
SEPARATELY TRADEABLE PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE
OFFER TO PURCHASE), A TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER OF
THE ASSOCIATED RIGHTS. UNLESS THE CONTEXT REQUIRES OTHERWISE, ALL
REFERENCES HEREIN TO SHARES INCLUDE THE ASSOCIATED RIGHTS. SHAREHOLDERS
WHOSE CERTIFICATES ARE NOT IMMEDIATELY AVAILABLE OR WHO CANNOT DELIVER
THEIR CERTIFICATES FOR SHARES AND ALL OTHER DOCUMENTS THIS LETTER OF
TRANSMITTAL REQUIRES TO THE COMPANY AT OR BEFORE THE EXPIRATION DATE
MUST TENDER THEIR SHARES ACCORDING TO THE GUARANTEED DELIVERY PROCEDURE
SET FORTH IN SECTION 3 OF THE OFFER TO PURCHASE. SEE INSTRUCTION 2.
___
/__/ CHECK HERE IF CERTIFICATES FOR TENDERED SHARES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE
COMPANY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s): ____________________________
____________________________
Date of Execution of Notice of Guaranteed Delivery: ___________________
Name of Institution Which Guaranteed Delivery: ________________________
<PAGE>
-3-
To: COMMUNITY BANCORP, INC.
The undersigned hereby tenders to Community Bancorp, Inc., a
Massachusetts corporation (the "Company"), the above-described shares of
the Company's common stock, par value $2.50 per share (including the
associated preferred share purchase rights [the "Rights"], the
"Shares"), at the price per Share indicated in this Letter of
Transmittal, net to the seller in cash, upon the terms and subject to
the conditions set forth in the Company's Offer to Purchase dated
September 15, 1997, receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which together constitute the "Offer"). Absent
circumstances causing the Rights to become exercisable or separately
tradeable prior to the Expiration Date, a tender of Shares will also
constitute a tender of the associated Rights. Unless the context
requires otherwise, all references herein to Shares include the
associated Rights.
Subject to and effective on acceptance for payment of the Shares
tendered hereby in accordance with the terms of the Offer (including, if
the Offer is extended or amended, the terms or conditions of any such
extension or amendment), the undersigned hereby sells, assigns, and
transfers to or upon the order of the Company all right, title and
interest in and to all Shares tendered hereby that are purchased
pursuant to the Offer and hereby irrevocably constitutes and appoints
the Company as attorney-in-fact of the undersigned with respect to such
Shares, with full power of substitution (such power of attorney being an
irrevocable power coupled with interest), to (upon receipt of the
Purchase Price [as defined below] and all accompanying evidences of
transfer and authenticity):
(a) present certificates for such Shares for cancellation
and transfer on the Company's books; and
(b) receive all benefits and otherwise exercise all rights
of beneficial ownership of such Shares, all in accordance with
the terms of the Offer.
The undersigned hereby represents and warrants to the Company
that:
(a) the undersigned understands that tenders of Shares pursuant to
any one of the procedures described in Section 3 of the Offer
to Purchase and in the Instructions hereto will constitute the
undersigned's acceptance of the terms and conditions of the
Offer, including the undersigned's representation and warranty
that (i) the undersigned has a net long position in Shares or
equivalent securities at least equal to the Shares tendered
within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended, and (ii) such
tender of Shares complies with Rule 14e-4;
(b) when and to the extent the Company accepts the Shares for
purchase, the Company will acquire good, marketable and
unencumbered title to them, free and clear of all security
<PAGE>
-4-
interests, liens, charges, encumbrances, conditional sales
agreements or other obligations relating to their sale or
transfer, and not subject to any adverse claim;
(c) on request, the undersigned will execute and deliver any
additional documents the Company deems necessary or desirable
to complete the assignment, transfer and purchase of the Shares
tendered hereby; and
(d) the undersigned has read and agrees to all of the terms of the
Offer.
The names and addresses of the registered owners should be printed, if
they are not already printed above, exactly as they appear on the
certificates representing Shares tendered hereby. The certificate
numbers, the number of Shares represented by such certificates, and the
number of Shares that the undersigned wishes to tender should be
indicated on the appropriate lines.
The undersigned understands that the Company will pay $12.00 per Share
(the "Purchase Price") for Shares validly tendered pursuant to the
Offer. The undersigned understands that the Company will buy a maximum
of 125,000 Shares (or such lesser number of Shares as are validly
tendered) pursuant to the Offer. The undersigned understands that all
Shares validly tendered will be purchased at the Purchase Price, net to
the seller in cash, upon the terms and subject to the conditions of the
Offer, including its proration provisions, and that the Company will
return all other Shares, including Shares not purchased because of
proration.
The undersigned recognizes that under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or
may not be required to purchase any of the Shares tendered hereby or may
accept for payment fewer than all of the Shares tendered hereby. The
undersigned understands that certificate(s) for any Shares not tendered
or not purchased will be returned to the undersigned at the address
indicated above, unless otherwise indicated under the "Special Payment
Instructions" or "Special Delivery Instructions" below. The undersigned
recognizes that the Company has no obligation, pursuant to the "Special
Payments Instructions," to transfer any certificate for Shares from the
name of their registered owner if the Company purchases none of the
Shares represented by such certificate.
The undersigned understands that acceptance of Shares by the Company for
payment will constitute a binding agreement between the undersigned and
the Company upon the terms and subject to the conditions of the Offer.
The check for the Purchase Price for such of the tendered Shares as are
purchased will be issued to the order of the undersigned and mailed to
the address indicated above unless otherwise indicated under the
"Special Payment Instructions" or the "Special Delivery Instructions"
below.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned,
<PAGE>
-5-
and any obligations of the undersigned under this Letter of Transmittal
shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Except as stated in the Offer to
Purchase, this tender is irrevocable.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
ODD LOTS
- --------
(See Instruction 7)
To be completed ONLY if Shares are being tendered by or on behalf
of a person owning beneficially, as of the close of business September
14, 1997 and who continues to own beneficially as of the Expiration Date
(as defined in the Company's Offer to Purchase), an aggregate of fewer
than 100 Shares.
The undersigned either (check one box):
___
/__/ was the beneficial owner, as of the close of business on
September 14, 1997 of an aggregate of fewer than 100 Shares, all
of which are being tendered, or
___
/__/ is a broker, dealer, commercial bank, trust company or other
nominee which
(a) is tendering, for the beneficial owners thereof, Shares with
respect to which it is the record owner, and
(b) believes, based on representations made to it by such
beneficial owners, that each such person was the beneficial
owner, as of the close of business on September 14, 1997 of an
aggregate of fewer than 100 Shares and is tendering all such
Shares.
