COMMUNITY BANCORP /VT
10-Ks and 10-Qs
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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 the Registrant
☒
Filed
by a Party other than the Registrant
☐
Check
the appropriate box:
☐
PreliminaryProxy 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:
COMMUNITY BANCORP.
4811 U.S. Route 5
Newport, Vermont 05855
April
5, 2018
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 15, 2018. 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 2017.
At the
meeting, you will be asked to vote on the following
items:
●
Election of four
directors to a three year term expiring in 2021; and
●
Ratification of
BerryDunn as the Company’s external auditors for
2018.
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), or by requesting a proxy card and returning it by fax or by
mail. 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 15, 2018
The
annual meeting of shareholders of Community Bancorp. will be held
at the Elks Club, Derby, Vermont, on Tuesday, May 15, 2018, at 5:30
p.m., for the following purposes:
1.
To
elect four directors to the class whose term will expire at the
2021 annual meeting of shareholders;
2.
To
ratify the selection of the independent registered public
accounting firm of BerryDunn as the Company’s external
auditor for the fiscal year ending December 31, 2018;
and
3.
To
transact such other business as may properly be brought before the
meeting.
The
close of business on March 19, 2018, 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
2018 ANNUAL SHAREHOLDERS MEETING
This proxy statement, the proxy card and our Annual Report to
Shareholders for the year ended December 31, 2017 are available on
the internet and may be accessed at
https://www.iproxydirect.com/CMTV
By
Order of the Board of Directors,
Louise
Bonvechio
Corporate
Secretary
Derby,
Vermont
April
5, 2018
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
INFORMATION ABOUT THE MEETING AND VOTING
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1
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SHARE
OWNERSHIP INFORMATION
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5
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Section
16(a) Beneficial Ownership Reporting
Compliance
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6
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PROPOSAL
1 – ELECTION OF DIRECTORS
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6
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Incumbent Director
and Nominee Qualifications
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8
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Directors’
Fees and Other Compensation
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10
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Directors’
Deferred Compensation Plan
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11
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Directors’
Retirement Plan
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11
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Director
Compensation Table
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11
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Vote
Required
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12
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CORPORATE
GOVERNANCE
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12
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Director
Independence
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12
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Board
Leadership Structure and Risk Oversight
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12
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|
Board
and Shareholder Meeting Attendance
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13
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Board
Committees
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13
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Shareholder
Communications with the Board
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15
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Compensation
Committee Interlocks and Insider
Participation
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15
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Transactions with
Related Persons
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15
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AUDIT
COMMITTEE REPORT
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16
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EXECUTIVE
OFFICERS
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17
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Executive Officer
Qualifications
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17
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COMPENSATION
COMMITTEE REPORT
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18
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EXECUTIVE
COMPENSATION
|
19
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Executive
Compensation Program Objectives and Risk Management
Considerations
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19
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Summary
Compensation Table
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20
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Officer
Incentive Plan
|
20
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Retirement Savings
Plan
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22
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Perquisites and
other Personal Benefits
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22
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Health
and Welfare Benefits
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23
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Change
in Control Agreements
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23
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PROPOSAL
2 – RATIFICATION OF SELECTION OF INDEPENDENT
AUDITORS
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24
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Pre-Approval
Required for Services of Independent Auditors
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24
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Fees
Paid to Independent Auditors
|
24
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Vote
Required
|
25
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ANNUAL
REPORT
|
25
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SHAREHOLDER
NOMINATIONS AND OTHER PROPOSALS
|
25
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Bylaw
Requirements for Shareholder Nominations and Other
Proposals
|
25
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Use of
Discretionary Authority in Connection with Shareholder Nominations
and Proposals
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26
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Inclusion of
Shareholder Proposals in Company Proxy
Materials
|
26
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OTHER
MATTERS
|
27
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VOTING
QUESTIONS OR OTHER SHAREHOLDER ASSISTANCE
|
27
|
COMMUNITY BANCORP.
4811 U.S. Route 5
Newport, Vermont 05855
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 15, 2018
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 15, 2018, at 5:30 p.m.
at the Elks Club in Derby, Vermont. This proxy statement and
related proxy card are first being sent to our shareholders on or
about April 5, 2018.
GENERAL INFORMATION ABOUT THE MEETING AND VOTING
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 19, 2018.
There
are 20 shares of the Company’s Series A Fixed-to-Floating
Rate Non-Cumulative Perpetual Preferred Stock (
“Series A Preferred Stock”
)
outstanding as of the date of this proxy statement. 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 19, 2018), there were
5,112,518 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 2018 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 reduces our
costs to print and distribute the proxy materials and reduces paper
waste.
How can I request a paper copy of the proxy materials?
