COMMUNITY BANCORP /VT
10-Ks and 10-Qs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE 14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment No. __)
Filed by a Party
other than the Registrant ☐
Check the
appropriate box:
☐
Preliminary
Proxy
Statement
☐
Confidential, For Use of the Commission Only (As Permitted by Rule
14c-5(d)(2))
☒
Definitive
Proxy
Statement
|
Community
Bancorp.
|
|
(Name of Registrant as Specified In Its Charter)
|
Payment of Filing
Fee (Check the appropriate box):
☒ No
fee required
☐ Fee
computed on table below per Exchange Act Rules 14c-5(g)(1) and
0-11.
(1) Title
of each class of securities to which transaction
applies:
(2) Aggregate
number of securities to which transaction applies:
(3) Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule
0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed
maximum aggregate value of transaction:
(5) Total
fee paid:
☐ Fee
paid previously with preliminary materials.
☐ Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date
of its filing.
(1) Amount
Previously Paid:
(2) Form,
Schedule or Registration Statement No.:
(3) Filing
Party:
(4) Date
Filed:
April 6,
2017
Dear Fellow
Shareholders:
Please join us for
the Annual Meeting of the Shareholders of Community Bancorp., which
will be held at 5:30 p.m. at the Elks Club, Derby, Vermont, on
Tuesday, May 16, 2017. As in prior years, a dinner will be served
following the meeting.
Accompanying this
letter for your review are our proxy materials for the meeting and
our Annual Report for 2016.
At the meeting, you
will be asked to vote on the following items:
● Election of
four directors to a three year term expiring in 2020;
and
●
Ratification of BerryDunn as the Company’s external auditors
for 2017.
Your participation
in the voting is important. Please be sure to vote your proxy
promptly so that your shares will be represented and can be voted
at the meeting whether or not you are present in person. You may
vote your shares via the internet, by telephone (toll free), by
fax, or by proxy card. You may withdraw your proxy and vote in
person at the meeting if you choose to do so.
If
you hold your shares through a broker, please note that under
current brokerage industry rules you must furnish voting
instructions to your broker in order for your shares to be voted in
the election of directors (Proposal 1).
Thank you for your
continued support of Community Bancorp. I look forward to seeing
you at the annual meeting.
Sincerely,
Kathryn M.
Austin
President &
CEO
COMMUNITY BANCORP.
4811 U.S. Route 5
Newport, Vermont 05855
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 16, 2017
The
annual meeting of shareholders of Community Bancorp. will be held
at the Elks Club, Derby, Vermont, on Tuesday, May 16, 2017, at 5:30
p.m., for the following purposes:
1. To
elect four directors to the class whose term will expire at the
2020 annual meeting of shareholders;
2. To
ratify the selection of the independent registered public
accounting firm of Berry Dunn McNeil & Parker, LLC as the
Company’s external auditor for the fiscal year ending
December 31, 2017; and
3. To
transact such other business as may properly be brought before the
meeting.
The
close of business on March 20, 2017, has been fixed as the record
date for determining holders of the Company’s common stock
entitled to notice of, and to vote at, the annual
meeting.
IMPORTANT NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS FOR
THE
2017 ANNUAL SHAREHOLDERS MEETING
This proxy statement, the proxy card and our Annual Report to
Shareholders for the year ended December 31, 2016 are available on
the internet and may be accessed at
https://www.iproxydirect.com/CMTV
By
Order of the Board of Directors,
Corporate
Secretary
Derby,
Vermont
April
6, 2017
PLEASE SUBMIT YOUR PROXY PROMPTLY BY FOLLOWING THE INSTRUCTIONS ON
THE CARD TO VOTE YOUR SHARES VIA THE INTERNET, BY TELEPHONE (TOLL
FREE), BY FAX, OR BY MAIL, WHETHER OR NOT YOU PLAN TO BE PRESENT AT
THE MEETING. YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE
MEETING. IT IS IMPORTANT THAT YOU VOTE YOUR SHARES BY SUBMITTING
YOUR COMPLETED PROXY PROMPTLY.
PROXY STATEMENT INDEX
|
GENERAL
VOTING INFORMATION ABOUT THE MEETING AND VOTING
|
1
|
|
SHARE
OWNERSHIP INFORMATION
|
5
|
|
Section
16(a) Beneficial Ownership Reporting Compliance
|
6
|
|
PROPOSAL
1 – ELECTION OF DIRECTORS
|
6
|
|
Incumbent
Director and Nominee Qualifications
|
8
|
|
Directors’
Fees and Other Compensation
|
10
|
|
Directors’
Deferred Compensation Plan
|
11
|
|
Directors’
Retirement Plan
|
11
|
|
Director
Compensation Table
|
11
|
|
Vote
Required
|
12
|
|
CORPORATE
GOVERNANCE
|
12
|
|
Director
Independence
|
12
|
|
Board
Leadership Structure and Risk Oversight
|
12
|
|
Board
and Shareholder Meeting Attendance
|
13
|
|
Board
Committees
|
13
|
|
Shareholder
Communications with the Board
|
15
|
|
Compensation
Committee Interlocks and Insider Participation
|
15
|
|
Transactions
with Related Persons
|
15
|
|
AUDIT
COMMITTEE REPORT
|
16
|
|
EXECUTIVE
OFFICERS
|
17
|
|
Executive
Officer Qualifications
|
17
|
|
COMPENSATION
COMMITTEE REPORT
|
18
|
|
EXECUTIVE
COMPENSATION
|
18
|
|
Executive
Compensation Program Objectives and Risk Management
Considerations
|
18
|
|
Summary
Compensation Table
|
19
|
|
Officer
Incentive Plan
|
19
|
|
Supplemental
Retirement Plan for Executives
|
21
|
|
Retirement
Savings Plan
|
22
|
|
Perquisites
and other Personal Benefits
|
22
|
|
Health
and Welfare Benefits
|
22
|
|
Change
in Control Agreements
|
22
|
|
Potential
Payments under Change in Control Agreements
|
23
|
|
PROPOSAL
2 – RATIFICATION OF SELECTION OF INDEPENDENT
AUDITORS
|
23
|
|
Pre-Approval
Required for Services of Independent Auditors
|
24
|
|
Fees
Paid to Independent Auditors
|
24
|
|
Vote
Required
|
24
|
|
ANNUAL
REPORT
|
24
|
|
SHAREHOLDER
NOMINATIONS AND OTHER PROPOSALS
|
25
|
|
Bylaw
Requirements for Shareholder Nominations and Other
Proposals
|
25
|
|
Use of
Discretionary Authority in Connection with Shareholder Nominations
and Proposals
|
25
|
|
Inclusion
of Shareholder Proposals in Company Proxy Materials
|
26
|
|
OTHER
MATTERS
|
26
|
|
VOTING
QUESTIONS OR OTHER SHAREHOLDER ASSISTANCE
|
26
|
COMMUNITY BANCORP.
4811 U.S. Route 5
Newport, Vermont 05855
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 16, 2017
This
proxy statement is furnished to our shareholders in connection with
the solicitation of proxies by the Board of Directors of Community
Bancorp. (the
“Company,” “we,”
“our”
or
“us”
) for use at the annual
meeting of shareholders and any adjournments of that meeting. The
annual meeting will be held on Tuesday, May 16, 2017, at 5:30 p.m.
at the Elks Club in Derby, Vermont. This proxy statement and
related proxy card are first being sent to shareholders on or about
April 6, 2017.
GENERAL VOTING INFORMATION ABOUT THE MEETING
Who is entitled to vote at the annual meeting?
Only
holders of record of the Company’s common stock, $2.50 par
value per share, on the record date for the meeting are entitled to
vote at the meeting. The record date for the meeting is the close
of business on March 20, 2017.
There
are 25 shares of the Company’s Series A Fixed-to-Floating
Rate Non-Cumulative Perpetual Preferred Stock (
“Series A Preferred Stock”
)
outstanding. The holders of those shares are not entitled to vote
on any matter to be presented for vote of the shareholders at the
annual meeting.
How many shares are entitled to vote at the meeting?
As of
the record date for the meeting (March 20, 2017), there were
5,057,954 shares of our common stock issued and outstanding, each
of which is entitled to one vote with respect to each matter to be
voted on at the meeting.
How many votes do I have?
Each
issued and outstanding share of the Company’s common stock
that you hold of record or through a broker or other nominee is
entitled to one vote on each matter presented for vote at the
meeting.
Why did I receive a notice regarding the internet availability of
the proxy materials instead of a paper copy of the proxy
materials?
Important Notice Regarding the Availability of Proxy Materials for
the 2017 Annual Shareholders’ Meeting.
We have mailed
a notice of availability of the proxy materials on the internet
(which also constitutes a notice of meeting), rather than a full
paper set of the proxy materials, to our shareholders, other than
participants in the Company stock fund under our Retirement Savings
401(k) Plan. The notice of availability includes instructions on
how to access our proxy materials on the internet, as well as
instructions on how shareholders may obtain a paper copy of the
proxy materials by mail. This distribution process will reduce the
costs of printing and distributing our proxy materials and reduce
paper waste.
How can I request a paper copy of the proxy materials?
We will
mail a paper copy of the proxy materials and the Annual Report to
Shareholders without charge to any shareholder to whom we sent a
notice of availability who requests a paper copy. If you received a
notice regarding the internet availability of the proxy materials,
you may request a paper copy by telephone (call toll free
1-866-752-8683); by faxing the notice of availability to
1-202-521-3464; by email (
proxy@proxydirect.com
,
and include your control ID found on the notice of availability);
or via the internet (
https://www.iproxydirect.com/CMTV
).
1
How can I access the proxy materials over the
internet?
You can
access the proxy material and the Annual Report to Shareholders by
going to the following website: https://www.iproxydirect.com/CMTV.
In accordance with the rules of the SEC, the software used for the
website does not identify visitors accessing the proxy
materials.
How do I vote?
If you
are a shareholder of record and you wish to vote by proxy, you have
three ways to vote your shares: via the internet, by following the
instructions at https://www.iproxydirect.com/CMTV; by using a
touchtone telephone and calling 1-866-752-8683 (toll free in the
United States); or, if you received a proxy card in the mail, by
completing it and returning it by mail in the return envelope
provided or faxing it to 1-202-521-3464. If you do not wish to vote
by proxy, you may vote your shares in person by written ballot at
the meeting. You are a shareholder of record with respect to shares
of Company common stock you own in your own name on the stock
records maintained by our transfer agent, Computershare Investor
Services LLC (
“Computershare”
).
How do I vote if my shares are held in the name of a broker or
bank?
If you
hold your shares through a broker or bank, your broker or bank
should have given you instructions for how you can direct the
voting of your shares. It will then be the responsibility of your
broker or bank to vote your shares for you in the manner you
direct.
As explained below, unless
you provide instructions, your broker will not have authority to
vote your shares on Proposal 1 (Election of
Directors).
What are “broker non-votes”?
Under
the rules of various national and regional securities exchanges,
brokers may generally vote shares they hold for their customers in
“street name” on routine matters, even without specific
instructions from the beneficial owner, but cannot vote on
non-routine matters unless they have received voting instructions.
If there is a non-routine matter presented to shareholders at a
meeting and your broker does not receive instructions from you on
how to vote, your broker will return the proxy card to us,
indicating that he or she does not have the authority to vote on
the matter, while voting on other (i.e., routine) matters. The
“missing” votes on non-routine matters are generally
referred to as “broker non-votes” and may affect the
outcome of the voting on certain matters.
Are the Proposals to be voted on at the annual meeting considered
routine or non-routine for broker voting?
PROPOSAL 1 – ELECTION OF DIRECTORS
(whether or not
contested):
non-routine,
therefore voting instructions
are
required.
PROPOSAL 2 – RATIFICATION OF SELECTION OF INDEPENDENT
AUDITORS:
routine,
therefore voting instructions
are
not
required.
It is important that you provide instructions to your broker
promptly as to how you want your shares voted at the 2017 annual
meeting on Proposal 1. We urge you to follow carefully the
instructions your broker gives you concerning its voting procedures
in order to ensure that your shares will be voted at the
meeting.
How do I vote if my shares are held in the Company’s 401(k)
Plan?
If you
are a participant in the Company stock fund under the
Company’s Retirement Savings 401(k) Plan, you will receive a
voting instructions card to instruct the trustees of the Plan on
how to vote the prorated number of shares in which you own an
interest indirectly through the Plan. You may provide the
instructions by completing the card and returning it to Issuer
Direct Corporation, our agent for tabulating the votes of Plan
participants, or you may provide your voting instructions by
telephone (toll free), as explained in the instructions on the
proxy form. Your voting instructions are confidential. Issuer
Direct Corporation will tabulate the votes of Plan participants and
the Plan Trustees will then submit a single proxy card to the
Company reflecting the aggregate voting instructions of all Plan
participants. The Plan Trustees and the Company are not informed
about how individual participants voted on any item.
In
order to ensure that your vote will be included in the vote totals
transmitted to the Plan Trustees, your voting instructions must be
received by Issuer Direct Corporation no later than the opening of
business on May 15, 2017 if voting by mail, fax, internet or
telephone.
2
What does it mean if I received more than one notice of
availability?
If you
received more than one notice of availability of these proxy
materials, your shares are registered in different names (for
example, “John Smith” and “J. Smith”) or
are in more than one account. To ensure that all your shares are
voted, you must submit a proxy with respect to each of your
separate shareholder accounts. For instructions on how to register
all your accounts in the same name and address, you should contact
the Assistant Corporate Secretary at 802-334-7915 or our transfer
agent, Computershare, at the contact location shown on the last
page of this proxy statement.
Can I change my vote after submitting my proxy card or voting via
the internet or by telephone?
Yes. If
you submit a proxy for shares registered in your name by mail or
fax, or you vote those shares via the internet or by telephone and
later decide that you wish to change or revoke your proxy, you may
do so at any time before the proxy is exercised at the annual
meeting, by
●
Giving written
notice of revocation to Melissa Tinker, Assistant Corporate
Secretary, Community Bancorp., 4811 US Route 5, Newport, Vermont
05855; or
●
Voting in person
after giving written notice of revocation of your proxy to the
Assistant Corporate Secretary.