<PAGE>
-6-
SPECIAL PAYMENT INSTRUCTIONS
- ----------------------------
(See Instructions 1, 4, 5, 8 and 10)
To be completed ONLY if certificate(s) for Shares not tendered or not
purchased and/or any check for the Purchase Price of Shares purchased
are to be issued in the name of and sent to someone other than the
undersigned.
___ ___
Issue: /__/ check /__/ certificate(s) to:
Name
(PLEASE PRINT)
______________________________
Address
______________________________
______________________________
______________________________
Tax Identification or Social Security Number: _________________________
SPECIAL DELIVERY INSTRUCTIONS
- -----------------------------
(See Instructions 1, 4, 5, 8 and 10)
To be completed ONLY if certificate(s) for Shares not tendered or not
purchased and/or any check for the Purchase Price of Shares purchased,
issued in the name of the undersigned, are to be sent to someone other
than the undersigned, or the undersigned at an address other than that
shown above.
___ ___
Mail: /__/ check /__/ certificates(s) to:
Name
(PLEASE PRINT)
______________________________
Address
______________________________
______________________________
______________________________
<PAGE>
-7-
REGISTERED OWNER(S) SIGN HERE
- -----------------------------
(See Instructions 1 and 5)
(Please Complete Substitute Form W-9 Contained Herein)
Must be signed by registered owner(s) exactly as name(s) appear(s) on
certificate(s) or on a security position listing or by person(s)
authorized to become registered owner(s) by certificate(s) and documents
transmitted with this Letter of Transmittal. If signature is by
attorney-in-fact, executor, administrator, trustee, guardian, officer of
a corporation or another acting in a fiduciary or representative
capacity, please set forth the full title. See Instruction 5.
_________________________________
(Signature)
_________________________________
(Signature)
Name and Capacity of Each Shareholder Signing Above
(PLEASE PRINT)
_________________________________
(Print name and title)
_________________________________
(Print name and title)
Area Code and Telephone Number: __________________________
Tax Identification or Social Security Number(s):______________________
______________________
<PAGE>
-8-
GUARANTEE OF SIGNATURE(S)
- -------------------------
(See Instructions 1 and 6)
Authorized Signature: ________________________________
(PLEASE PRINT)
Name: ________________________________
Title: _______________________________
Name of Firm: _______________________________
Address: ____________________________________
____________________________________
____________________________________
Area Code and Telephone Number: ______________________________
Dated: ______________________
<PAGE>
-9-
INSTRUCTIONS FORMING PART OF THE TERMS OF THE OFFER
- ---------------------------------------------------
(1) Guarantee of Signatures. No signature guarantee is required
if either:
(a) this Letter of Transmittal is signed by the registered owner of
the Shares exactly as the name of the registered holder appears
on the certificate tendered with this Letter of Transmittal and
payment and delivery are to be made directly to such owner
unless such owner has completed either the box entitled
"Special Payment Instructions" or "Special Delivery
Instructions" above; or
(b) such Shares are tendered for the account of a member firm of a
registered national securities exchange, a member of the
National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office, branch or
agency in the United States (each such entity an "Eligible
Institution").
In all other cases, an Eligible Institution must guarantee all
signatures on this Letter of Transmittal. See Instructions 5(d) and 10.
(2) Delivery of Letter of Transmittal and Certificates: Guaranteed
Delivery Procedures. This Letter of Transmittal is to be used only
if certificates are delivered with it to the Company (or such
certificates will be delivered pursuant to a Notice of Guaranteed
Delivery previously sent to the Company). Certificates for all
physically tendered Shares, together in each case with a properly
completed and duly executed Letter of Transmittal or facsimile of
it, and any other documents required by this Letter of Transmittal,
should be mailed or delivered to the Company at the appropriate
address set forth herein and must be delivered to the Company on or
before the Expiration Date (as defined in the Offer to Purchase).
Shareholders whose certificates are not immediately available or
who cannot deliver Shares and all other required documents to the
Company on or before the Expiration Date, may tender their Shares
by or through any Eligible Institution by properly completing and
duly executing and delivering a Notice of Guaranteed Delivery (or
facsimile of it) and by otherwise complying with the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase.
Pursuant to such procedure, the certificates for all physically
tendered Shares, as well as a properly completed and duly executed
Letter of Transmittal and all other documents required by this
Letter of Transmittal, must be received by the Company within five
business days after receipt by the Company of such Notice of
Guaranteed Delivery, all as provided in Section 3 of the Offer to
Purchase.
<PAGE>
-10-
The Notice of Guaranteed Delivery may be delivered by hand or
transmitted by telegram, telex, facsimile transmission or mail to
the Company and must include a signature guarantee by an Eligible
Institution in the form set forth in such Notice. For Shares to be
validly tendered pursuant to the guaranteed delivery procedure, the
Company must receive the Notice of Guaranteed Delivery on or before
the Expiration Date.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR
SHARES, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER.
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
The Company will not accept any alternative, conditional or
contingent tenders, nor will it purchase any fractional Shares.
All tendering shareholders, by execution of this Letter of
Transmittal (or a facsimile of it), waive any right to receive any
notice of the acceptance of their tender.
(3) Inadequate Space. If the space provided in the box captioned
"Description of Shares Tendered" is inadequate, the certificate
numbers and/or the number of Shares should be listed on a separate
signed schedule and attached to this Letter of Transmittal.
(4) Partial Tenders and Unpurchased Shares. If fewer than all of the
Shares evidenced by any certificate are to be tendered, fill in the
number of Shares which are to be tendered in the column entitled
"Number of Shares Tendered." In such case, if any tendered Shares
are purchased, a new certificate for the remainder of the Shares
evidenced by the old certificate(s) will be issued and sent to the
registered holders, unless otherwise specified in either the
"Special Payment Instructions" or "Special Delivery Instructions"
boxes on this Letter of Transmittal, as soon as practicable after
the Expiration Date. All Shares represented by the certificate(s)
listed and delivered to the Company are deemed to have been
tendered unless otherwise indicated.
(5) Signatures on Letter of Transmittal, Stock Powers and Endorsements.
(a) If this Letter of Transmittal is signed by the registered
owner(s) of the Shares tendered hereby, the signature(s) must
correspond exactly with the name(s) as written on the face of
the certificates without any change whatsoever.
(b) If the Shares are registered in the names of two or more joint
owners, each such owner must sign this Letter of Transmittal.