Upon
request, 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 internet availability. Requests should be
submitted 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
(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 materials, including our 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: (1) via the internet, by following
the instructions at
https://www.iproxydirect.com/CMTV
;
(2) by using a touchtone telephone and calling 1-866-752-8683 (toll
free in the United States); or (3) 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 are a
shareholder of record and 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 (such as election of directors) 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 2018 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 instruction 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 mailing or faxing it to Issuer Direct
Corporation, our agent for tabulating the votes of Plan
participants, or, as explained in the card, you may provide your
voting instructions by telephone (toll free) or via the internet.
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 14, 2018 if voting by mail, fax, internet or
telephone.
2
What does it mean if I received more than one notice of internet
availability?
If you
received more than one notice of internet 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
that 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 annual 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 BerryDunn as
the Company’s independent auditor for 2018 (Proposal
2)?
Approval
of BerryDunn as the Company’s independent auditor for 2018
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 you sign and return
the proxy card by mail or fax 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 15, 2018. For next
year’s annual meeting, which is expected to be held on May
14, 2019, the deadline under the bylaws for shareholder proposals
and nominations is no earlier than November 15, 2018 and no later
than January 14, 2019. 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 2019 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 2019 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 2019 annual meeting is
no later than December 6, 2018. 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 notice process
and information requirements 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 19, 2018, 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
|
Percent
of
|
|
|
Shares
|
Class
|
|
Directors and Nominees
|
|
|
|
Thomas E. Adams
(1)
|
27,734
|
0.54
%
|
|
Kathryn M. Austin
(2)
|
47,562
|
0.93
%
|
|
David M.
Bouffard
|
1,088
|
0.02
%
|
|
Charles W. Bucknam,
Jr. (3)
|
3,000
|
0.06
%
|
|
Aminta K. Conant
(4)
|
2,139
|
0.04
%
|
|
Jacques R. Couture
(5)
|
19,738
|
0.39
%
|
|
David P. Laforce
(6)
|
400
|
0.01
%
|
|
Rosemary M.
Lalime
|
57,903
|
1.13
%
|
|
Stephen P. Marsh
(7)
|
108,731
|
2.13
%
|
|
Dorothy
Mitchell
|
6,697
|
0.13
%
|
|
Fredric
Oeschger
|
78,919
|
1.54
%
|
|
James G. Wheeler,
Jr.
|
1,769
|
0.03
%
|
|
|
|
|
|
Non-Director/Nominee Executive Officers
|
|
|
|
Louise M. Bonvechio
(8)
|
6,406
|
0.13
%
|
|
Terrie L. McQuillen
(9)
|
11,493
|
0.22
%
|
|
|
|
|
|
All
Directors, Nominees & Executive Officers
|
|
|
|
as a Group (14 in number) (10)
|
373,579
|
7.31
%
|
|
(1)
|
Includes
11,545 shares held in an IRA for Mr. Adams’
benefit.
|
|
|
(2)
|
Includes
11,504 shares as to which voting and investment power is shared and
36,058 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) 8,183 shares held by Mr. Couture jointly with his wife, as to
which voting and investment power is shared; (ii) 2,575 shares held
in an IRA for Mr. Couture’s benefit; and (iii) 2,583 shares
held in an IRA for the benefit of Mr. Couture’s
wife.
|
|
|
(6)
|
Includes
400 shares held by Mr. Laforce jointly with his wife, as to which
voting and investment power is shared.
|
|
|
(7)
|
Includes
(i) 28,556 shares held by Mr. Marsh jointly with his wife, as to
which voting and investment power is shared; and (ii) 28,556 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.
|
|
|
(8)
|
All
such shares are held indirectly through participation in the
Community Bancorp. stock fund under the 401(k) Plan.
|
|
|
(9)
|
Includes
10,993 shares held indirectly through participation in the
Community Bancorp. stock fund under the 401(k) Plan.
|
|
|
(10)
|
Includes
51,493 shares as to which voting and investment power is shared and
132,730 shares held indirectly, through participation in the
Community Bancorp. stock fund under the 401(k) Plan.
|
|
5
In
addition, as of March 19, 2018, 456,289 shares (11.20%) 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”
) for various
beneficial owners, including 470,002 shares, or 10.88%, 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 20 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 2017. Based solely on
such review, the Company believes that all Section 16 filing
requirements applicable to its executive officers and directors for
2017 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
2018 annual meeting are Kathryn M. Austin, David M. Bouffard,
Aminta K. Conant and Rosemary M. Lalime, and each has been
nominated to stand for election to the class whose term will expire
at the 2021 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.
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 “Incumbent Director and Nominee
Qualifications.”