If you
need to revoke an earlier proxy or if you have any questions about
proxy voting procedures, please call the Assistant Corporate
Secretary at 802-334-7915.
The
last vote you submit will supersede all your prior
vote(s).
If your
shares are held through a broker or other nominee and you wish to
change your vote, you should contact the broker or nominee for
instructions. Similarly, if your shares are held in the
Company’s 401(k) Plan and you wish to change your vote, you
should contact Issuer Direct Corporation for instructions. Contact
information for Issuer Direct Corporation is shown on the last page
of this proxy statement.
What constitutes a quorum and how are votes counted for that
purpose?
In
order to convene the meeting, a quorum must be present, and in
order to take action on any matter, a quorum must be present as to
such matter. A majority (more than 50%) of the outstanding shares
of the Company’s common stock, present in person or
represented by proxy and entitled to vote, will constitute a quorum
to convene the meeting and to take action as to each matter to be
acted upon at the meeting. Shares represented by proxies (whether
voted via the internet, by telephone, by fax or by mail) or ballots
and voted on either of the two proposals (including those marked
“WITHHOLD AUTHORITY” on Proposal 1 or
“ABSTAIN” on Proposal 2) will be treated as shares
present or represented at the meeting and entitled to vote for
purposes of determining a quorum to convene the meeting and to vote
on the particular proposal. Broker non-votes on Proposal 1, which
is considered a non-routine matter for purposes of broker voting
authority, will not be considered as shares present and entitled to
vote in determining whether a quorum is present for any purpose.
Broker proxies will be considered as shares present and entitled to
vote in determining whether a quorum is present to convene the
meeting and to vote on Proposal 2, which is considered a routine
matter for purposes of broker voting authority.
How many votes are required for the election of directors (Proposal
1)?
Under
our Amended and Restated Articles of Incorporation and bylaws, in
order to be elected under Proposal 1 (Election of Directors) a
nominee for director must receive the affirmative vote of the
holders of at least a majority of the shares present in person or
represented by proxy at the meeting and entitled to vote. Broker
non-votes, if any, and shares represented by proxies or ballots
marked “WITHHOLD” on Proposal 1, with respect to one or
more individual nominees or the entire slate of nominees, will have
the same effect on the outcome of the election as a vote against
the nominees or slate of nominees, as the case may be.
How many votes are required to ratify the selection of Berry Dunn
McNeil & Parker, LLC (“BerryDunn”) as the
Company’s independent auditor for 2017 (Proposal
2)?
Approval
of BerryDunn as the Company’s independent auditor for 2017
will require that more votes are cast “FOR” than are
cast “AGAINST” the proposal. Votes to
“ABSTAIN” on Proposal 2 and broker non-votes, if any,
are not treated as votes cast and, therefore, will have no effect
on the outcome of the vote on Proposal 2.
3
How many votes are required to approve any other matter that may
come before the meeting?
As of
the date of this proxy statement, our management and directors do
not know of any matter that may be put to a vote at the meeting
other than Proposals 1 and 2. If any such matter does arise and is
not ruled out-of-order by the Chair, any shares represented by
proxies may be voted at the discretion of the attorneys-in-fact
named in the proxies, to the extent permitted by law, in accordance
with the recommendations of management. Under Vermont law, approval
of any such other matter would ordinarily require that more votes
be cast for the matter than against. Abstentions from voting and
broker non-votes, if any, would not be treated as votes cast and
therefore, would have no effect on the vote to approve any such
other matter.
What is the Board of Directors’ recommendation on how I
should vote my shares?
The
Board recommends that you vote
FOR
Proposals 1 and 2.
How will my shares be voted if I do not specify on my signed proxy
card how they should be voted?
If you
request a paper copy of the proxy materials and choose to vote by
mail or by fax and you sign and return your proxy card but do not
indicate how you want your shares to be voted, the persons
appointed as proxies by the Board of Directors will vote your
shares FOR approval of Proposals 1 and 2, and in accordance with
the recommendations of management on any other matter presented for
vote at the meeting.
When will the vote results be announced?
The
Company will appoint inspectors of election to count the votes on
all proposals and any other matter voted on at the annual meeting,
and the vote results will be announced at the meeting. The vote
results will also be disclosed in a report on Form 8-K filed with
the Securities and Exchange Commission (
“SEC”
) within four business
days after the annual meeting.
How are proxies being solicited and who pays the
expenses?
Proxies
are being solicited via the internet and by mail. They may also be
solicited by the Company’s directors and officers and by the
directors, officers and employees of the Company’s
wholly-owned subsidiary, Community National Bank. Those individuals
may solicit proxies personally or by telephone or electronic
communication but they will not receive any additional compensation
for such efforts. In addition, the Company has arranged with
brokerage houses, banks and other custodians, nominees and
fiduciaries to send the proxy materials to their principals and
will reimburse them for out-of-pocket expenses they incur in
forwarding the materials.
May shareholders submit nominations for election as directors or
for consideration of other matters?
Our
bylaws include a process shareholders must follow if they wish to
submit director nominations or propose other action for vote by the
shareholders. The deadline for submissions relating to this
year’s annual meeting was January 18, 2017. For next
year’s annual meeting, which is expected to be held on May
15, 2018, the deadline under the bylaws for shareholder proposals
and nominations is no earlier than November 16, 2017 and no later
than January 15, 2018. Additional information about this process is
contained elsewhere in this proxy statement under the caption
“SHAREHOLDER NOMINATIONS AND OTHER PROPOSALS—Bylaw
Requirements for Shareholder Nominations and Other
Proposals.” This process applies whether or not a shareholder
wishes to include the proposal in the Company’s proxy
materials for the meeting. However, if a shareholder does wish to
include the proposal in the Company’s proxy materials for the
annual meeting, as explained immediately below the deadline for
submission of the proposal to the Company will be earlier than the
deadline specified under the Company’s bylaws and certain
additional requirements apply.
In
addition, the Corporate Governance/Nominating Committee of the
Board of Directors will consider recommendations made by
shareholders for possible board nominees. Additional information
about this process is contained elsewhere in this proxy statement
under the caption “CORPORATE GOVERNANCE—Board
Committees–Corporate Governance/Nominating
Committee.”
What is the deadline to submit a shareholder proposal for inclusion
in the Company’s 2018 annual meeting proxy
statement?
The
SEC’s rules provide a process (separate from the process in
our bylaws discussed above) for shareholders to submit proposals
for possible inclusion in the Company’s proxy materials. The
deadline under SEC rules for submitting a proposal you wish to
include in the Company’s 2018 annual meeting proxy statement
is earlier than the general deadline under the bylaws for providing
notice and furnishing specified information to the Company. The
deadline under SEC rules for submitting a proposal for inclusion in
the Company’s proxy materials for the 2018 annual meeting is
no later than December 7, 2017. Proposals may be excluded or
included from the Company’s proxy materials based on
applicable rules relating to eligibility, timeliness and subject
matter. Additional information about this process is contained
elsewhere in this proxy statement under the caption
“SHAREHOLDER NOMINATIONS AND OTHER PROPOSALS—Inclusion
of Shareholder Proposals in Company Proxy Materials.” This
process is separate from, and in addition to, the process referred
to above that is contained in our bylaws.
4
SHARE OWNERSHIP INFORMATION
The
following table shows the amount of our common stock beneficially
owned by all of our incumbent directors, nominees and executive
officers, individually and as a group, as of March 20, 2017, the
record date for the meeting. None of our directors or executive
officers owns any shares of the Company’s Series A preferred
stock. Except as otherwise indicated in the footnotes to the table,
the named individuals possess sole voting and investment power over
the common shares listed.
|
|
|
|
|
|
Number of Shares Beneficially
|
|
|
|
Owned and Percent of Class
|
|
|
|
Number of Shares
|
Percent of Class
|
|
|
|
|
|
Directors and Nominees
|
|
|
|
Thomas
E. Adams (1)
|
27,734
|
0.55
%
|
|
Kathryn
M. Austin (2)
|
45,229
|
0.89
%
|
|
David
M. Bouffard
|
2,033
|
0.04
%
|
|
Charles
W. Bucknam, Jr. (3)
|
3,000
|
0.06
%
|
|
Aminta
K. Conant (4)
|
2,067
|
0.04
%
|
|
Jacques
R. Couture (5)
|
20,169
|
0.40
%
|
|
Rosemary
M. Lalime
|
57,563
|
1.13
%
|
|
Patrick
M. Malone
|
400
|
0.01
%
|
|
Stephen
P. Marsh (6)
|
106,230
|
2.09
%
|
|
Dorothy
Mitchell
|
6,669
|
0.13
%
|
|
Fredric
Oeschger
|
75,919
|
1.50
%
|
|
James
G. Wheeler, Jr.
|
1,769
|
0.03
%
|
|
|
|
|
|
Non-Director/Nominee Executive Officers
|
|
|
|
Louise
M. Bonvechio (7)
|
6,204
|
0.12
%
|
|
Terrie
L. McQuillen (8)
|
10,275
|
0.20
%
|
|
|
|
|
|
All Directors, Nominees & Executive
|
|
|
|
Officers as a Group (14 in
number) (9)
|
365,260
|
7.20
%
|
(footnotes
on following page)
5
|
(1)
|
Includes
11,545 shares held in an IRA for Mr. Adams’
benefit.
|
|
|
(2)
|
Includes
11,142 shares as to which voting and investment power is shared and
34,087 shares held indirectly, through participation in the
Community Bancorp. stock fund under the Company’s Retirement
Savings Plan (the “401(k) Plan”).
|
|
|
(3)
|
Includes
2,600 shares held by Mr. Bucknam jointly with his wife, as to which
voting and investment power is shared.
|
|
|
(4)
|
Includes
250 shares held in a family trust as to which voting and investment
power is shared.
|
|
|
(5)
|
Includes
(i) 9,786 shares held by Mr. Couture jointly with his wife, as to
which voting and investment power is shared; (ii) 3,030 shares held
in an IRA for Mr. Couture’s benefit; and (iii) 3,040 shares
held in an IRA for the benefit of Mr. Couture’s
wife.
|
|
|
(6)
|
Includes
(i) 28,556 shares held by Mr. Marsh jointly with his wife, as to
which voting and investment power is shared; and (ii) 76,771 shares
indirectly owned by Mr. Marsh through his participation in the
Community Bancorp. stock fund under the 401(k) Plan. Of the shares
listed, 29,058 are pledged as collateral for a loan with a
nonaffiliated bank.
|
|
|
(7)
|
All
such shares are held indirectly through participation in the
Community Bancorp. stock fund under the 401(k) Plan.
|
|
|
(8)
|
Includes
10,275 shares held indirectly through participation in the
Community Bancorp. stock fund under the 401(k) Plan.
|
|
|
(9)
|
Includes
52,334 shares as to which voting and investment power is shared and
144,952 shares held indirectly, through participation in the
Community Bancorp. stock fund under the 401(k) Plan.
|
|
In
addition, as of March 20, 2017, 646,306 shares (13.29%) of the
Company’s issued and outstanding common stock were held in
fiduciary or custodial capacity by the Company’s affiliated
trust and investment management company, Community Financial
Services Group, LLC (
“CFSG”
), including 456,289
shares, or 9.38%, held on behalf of the 401(k) Plan Trustees and
participants. Participants in the Company stock fund under the
401(k) Plan, including the Company’s four executive officers,
have the right to vote their proportionate share of the stock held
in the fund. The 401(k) Plan Trustees do not generally vote shares
of the Company’s common stock unless instructions are
received from the participants. Similarly, CFSG does not vote
shares of the Company’s common stock held in fiduciary
capacity unless voting instructions are received from the
beneficial owner.
Except
as set forth above, the Company is not aware of any individual,
group, corporation or other entity owning beneficially more than 5%
of the Company’s outstanding common stock, its only class of
voting securities. The Company has no other authorized class of
voting securities. The Company has outstanding 25 shares of Series
A preferred stock, which are nonvoting except in very limited
circumstances affecting the rights of the holders of such
shares.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section
16(a) of the Securities Exchange Act of 1934 requires the
Company’s executive officers and directors to file reports of
ownership and changes in ownership with the SEC and to furnish the
Company with copies of all such reports. The Company has reviewed
the copies of the Section 16 reports filed by the directors and
executive officers, or written representations from them that no
Form 5’s were required to be filed for 2016. Based solely on
such review, the Company believes that all Section 16 filing
requirements applicable to its executive officers and directors for
2016 were timely complied with.
PROPOSAL 1
ELECTION OF DIRECTORS
Our
Amended and Restated Articles of Association and our bylaws provide
for a Board of no fewer than nine and no more than twenty-five
directors, to be divided into three classes, as nearly equal in
number as possible, each class serving for a period of three years.
The Board of Directors currently consists of twelve members and the
Board has voted to fix the number of directors at twelve for the
ensuing year. The incumbent directors whose terms expire at the
2017 annual meeting are Thomas E. Adams, Jacques R. Couture,
Dorothy R. Mitchell and James G. Wheeler Jr., and each has been
nominated to stand for election to the class whose term will expire
at the 2020 annual meeting (Proposal 1).
Unless
authority is withheld, proxies we solicit will be voted in favor of
the four nominees to hold a three year term of office or until
their respective successors are elected and qualify. If for any
reason not now known to the Company, any of such nominees should
not be able to serve, proxies will be voted for a substitute
nominee or nominees designated by the Board of Directors, or to fix
the number of directors at fewer than twelve, as the directors in
their discretion may deem advisable.