(c) If any tendered Shares are registered in different names on
several certificates, it will be necessary to complete, sign
and submit as many separate Letters of Transmittal (or
facsimiles thereof) as there are different registrations of
certificates.
<PAGE>
-11-
(d) When this Letter of Transmittal is signed by the registered
owner(s) of the Shares listed and transmitted hereby, no
endorsements of certificate(s) representing such Shares or
separate stock powers are required unless payment is to be
made, or the certificates for Shares not tendered or not
purchased are to be issued, to a person other than the
registered owner(s). Signatures on such certificates or stock
powers must be guaranteed by an Eligible Institution. If this
Letter of Transmittal is signed by a person other than the
registered owner of the certificates listed, however, the
certificates must be endorsed or accompanied by appropriate
stock powers, in either case signed exactly as the name(s) of
the registered owner(s) appear(s) on the certificate, and the
signatures on such certificate or stock powers must be
guaranteed by an Eligible Institution (as defined in
Instruction 1(b) above). See Instruction 1.
(e) If this Letter of Transmittal or any certificates or stock
powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and must submit proper
evidence satisfactory to the Company of their authority so to
act.
(6) Stock Transfer Taxes. Except as provided in this Instruction 6, no
stock transfer tax stamps or funds to cover such stamps need
accompany this Letter of Transmittal. The Company will pay or
cause to be paid any stock transfer taxes payable on the transfer
to it of Shares purchased pursuant to the Offer. If, however:
(a) payment of the Purchase Price is to be made to any person(s)
other than the registered owner(s);
(b) Shares not tendered or not accepted for purchase are to be
registered in the name of any person(s) other than the
registered owner(s); or
(c) tendered certificates are registered in the name(s) of any
person(s) other than the person(s) signing this Letter of
Transmittal,
then the Company will deduct from the Purchase Price the amount of
any stock transfer taxes (whether imposed on the registered owner,
such other person or otherwise) payable on account of the transfer
to such person unless satisfactory evidence of the payment of such
taxes or an exemption from them is submitted.
(7) Odd Lots. As described in Section 1 of the Offer to Purchase, if
the Company is to purchase less than all Shares tendered before the
Expiration Date, the Shares purchased first will consist of all
Shares tendered by any shareholder who owned beneficially, as of
the close of business on September 14, 1997 and continues to own
beneficially as of the Expiration Date, an aggregate of fewer than
100 Shares and who tenders all of his Shares. This preference will
not be available unless the box captioned "Odd Lots" is completed.
<PAGE>
-12-
(8) Special Payment and Delivery Instructions. If certificates for
Shares not tendered or not purchased and/or checks are to be issued
in the name of a person other than the person signing the Letter of
Transmittal or if such certificates and/or checks are to be sent to
someone other than the person signing the Letter of Transmittal or
to the signer at a different address, the boxes captioned "Special
Payment Instructions" and/or "Special Delivery Instructions" on
this Letter of Transmittal should be completed as applicable and
signatures must be guaranteed as described in Instruction 1.
(9) Irregularities. The Company will determine, in its sole
discretion, all questions as to the number of Shares to be
accepted, the price to be paid therefor and the validity, form,
eligibility (including time of receipt) and acceptance for payment
of any tender of Shares and its determination shall be final and
binding on all parties. The Company reserves the absolute right to
reject any or all tenders of Shares determined by it not to be in
proper form or the acceptance of or payment for which may be
unlawful. The Company also reserves the absolute right to waive
any of the conditions of the Offer or any defect or irregularity in
the tender of any particular Shares and the Company's
interpretation of the terms of the Offer (including these
instructions) will be final and binding on all parties. No tender
of Shares will be deemed to be validly made until all defects and
irregularities have been cured or waived. Unless waived, any
defects or irregularities in connection with tenders must be cured
within such time as the Company shall determine. Neither the
Company nor any other person is or will be obligated to give notice
of defects or irregularities in tenders, nor shall the Company or
any other person incur any liability for failure to give any such
notice.
(10) Questions and Requests for Assistance and Additional Copies.
Questions and request for assistance may be directed to, or
additional copies of Offer to Purchase, the Notice of Guaranteed
Delivery and this Letter of Transmittal may be obtained from, the
Company or from your broker, dealer, commercial bank or trust
company.
(11) Substitute Form W-9. Each tendering shareholder (see "Important
Tax Information" below) is required to provide the Company with a
correct taxpayer identification number ("TIN") on Substitute Form
W-9 (the "Form W-9") which is provided under "Important Tax
Information" below, and, if applicable, to indicate that the
shareholder is not subject to backup withholding by checking the
box in Part 2 of the form. Failure to provide the information on
the form or to check the box in Part 2 of the form may subject
the tendering shareholder to 31% federal income tax withholding
on the payments made to the shareholder or other payee with
respect to Shares purchased pursuant to the Offer. The box in
Part 3 of the form may be checked if the tendering shareholder
has not been issued a TIN and has applied for a TIN or intends to
<PAGE>
-13-
apply for a TIN in the near future. If the box in Part 3 is
checked and the Company is not provided with a TIN within sixty
(60) days, the Company will withhold 31% on all such payments
thereafter until a TIN is provided to the Company.
(12) Withholding on Foreign Shareholders. The Company will withhold
federal income taxes equal to 30% of the gross payments payable to
a foreign shareholder unless the Company determines that a reduced
rate of withholding or an exemption from withholding is
applicable. For this purpose, a foreign shareholder is any
shareholder that is not (i) a citizen or resident of the United
States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or any
political subdivision thereof, or (iii) any estate or trust the
income of which is subject to United States federal income
taxation regardless of the source of such income. The Company
will determine a shareholder's status as a foreign shareholder and
eligibility for a reduced rate of, or an exemption from,
withholding by reference to the shareholder's address and to any
outstanding certificates or statements concerning eligibility for
a reduced rate of, or exemption from, withholding unless facts and
circumstances indicate that reliance is not warranted. A foreign
shareholder who has not previously submitted the appropriate
certificates or statements with respect to a reduced rate of, or
exemption from, withholding for which such shareholder may be
eligible should consider doing so in order to avoid
overwithholding. A foreign shareholder may be eligible to obtain
a refund of tax withheld if such shareholder meets one of the
three tests for capital gain or loss treatment described in
Section 13 of the Offer to Purchase or is otherwise able to
establish that no tax or a reduced amount of tax was due.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE OF
IT (TOGETHER WITH CERTIFICATES FOR SHARES AND ALL OTHER REQUIRED
DOCUMENTS) OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE
COMPANY ON OR BEFORE THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
- -------------------------
Under federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required to provide the Company with such
shareholder's correct TIN on Form W-9 below. If the Company is not
provided with the correct TIN, the Internal Revenue Service may subject
the shareholder or other payee to a $50.00 penalty. In addition,
payments that are made to such shareholder or other payee with respect
to Shares purchased pursuant to the Offer may be subject to backup
withholding.