6
|
|
|
Director of
Community
|
|
|
Name and
Age
|
Principal
Occupation
|
Bancorp. Since
(1)
|
|
|
Nominees (if elected) to serve until 2021 annual
meeting:
|
|||
|
|
|
|
|
|
Kathryn
M. Austin, 60
|
President,
Chief Executive Officer and Director,
|
2013
|
|
|
|
Community
Bancorp. and Community National Bank
|
|
|
|
|
Derby,
VT
|
|
|
|
|
|
|
|
|
David
M. Bouffard, 60
|
Co-Owner,
|
2014
|
|
|
|
Derby
Village Store
|
|
|
|
|
Derby,
VT
|
|
|
|
|
|
|
|
|
Aminta
K. Conant, 64
|
Business
Consulting,
|
2006
|
|
|
|
USA and
Europe
|
|
|
|
|
|
|
|
|
Rosemary
M. Lalime, 71
|
Owner
and Partner,
|
1985
|
|
|
|
RE/Max
All Seasons Realty
|
|
|
|
|
Newport,
VT
|
|
|
|
|
(real
estate brokerage)
|
|
|
|
Incumbent Directors to serve until 2020 annual
meeting:
|
|||
|
|
|
|
|
|
Thomas
E. Adams, 71
|
Owner,
|
1986
|
|
|
|
NPC
Realty Co., Inc.
|
|
|
|
|
Holland,
VT
|
|
|
|
|
(real
estate investment)
|
|
|
|
|
|
|
|
|
Jacques
R. Couture, 67
|
Owner,
|
1992
|
|
|
|
Dairy
Farm/Maple Products
|
|
|
|
|
Westfield,
VT
|
|
|
|
|
|
|
|
|
Dorothy
R. Mitchell, 73
|
Board
Chair,
|
2006
|
|
|
|
Vermont
Student Assistance Corporation
|
|
|
|
|
Winooski,
VT
|
|
|
|
|
|
|
|
|
James
G. Wheeler, Jr., 69
|
Attorney
and Principal,
|
2011
|
|
|
|
Downs
Rachlin Martin PLLC
|
|
|
|
|
St.
Johnsbury, VT
|
|
|
|
|
(law
firm)
|
|
|
7
|
Name and
Age
|
Principal
Occupation
|
Director of
Community
Bancorp. Since
(1)
|
|
Incumbent Directors to serve until 2019 annual
meeting:
|
||
|
|
|
|
|
Charles
W. Bucknam, Jr., 74
|
Practice
Manager,
|
2008
|
|
|
Bucknam
& Black, P.C.
|
|
|
|
St.
Johnsbury, VT
|
|
|
|
(law
firm)
|
|
|
|
|
|
|
David
P. Laforce, 45
|
President
and Owner,
|
2018
(2)
|
|
|
Newport Furniture Parts Corporation |
|
|
|
d/b/a
Built by Newport
|
|
|
|
Newport,
VT
|
|
|
|
(wood
furniture and component manufacturing company)
|
|
|
|
|
|
|
Stephen
P. Marsh, 70
|
Board
Chair,
|
1998
|
|
|
Community
Bancorp. and Community National Bank
|
|
|
|
Derby,
VT
|
|
|
|
|
|
|
Fredric
Oeschger, 71
|
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)
|
|
|
(1)
|
Each
person named in the table is also a director of Community National
Bank.
|
|
|
(2)
|
Appointed
on January 10, 2018 to fill the vacancy created by the resignation
of former director Patrick Malone.
|
|
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 chairs the Audit Committee and also serves on the
Compensation Committee and on the Bank’s Human Resources
Committee. He lives in Holland, Vermont.
8
Kathryn Austin
– Kathy has served as President of the
Bank and Company since January 2016 and as CEO of both entities
since January 2017. From January 2014 until her appointment as CEO
she also served as the Bank’s Chief Operating Officer. Kathy
was appointed to the Bank’s 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
as 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. Her many years of service to the Company in a variety of
positions provide 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, as a
Trustee of the Northwoods Stewardship Center, as a member of the
Newport Age Friendly Advisory Council, and as First Vice Chairman
of the Vermont Bankers Association. She serves on the
Company’s Corporate Governance/Nominating and Compensation
Committees and on the Bank’s Risk Management and Human
Resources Committees. She lives in Morgan, Vermont.
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 and also served
on its finance committee. 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 Committee. 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 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 Companies, 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 Committee. He has been a
director since 1992, and prior to that served on our Troy Advisory
Board. He lives in Westfield, Vermont.
David Laforce
– Dave is the newest member of our
Board, having been appointed earlier this year to the Boards of the
Company and the Bank to fill a vacancy. Dave owns and operates
Built by Newport, a wood furniture and component manufacturing
company that has been family owned since the 1960s. Dave’s
experience as a small business owner and familiarity with the local
woods products industry, which is so important to our regional
economy, provides valuable perspectives and insight to our Board.