6
The
table below contains certain information concerning each of the
nominees and the incumbent directors whose term of office will
continue following the annual meeting. Additional biographical and
background information about each of them follows the table, under
the caption “Director Qualifications.”
|
Name and
Age
|
|
Principal
Occupation
|
|
Director of
Community
Bancorp. Since
(1)
|
|
|
|
|
|
|
|
Nominees (if elected) to serve until 2020 annual meeting:
|
|
|
|
|
|
|
|
|
|
|
|
Thomas
E. Adams, 70
|
|
Owner,
|
|
1986
|
|
|
|
NPC
Realty Co., Inc.
|
|
|
|
|
|
Holland,
VT
|
|
|
|
|
|
(real
estate investment)
|
|
|
|
|
|
|
|
|
|
Jacques
R. Couture, 66
|
|
Owner,
|
|
1992
|
|
|
|
Dairy
Farm/Maple Products
|
|
|
|
|
|
Westfield,
VT
|
|
|
|
|
|
|
|
|
|
Dorothy
R. Mitchell, 72
|
|
Board
Chair,
|
|
2006
|
|
|
|
Vermont
Student Assistance Corporation
|
|
|
|
|
|
Winooski,
VT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
G. Wheeler, Jr., 68
|
|
Attorney
and Principal,
|
|
2011
|
|
|
|
Downs
Rachlin Martin PLLC
|
|
|
|
|
|
St.
Johnsbury, VT
|
|
|
|
|
|
(law
firm)
|
|
|
|
|
|
|
|
|
|
Incumbent Directors to serve until 2019 annual meeting:
|
|
|
|
|
|
|
|
|
|
|
|
Charles
W. Bucknam, Jr., 73
|
|
Practice
Manager,
|
|
2008
|
|
|
|
Bucknam
& Black, P.C.
|
|
|
|
|
|
St.
Johnsbury, VT
|
|
|
|
|
|
(law
firm)
|
|
|
|
|
|
|
|
|
|
Stephen
P. Marsh, 69
|
|
Board
Chair,
|
|
1998
|
|
|
|
Community
Bancorp. and Community National Bank
|
|
|
|
|
|
Newport,
VT
|
|
|
|
|
|
|
|
|
|
Patrick
M. Malone, 56
|
|
Owner,
|
|
2015
|
|
|
|
Malone
Properties Inc.
|
|
|
|
|
|
Montpelier,
VT
|
|
|
|
|
|
(property
investment, management and development)
|
|
|
|
|
|
|
|
|
|
Fredric
Oeschger, 70
|
|
President
and Principal,
|
|
2009
|
|
|
|
Fred’s
Energy, Inc. and D&C Transportation, Inc.
|
|
|
|
|
|
Derby,
VT
|
|
|
|
|
|
(plumbing
and heating contractor and fuel oil, propane and
|
|
|
|
|
|
petroleum
distributor)
|
|
|
7
|
Name and
Age
|
|
Principal
Occupation
|
|
Director of
Community
Bancorp. Since
(1)
|
|
|
|
|
|
|
|
Incumbent Directors to serve until 2018 annual
meeting:
|
|
|
|
|
|
|
|
|
|
|
|
Kathryn
M. Austin, 59
|
|
President,
Chief Executive Officer and Director,
|
|
2013
|
|
|
|
Community
Bancorp. and Community National Bank
|
|
|
|
|
|
Newport,
VT
|
|
|
|
|
|
|
|
|
|
David
M. Bouffard, 59
|
|
Co-Owner,
|
|
2014
|
|
|
|
Derby
Village Store
|
|
|
|
|
|
Derby,
VT
|
|
|
|
|
|
|
|
|
|
Aminta
K. Conant, 63
|
|
Business
Consulting,
|
|
2006
|
|
|
|
USA and
Europe
|
|
|
|
|
|
|
|
|
|
Rosemary
M. Lalime, 70
|
|
Owner
and Partner,
|
|
1985
|
|
|
|
RE/Max
All Seasons Realty
|
|
|
|
|
|
Newport,
VT
|
|
|
|
|
|
(real
estate brokerage)
|
|
|
(1)
Each
person named in the table is also a director of Community National
Bank. The dates indicated in the table reflect only service on the
Board of Directors of the Company and not Community National Bank
or its regional advisory boards.
Incumbent Director and Nominee Qualifications
As a
community banking organization operating in a heavily regulated
industry, we rely on our Board of Directors for knowledge of our
local markets, business acumen and strategic vision. Each incumbent
director and nominee lives or works (unless retired) in the markets
we serve, and brings a unique background, perspective and set of
skills to our Board. This provides our Board as a whole with a
thorough understanding of our local markets, and significant
competence and experience in a wide variety of areas, including
corporate governance, real estate, insurance, building trades, real
estate development, agriculture, energy and commodities, the law
and business management. In addition, many of our directors are
long-serving members of our Company and Bank Boards, whose past
contributions and industry knowledge, judgment and leadership
capabilities have benefited our Company over the years and through
multiple economic cycles.
The
information below summarizes each incumbent director’s or
nominees specific experience, qualifications, attributes and skills
that led our directors to conclude that the individual should serve
on our Board. We also believe that in their professional lives and
Board service, each has demonstrated adherence to high ethical
standards and a strong commitment to service to the Company and our
Board.
Thomas Adams
– Tom has served as a director since
1986. At the time of his initial election, he was the President and
Chief Executive Officer (
“CEO”
) of Newport Plastics,
where he had also served as the Chief Financial Officer
(
“CFO”
) for many
years. He is the owner of NPC Realty and until his retirement in
November 2010, was a real estate broker at Coldwell Banker All
Seasons Realty (now Re/Max All Seasons Realty). In addition to his
business interests, Tom served for several years on the board of
North Country Hospital in Newport, Vermont, including as its
Chairman and Treasurer. He also served for several years as a
trustee of the Haskell Free Library and Opera House in Derby Line,
Vermont. Tom holds an accounting degree from the University of
Vermont. He brings to the Board extensive business experience,
familiarity with accounting procedures, and broad knowledge of the
community. He is Chair of the Audit Committee and also serves on
the Compensation Committee and on the Bank’s Human Resources
Committee. He lives in Holland, Vermont.
Kathryn Austin
– Kathy has served as President of the
Bank and Company since January 2016 and was promoted to CEO of both
entities in January 2017 and she also served as the Bank’s
Chief Operating Officer from January 2014 until her appointment as
CEO in January 2017. Kathy was appointed to the Community National
Bank Board of Directors in January 2012 and was first elected to
the Company’s Board at the 2013 annual meeting. She joined
the Bank in 1980 and over the years has held many management
positions. Kathy served as Executive Vice President of both the
Company and the Bank from 2011 to 2016, and Vice President of the
Company and Senior Vice President of the Bank from 2004 to 2011,
responsible for the Bank’s Retail Banking, Human Resources
and Marketing departments. Kathy also serves on the Board of
Managers of our trust company affiliate, CFSG. Kathy’s many
years of service to the Company in a variety of positions provides
her with valuable insights into the Bank’s day-to-day
operations, adding further depth and community banking expertise to
the Board. Kathy is a graduate of the New England School of Banking
at Williams College and the Stonier Graduate School of Banking at
Georgetown University. She currently serves as Chair of the North
Country Health Systems Board of Trustees, a Trustee of the
Northwoods Stewardship Center, a member of the Newport Age Friendly
Advisory Council, and First Vice Chairman of the Vermont Bankers
Association. She serves on the Company’s Corporate Governance
and Nominating and Compensation Committees. Kathy also serves on
the Bank’s Risk Management Committee and Human Resources
Committee. Kathy lives in Morgan, Vermont.
8
David Bouffard
–Dave joined the Boards of the Company
and the Bank in 2014 and is a life-long resident of the area. He
and his wife Beth have owned the Derby Village Store in Derby,
Vermont since 2000. Prior to purchasing the store, Dave acquired
retail management experience as the Manager of the Grand Union
grocery store in Newport. Dave has served on various local boards,
and is a past Board Chair of North Country Hospital. His
perspective as a small business owner and knowledge of our Orleans
County market area add further depth to our Board. Dave serves on
the Company’s Audit and Governance/Nominating Committees. He
lives in Newport, Vermont.
Charles Bucknam
– Charlie is the former President, CEO
and a director of LyndonBank and joined the Board in 2008 following
our merger with LyndonBank. His career in the banking industry in
Vermont spanned 36 years, including 17 years as a bank CEO. His
deep familiarity with LyndonBank’s operations, personnel and
customers has been and continues to be a great resource for the
Board, as is his experience and knowledge of community banking
generally. Charlie holds an MBA degree in finance from the
University of Vermont. Charlie served as Assistant Headmaster for
Finance (CFO) at Lyndon Institute until August 2015 and is
currently Practice Manager at Bucknam & Black, P.C., a law firm
in St. Johnsbury, Vermont. He serves on the Corporate
Governance/Nominating Committee and on the Bank’s Risk
Management Committees. He lives in Walden, Vermont.
Aminta Conant
– Minty is a successful business woman
with experience running manufacturing facilities in Vermont, New
Hampshire and North Carolina. She is currently a business
consultant to companies across the United States and Europe.
Previously, she served as the director of Lean Six Sigma programs
for Lydall, Inc., an international manufacturing company listed on
the New York Stock Exchange. Minty is a CPA and has an MBA degree,
and brings to the Board not only her experience and knowledge of
accounting, finance, and good business practices, but also her
experience in working in a public company much larger than
Community Bancorp. That perspective is a rarity for community bank
directors and a real asset to the Board. She serves on the Audit
and Compensation Committees and on the Bank’s Human Resources
Committee. She has been a director since 2006, and prior to that
served on our St. Johnsbury (now Caledonia County) Advisory Board.
She lives in Barnet, Vermont.
Jacques Couture
– Jacques is a dairy farmer and maple
sugar maker, who runs a successful family farm and bed and
breakfast in Westfield. He has served on numerous governmental,
non-profit and industry-related boards, including the Westfield
Select Board, the Vermont Maple Association and the Cooperative
Insurance Company, among others. He brings relevant board
experience and an agricultural perspective to our Board, where he
chairs the Corporate Governance/Nominating Committee and also
serves on the Bank’s Risk Management Committees. He has been
a director since 1992, and prior to that served on our Troy
Advisory Board. He lives in Westfield, Vermont.
Rosemary Lalime
– Rosemary is our longest serving
director, having been first elected to the position in 1985. She
has been designated as our “outside” vice president (a
tradition we have had at the Company for many years) and as our
lead independent director to convene and run board meetings in the
absence of management. A long time realtor in the area, and the
owner and partner of Re/Max All Seasons Realty, Rosemary brings to
the Board her extensive experience in real estate matters and her
knowledge of properties and residents throughout our service area.
She chairs the Compensation Committee and also serves on the
Bank’s Human Resources and Risk Management Committees. She
lives in Derby, Vermont.
Patrick Malone
– Patrick is our newest director,
having been appointed in 2015 to fill a vacancy on the board.
Patrick is the owner and manager of Malone Properties Inc., a real
estate investment, management and development business based in
Montpelier, Vermont. In that capacity, he has gained extensive
knowledge and experience with renovating, rehabilitating and
managing industrial, commercial and office property in an important
part of our market area. That significant background in commercial
real estate provides valuable insights and perspective to the
Board. Previously, Patrick owned and operated Windshield World and
Woodbury Auto Sales. Patrick serves on the Compensation Committee
and on the Bank’s Risk Management Committee and Human
Resources Committee. He lives in Calais, Vermont.
9
Stephen Marsh
– Steve serves as Chair of Boards of
Directors of the Company and the Bank. He served as CEO of both
entities from 2008, until his retirement at the end of 2016. He was
first appointed to the Board in 1998 and has served as its Chair
since 2011. Previously, he served as President of the Company and
the Bank from 2004 through the end of 2015, when Kathy Austin
succeeded to that position for both entities. He began his
employment with the Bank in 1973, serving over the years in various
managerial capacities, including as CFO and Chief Operating Officer
of the Company and the Bank prior to becoming President and CEO.
Steve also served on the Board of Managers of our trust company
affiliate, CFSG, from its formation in 2002 through 2016. He has
been active over the years with various community, business and
nonprofit organizations, most recently serving on the boards of the
Associated Industries of Vermont, Housing Vermont, Inc., where he
serves on the Executive Committee, and the University of Vermont
Health Network (formerly Fletcher Allen Health Care). Steve’s
in depth knowledge of our Bank and our local markets provides
invaluable assistance and leadership to the Board in overseeing the
Company’s affairs and strategic planning. He lives in Newport
Center, Vermont. Steve was appointed to the Company’s
Compensation Committee and the Corporate Governance/ Nominating
Committee in 2017 following his retirement as CEO. Steve also
serves on the Bank’s Risk Management Committee and Human
Resources Committee.
Dorothy Mitchell
– Dodie has been a director since
2006, prior to which she served as a member of our Central Vermont
Advisory Board. She brings to the Board a variety of governance
experience, primarily as a board member of several non-profit
organizations, including serving as Chair of the Vermont Student
Assistance Corporation. Dodie also previously served as the
President of the Vermont Historical Society and as Co-Chair of the
Vermont Historical Society Capital Campaign. As an active member of
the community, she has extensive familiarity with the people and
businesses in our central Vermont market area. Dodie serves on the
Corporate Governance/Nominating Committee and on the Bank’s
Risk Management Committees. She lives in Worcester,
Vermont.
Fredric Oeschger
– First elected to the Board in 2009,
Fred is a prominent local businessman, with diverse business
interests, including plumbing and heating, propane and fuel oil
distribution and commercial real estate. Fred is a longtime
customer of the Bank and has extensive experience with commercial
lending practices both here and elsewhere and possesses valuable
insights into our small business market. He serves on the Audit and
Compensation Committees and on the Bank’s Human Resources
Committee. He lives in Newport, Vermont.