Certain shareholders (including, among others, all corporations and
certain foreign individuals) are considered "exempt recipients" and are
not subject to these backup withholding and reporting requirements. In
order for a foreign individual to qualify as an exempt recipient, the
shareholder must submit a Form W-8, signed under penalties of perjury,
<PAGE>
-14-
attesting to that individual's exempt status. A Form W-8 can be
obtained from the Company. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9"
for more instructions.
If backup withholding applies, the Company is required to withhold 31%
of any such payments made to the shareholder or other payee. Backup
withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of
tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained.
PURPOSE OF FORM W-9
- -------------------
To prevent backup withholding on payment made to a shareholder or other
payee with respect to Shares purchased pursuant to the Offer, the
shareholder is required to notify the Company of the shareholder's
correct TIN by completing the form below, certifying that the TIN
provided on Form W-9 is correct (or that such shareholder is awaiting a
TIN) and that:
(a) the shareholder has not been notified by the Internal Revenue
Service that the shareholder is subject to backup withholding as
a result of failure to report all interest or dividends; or
(b) the Internal Revenue Service has notified the shareholder that
the shareholder is no longer subject to backup withholding.
The Shareholder is required to give the Company the TIN (e.g., social
security number or employer identification number) of the record owner
of the Shares. If the Shares are in more than one name or are not in
the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Form W-9" for
additional guidance on which number to report.
<PAGE>
-15-
PAYER'S NAME: COMMUNITY BANCORP, INC.
SUBSTITUTE FORM W-9
- -------------------
Department of the Treasury,
Internal Revenue Service
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (TIN)
______________________________________________________________________
Part 1 - PLEASE PROVIDE YOUR TIN _____________________________
IN THE BOX AT RIGHT AND / /
CERTIFY BY SIGNING AND /____________________________/
DATING BELOW
Part 2 - Check the box if you are NOT subject to backup withholding
under the provisions of Section 3406(a)(1)(C) of the Internal
____ Revenue Code because (1) you have not been notified that you
/___/ are subject to backup withholding as a result of failure to
report all interest or dividends or (2) the Internal Revenue
Service has notified you that you are no longer subject to
backup withholding.
CERTIFICATION - UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT THE
INFORMATION ON THIS FORM IS TRUE, CORRECT AND COMPLETE.
SIGNATURE: _____________________________ DATE:__________________
____
Part 3 - Awaiting TIN: /___/
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED BOX IN PART 3
OF THIS SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (a) I have mailed or
delivered an application to receive a taxpayer identification number to
the appropriate Internal Revenue Service Center or Social Security
Administration Office or (b) I intend to mail or deliver an application
in the near future. I understand that if I do not provide a taxpayer
identification number within sixty (60) days, 31% of all reportable
payments made to me thereafter will be withheld until I provide a number.
SIGNATURE: _____________________________ DATE:__________________
<PAGE>
GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
-----------------------------------------------------
SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE.
Purpose of Form. -- A person or company that is required to file an
information return with the IRS must obtain your correct taxpayer
identification number ("TIN") to report (1) income paid to you, (2)
real estate transactions, (3) mortgage interest you paid, (4) the
acquisition or abandonment of secured property, or (5) contributions
you made to an IRA.
You use Form W-9 to furnish your correct TIN to the requester (the
person asking you to furnish your TIN) and, when applicable, (1) to
certify that the TIN you are furnishing is correct (or that you are
waiting for a number to be issued), (2) to certify that you are not
subject to backup withholding, and (3) to claim exemption from
backup withholding if you are an exempt payee. Furnishing your
correct TIN and making the appropriate certifications will prevent
certain payments from being subject to backup withholding.
Note: If a requester gives you a form other than a W-9 to request
your TIN, you must use the requester's form.
How To Obtain a TIN. -- If you do not have a TIN, apply for one
immediately. To apply, get Form SS-5, Application for a Social
Security Card (for individuals), from your local office of the
Social Security Administration, or Form SS-4, Application for
Employer Identification Number (for businesses and all other
entities), from your local IRS office.
To complete Form W-9 if you do not have a TIN, write "Applied for"
in the space for the TIN in Part I (or check the box under Part 3 of
Substitute Form W-9), sign and date the form, and give it to the
requester. Generally, you must obtain a TIN and furnish it to the
requester by the time of payment. If the requester does not receive
your TIN by the time of payment, backup withholding, if applicable,
will begin and continue until you furnish your TIN to the requester.
Note: Writing "Applied for" (or checking the box under Part 3 of
the Substitute Form W-9) on the form means that you have already
applied for a TIN OR that you intend to apply for one in the near
future.
As soon as you receive your TIN, complete another Form W-9, include
your TIN, sign and date the form, and give it to the requester.
What Is Backup Withholding? -- Persons or companies making certain
payments to you after 1992 are required to withhold and pay to the
IRS 31% of such payments under certain conditions. This is called
"backup withholding." Payments that could be subject to backup
withholding include interest, dividends, broker and barter exchange
transactions, rents, royalties, nonemployee compensation, and
certain payments from fishing boat operators, but do not include
real estate transactions.
<PAGE>
-2-
If you give the requester your correct TIN, make the appropriate
certifications, and report all your taxable interest and dividends
on your tax return, your payments will not be subject to backup
withholding. Payments you receive will be subject to backup
withholding if:
1. You do not furnish your TIN to the requester, or
2. The IRS notifies the requester that you furnished an incorrect
TIN, or
3. You are notified by the IRS that you are subject to backup
withholding because you failed to report all your interest and
dividends on your tax return (for reportable interest and
dividends only), or
4. You do not certify to the requester that you are not subject to
backup withholding under 3 above (for reportable interest and
dividend accounts opened after 1983 only), or
5. You do not certify your TIN. This applies only to reportable
interest, dividend, broker, or barter exchange accounts opened
after 1983, or broker accounts considered inactive in 1983.
Except as explained in 5 above, other reportable payments are
subject to backup withholding only if 1 or 2 above applies. Certain
payees and payments are exempt from backup withholding and
information reporting.
See Payees and Payments Exempt From Backup Withholding, below, and
Example Payees and Payments under Specific Instructions, below, if
you are an exempt payee.
Payees and Payments Exempt From Backup Withholding. -- The
following is a list of payees exempt from backup withholding and for
which no information reporting is required. For interest and
dividends, all listed payees are exempt except item (9). For broker
transactions, payees listed in (1) through (13) and a person
registered under the Investment Advisers Act of 1940 who regularly
acts as a broker are exempt. Payments subject to reporting under
Sections 6041 and 6041A are generally exempt from backup withholding
only if made to payees described in items (1) through (7), except a
corporation that provides medical and health care services or bills
and collects payments for such services is not exempt from backup
withholding or information reporting. Only payees described in
items (2) through (6) are exempt from backup withholding for barter
exchange transactions, patronage dividends, and payments by certain
fishing boat operators.
<PAGE>
-3-
(1) A corporation. (2) An organization exempt from tax under
Section 501(a), or an IRA, or a custodial account under Section
403(b)(7). (3) The United States or any of its agencies or
instrumentalities. (4) A state, the District of Columbia, a
possession of the Unites States, or any of their political
subdivisions or instrumentalities. (5) A foreign government or any
of its political subdivisions, agencies, or instrumentalities. (6)
An international organization or any of its agencies or
instrumentalities. (7) A foreign central bank of issue. (8) A
dealer in securities or commodities required to register in the
United States or a possession of the United States. (9) A futures
commission merchant registered with the Commodity Futures Trading
Commission. (10) A real estate investment trust. (11) An entity
registered at all times during the tax year under the Investment
Company Act of 1940. (12) A common trust fund operated by a bank
under Section 584(a). (13) A financial institution. (14) A
middleman known in the investment community as a nominee or listed
in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List. (15) A trust exempt from tax under
Section 664 or described in Section 4947.
Payments of dividend and patronage dividends generally not subject
to backup withholding include the following:
- Payments to nonresident aliens subject to withholding under
Section 1441.
- Payments to partnerships not engaged in a trade or business in
the United States and that have at least one nonresident
partner.
- Payments of patronage dividends not paid in money.
- Payments made by certain foreign organizations.
Payments of interest generally not subject to backup withholding
include the following:
- Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this
interest is $600 or more and is paid in the course of the
payer's trade or business and you have not provided your
correct TIN to the payer.
- Payments of tax-exempt interest (including exempt-interest
dividends under Section 852).
- Payments described in Section 6049(b)(5) to nonresident aliens.
<PAGE>
-4-
- Payments on tax-free covenant bonds under Section 1451.
- Payments made by certain foreign organizations.
- Mortgage interest paid by you.
Payments that are not subject to information reporting are also not
subject to backup withholding. For details, see Sections 6041,
6041A(a), 6042, 6044, 6045, 6049, 6050A, and 6050N, and their
regulations.
PENALTIES
- ---------
Failure To Furnish TIN. -- If you fail to furnish your correct TIN
to a requester, you will be subject to a penalty of $50 for each
such failure unless your failure is due to reasonable cause and not
to willful neglect.
Civil Penalty for False Information With Respect to Withholding. --
If you make a false statement with no reasonable basis that results
in no backup withholding, you are subject to a $500 penalty.
Criminal Penalty for Falsifying Information. -- Willfully
falsifying certifications or affirmations may subject you to
criminal penalties including fines and/or imprisonment.
Misuse of TINS. -- If the requester discloses or uses TINs in
violation of Federal law, the requester may be subject to civil and
criminal penalties.
SPECIFIC INSTRUCTIONS
- ---------------------
Name. -- If you are an individual, you must generally provide the
name shown on your Social Security card. However, if you have
changed your last name, for instance, due to marriage, without
informing the Social Security Administration of the name change,
please enter your first name, the last name shown on your Social
Security card, and your new last name.
If you are a sole proprietor, you must furnish your individual name
and either your SSN or EIN. You may also enter your business name
or "doing business as" name on the business name line. Enter your
name(s) as shown on your Social Security card and/or as it was used
to apply for your EIN on Form SS-4.
SIGNING THE CERTIFICATION
- -------------------------
1. Interest, Dividend, Broker and Barter Exchange Accounts Opened
Before 1984 and Broker Accounts Considered Active During 1983. You
are required to furnish your correct TIN, but you are not required
to sign the certification.
<PAGE>
-5-
2. Interest, Dividend, Broker, and Barter Exchange Accounts Opened
After 1983 and Broker Accounts Considered Inactive During 1983. You
must sign the certification or backup withholding will apply. If
you are subject to backup withholding and you are merely providing
your correct TIN to the requester, you must cross out item 2 in the
certification before signing the form.
3. Real Estate Transactions. You must sign the certification.
You may cross out item 2 of the certification.
4. Other Payments. You are required to furnish your correct TIN,
but you are not required to sign the certification unless you have
been notified of an incorrect TIN. Other payments include payments
made in the course of the requester's trade or business for rents,
royalties, goods (other than bills for merchandise), medical and
health care services, payments to a nonemployee for services
(including attorney and accounting fees), and payments to certain
fishing boat crew members.
5. Mortgage Interest Paid by You, Acquisition or Abandonment of
Secured Property, IRA Contributions. You are required to furnish
you correct TIN, but you are not required to sign the certification.
6. Exempt Payees and Payments. If you are exempt from backup
withholding, you should complete this form to avoid possible
erroneous backup withholding. Enter your correct TIN in Part I,
write "EXEMPT" in the block in Part II, and sign and date the form.
If you are a nonresident alien or foreign entity not subject to
backup withholding, give the requester a complete Form W-8,
Certificate of Foreign Status.
7. TIN "Applied for." Follow the instructions under How To Obtain
a TIN on page 1, and sign and date this form.
Signature. -- For a joint account, only the person whose TIN is
shown in Part I should sign.
Privacy Act Notice. --Section 6109 requires you to furnish your
correct TIN to persons who must file information returns with the
IRS to report interest, dividends, and certain other income paid to
you, mortgage interest you paid, the acquisition or abandonment of
secured property, or contributions you made to an IRA. The IRS uses
the numbers for identification purposes and to help verify the
accuracy of your tax return. You must provide your TIN whether or
not you are required to file a tax return. Payers must generally
withhold 31% of taxable interest, dividend, and certain other
payments to a payee who does not furnish a TIN to a payer. Certain
penalties may also apply.