James Wheeler
– Jake joined the Board in 2011 to fill
the vacancy created upon the retirement of former Chairman Richard
White. In addition to his service on our Board, he has been a
guiding force with the Company’s trust company affiliate for
many years, having served on its Board of Managers since its
formation in 2002. Jake has practiced law in St. Johnsbury since
1974 with the state’s largest law firm, Downs Rachlin Martin
PLLC, and has been a member of the firm since 1978. His practice
focuses principally in the areas of corporate governance,
transactions and financing; complex real estate acquisitions and
financing; and trusts and estates. Jake received his undergraduate
degree from Harvard University and his law degree from Boston
University School of Law. He chairs the Board of Directors of The
Vermont Community Foundation. Jake’s judgment and insight as
a seasoned attorney provide a valuable addition to our Board. Jake
serves on the Company’s Audit and Corporate
Governance/Nominating Committees. He lives in East Burke,
Vermont.
Information
about our Board’s important role in the governance of our
Company, including the Board’s committees, leadership
structure and role in oversight of risks, is contained below under
the caption “CORPORATE GOVERNANCE.”
Directors’ Fees and Other Compensation
Only
the outside (non-employee) directors are paid for their service on
the Boards of the Company and the Bank. All fees are paid in cash.
The Company and the Bank do not pay any stock-based compensation to
directors.
The
schedule of fees in effect during 2016 for our nonemployee
directors was as follows:
|
Company Director
Fees
|
|
|
Bank Director
Fees
|
||
|
|
|
|
|
|
|
|
Annual
Retainer
|
$8,000
|
|
|
Annual
Retainer
|
$8,000
|
|
Board
Meeting Fee
|
450
|
|
|
Board
Meeting Fee
|
450
|
|
Board
Committee Meeting Fee
|
450
|
|
|
Board
Committee Meeting Fee
|
450
|
|
Disclosure
Control Committee Meeting Fee (1)
|
450
|
|
|
Local
Advisory Board Meeting Fee (2)
|
450
|
|
(1)
|
At
least one member of the Audit Committee attends the quarterly
meetings of the Company’s Disclosure Control Committee, which
reviews the Company’s periodic reports prior to filing with
the SEC.
|
|
|
(2)
|
Each
Bank director attends several meetings a year of the Bank’s
local advisory boards. Employee-directors attend local advisory
board meetings but do not receive any fees for doing
so.
|
|
10
This
fee structure is designed to compensate our outside directors for
attendance at Board meetings, as well as for the time they spend in
activities directly related to their service on the Board for which
they receive no additional compensation, such as attendance at the
annual directors’ retreat and attendance at educational
seminars or programs on pertinent banking or corporate governance
topics.
Directors’ Deferred Compensation Plan
The
directors may choose to defer current receipt of some or all of
their Company or Bank director fees under the Company’s
Deferred Compensation Plan for Directors. Deferrals are credited to
a cash account that bears interest at the rate the Bank pays on a
three-year certificate of deposit, as adjusted from time to time.
Payments are deferred until the director’s retirement, death
or disability, or at an earlier or later date elected by the
director. The director may choose to receive his or her deferrals
and accumulated interest in a lump sum or monthly installments.
Deferred fees and accumulated interest represent a general
unsecured obligation of the Company. No assets of the Company or
the Bank have been segregated to satisfy the Company’s
obligations under the Plan.
Directors’ Retirement Plan
Prior
to 2005, the Company maintained a non-qualified retirement plan for
the Company’s outside directors. Non-employee directors who
served on the Board of the Company or the Bank for at least five
years between 1994 and 2004 are entitled to receive upon retirement
a lump sum payment of $1,000 for each year of Board service. For
this purpose, service as a director of the Company and of the Bank
during the same year is not counted separately. Following a
re-evaluation of the Company’s benefit plans affected by IRC
Section 409A, the Company terminated any further accruals under the
plan for years after 2004 and Board fees were increased to
compensate for the loss of this retirement benefit.
As of
December 31, 2016, the total remaining accrued and unpaid benefit
for all directors covered by the plan was $33,000. The
participating directors are fully vested in their accrued benefits
and would be entitled to payout of the full benefit upon retirement
from the Board for any reason, regardless of age. Directors Adams,
Couture, and Lalime each have an accumulated lump sum retirement
benefit of $11,000. Accrued benefits do not earn interest, are not
adjusted for inflation and will be paid out to participants when
they retire from the Board. All benefit accruals under the plan
represent a general unsecured obligation of the Company. No assets
of the Company or the Bank have been segregated to satisfy the
Company’s obligations under the plan.
Director Compensation Table
The
table below shows the total compensation paid to each of our
outside directors during 2016 for service on the Boards of the
Company and the Bank:
2016 Director Compensation
|
|
Fees Earned
or
|
All
Other
|
|
|
Name
|
Paid in
Cash
|
Compensation(1)
|
Total
|
|
|
|
|
|
|
Thomas E.
Adams
|
$
27,700
|
$
0
|
$
27,700
|
|
David M.
Bouffard
|
27,250
|
0
|
27,250
|
|
Charles W. Bucknam,
Jr.
|
27,700
|
1,366
|
29,066
|
|
Aminta K.
Conant
|
27,700
|
0
|
27,700
|
|
Jacques R.
Couture
|
27,700
|
0
|
27,700
|
|
Rosemary M.
Lalime
|
26,800
|
0
|
26,800
|
|
Patrick M.
Malone
|
25,450
|
0
|
25,450
|
|
Dorothy R.
Mitchell
|
27,700
|
1,332
|
29,032
|
|
Fredric
Oeschger
|
26,350
|
0
|
26,350
|
|
James G. Wheeler,
Jr.
|
26,350
|
1,013
|
27,363
|
|
(1)
|
Represents
mileage reimbursement. Does not include earnings on
directors’ fees deferred under the Directors’ Deferred
Compensation Plan because interest on those amounts is not accrued
at a preferential (above market) rate.
|
|
11
Vote Required
Election
of a nominee for director will require the affirmative vote of a
majority of the shares present in person or represented by proxy at
the annual meeting and entitled to vote. A vote to “WITHHOLD
AUTHORITY” as to a nominee will have the same effect as a
vote against such nominee.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
PROPOSAL 1 TO ELECT INCUMBENT
DIRECTORS ADAMS, COUTURE, MITCHELL AND WHEELER TO A THREE YEAR
TERM.
CORPORATE GOVERNANCE
Director Independence
The
primary responsibility of the Board of Directors is to provide
objective, independent judgment in its management oversight
function, and our Board’s composition reflects that
principle. Although the Company’s common stock is not listed
on NASDAQ, our Board uses the definition of independence contained
in the NASDAQ listing standards in its annual evaluation of Board
member independence. Under current NASDAQ standards, a director is
considered independent if he or she is not an officer or employee
of the Company or the Bank and does not have any other relationship
which, in the opinion of the Board, would interfere with the
exercise of independent judgment in carrying out his or her
responsibilities as a director. Under NASDAQ standards, a director
of the Company is not considered independent if he or
she:
●
has been employed
in any capacity by the Company or the Bank during the past three
years;
●
has accepted, or
has a close family member who accepted, any payments from the
Company or the Bank in excess of $120,000 in any consecutive
twelve-month period during the last three years, except
for
●
payments
relating to ordinary loan or deposit relationships with the
Bank
●
compensation
for Board service
●
compensation
paid to a close family member who is not an executive officer of
the Company or the Bank
●
certain
retirement benefits or non-discretionary compensation
and
●
payments
arising solely from investments in the Company’s common
stock;
●
has a close family
member who during the past three years was an executive officer of
the Company or the Bank;
●
has been a
principal, or has a close family member who was a principal, of any
organization to which the Company made or from which it received
payments, in any of the past three years, that exceeded the greater
of $200,000 or 5% of the annual consolidated gross revenues of the
other entity;
●
has been an
executive officer of any other entity, or has a close family member
who was an executive officer of any other entity, where any of the
Company’s executives serves on that other entity’s
compensation committee; or
●
has been, or had a
family member who was, a partner or employee of the Company’s
independent auditor at any time during the last three
years.
In
determining whether a director or nominee for director is
independent, the Board considers all relevant facts and
circumstances and may consider a director or nominee not to be
independent even if none of the disqualifying factors listed above
applies. However, if any of the above disqualifying factors apply,
a director or nominee will not be considered
independent.
Based
on the information available to it, the Company’s Board of
Directors has determined that each of the incumbent directors is
independent within the meaning of the listing standards of NASDAQ,
except for President and CEO Kathryn Austin, who is an executive
officer of the Company and the Bank, Board Chair Stephen Marsh, who
is the immediate past CEO of the Company and the Bank, and director
Jacques Couture, who is the brother of the Company Treasurer and
the Bank Senior Vice President and CFO, Louise
Bonvechio.
Board Leadership Structure and Risk Oversight
Our
Board of Directors believes that each business is unique, and that
therefore, the appropriate board leadership structure will depend
upon each company’s unique circumstances and needs at the
time. In the past the positions of Board Chair and CEO at the
Company generally have been held by the same individual. However,
the Board has sometimes chosen to alter this pattern, such as
following the CEO’s retirement. The positions were separated
from 2008-2010, as Stephen Marsh transitioned into his leadership
role following the retirement of the previous CEO, Richard White,
who remained as Board Chair during the transition period. The
positions of CEO and Board Chair were again combined beginning in
2011, with Mr. Marsh serving in both capacities through the end of
2016. With Mr. Marsh’s retirement as CEO at the end of 2016
and Kathy Austin’s appointment as his successor in January
2017, the CEO and Board Chair positions are again separated. The
Board believes that division of the CEO and Board Chair positions
during a period of management succession contributes to the smooth
transition of the Company’s top executive leadership
position, while at the same time ensuring that the outgoing
CEO’s valuable experience, judgment and service would remain
available to the Company in a prominent leadership role during the
transition period.
12
The
Board believes that the Company has been well served over the years
by a leadership structure guided by the Corporate
Governance/Nominating Committee that includes a Board Chair with
in-depth managerial and operational knowledge of the banking
industry and the Company’s business. This structure fosters
clear accountability, efficient and effective decision-making and
focus on strategic priorities. The Board also believes this
structure helps to facilitate the efficient and timely flow of
information between management and the Board.
While
the Board of Directors believes that having the position of Board
Chair held by the current or immediate past CEO is conducive to our
Company’s efficient operation and strategic development, the
Board is also mindful of its obligation to provide independent
oversight of management. In order to enhance its oversight
function, the Board has created the position of lead independent
director, which is currently held by long-serving director Rosemary
Lalime. The lead director presides over executive sessions of the
independent directors. The Board believes that this structure
strikes an appropriate balance by providing for both a Board Chair
with extensive executive experience with the Company and knowledge
of its operations, and a lead director to help ensure that the
Board provides independent oversight and perspective.
While
risks are inherent in any business, effective management of those
risks can contribute significantly to the ultimate success of an
enterprise. As a community banking organization, we face a number
of risks, including general and local economic risk, credit risk,
interest rate risk, liquidity risk, operational risk, strategic
risk and reputational risk. Management is responsible for the
day-to-day management of risks the Company faces, while the Board,
as a whole and through its committees, is responsible for the
general oversight of risk management. In order to identify and
manage the Company’s risks more effectively, the Risk
Management Committee of the Bank’s Board of Directors is
provided with a detailed review and analysis of the risks facing
the Company on a quarterly basis. This facilitates the
Committee’s oversight role by providing the Committee members
with information on the enterprise-wide risk program framework and
on the Company’s methods of identifying, monitoring, managing
and controlling risks.
Other
Board committees also contribute significantly to the Board’s
oversight role in risk management. In particular, the Audit
Committee plays an important role in monitoring and assessing our
financial, legal and organizational risks and at least one member
of the Committee sits on the Company’s Disclosure Control
Committee which reviews our periodic reports under the Securities
Exchange Act prior to filing with the SEC. The Compensation
Committee monitors and assesses risks associated with our
compensation policies and practices, including the establishment of
appropriate incentives that do not encourage excessive risk-taking.
The Board’s Corporate Governance/Nominating Committee
contributes to risk mitigation by its formulation of the
Company’s corporate governance policies, which help to
establish a “tone at the top” that values and
encourages diligence, honesty and integrity in the conduct of the
Company’s business. Committees of the Bank’s Board of
Directors, in addition to the Risk Management Committee referred to
above, also contribute to the Company’s risk management
program.
Board and Shareholder Meeting Attendance
The
Company’s Board of Directors held four regular meetings and
four special meetings during 2016. Each incumbent director attended
at least 75% of the aggregate of all Company Board meetings and
meetings of Company Board committees on which he or she served
during the year except Mr. Malone who attended 31% of such
meetings. All Company directors also attended meetings of the
Bank’s Board, which meets more frequently than the
Company’s Board, and meetings of its committees on which they
serve.
All
directors are encouraged and expected to attend the annual
shareholders meeting. All of the Company’s directors attended
the 2016 annual meeting, except for Mr. Malone, due to a prior
commitment.
Board Committees
The
Board of Directors has established three standing committees to
help it in fulfilling its responsibilities: Audit; Compensation;
and Corporate Governance/Nominating. Members of the committees are
nominated by the Corporate Governance/Nominating Committee and
appointed by the Board. Except as otherwise noted below, all
members of the three standing committees are considered to be
independent under the NASDAQ standards described above. Director
Jacques Couture, the Chair of the Corporate Governance/Nominating
Committee, is not considered independent under NASDAQ standards due
to his sibling relationship with Corporate Secretary and Treasurer,
and Bank Senior Vice President and CFO Louise Bonvechio, and Board
Chair Stephen Marsh who now serves on the Compensation Committee
and the Corporate Governance/Nominating Committee, is not
considered independent under those standards due to his prior
executive management positions with the Company and the Bank.
Additional information about each of the three standing committees
is set forth below.
13
Compensation Committee.
The responsibilities of the
Company’s Compensation Committee include reviewing and making
recommendations to the Board of Directors concerning the
compensation of the Company’s executive officers and
directors, establishing performance goals under the Officer
Incentive Plan and approving matters relating to other compensation
plans. A report of the Committee regarding executive compensation
is set forth elsewhere in this proxy statement under the caption
“COMPENSATION COMMITTEE REPORT.”