<PAGE>
-6-
WHAT NAME AND NUMBER TO GIVE THE REQUESTER
- ------------------------------------------
For this type of account
Give name and SSN of:
1. Individual
The individual
2. Two or more individuals (joint account)
The actual owner of the account or, if combined funds, the
first individual on the account (1).
3. Custodian account of a minor (Uniform Gift to Minors Act)
The minor(2)
4. a. The usual revocable savings trust (grantor is also trustee)
The grantor-trustee (1)
b. So-called trust account that is not a legal or valid trust
under state law.
The actual owner (1)
5. Sole proprietorship
The owner (3)
For this type of account:
Give name and EIN of:
6. Sole proprietorship
The owner (3)
7. A valid trust, estate, or pension trust
Legal entity (4)
8. Corporate
The corporation
9. Association, club, religious, charitable, educational, or
another tax-exempt organization
The organization
10. Partnership
The partnership
<PAGE>
-7-
11. A broker or registered nominee
The broker or nominee
12. Account with the Department of Agriculture in the name of a
public entity (such as a state or local government, school
district or prison) that receives agriculture program payments.
The public entity
FOOTNOTES:
- ---------
(1) List first and circle the name of the person whose number you
furnish.
(2) Circle the minor's name and furnish the minor's SSN.
(3) Show your individual name. You may also enter your business
name. You may use your SSN or EIN.
(4) List first and circle the name of the legal trust, estate, or
pension trust. (Do not furnish the TIN of the personal
representative or trustee unless the legal entity itself is not
designated in the account title.)
Note: If no name is circled when there is more than one name, the
number will be considered to be that of the first name listed.
<PAGE>
[Printed on Community Bancorp, Inc. letterhead]
September 15, 1997
Dear Shareholder:
I am pleased to inform you that Community Bancorp, Inc. is offering
to purchase 125,000 shares (representing approximately 4.2% of the
currently outstanding shares) of its common stock (including the
associated Preferred Share Purchase Rights) from its shareholders
through a tender offer at a price of $12.00 per share.
All of the shares that are validly tendered will, subject to
possible proration, be purchased, net in cash to the selling
shareholder. All other shares which have been tendered and not
purchased will be returned to the shareholder. The tender offer is
not conditioned on any minimum number of shares being tendered.
The Company is making this Offer as part of a plan developed to
enhance shareholder value. The Offer is intended to reposition the
Company's balance sheet to increase return on equity by redeploying
the portion of the Company's equity capital that is not necessary
for the Company's core banking business.
The Offer is explained in detail in the enclosed Offer to Purchase
and Letter of Transmittal. If you wish to tender your shares,
detailed instructions on how to tender shares are in the enclosed
materials. We encourage you to read these materials carefully
before making any decision with respect to the Offer. Please note
that the tender offer is scheduled to expire at 5:00 p.m. on
October 15, 1997, unless extended by the Company. Neither the
Company nor its Board of Directors makes any recommendation to any
shareholder as to whether to tender or refrain from tendering shares.
Sincerely,
/s/ James A. Langway
James A. Langway
President and Chief Executive Officer
Enclosures
<PAGE>
COMMUNITY BANCORP, INC.
NOTICE OF GUARANTEED DELIVERY
OF SHARES OF COMMON STOCK
OFFER TO PURCHASE FOR CASH UP TO 125,000 SHARES
OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
AT A PURCHASE PRICE OF $12.00
NOT VALID UNLESS SIGNED BY AN ELIGIBLE INSTITUTION
---------------------------------------------------
This form or a facsimile copy of it must be used to accept the offer
(as defined below) if:
(a) certificates for common stock, par value $2.50 per share
(the "Shares"), including the associated Rights (as defined
herein), of Community Bancorp, Inc., a Massachusetts
corporation, (the "Company"), are not immediately
available; or
(b) time will not permit the Letter of Transmittal or other
required documents to reach the Company before the
Expiration Date (as defined in Section 1 of the Offer to
Purchase, as defined below).
This form or a facsimile of it, signed and properly completed, may
be delivered by hand, mail, telegram or facsimile transmission to
the Company by the Expiration Date. See Section 3 of the Offer to
Purchase.
COMMUNITY BANCORP, INC.
By Mail/Hand: Facsimile Transmission:
------------- -----------------------
17 Pope Street (978) 562-7129
Hudson, MA 01749
(978) 568-8321
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THAT SHOWN
ABOVE OR TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER
THAN THAT LISTED ABOVE DOES NOT CONSTITUTE A VALID DELIVER.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Community Bancorp, Inc., at the
Purchase Price, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated
September 15, 1997(the "Offer to Purchase"), and the related Letter of
Transmittal (which together with the Offer to Purchase constitute
the "Offer"), receipt of which is hereby acknowledged, Shares of
common stock, par value $2.50 per Share (including the associated
Preferred Share Purchase Rights [the "Rights"], the "Shares"),
pursuant to the guaranteed delivery procedure set forth in Section 3
of the Offer to Purchase. Unless the Rights become exercisable or
separately tradeable prior to the Expiration Date, a tender of
Shares will also constitute a tender of the associated Rights.
Unless the context requires otherwise, all references herein to
Shares include the associated Rights.
ODD LOTS
- --------
To be completed only if Shares are being tendered by or on behalf of
a person owning beneficially, as of the close of business on September
14, 1997, and who continues to own beneficially as of the Expiration
Date, an aggregate of fewer than 100 Shares.
The undersigned either (check one):
___
/__/ was the beneficial owner, as of the close of business on
September 14, 1997 of an aggregate of fewer than 100 Shares all
of which are being tendered, or
___
/__/ is a broker, dealer, commercial bank, trust company or other
nominee which;
(a) is tendering, for the beneficial owners thereof, Shares
with respect to which it is the record owner, and
(b) believes, based upon representations made to it by such
beneficial owners, that each such person was the beneficial
owner, as of the close of business on September 14, 1997 of an
aggregate of fewer than 100 Shares and is tendering all of
such Shares.
<PAGE>
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Certificate Nos.: ___________________________
PLEASE TYPE OR PRINT
Name(s): ______________________________
______________________________
Address(es): ______________________________
______________________________
______________________________
Area Code and Telephone Number: ____________________________
Sign Here: ________________________________
Dated: ____________________, 1997
<PAGE>
-3-
GUARANTEE
- ---------
(Not to be used for signature guarantee)
The undersigned, a member firm of a registered national securities
exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States (each, an "Eligible
Institution"), hereby (i) represents that the undersigned has a net
long position in Shares or equivalent securities within the meaning
of Rule 14e-4 promulgated under the Securities Exchange Act of 1934,
as amended, at least equal to the Shares tendered, (ii) represents
that such tender of Shares complies with Rule 14e-4, and (iii)
guarantees that the certificates representing the Shares tendered
hereby in proper form for transfer (pursuant to the procedures set
forth in Section 3 of the Offer to Purchase), together with a
properly completed and duly executed Letter of Transmittal (or
facsimile thereof) with any required signature guarantee and any
other documents required by the Letter of Transmittal, will be
received by the Company at its address set forth above within five
business days after the date of execution hereof.
Name of Firm: ____________________________
Address: _________________________________
_________________________________
_________________________________
Area Code and Telephone Number: ___________________________
AUTHORIZED SIGNATURE
--------------------
Name: ____________________________
Title: ___________________________
Dated: ___________________________, 1997
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES
SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
[Printed on Community Bancorp, Inc. letterhead]
OFFER TO PURCHASE FOR CASH UP TO
125,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARED PURCHASE RIGHTS)
AT A PURCHASE PRICE OF $12.00 PER SHARE
September 15, 1997
To Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees:
Community Bancorp, Inc., a Massachusetts corporation (the
"Company"), has made an offer to purchase for cash up to 125,000
shares of its common stock, par value $2.50 per share (including the
associated Preferred Share Purchase Rights [the "Rights"], the
"Shares"), at the price, upon the terms and subject to the
conditions set forth in its Offer to Purchase dated September 15, 1997
and in the related Letter of Transmittal (which together constitute
the "Offer"). We enclose the materials listed below relating to the
Offer. Unless the Rights become exercisable or separately tradeable
prior to the Expiration Date (as defined in Section 1 of the Offer
to Purchase), a tender of Shares will also constitute a tender of
the associated Rights. Unless the context requires otherwise, all
references herein to Shares include the associated Rights.
All Shares validly tendered will be purchased at the Purchase Price,
net to the seller in cash, upon the terms and subject to the
conditions of the Offer, including the proration terms thereof. See
Section 1 of the Offer to Purchase.
If, prior to the Expiration Date, more than 125,000 Shares (or such
greater number of Shares as the Company may elect to purchase) are
validly tendered, the Company will, upon the terms and subject to
the conditions of the Offer, accept Shares for purchase first from
Odd Lot Owners (as defined in Section 2 of the Offer to Purchase)
who validly tender their Shares and then on a pro rata basis from
all other shareholders whose Shares are validly tendered.
The Offer is not conditioned on any minimum number of Shares being
tendered. The Offer is, however, subject to certain other
conditions set forth in the Offer. See Section 6 of the Offer to
Purchase.
<PAGE>
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For your information and for forwarding to your clients for whom you
hold Shares registered in your name or in the name of your nominee,
we are enclosing the following documents:
1. Offer to Purchase dated September 15, 1997;
2. Letter to Clients which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of
your nominee, with space provided for obtaining such clients'
instructions with regard to the Offer;
3. Letter, dated September 15, 1997, from James A. Langway, President
and C.E.O. of the Company;
4. Letter of Transmittal for your use and for the information of
your clients (together with Substitute Form W-9 and guidelines); and
5. Notice of Guaranteed Delivery to be used to accept the Offer if
Share certificates and all other required documents cannot be
delivered to the Company by the Expiration Date.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRES AT
5:00 P.M. E.D.T. TIME, ON OCTOBER 15, 1997, UNLESS THE OFFER IS
EXTENDED.
No fees or commissions will be payable to brokers, dealers or any
other persons for soliciting tenders of Shares pursuant to the
Offer. The Company will, however, upon request, reimburse you for
customary mailing and handling expenses incurred by you in
forwarding any of the enclosed materials to the beneficial owners of
Shares held by you as a nominee or in a fiduciary capacity. The
Company will pay or cause to be paid any stock transfer taxes
applicable to its purchase of Shares, except as otherwise provided
in Instruction 6 of the Letter of Transmittal.
In order to take advantage of the Offer, a duly executed and
properly completed Letter of Transmittal and any other required
documents should be sent to Company with certificate(s) representing
the tendered Shares all in accordance with the instructions set
forth in the Letter of Transmittal and the Offer to Purchase.
As described in Section 3 of the Offer to Purchase, tenders may be
made without the concurrent deposit of stock certificates, if such
tenders are made by or through a broker or dealer which is a member
firm of a registered national securities exchange or a member of the
National Association of Securities Dealers, Inc. or a commercial
bank or trust company having an office, branch or agency in the
United States. Certificates for Shares so tendered, together with a
properly completed and duly executed Letter of Transmittal and any
other documents required by the Letter of Transmittal, must be
received by the Company within five business days after timely
receipt by the Company of a properly completed and duly executed
Notice of Guaranteed Delivery.
<PAGE>
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Any inquiries you may have with respect to the Offer should be
addressed to the Company.
Additional copies of the enclosed material may be obtained from the
Company.
Very truly yours,
COMMUNITY BANCORP, INC.
By: /s/ James A. Langway
--------------------
James A. Langway
President and C.E.O.
Enclosures
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL
CONSTITUTE YOU OR ANY OTHER PERSON AS THE AGENT OF THE COMPANY OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENT ON BEHALF OF ANY OF THE COMPANY IN CONNECTION WITH THE
OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED
THEREIN.
<PAGE>
OFFER TO PURCHASE FOR CASH UP TO
125,000 SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARED PURCHASE RIGHTS)
AT A PURCHASE PRICE OF $12.00 PER SHARE
September 15, 1997
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated
September 15, 1997, and the related Letter of Transmittal (which
together constitute the "Offer"), in connection with the offer by
Community Bancorp, Inc., a Massachusetts corporation (the
"Company"), to purchase for cash up to 125,000 shares of its common
stock, par value $2.50 per share (including the associated Preferred
Shared Purchase Rights [the "Rights"], the "Shares"), at a price of
$12.00 (the "Purchase Price") per Share, upon the terms and subject
to the conditions of the Offer. Unless the Rights become
exercisable or separately tradeable prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase), a tender of Shares
will also constitute a tender of the associated Rights. Unless the
context requires otherwise, all references herein to Shares include
the associated Rights.
All Shares validly tendered prior to the Expiration Date will be
purchased at the Purchase Price, net to the seller in cash, upon the
terms and subject to the conditions of the Offer, including the
proration terms thereof. The Company will return all other Shares,
including Shares not purchased because of proration. See Section 1
of the Offer to Purchase.