The
members of the Compensation Committee are Rosemary Lalime (Chair),
Thomas Adams, Kathryn Austin, Aminta Conant, Fredric Oeschger,
Patrick Malone, and Stephen Marsh. Ms. Austin and Mr. Marsh were
appointed to the Committee in 2017. During 2016, the Committee met
two times. The Committee’s charter is available on the
Company’s website at
www.communitybancorpvt.com
.
Corporate Governance/Nominating Committee.
The Corporate
Governance/Nominating Committee considers and makes recommendations
on matters related to the practices, policies and procedures of the
Board and takes a leadership role in shaping the corporate
governance environment of the Company. As part of its duties, the
Committee assesses the size, structure and composition of the Board
and its committees, coordinates evaluation of Board and committee
performance, makes recommendations as to the structure of Board
meetings and flow of information to the Board, reviews Board
compensation and reviews and makes recommendations as to the size,
structure, composition and functions of the Bank’s regional
advisory boards.
The
Committee also acts as a screening and nominating committee for
candidates considered for election to the Board. In this capacity
it has established minimum criteria for Board nominees. The
Committee believes it would be desirable for a Board candidate to
possess the following characteristics:
●
have experience in
the management or leadership of a substantial private business
enterprise, educational, religious or not-for-profit organization,
or such other professional experience as the Committee deems
appropriate;
●
be a shareholder of
the Company;
●
be willing and able
to devote full interest and attendance to the Board and its
committees;
●
bring business to
the Company and its trust company affiliate, CFSG, including
personal, business and investment accounts;
●
help develop
business and promote the Company and its subsidiary and affiliate
throughout our service area;
●
provide advice and
counsel to the Board and senior management;
●
bring a diversity
of interests to the Board as evidenced by participation in
community, charitable or other similar activities;
●
have the ability to
serve at least seven years before reaching the mandatory retirement
age; and
●
maintain integrity
and confidentiality at all times.
The
Nominating/Corporate Governance Committee does not currently have a
formal diversity policy. However, the Committee and the Board
believe that it is important and desirable for the Board to include
members with diverse business experience, backgrounds and
viewpoints. In considering candidates for the Board, the Committee
reviews their particular qualifications, strengths and attributes
individually and in relation to the Board as a whole, with the aim
of complementing and strengthening the overall composition of the
Board.
Evaluation
of external candidates occurs on the basis of materials submitted
by or on behalf of the candidate. If a candidate continues to be of
interest after initial consideration by the Committee, additional
information about her/him will be obtained through inquiries to
various sources and, if warranted, interviews.
The
Committee will consider prospective nominees recommended by
shareholders. Any shareholder wishing to recommend a person for
consideration as a Board nominee should submit to the Committee the
same information that would be required under the Company’s
bylaws if the shareholder sought to make a nomination from the
floor at the annual meeting. The required information is described
elsewhere in this proxy statement under the caption
“SHAREHOLDER NOMINATIONS AND OTHER PROPOSALS—Bylaw
Requirements for Shareholder Nominations and Other
Proposals.” The Committee uses the same criteria for
evaluating candidates recommended by shareholders as it does for
those proposed by Board members or management.
The
members of the Corporate Governance/Nominating Committee are
Jacques Couture (Chair), Kathryn Austin, David Bouffard, Charles
Bucknam, Stephen Marsh, Dorothy Mitchell and James Wheeler. Ms.
Austin and Mr. Marsh were appointed to the Committee in 2017.
During 2016, the Committee met two times. The Committee’s
charter is available on the Company’s website at
www.communitybancorpvt.com
.
Audit Committee.
The Audit Committee, which operates under a
written charter, oversees the Company’s accounting and
financial reporting process, internal controls and audits. The
Audit Committee consults with management, the internal auditors and
the independent auditors on, among other items, matters related to
the annual audit, the published financial statements and the
accounting principles applied. As part of its duties, the Committee
appoints, evaluates and retains the Company’s independent
auditors. It has responsibility for the compensation, termination
and oversight of the Company’s independent auditors and
evaluates the independent auditors’ qualifications,
performance and independence. The Committee has similar authority
regarding selection and oversight of the Company’s internal
auditor. In addition, the Audit Committee pre-approves all services
provided by the independent auditors, including both audit and
permitted non-audit services. Those services and fees are described
elsewhere in this proxy statement under the caption “PROPOSAL
2 – RATIFICATION OF SELECTION OF INDEPENDENT
AUDITORS—Fees Paid to Independent Auditors.” The
Committee is also involved in the review of the Company’s
periodic reports filed with the SEC, including participation by one
of its members in the meetings of the Company’s Disclosure
Control Committee.
14
The
Audit Committee has established so-called “whistleblower
procedures” for the receipt, retention and treatment, on a
confidential basis, of complaints received by the Company regarding
accounting, internal accounting controls or auditing matters. These
complaint procedures, as well as the Audit Committee’s
charter, are posted on the Company’s website at
www.communitybancorpvt.com
.
Under
SEC rules, companies must disclose whether at least one member of
the Audit Committee qualifies as a “financial expert.”
As defined by the SEC, the concept of financial expert is heavily
focused on individuals who have prepared or audited public company
financial statements or have had similar management experience or
responsibility for others performing those or comparable functions.
Given the Company’s rural market area and the limited number
of public companies in it, the Board has not deemed it advisable to
require that the Audit Committee include a person qualifying as a
financial expert under this definition. The Board has considered
the business experience, past performance as a Board and/or Audit
Committee member and other qualifications of each of the members of
the Audit Committee and has concluded that each of them has
demonstrated that he or she is capable of (i) understanding
generally accepted accounting principles (
“GAAP”
) and financial
statements, (ii) assessing the general application of GAAP
principles in connection with the accounting for estimates,
accruals and reserves, (iii) analyzing and evaluating the
Company’s financial statements, (iv) understanding internal
controls and procedures for financial reporting, and (v)
understanding audit committee functions. Given the business
experience and acumen of each of the members of the Audit
Committee, the Board believes that each of such persons, although
not a “financial expert” under the SEC definition, is
nevertheless qualified to carry out all of the duties and
responsibilities of a member of the Company’s Audit
Committee.
The
members of the Audit Committee are Thomas Adams (Chair), David
Bouffard, Aminta Conant, Fredric Oeschger and James Wheeler. All
members of the Audit Committee are considered independent directors
under the applicable NASDAQ standard as well as under the standards
applicable to FDIC-insured depository institutions and their
holding companies. During 2016, the Committee met four times. A
report of the Audit Committee is set forth elsewhere in this proxy
statement under the caption “AUDIT COMMITTEE
REPORT.”
Shareholder Communications with the Board
The
Board welcomes communications from shareholders on matters relating
to the Company’s business operations and corporate
governance. Shareholders may communicate with the Board, or its
committees or individual directors, by writing to the following
address: Board of Directors [or Board Committee or name of
individual director]—Shareholder Communications; c/o
Assistant Corporate Secretary, Community Bancorp., 4811 US Route 5,
Newport, Vermont 05855. The Assistant Corporate Secretary will
forward communications to the Board or appropriate committee or
individual director.
Compensation Committee Interlocks and Insider
Participation
The
Company is not aware of the existence of any interlocking
relationships between the senior management of the Company and that
of any other company.
Transactions with Related Persons
Director
Fredric Oeschger is the President and principal shareholder of
Fred’s Energy, a plumbing and heating contractor and fuel oil
distributor based in Orleans, Vermont, from which the Company and
the Bank purchased plumbing and heating services and heating oil,
on arm’s length terms, during 2015 and 2016.
Director
James Wheeler, Jr. is a member of the law firm Downs Rachlin Martin
PLLC, which performs various legal services for the
Company
and the Bank, on arm’s length terms, during 2015 and
2016.
Some of
the incumbent directors, nominees and executive officers of the
Company, and some of the corporations and firms with which these
individuals are associated, are customers of Community National
Bank in the ordinary course of business, or have loans outstanding
from the Bank, and it is anticipated that they will continue to be
customers of and indebted to the Bank in the future. All such loans
were made in the ordinary course of business, and except as
disclosed below, do not involve more than normal risk of
collectability or present other unfavorable features, and were made
on substantially the same terms, including interest rates and
collateral, as those prevailing at the same time for comparable
Bank transactions with unaffiliated persons, although directors
were generally allowed the lowest interest rate given to others on
comparable loans.
15
Community
National Bank has a commercial real estate loan to a commercial
enterprise in which Director Patrick Malone is a 35% equity owner.
As of March 20, 2017 the outstanding principal balance of the loan
was $2,512,069. During 2016 and 2015, the largest outstanding
principal balance on the loan was $2,597,629 and $2,683,538,
respectively. Payments of principal and interest on such loan
during 2016 were $62,933 and $138,209, respectively, and during
2015 were $85,910 and $141,574, respectively. During 2016 a related
commercial line of credit was paid off; the largest outstanding
balance on the commercial line of credit during both 2016 and 2015
was $737,237. Payments of principal and interest on the line of
credit were $727,237 and $33,661, respectively, during 2016
and $0 and $35,852, respectively, during 2015. The line
of credit bore interest at a variable annual rate of prime plus 2%
, while the commercial real estate loan bears interest at the
annual rate of 5.35%. Director Malone personally guaranteed
repayment to the Bank of 35% the commercial real estate loan.
The borrower and guarantor Malone are working cooperatively toward
collateral sale and full repayment of the loans. The
collateral coverage is protective and no loss is
expected.
AUDIT COMMITTEE REPORT
The
Audit Committee consists of five Directors, each of whom meets
applicable NASDAQ standards for independence. The Audit
Committee’s primary responsibility is to oversee the
Company’s financial reporting process and to report the
results of its activities to the Board. Management is responsible
for preparing the Company’s financial statements and the
independent registered public accounting firm is responsible for
auditing those statements.
Among
other things, the responsibilities of the Audit Committee include
selecting an accounting firm to be engaged as the Company’s
independent auditors. Additionally, and as appropriate, the Audit
Committee reviews and evaluates, discusses and consults with the
Company’s management, the Company’s internal auditor
and its independent registered public accounting firm, regarding
the following matters:
●
the plan and budget
for, and the independent auditors’ report on, the audit of
the Company’s financial statements;
●
the Company’s
financial disclosure documents, including financial statements and
reports filed with the SEC or sent to shareholders;
●
changes in the
Company’s auditing and accounting practices, principles,
controls or methodologies, or in the Company’s financial
statements;
●
significant
developments in auditing and accounting rules;
●
the adequacy of the
Company’s internal auditing controls, and its accounting,
financial and auditing personnel; and
●
the establishment
and maintenance of an environment within the Company that promotes
and encourages quality financial reporting, sound business risk
practices and ethical behavior.
In the
Fall of 2013, the Committee solicited bids for a multi-year
proposal for external audit services and, after a review of the
proposals, selected Berry Dunn McNeil & Parker, LLC
(
“BerryDunn”
).
BerryDunn has served as the Company’s registered public
accounting firm since 2003 and is providing such services for
2017.
The
Audit Committee is responsible for recommending to the Board that
the Company’s financial statements be included in the
Company’s annual report. The Committee took a number of steps
in making this recommendation for the year ended December 31, 2016.
First, the Committee discussed with BerryDunn those matters
BerryDunn communicated to and discussed with the Committee under
Auditing Standard No.16 (Communication with Audit Committees),
including information regarding the scope and results of the audit.
These communications and discussions are intended to assist the
Audit Committee in overseeing the financial reporting and
disclosure process. Second, the Committee discussed with, and
received a letter from, BerryDunn concerning their independence
from the Company and its management as required by Public Company
Accounting Oversight Board Rule 3526, regarding the independent
registered public accounting firm’s communications with the
audit committee concerning independence. This discussion and
disclosure informed the Committee of BerryDunn’s independence
and assisted the Committee in evaluating such independence. The
Committee also considered applicable auditor independence standards
under the Sarbanes-Oxley Act and related regulations of the
Securities and Exchange Commission. Finally, the Committee reviewed
and discussed the Company’s financial statements with the
Company’s management.
Based
on the discussions with BerryDunn, on the independence discussions,
and on the financial statement review, the Audit Committee
recommended to the Board that the financial statements be included
in the Company’s 2016 Annual Report on Form 10-K for filing
with the Securities and Exchange Commission.
16
The
Audit Committee has established procedures for the treatment of
complaints received by the Company regarding accounting, internal
accounting controls or auditing matters. The Committee has also
established procedures for the confidential, anonymous submission
by employees of concerns regarding questionable accounting or
auditing matters. No such complaints or concerns were received in
2016.
Submitted
by the Community Bancorp.
Audit
Committee,
Thomas
E. Adams, Chair
David
M. Bouffard
Aminta
K. Conant
Fredric
Oeschger
James
Wheeler
EXECUTIVE OFFICERS
Our
executive officers are appointed by the Board of Directors to hold
office at the discretion of the Board and may be removed at any
time by the Board with or without cause. The names, ages and
current titles with the Company and the Bank are listed in the
following table:
|
Name and
Age
|
|
Current
Position(s) with the Company and the Bank
|
|
|
|
|
|
Kathryn
M. Austin, 59
|
|
President,
CEO and Director, Community Bancorp. and
Community National
Bank (1)
|
|
|
|
|
|
|
|
|
|
Louise
M. Bonvechio, 56
|
|
Corporate
Secretary and Treasurer, Community Bancorp. and Senior Vice
President, CFO
|
|
|
|
and
Cashier
Community National
Bank
|
|
|
|
|
|
Terrie
L. McQuillen, 54
|
|
Vice
President, Community Bancorp. and Senior Vice President and Chief
Credit
|
|
|
|
Officer,
Community National Bank
|
(1) Ms.
Austin was appointed as CEO of the Company and the Bank in January
2017.
Executive Officer Qualifications
Additional
information about Ms. Austin’s background, qualifications and
years of service with the Company and the Bank is set forth above
under the caption “PROPOSAL 1 – ELECTION OF DIRECTORS
– Incumbent Director and Nominee Qualifications.” Set
forth below is additional information about the background and
qualifications of the Company’s other two executive
officers:
Louise Bonvechio
– Louise became an executive officer
of the Company in 2008 when she was appointed as its Treasurer.
Since January, 2011 she has also served as the Bank’s Senior
Vice President and since 2008 as its CFO. In her 24 years with the
Bank, she has held a number of other positions, including serving
as the Bank’s Vice President and Cashier from 2004 to 2008,
as the Bank’s Controller in 2003 and as Assistant Finance
Officer in 2002. Louise holds an Associate Degree in Accounting and
has received diplomas in general banking and finance, including
from the New England School of Financial Studies at Babson
College.
Terrie McQuillen
– Terrie became an executive officer
of the Company in 2008 when she was appointed as its Vice
President. Since January, 2011, Terrie has also served as the
Bank’s Senior Vice President and Chief Credit Officer. In her
24 years of employment with the Bank, she has served in various
other capacities, including as the Bank’s Senior Vice
President – Loan Administration between 2004 and 2011 and as
its Compliance and Bank Secrecy Officer in 2004 and 2005. Terrie is
a graduate of the Graduate School of Banking at Colorado and of the
New England School of Banking at Williams College.
17
COMPENSATION COMMITTEE REPORT
The
Compensation Committee reviews and makes recommendations to the
full Board of the Bank on all compensation and benefits issues
relating to the CEO and other executive officers of the Bank. No
separate compensation is paid to such individuals for their service
as executive officers of the Company.
As CEO,
Mr. Marsh made recommendations to the Committee with respect to the
2016 compensation of the other executive officers, including Ms.
Austin, Ms. McQuillen and Ms. Bonvechio, which were acted on by the
Committee and recommended to the full Board.
The
Committee and Board believe they have designed a compensation
package for the executive officers that will attract and retain
competent senior management for the Bank and provide for
appropriate rewards for both personal and Bank
performance.
To
reach these objectives, the Bank provides for a base salary which
is reviewed annually in relation to each individual’s
responsibilities and performance and a cash bonus as a short term
incentive, the amount of which depends upon the Bank’s
performance. (The Bank’s Officer Incentive Plan is described
elsewhere in this proxy statement.) The Bank does not currently
provide for long term incentives, such as stock options or similar
equity-based compensation.
In Mr.
Marsh’s case, the Board’s annual review process
included consideration of his self-evaluation covering certain key
elements of his written job description, including strategic
planning, establishment and overall implementation of operating
policies, and regulatory matters. The Board also undertook its own
evaluation of Mr. Marsh, reviewing various matters, including
leadership, planning and organization abilities, creativity and
problem solving, CRA (community reinvestment) and bank regulatory
compliance. The Committee’s evaluation resulted in an
excellent performance rating for Mr. Marsh in 2016.
The
annual review and adjustment (if any) of executive officer salaries
takes place at mid-year. Mr. Marsh’s salary was increased
from $310,000 to $315,000, effective July 1, 2016. Also as of that
date, Ms. Austin’s base salary was increased from $189,000 to
$225,000 and Ms. McQuillen’s base salary was increased from
$152,500 to $157,000.
A total
of $291,481 was paid in February, 2017, to the Executive Officers
for 2016 performance under the Bank’s Officer Incentive Plan,
pursuant to awards to Mr. Marsh, Ms. Austin, Ms. McQuillen and Ms.
Bonvechio.
Submitted
by the Community Bancorp.
Compensation
Committee,
Rosemary
M. Lalime, Chair
Thomas
E. Adams
Kathryn
M. Austin
1
Aminta
K. Conant
Patrick
Malone
Stephen
P. Marsh
1
Fredric
Oeschger
(1)
Appointed to the Committee in
2017.
EXECUTIVE COMPENSATION
The
executive officers of the Company did not receive any compensation
for services rendered to the Company in 2016 or 2015 but did
receive compensation for services rendered in their capacities as
executive officers of the Bank. Accordingly, references in this
proxy statement to the Company’s executive compensation
program relate to the Bank’s executive compensation practices
and objectives.
Executive Compensation Program Objectives and Risk Management
Considerations
The key
objectives of the Company’s executive compensation programs
are: to support and drive business objectives and strategies; to
reward competent stewardship of the enterprise; to provide a
cost-effective, competitive total compensation package that enables
the Company to attract and retain qualified executives for
leadership roles; and to motivate and reward these executives for
creating value for the Company and its shareholders. The cash
incentive bonus program, in particular, is intended to reward
exceptional financial performance of the Company, while at the same
time ensuring consequences for below-average performance. In making
compensation decisions about the executive officers, the
Compensation Committee and the Board have traditionally placed
emphasis on the overall performance of the Company rather than on
individual performance targets, in order to foster an attitude of
team spirit and shared goals among our executives.
18
In
establishing the overall compensation program for employees,
including the executive officers, the Compensation Committee and
the Board are mindful of the potential implications for enterprise
risk management. The Committee and Board believe that the
Company’s compensation practices, which for executives are
heavily weighted to fixed salary, do not create any material
adverse risks to the Company. In addition, the short-term incentive
program is focused largely on Bank-wide performance, which
encourages overall achievement of annual goals rather than
individual or business line performance, and includes a recoupment
provision which discourages inappropriate risk-taking that might
lead to improper financial reporting.
Summary Compensation Table
The
following table summarizes annual compensation earned in 2016 and
2015 for services rendered in all capacities to the Company and the
Bank by the CEO and the Company’s two other most
highly-compensated executive officers.
2016 Summary Compensation Table
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
Incentive
Plan
|
All
Other
|
|
|
Name and
Principal Position
|
Year
|
Salary
(1)
|
Compensation
(2)
|
Compensation
(3)
|
Total
|
|
|
|
|
|
|
|
|
Stephen P.
Marsh,
|
2016
|
$
312,500
|
$
106,690
|
$
95,375
|
$
514,565
|
|
CEO and Board
Chair, Community
|
2015
|
$
305,000
|
$
78,215
|
$
53,274
|
$
436,489
|
|
Bancorp. and
Community National Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kathryn M.
Austin,
|
2016
|
$
207,000
|
$
76,350
|
$
50,354
|
$
333,704
|
|
President, Chief
Operating Officer
|
2015
|
$
185,500
|
$
47,686
|
$
37,716
|
$
270,902
|
|
and Director,
Community
|
|
|
|
|
|
|
Bancorp. and
Community National Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrie L.
McQuillen,
|
2016
|
$
154,750
|
$
53,275
|
$
31,244
|
$
239,269
|
|
Vice President,
Community Bancorp.;
|
2015
|
$
150,250
|
$
38,477
|
$
32,650
|
$
221,377
|
|
and Senior Vice
President and Chief Credit
|
|
|
|
|
|
|
Officer, Community
National Bank
|
|
|
|
|
|
|
(1)
|
Amounts
shown include voluntary salary deferrals under the Company’s
Retirement Savings (401(k)) Plan.
|
|
(2)
|
Represents
cash bonuses earned under the Officer Incentive Plan with respect
to the 2016 and 2015 annual performance periods, respectively, and
paid in February of the following year.
|
|
(3)
|
Amounts
shown include discretionary profit-sharing contributions under the
Retirement Savings Plan as follows: For 2016 Mr. Marsh, $34,375,
Ms. Austin, $28,375 and Ms. McQuillen, $25,236; and for 2015: Mr.
Marsh, $34,375, Ms. Austin, $28,681, and Ms. McQuillen, $26,441.
Also includes (i) matching employer 401(k) contributions under the
Plan; (ii) the taxable portion of employer-provided term life
insurance benefits in excess of $50,000; (iii) for Mr. Marsh and
Ms. Austin, includes the taxable fringe benefit for personal use of
a bank-owned automobile; and (iv) taxable retirement gift for Mr.
Marsh.
|
Officer Incentive Plan
The
Bank maintains an Officer Incentive Plan for designated executive
officers and for other officers and exempt employees, including
employees whose compensation is commission-based. Each executive
officer, non-executive officer and qualifying exempt employee
having at least one year of service is eligible to participate in
the plan. There are two separate incentive payment components under
the plan, one for designated executive officers and another for all
other officers and participating exempt employees.
Executive Officers.
Under the executive officers portion of
the plan, designated executive officers are eligible to earn a cash
bonus equal to a percentage of salary based on attainment of annual
weighted performance criteria approved by the Board upon
recommendation of the Compensation Committee. Cash bonus awards for
the 2016 performance period were based on a combination of (1) the
Bank’s September 30 rating issued by IDC Financial
Publishing, Inc. (
“IDC”
), an industry-wide
recognized ranking service, (2) return on average assets, (3) the
ratio of non-performing loans as percentage of average loans, (4)
the ratio of overhead expense as a percentage of average assets,
and (5) a subjective individual performance evaluation by the Board
of Directors of the Company. The plan includes threshold, target
and “stretch” benchmarks for each performance measure,
and those measures are assigned percentage weights in the overall
bonus calculation.
19
The
actual amount of bonus earned is determined by applying a
“multiplier” to the target award. The multiplier is
determined by the extent to which the various performance goals
were achieved during the annual performance period. The following
table summarizes the 2016 performance measures and actual results
used in calculating executive officer bonuses with respect to 2016
performance:
|
Criteria/Weight
|
Threshold
|
Target
|
Stretch
|
Actual
|
Earned
|
Multiplier
|
|
|
|
|
|
|
|
|
|
Return on Average
Assets/30%
|
≥
to .90
%
|
≥ .95
%
|
≥ 1.05
%
|
1.00
%
|
125
%
|
37.50
%
|
|
Percentage
reward
|
40.000
%
|
100.000
%
|
150.000
%
|
|
|
|
|
|
|
|
|
|
|
|
|
I.D.C Rating
/25%
|
Average
|
Excellent
|
Superior
|
Superior
|
150.00
%
|
37.50
%
|
|
Percentage
reward
|
40.000
%
|
100.000
%
|
150.000
%
|
208
|
|
|
|
|
|
|
|
|
|
|
|
Board Subjective
Evaluation/20%
|
0.00
|
3.00
|
5.00
|
5.00
|
150.00
%
|
30.00
%
|
|
Percentage
reward
|
40.000
%
|
100.000
%
|
150.000
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Overhead Expense as
a % of
|
|
|
|
|
|
|
|
Average
Assets/15%
|
3.30
%
|
3.20
%
|
3.05
%
|
3.12
%
|
126.67
%
|
19.00
%
|
|
Percentage
reward
|
40.000
%
|
100.000
%
|
150.000
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Performing
Loans as a % of
|
|
|
|
|
|
|
|
Average
Loans/10%
|
1.75
%
|
1.00
%
|
0.25
%
|
.74
%
|
117.33
%
|
11.73
%
|
|
Percentage
reward
|
40.000
%
|
100.000
%
|
150.000
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals =
100.000%
|
|
|
|
|
|
135.73
%
|
The IDC
rating, which constitutes one of the performance criteria, takes
into account the Bank’s financial performance and risk
profile in areas of asset quality, capital, margins, earnings and
liquidity. For the twelve months ended September 30, 2016, the Bank
earned the IDC rating of “Superior”. Use of a September
30 rating rather than a year-end rating permits the Company to
calculate and pay out the executive officer bonuses consistent with
the short-term deferral exception under Internal Revenue Code
Section 409A, added by the American Jobs Creation Act of 2004,
pursuant to which bonuses must be paid out no later than 2-1/2
months following the end of the calendar year in which the related
services were rendered.
For
2016, the fixed percentage of salary defining the target award for
each of the four executive officers was 25% and the multiplier
applied to that salary percentage, based on achievement of 2016
performance targets, was 135.73%, resulting in a bonus of 33.93% of
base salary for each of the four executive officers. The following
table shows the bonuses paid under the plan to the three executive
officers named in the Summary Compensation Table for services
rendered in 2016.
|
Name
|
Target Award
(1)
|
Multiplier
|
Bonus
(2)
|
|
|
|
|
|
|
Stephen P.
Marsh
|
$
78,750
|
135.73
%
|
$
106,890
|
|
Kathryn M.
Austin
|
$
56,250
|
135.73
%
|
$
76,350
|
|
Terrie L.
McQuillen
|
$
39,250
|
135.73
%
|
$
53,275
|
|
|
|
|
|
|
Total
|
|
|
$
236,515
|
|
|
|
|
|
(1)
|
25% of
base salary at the rate in effect on December 31,
2016.
|
|
|
(2)
|
Earned
for 2016 services and paid in February, 2017.
|
|
For the
2015 performance period, the target award for each of the four
executive officers was 25% of salary and the applicable multiplier,
based on actual attainment of the applicable weighted performance
criteria, was 100.92%, resulting in the following bonuses: Mr.
Marsh, $78,213; Ms. Austin, $47,686; and Ms. McQuillen, $38,477.
Incentive bonuses paid to the three executive officers named in the
Summary Compensation Table for services rendered in 2016 and 2015
are included in the “Non-Equity Incentive Plan
Compensation” column of the Table.
20
The
Compensation Committee periodically reviews the allocation
percentages, performance tiers, performance criteria and
weightings, and may recommend changes for approval by the
Bank’s Board of Directors. The Company’s Board of
Directors, in its discretion and in consultation with the
Compensation Committee, designates participating executive officers
and establishes annually minimum performance targets as well as
performance criteria used to determine the incentive bonus
pool.
The
Plan includes a recoupment provision, which provides that if the
Company restates its financial statements, any current or former
executive officer who received bonus compensation under this Plan
may be required to reimburse the Company with respect to any bonus
compensation paid within the preceding three years. Any such
reimbursement shall not exceed the amount by which the bonus
compensation paid to the executive officer exceeds the amount of
bonus compensation (if any) that would have been paid if it had
been based upon the financial statements as restated.
Other Officers and Exempt Employees.