If, prior to the Expiration Date, more than 125,000 Shares (or such
greater number of Shares as the Company may elect to purchase) are
validly tendered, the Company will, upon the terms and subject to
the conditions of the Offer, accept Shares for purchase first from
Odd Lot Owners (as defined in Section 2 of the Offer to Purchase)
who validly tender their Shares and then on a pro rata basis from
all other shareholders whose Shares are validly tendered.
WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT. AS
SUCH, WE ARE THE ONLY ONES WHO CAN TENDER YOUR SHARES, AND THEN ONLY
PURSUANT TO YOUR INSTRUCTIONS. WE ARE SENDING YOU THE LETTER OF
TRANSMITTAL FOR YOUR INFORMATION ONLY; YOU CANNOT USE IT TO TENDER
SHARES WE HOLD FOR YOUR ACCOUNT.
Please instruct us as to whether you wish us to tender any or all of
the Shares we hold for your account on the terms and subject to the
conditions of the Offer.
<PAGE>
-2-
We call your attention to the following:
1. The Offer is not conditioned on any minimum number of Shares
being tendered. The Offer is, however, subject to certain other
conditions set forth in the Offer.
2. The Offer, proration period and withdrawal rights will expire
at 5:00 p.m., E.D.T., on October 15, 1997, unless the Company
extends the Offer.
3. The Offer is for up to 125,000 Shares, constituting
approximately 4.2% of the Shares outstanding as of June 30, 1997.
4. Tendering shareholders will not be obligated to pay any
brokerage commissions, solicitation fees or, subject to Instruction
7 of the Letter of Transmittal, stock transfer taxes on the
Company's purchase of Shares pursuant to the Offer.
5. If you owned beneficially as of the close of business on September
14, 1997 and continued to own beneficially as of the Expiration
Date, an aggregate of fewer than 100 Shares and you instruct us to
tender on your behalf all such Shares before the expiration of the
Offer and check the box captioned "Odd Lots" in the attached
Instruction Form, the Company, upon the terms and subject to the
conditions of the Offer, will accept all such Shares for purchase
before proration, if any, of the purchase of other Shares tendered.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing, detaching and returning to us
the attached Instruction Form. An envelope to return your
Instruction Form to us is enclosed. If you authorize us to tender
your Shares, we will tender all such Shares unless you specify
otherwise on the attached Instruction Form.
YOUR INSTRUCTION FORM SHOULD BE FORWARDED TO US IN AMPLE TIME TO
PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE
EXPIRATION DATE OF THE OFFER. THE OFFER, PRORATION PERIOD AND
WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., E.D.T., ON OCTOBER 15,
1997, UNLESS THE COMPANY EXTENDS THE OFFER.
As described in Section 1 of the Offer to Purchase, if before the
Expiration Date more than 125,000 Shares (or such greater number of
Shares as the Company elects to purchase) are validly tendered at or
below the Purchase Price, the Company will accept Shares for
purchase at the Purchase Price in the following order of priority:
(a) first, all Shares validly tendered prior to the Expiration
Date by any Odd Lot Owner who:
<PAGE>
-3-
(1) tenders all Shares beneficially owned by such Odd Lot
Owners (partial tenders will not qualify for this preference); and
(2) completes the section captioned "Odd Lots" on the
Letter of Transmittal and, if applicable, on the Notice of
Guaranteed Delivery; and
(b) then, after purchase of all of the foregoing Shares, all
other Shares validly tendered before the Expiration Date on a pro
rata basis, if necessary (with adjustments to avoid purchases of
fractional Shares).
The Offer is not being made to, nor will the Company accept tenders
from, holders of Shares in any jurisdiction in which the Offer or
its acceptance would not comply with the securities or Blue Sky laws
of such jurisdiction. The Company is not aware of any jurisdiction
in which the making of the Offer or the tender of Shares would not
be in compliance with the laws of such jurisdictions. However, the
Company reserves the right to exclude holders in any jurisdiction in
which it is asserted that the Offer cannot lawfully be made. So
long as the Company makes a good faith effort to comply with any
state law deemed applicable to the Offer, if it cannot do so, the
Company believes that the exclusion of holders residing in such
jurisdiction is permitted under Rule 13e-4(f)(9) promulgated under
the Exchange Act.
<PAGE>
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INSTRUCTION FORM
WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
UP TO 125,000 SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF COMMUNITY BANCORP, INC.
AT A PURCHASE PRICE OF $12.00 PER SHARE
The undersigned acknowledge(s) receipt of your letter and the
enclosed Offer to Purchase dated September 15, 1997 and the related
Letter of Transmittal (which together constitute the "Offer"), in
connection with the offer by Community Bancorp, Inc., a
Massachusetts corporation (the "Company"), to purchase for cash up
to 125,000 shares of its common stock, par value $2.50 per share
(including the associated Preferred Share Purchase Rights [the
"Rights"], the "Shares"), at a price of $12.00 per Share (the
"Purchase Price"), upon the terms and subject to the conditions of
the Offer. Unless the Rights become exercisable or separately
tradeable prior to the Expiration Date (as defined in Section 1 of
the Offer to Purchase), a tender of Shares will also constitute a
tender of the associated Rights. Unless the context requires
otherwise, all references herein to Shares include the associated
Rights.
All Shares validly tendered at the Purchase Price will be purchased
at the Purchase Price, net to the seller in cash, upon the terms and
subject to the conditions of the Offer, including the proration
terms thereof. The Company will return all other Shares, including
Shares not purchased because of proration. See Section 1 of the
Offer to Purchase.
The undersigned hereby instruct(s) you to tender to the Company the
number of Shares indicated below or, if no number is indicated, all
Shares you hold for the account of the undersigned, pursuant to the
terms and subject to the conditions of the Offer.
Aggregate number of Shares to
be tendered by you for us: _____________________ Shares*.
ODD LOTS
___
/__/ By checking this box, the undersigned represents that the
undersigned owned beneficially, as of the close of business on
September 14, 1997, and will continue to own beneficially as of the
Expiration Date, an aggregate of fewer than 100 Shares and is
instructing the holder to tender all such Shares.
* Unless otherwise indicated, all of the Shares, including the
associated Rights, held for the account of the undersigned will be
tendered.
<PAGE>
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Signature(s)
___________________________
___________________________
___________________________
Dated: ____________________
Name(s) and Address(es) (Please Print)
___________________________
___________________________
___________________________
Area Code and Telephone Number: _________________________
Taxpayer Identification or
Social Security Number: _______________________________
Enclosures
<PAGE>