The Company creates a
separate incentive bonus pool under the plan for officers (other
than executive officers) and qualifying exempt employees using
performance criteria similar to those for executive officers. The
target amount of the bonus pool is based on a percentage of the
Bank’s net income (2.04% in 2016 and 1.51% for 2015), with a
multiplier applied to the target amount, based on the extent to
which the specified performance measures were actually achieved
during the annual performance period. The resulting bonus pool is
generally allocated among participants based on job title and
responsibilities. Several officers (but not the executive officers)
are eligible to receive individual incentive awards based upon the
attainment of specific performance goals. These individual
incentives are accounted for in the allotment of shares in the
incentive pools and are paid in addition to incentive payouts
described above.
Distributions
from this pool are ordinarily paid in February for services
rendered during the preceding fiscal year.
Supplemental Retirement Plan for Executives
The
Company maintains a non-qualified Supplemental Retirement Plan
designed to provide an annual retirement benefit for the
participating executive officer approximating 75% of the average
annual bonus earned by the participant for the five highest years
of bonus compensation in the ten years before retirement
(
“Replacement
Benefit”
). This benefit, combined with the projected
benefits under the Company’s Retirement Savings Plan, is
intended to approximate the benefit that the participant would have
been entitled to receive under the Company’s now terminated
defined benefit pension plan. During 2008, the Supplemental
Retirement Plan was amended in certain respects to comply with
Internal Revenue Code Section 409A. President and CEO Stephen Marsh
is currently the only remaining active participant in the plan and
will receive a payout of his accrued benefit during
2017.
Under
the plan, the Company makes an annual credit to the
participant’s account in an amount equal to the level annual
deposit that would be required to be made for each year up to his
normal retirement date (at attainment of age 65), in order to pay
an annual estimated benefit amount approximately equal to the
Replacement Benefit. Calculation of the required annual deposit is
based on a 6% discount rate; the officer’s remaining years to
retirement, and payment of the annual benefits in the form of a 240
month annuity. For this purpose, the estimated Replacement Benefit
is calculated based on 75% of the average annual bonus compensation
earned by the participant for the highest five years during the ten
years preceding the calculation date.
Benefits
under the plan are payable at retirement at or after age 65, or
upon earlier disability, in accordance with the participant’s
election, in a lump sum or in substantially equal installments over
the participant’s projected life expectancy. If the
participant dies before receiving all payments due, the remaining
payments will be paid to the participant’s designated
beneficiary. If the participant dies before benefit payments have
commenced, the accrued benefit will be paid out to his designated
beneficiary over the beneficiary’s projected life expectancy.
A participant with at least ten years of service who retires early
(before age 65) is entitled to receive his accrued plan benefit on
or after attainment of age 55. Ms. Marsh’s estimated accrued
lump sum retirement benefit as of December 31, 2016 was $767,977.
Although benefit accruals are held in a special-purpose trust,
until payout to Mr. Marsh those funds remain available to satisfy
the claims of the Company’s creditors.
21
Retirement Savings Plan
Employees
who are age 21 or over and who have completed at least one year of
service (as defined in the plan) are eligible to participate in the
Community Bancorp. and Designated Subsidiaries’ Retirement
Savings Plan. The plan contains features of a so-called 401(k) plan
which permit participants to make voluntary compensation deferrals
on a tax-deferred or after-tax (ROTH) basis. The 401(k) plan
maximum per participant contribution limit for 2016 was $18,000
($24,000 for participants age 50 and older) and is unchanged for
2017. During 2016 the Company matched 50 cents for each dollar of
compensation deferred, up to 5% of compensation. This same matching
contribution percentage is in effect for 2017. The plan also
provides for discretionary profit sharing contributions by the
Company. During 2016 and 2015, each of the three executive officers
named in the Summary Compensation Table made voluntary salary
deferrals and received matching employer contributions. These
amounts are reflected in the Table.
Participants
are at all times fully vested in their own compensation deferrals
and in any rollover contributions from other plans. Vesting in any
matching employer contribution begins after one year of service,
with full vesting after six years of service. Vesting in any
discretionary profit sharing employer contribution begins in the
first year of service, with full vesting after six years of
service. Participants may direct the investment of their plan
account among several funds maintained by the plan trustee,
including a Community Bancorp. stock fund. Distributions of
accounts are generally deferred until the participant’s
death, disability or retirement, except in cases of financial
hardship (as defined in the plan). Benefits are subject to income
tax upon distribution and certain early withdrawals may be subject
to an additional 10% penalty tax. Distribution of plan benefits may
be in the form of an annuity, a lump sum in cash, or in certain
circumstances, common stock of the Company.
In
addition to 401(k) compensation deferrals and matching employer
contributions, the plan permits the Company to make a discretionary
profit sharing contribution in any year for the account of all
participants, including the three executive officers named in the
Summary Compensation Table. The amount of the contribution for any
year is determined annually based on a calculation of the maximum
allowable deductible contribution that the Company is permitted to
make on behalf of the executives, but subject to the annual
contribution limitations of the Internal Revenue Code. The profit
sharing contributions made for 2016 and 2015 to the account of the
three executive officers named in the Summary Compensation Table
are included in the “All Other Compensation” column of
the Table.
Perquisites and other Personal Benefits
The
Company does not generally provide its executive officers with
perquisites or other personal benefits such as club memberships,
financial planning assistance, tax preparation, living allowances,
commuting expenses, or similar benefits not described in this proxy
statement. However, the Company does provide a Company-owned
vehicle to Ms. Austin and pays related gas and maintenance charges.
The Company also pays the expenses of the executive officers and
their spouses in connection with attendance at certain
banking-related functions, such as bankers’ association
conventions.
Health and Welfare Benefits
The
Company offers the same health and welfare benefits to all salaried
and non-salaried employees, although benefits may vary depending on
whether the employee is employed full-time or part-time. These
benefits include health insurance, life insurance, short-term
disability insurance, long-term disability insurance, an employee
assistance program, wellness reimbursement, education benefits and
combined time off.
Change in Control Agreements
In 2015
the Company entered into change in control agreements with two of
our three named executive officers (Kathryn Austin and Terrie
McQuillen) and with one additional executive officer (Louise
Bonvechio). As described below, the agreements may require the
Company (or a successor company) to make payments to the covered
executive officers in the event of the termination of their
employment in specified circumstances, either in anticipation of or
following a change in control of the Company.
The
change in control agreements provide that the executive officer
will be entitled to a specified severance payment if her employment
is terminated by the Company (or its successor) without
“cause” (as defined in the agreement), or the executive
terminates her employment with the Company for “good
reason” (as defined in the agreement), during the three-year
period following a “change in control” (as defined in
the agreement). The executive is also entitled to
receive the specified severance benefit if her employment is
terminated by the Company without cause or by the executive with
good reason after public announcement of a proposed change in
control and within 120 days prior to occurrence of the change in
control. The severance benefit is equal to two times the
executive’s highest total annual cash compensation (salary
plus cash bonus, if any) in any of the three years immediately
preceding the termination and is payable in a lump sum, subject to
execution by the executive of a release of claims. The severance
benefit is the only benefit payable under the change in control
agreements and is in addition to any other compensation and
benefits to which the executive is otherwise entitled, including
accrued and unpaid salary and vested benefits under any employee
compensation plan.
22
For
purposes of the agreements, “cause” means (i) personal
dishonesty; (ii) willful misconduct; (ii) incompetence; (iv) breach
of fiduciary duty involving personal profit; (v) intentional
failure to perform the executive’s stated duties; (vi)
willful violation of law; (vii) conviction of, or plea of nolo
contendere to a felony; or (viii) material breach of the agreement
by the executive. “Good reason” means (i) a
reduction in the executive’s total annual cash compensation
in an amount equal to 15% or more of the executive’s highest
total annual cash compensation in any of the preceding three (3)
calendar years, unless the reduction is part of a general,
non-discriminatory reduction in base salary and/or bonus applicable
to all similarly situated officers; (ii) a material reduction in
the executive’s authority, duties or responsibilities; (iii)
a relocation of the executive’s principal place of employment
by more than 75 miles from the Bank’s main office in Derby;
or (iv) failure by the Bank or the Company to obtain a written
assumption of the agreement from any successor entity.
A
“change in control” is defined in the agreements to
include (i) a merger, consolidation or plan of share exchange which
results in the shareholders of the Company owning less than a
majority of the surviving company; (ii) the acquisition by any
person or group of more than 50% of the Company’s voting
stock; (iii) a sale of substantially all the assets of the Company
or the Bank; (iv) liquidation or dissolution of the Company; and
(v) a turnover during any two year period of a majority of the
members of the Board, other than nominees approved by two-thirds
vote of the directors in office at the beginning of the two year
period.
The
agreements have an initial three year term, with automatic three
year renewals on each third anniversary unless notice of
termination is provided by either party at least 30 days prior to a
renewal date. If a change in control occurs during the
term, the agreements will renew automatically for a period of three
years following the change in control.
The
change in control agreements provide that if the excise tax on
excess parachute payments under Internal Revenue Code Sections 280G
and 4999 would be imposed, the executive’s severance benefit
under the agreement will be reduced to a level at which the excise
tax will not apply.
The
executives will be subject to certain post-termination
confidentiality and non-disparagement covenants.
The
following table shows the lump sum cash payments that would be
payable under the change in control agreements to the two covered
executive officers who are named in the Summary Compensation Table,
assuming the executive had experienced a qualifying termination of
employment at the end of 2016.
Potential Payments under Change in Control Agreements
|
Executive
Officer
|
Severance
Payment*
|
|
Kathryn M.
Austin
|
$
566,700
|
|
Terrie L.
McQuillen
|
$
416,050
|
*
The amounts shown in the table are
for illustrative purposes only, and are equal to two times the
named executive officer’s highest total cash compensation
(salary plus cash bonus) paid in any of the last three completed
fiscal years.
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The
Audit Committee of the Board has appointed BerryDunn as the
Company’s independent registered public accounting firm to
audit Community Bancorp.’s consolidated financial statements
for the year ending December 31, 2017. BerryDunn served as the
Company’s independent auditors for 2016 and 2015 and also
provided certain tax and other audit-related services in both
years. See “Fees Paid to Independent Auditors” below.
Representatives of BerryDunn are expected to attend the annual
meeting, where they will be available to respond to appropriate
questions and, if they desire, to make a statement.
Although
neither Vermont law nor the Company’s bylaws requires the
submission of the selection of the Company’s independent
auditors to the shareholders for approval, the Board of Directors
believes it is appropriate to give shareholders the opportunity to
vote on whether to ratify the decision of the Audit Committee.
Neither the Audit Committee nor the Board has made any
determination as to what action, if any, would be taken if the
shareholders do not ratify the appointment of BerryDunn as the
Company’s independent registered public accounting firm for
2017. If the shareholders fail to ratify this appointment, the
Audit Committee may reconsider whether to retain BerryDunn and may
retain that firm or another firm without resubmitting the matter to
the shareholders.
23
Pre-Approval Required for Services of Independent
Auditors
As part
of its duties, the Audit Committee is required to pre-approve audit
and non-audit services performed by the Company’s independent
auditors, in order to ensure that the provision of such services
does not impair the auditors’ independence. Under applicable
law, certain services may not be performed by the auditors under
any circumstances. Consistent with these legal requirements, the
Audit Committee’s charter provides that all permitted
services must be approved by the Audit Committee in advance.
However, the Audit Committee may delegate this authority to a
member of the Committee, who is required to inform the entire
Committee of any approval taken pursuant to that delegated
authority. The Audit Committee does not delegate to management its
responsibilities to pre-approve services performed by the
independent auditors. Each of the services performed by BerryDunn
described under the captions below was pre-approved by the Audit
Committee.
Fees Paid to Independent Auditors
The
following table summarizes the fees billed for professional
services rendered by BerryDunn for each of the last two calendar
years:
|
Fees
|
December
31,
2016
|
December
31,
2015
|
|
|
|
|
|
Audit
Fees
|
$
137,260
|
$
139,732
|
|
Audit-Related
Fees
|
1,485
|
1,579
|
|
Tax
Fees
|
13,963
|
15,628
|
|
All Other
Fees
|
0
|
0
|
|
Total
|
$
152,708
|
$
156,939
|
Audit Fees.
The aggregate audit fees billed for professional
services rendered by BerryDunn related to the audit of the
Company’s annual financial statements included in each of the
Company’s Forms 10-K, review of financial statements included
in each of the Company’s Forms 10-Q and audit of the
Company’s Retirement Savings Plan, for the years ended
December 31, 2016 and 2015.
Audit-Related Fees.
The aggregate fees billed for assurance
and related services rendered by BerryDunn related to the
performance of the audit or review of the Company’s financial
statements in the years ended December 31, 2016 and 2015. These
services related to the application of accounting
pronouncements.
Tax Fees.
The aggregate tax fees billed for professional
services rendered by BerryDunn related to tax compliance, tax
advice and tax planning in the years ended December 31, 2016 and
2015. These services included preparation of federal tax returns,
review of estimated tax payments, review of compliance with
information reporting requirements and tax planning.
All Other Fees.
There were no other fees billed for services
provided by BerryDunn, other than the services reported in the
paragraphs above, in the years ended December 31, 2016 and
2015.
Vote Required
Ratification
of the selection of BerryDunn as the Company’s independent
auditors for the ensuing year will require that more votes be cast
“FOR” than “AGAINST” the
proposal.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
PROPOSAL 2.
ANNUAL REPORT
The
Company’s Annual Report to Shareholders for the year ended
December 31, 2016, containing the consolidated financial statements
and the report of BerryDunn thereon, accompanies this proxy
statement.
24
SHAREHOLDER NOMINATIONS AND OTHER PROPOSALS
Bylaw Requirements for Shareholder Nominations and Other
Proposals
A
shareholder may make a nomination for director or present other
matters for action from the floor at the annual meeting, under
procedures specified in Section 2.13 of the Company’s bylaws,
which requires that a shareholder provide timely advance written
notice and specified information to the Company. In order for a
shareholder to make a nomination or propose other business from the
floor at the 2018 annual meeting, the shareholder must provide to
the Company advance written notice of the proposed nomination or
other business, containing all of the information specified in
Section 2.13 of the bylaws, no earlier than November 16, 2017 and
no later than January 15, 2018.
The
required notice and information should be sent within the specified
deadlines to the attention of the Corporate Secretary, Community
Bancorp., 4811 US Route 5 Newport, Vermont 05855. The notice must
include the following information about the shareholder and any
associated persons, and, as applicable in the circumstances, the
following information regarding any nominee or other
proposal:
Information Regarding the Proponent and Any Associated
Person*
●
Name and
address;
●
Class, series and
number of shares of the Company’s capital stock held of
record or beneficially owned;
●
Any derivative
positions held of record or beneficially owned and information
regarding any hedging transactions involving the Company’s
capital stock;
●
Any material
interest in the proposed business or nomination; and
●
A representation
that the shareholder intends to be present at the meeting in person
or by proxy to make the nomination or proposal.
Information Required for Director Nominations
●
Name and address of
the nominee;
●
Description of all
arrangements or understandings between the nominee and any other
person (including the shareholder or any associated person of the
shareholder) regarding the nomination;
●
All other
information about the nominee that would be required to be included
in the proxy materials filed under applicable rules of the SEC if
the nominee had been nominated by the Board of Directors;
and
●
A written consent
of the nominee to serve as a director if properly nominated and
elected.
Information Required for Other Business
●
A brief description
of the proposal;
●
The reasons for
making the proposal; and
●
Any direct or
indirect interest of the shareholder or any associated person of
the shareholder in making the proposal.
|
*
|
An
associated person of a shareholder is any person directly or
indirectly controlling or acting in concert with the shareholder,
any beneficial owner of shares for which the shareholder is the
record holder and any person controlling, controlled by or under
common control with, the associated person.
|
|
The
above description is merely a summary and is qualified in its
entirety by reference to the full text of Section 2.13 of the
bylaws. The Company’s Amended and Restated Bylaws are
contained in Exhibit 3.1 to the Company’s current report on
Form 8-K, filed with the SEC on March 14, 2013, and are available
on the SEC’s website at
www.sec.gov/edgar.shtml
. A
shareholder may also request a copy of the bylaws by contacting the
Corporate Secretary at the address or telephone number shown below
under “VOTING QUESTIONS OR OTHER SHAREHOLDER
ASSISTANCE.”
The
above process, which is governed by the Company’s bylaws, is
in addition to, and separate from (i) the process contained
elsewhere in this proxy statement under the caption
“CORPORATE GOVERNANCE—Board
Committees–
Corporate
Governance/Nominating Committee”
for submitting names
of possible director nominees for consideration by the Corporate
Governance/Nominating Committee; and (ii) the process described
below under “Inclusion of Shareholder Proposals in Company
Proxy Materials,” which is governed by SEC Rules and which
has an earlier notification deadline.
Use of Discretionary Authority in Connection with Shareholder
Nominations and Proposals
Under
the rules and regulations of the SEC, the Company will be permitted
to use its discretionary authority conferred in the proxy card for
the annual meeting to vote on a shareholder proposal or director
nominee even if the proposal or nominee has not been discussed in
the Company’s proxy statement, unless the
shareholder-proponent has given timely notice to the Company of his
or her intention to present the proposal or nominee for vote at the
meeting. If timely notice has been given, the proxies would only be
voted on the matter pursuant to the grant of discretionary
authority in the proxy card if the Company has described the
proposal in the proxy statement and indicated how the persons named
as proxies intend to vote on the matter. In order to be considered
timely for the 2018 annual meeting, the shareholder-proponent must
furnish written notice to the Company of the proposal or nominee no
earlier than November 16, 2017 and no later than January 15, 2018,
the same advance notice period as described above for notice of
proposals to be made from the floor at the annual
meeting.
25
Inclusion of Shareholder Proposals in Company Proxy
Materials
There
is a separate process from that described above, with an earlier
notification deadline, if a shareholder seeks to have his or her
proposals included in the Company’s proxy materials for the
2018 annual meeting. That process is governed by SEC rules, and not
exclusively by the Company’s bylaws. In order to be
considered for inclusion in the Company’s proxy material for
the 2018 annual meeting, shareholder proposals must be submitted in
writing to the Secretary of the Company not later than December 7,
2017, and must comply in all respects with applicable rules and
regulations of the SEC relating to such inclusion. Any such
proposal will be omitted from or included in the proxy material at
the discretion of the Board of Directors of the Company, subject to
such rules and regulations. Proponents must also timely provide the
information required under the bylaws, as described
above.
Questions
about any of the procedures for shareholder nominations or
proposals should be directed to the Corporate Secretary, Community
Bancorp., 4811 US Route 5 Newport, Vermont 05855.
OTHER MATTERS
As of
the date of this proxy statement, the Board of Directors knows of
no business that may come before the 2017 annual meeting other than
the two proposals described in this proxy statement. If any other
matters should properly come before the meeting, it is expected
that proxies will be voted on such matters in accordance with the
recommendations of management.
VOTING QUESTIONS OR OTHER SHAREHOLDER ASSISTANCE
If you
have any questions or require assistance with the voting process,
contact either Corporate Secretary Chris Bumps or Issuer Direct. If
you have questions regarding the titling of your share account(s),
contact the Company’s stock transfer agent, Computershare.
Contact information is:
|
Melissa
Tinker
|
|
Issuer
Direct Corporation
|
|
Computershare
Investor Services LLC
|
|
Assistant
Corporate Secretary
|
|
500
Perimeter Park Drive, Suite D
|
|
480
Washington Boulevard
|
|
|
|
Morrisville,
NC 27560
|
|
Jersey
City, NJ 07310
|
|
|
|
(919)
481-4000
|
|
(201)
680-2314
|
|
|
|
www.issuerdirect.com
|
|
www.computershare.com
|
|
|
|
|
|
|
|
mtinker@communitynationalbank.com
|
|
|
|
|
26
|
COMMUNITY BANCORP.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, AND
MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED
ANNUAL
MEETING OF SHAREHOLDERS – MAY 16, 2017 AT 5:30
PM
|
|
|
|
|
|
|||||||
|
CONTROL ID:
|
|
|
|
|
|
|
|
|||||
|
REQUEST ID:
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
||||||
|
The
undersigned, being a shareholder of Community Bancorp. (the
“Company,” “we,” “our” or
“us”), hereby authorizes and appoints Rachel Ducharme
and Elizabeth Bumps, and each of them individually with full power
of substitution in each, as his or her lawful agents and proxies,
to vote all of the common stock of the Company that the undersigned
is (are) entitled to vote at the Annual Meeting of Shareholders
(the “Meeting”) of Community Bancorp. to be held on
Tuesday, May 16, 2017, at 5:30 p.m. at the Elks Club in Derby,
Vermont, and at any adjournment or postponement
thereof.
|
||||||||||||
|
|
|
|||||||||||
|
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
|
||||||||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
VOTING INSTRUCTIONS
|
|
|
|
|
|
|
||||||
|
If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
MAIL:
|
Please
mark, sign, date, and return this Proxy Card promptly using the
enclosed envelope.
|
|
|
|
|
|
|||||
|
FAX:
|
Complete
the reverse portion of this Proxy Card and Fax to
202-521-3464.
|
|
|
|
|
|
|||||
|
INTERNET:
|
https://www.iproxydirect.com/CMTV
|
|
|
|
|
|
|||||
|
PHONE:
|
1-866-752-VOTE(8683)
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|||||||||
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||
|
ANNUAL MEETING OF THE SHAREHOLDERS OF COMMUNITY
BANCORP.
|
IF RETURNING YOUR INSTRUCTIONS BY MAIL (OR FAX) PLEASE COMPLETE,
DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE, OR FAX TO
202-521-3464. PLEASE MARK YOUR INSTRUCTIONS IN BLUE OR BLACK INK AS
SHOWN HERE:
☒
|
|||||||||
|
|
|
|||||||||
|
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
|
|
|||||||||
|
|
|
|
|
|||||||
|
Proposal 1
|
|
|
FOR ALL
|
|
WITHHOLD
ALL
|
|
FOR ALL
EXCEPT
|
|
|
|
|
|
Election
of Directors to a term that expires at the 2020 Annual
Meeting:
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
Thomas
E. Adams
|
|
|
|
|
|
☐
|
|
|
|
|
|
Jacques
R. Couture
|
|
|
|
|
|
☐
|
|
CONTROL
ID:
|
|
|
|
Dorothy
R. Mitchell
|
|
|
|
|
|
☐
|
|
REQUEST
ID:
|
|
|
|
James
G. Wheeler Jr.
|
|
|
|
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proposal 2
|
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
|
|
|
|
Ratification
of BerryDunn as the Company’s external auditors for
2017.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARK “X” HERE IF YOU PLAN
TO ATTEND THE MEETING:
☐
|
|||||
|
In
their discretion, the persons named as proxies are authorized to
act upon such other business as may properly come before the
meeting or any adjournment of the meeting. If any such business is
presented, the proxies intend to vote the shares represented by
this proxy in accordance with the recommendations of
management.
The
Board recommends that you vote
FOR
Proposals 1 and 2.
This
proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholders. If this proxy is properly
executed but no direction is made this proxy will be voted
FOR
Proposals 1 and
2.
|
|
|
|
MARK
HERE FOR ADDRESS CHANGE
☐
New Address (if
applicable):
____________________________________________________________________________________
IMPORTANT:
Please sign exactly as your name or names appear
on this Proxy. When shares are held jointly, each holder should
sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized person.
Dated:
________________________, 2017
|
||||||
|
|
||||||||||
|
|
(Print
Name of Shareholder and/or Joint Tenant)
|
|||||||||
|
|
||||||||||
|
(Signature
of Shareholder)
|
||||||||||
|
|
||||||||||
|
(Second
Signature if held jointly)
|
||||||||||
|
401K PLAN VOTING INSTRUCTION CARD
COMMUNITY BANCORP.
THIS VOTING INSTRUCTION IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS, AND MAY BE REVOKED AT ANY TIME
BEFORE IT IS EXERCISED
ANNUAL
MEETING OF SHAREHOLDERS – MAY 16, 2017 AT 5:30
PM
|
|
|
|
|
|
|||||||
|
CONTROL ID:
|
|
|
|
|
|
|
|
|||||
|
REQUEST ID:
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
||||||
|
The
undersigned hereby authorizes and instructs the Trustees of the
Community Bancorp. Retirement Savings (401k) Plan (the “401K
Plan”) to vote all of the common stock of Community Bancorp.
that are allocated to the undersigned’s account under the
401K Plan at the Annual Meeting of Shareholders (the
“Meeting”) of Community Bancorp. to be held on Tuesday,
May 16, 2017, at 5:30 p.m. at the Elks Club in Derby, Vermont, and
at any adjournment or postponement thereof.
|
||||||||||||
|
|
|
|||||||||||
|
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
|
||||||||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
VOTING INSTRUCTIONS
|
|
|
|
|
|
|
||||||
|
If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
MAIL:
|
Please
mark, sign, date, and return this Proxy Card promptly using the
enclosed envelope.
|
|
|
|
|
|
|||||
|
FAX:
|
Complete
the reverse portion of this Proxy Card and Fax to
202-521-3464.
|
|
|
|
|
|
|||||
|
INTERNET:
|
https://www.iproxydirect.com/CMTVK
|
|
|
|
|
|
|||||
|
PHONE:
|
1-866-752-VOTE(8683)
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|||||||||
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||
|
ANNUAL MEETING OF THE SHAREHOLDERS OF COMMUNITY
BANCORP.
|
IF RETURNING YOUR INSTRUCTIONS BY MAIL (OR FAX) PLEASE COMPLETE,
DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE, OR FAX TO
202-521-3464. PLEASE MARK YOUR INSTRUCTIONS IN BLUE OR BLACK INK AS
SHOWN HERE:
☒
|
|||||||||
|
|
|
|||||||||
|
VOTING INSTRUCTION SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
|
|
|||||||||
|
|
|
|
|
|||||||
|
Proposal 1
|
|
|
FOR ALL
|
|
WITHHOLD
ALL
|
|
FOR ALL
EXCEPT
|
|
|
|
|
|
Election
of Directors to a term that expires at the 2020 Annual
Meeting:
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
Thomas
E. Adams
|
|
|
|
|
|
☐
|
|
|
|
|
|
Jacques
R. Couture
|
|
|
|
|
|
☐
|
|
CONTROL
ID:
|
|
|
|
Dorothy
R. Mitchell
|
|
|
|
|
|
☐
|
|
REQUEST
ID:
|
|
|
|
James
G. Wheeler Jr.
|
|
|
|
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proposal 2
|
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
|
|
|
|
Ratification
of BerryDunn as the Company’s external auditors for
2017.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARK “X” HERE IF YOU PLAN
TO ATTEND THE MEETING:
☐
|
|||||
|
In
their discretion, the 401K Plan Trustees are authorized to act upon
such other business as may properly come before the meeting or any
adjournment of the meeting. If any such business is presented, the
Trustees intend to vote the shares, or refrain from voting the
shares, represented by this proxy in accordance with the best
interests of the participants in the 401K Plan.
The
Board recommends that you vote
FOR
Proposals 1and 2.
This
voting instruction, when properly executed, will be voted in the
manner directed herein by the undersigned shareholders. If this
voting instruction is properly executed but no direction is made
the shares represented by this voting instruction will be voted
FOR
Proposals 1 and
2.
|
|
|
|
MARK
HERE FOR ADDRESS CHANGE
☐
New Address (if
applicable):
____________________________________________________________________________________
IMPORTANT:
Please sign exactly as your name or names appear
on this Proxy. When signing as executor, administrator, attorney,
trustee or guardian, please give full title as such.
Dated:
________________________, 2017
|
||||||
|
|
||||||||||
|
|
(Print
Name of Plan Participant)
|
|||||||||
|
|
||||||||||
|
(Signature
of Plan Participant)
|
||||||||||
TABLE OF CONTENTS