He is a lifelong resident of the Newport-Derby area and over the
years has served on several local boards. He serves on the
Company’s Compensation Committee and on the Bank’s
Human Resources and Risk Management Committees. He lives in Derby,
Vermont.
Rosemary Lalime
– Rosemary is our longest serving
director, having been first elected to the Board 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.
9
Stephen Marsh
– Steve has served as Chair of Boards of
Directors of the Company and the Bank since 2011 and was first
appointed to the Board in 1998. He served as CEO of the Company and
the Bank from 2008, until his retirement at the end of 2016 and
previously served as President of both entities from 2004 through
the end of 2015. 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. Steve was appointed to the Company’s
Compensation and Corporate Governance/Nominating Committees in 2017
following his retirement as CEO, and also serves on the
Bank’s Risk Management and Human Resources Committees. He
lives in Newport Center, Vermont.
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 our 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 on local and
international boards of higher education, 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 Committee. 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 and Lady Lake,
Florida.
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 and serves on the Board of Directors
of Kingdom Trail Association, Inc. 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 2017 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
|
500
|
|
Board
Committee Meeting Fee
|
500
|
|
Board
Committee Meeting Fee
|
500
|
|
Disclosure
Control Committee Meeting Fee (1)
|
500
|
|
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)
|
During
2017, Bank directors who attended meetings of the Bank’s
local advisory boards received a per meeting fee for such
attendance. Employee-directors do not receive any fees for
attending local advisory board meetings.
|
|
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, 2017, 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 2017 for service on the Boards of the
Company and the Bank. All such fees were paid in cash.
2017 Director Compensation (1)
|
|
Fees Earned
or
|
|
|
Name
|
Paid in
Cash
|
Total
|
|
|
|
|
|
Thomas E.
Adams
|
$
27,700
|
$
27,700
|
|
David M.
Bouffard
|
27,750
|
27,750
|
|
Charles W. Bucknam,
Jr.
|
27,750
|
27,750
|
|
Aminta K.
Conant
|
27,200
|
27,200
|
|
Jacques R.
Couture
|
27,750
|
27,750
|
|
Rosemary M.
Lalime
|
27,300
|
27,300
|
|
Patrick M. Malone
(2)
|
27,300
|
27,300
|
|
Stephen P.
Marsh
|
29,750
|
29,750
|
|
Dorothy R.
Mitchell
|
27,750
|
27,750
|
|
Fredric
Oeschger
|
27,650
|
27,650
|
|
James G. Wheeler,
Jr.
|
27,700
|
27,700
|
|
(1)
|
Does
not include (i) 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;
or (ii) certain expense reimbursements related to board service
such as for mileage and expenses related to attendance at director
educational conferences.
|
|
|
(2)
|
Mr.
Malone resigned from the Boards of the Company and the Bank on
December 31, 2017.
|
|
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 AUSTIN, BOUFFARD, CONANT AND LALIME 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, which is heavily
weighted toward independent directors, 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, Board Chair and
immediate past President and CEO Stephen Marsh, and director
Jacques Couture, who is the brother of the Company’s
Corporate Secretary and Treasurer and the Bank’s 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 management
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. Following 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
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 operations and markets.
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.
The
Board of Directors plays an active role, as a whole and also at the
committee level, in oversight of the risks facing the Company and
ensuring that management has the skills and resources to identify
and manage the risks within the organization. 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
Company’s 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 encourage performance without also encouraging 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. Additionally, the Board and executive management engage in
strategic planning at an off-site retreat annually, which provides
an opportunity to focus on long-term goals and
challenges.
Board and Shareholder Meeting Attendance
The
Company’s Board of Directors held four regular meetings and
four special meetings during 2017. 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. All of the Company’s incumbent 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 incumbent
directors attended the 2017 annual meeting, except for Mr.
Bouffard, 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. President
and CEO Kathryn Austin, who serves on the Compensation Committee
and the Corporate Governance/Nominating Committee, is not
considered independent under the NASDAQ standards due to her
executive management positions with the Company. Similarly, Board
Chair Stephen Marsh who serves on the Compensation and Corporate
Governance/Nominating Committees, is not considered independent
under the NASDAQ standards due to his recent 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, David Laforce, Stephen
Marsh and Fredric Oeschger. During 2017, the Committee met two
times. Mr. Lafore was appointed to the Committee on January 10,
2018 and, accordingly, did not participate in any committee
meetings or compensation decisions during 2017. 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 Company’s corporate governance
environment. 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 and reviews Board compensation. The
Committee also reviews and makes recommendations to the Board as to
the size, structure, composition and functions of the Bank’s
advisory council, which replaced the former multiple local advisory
board structure in 2018.
The
Committee also acts as a screening and nominating committee for
candidates considered for appointment or 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. During
2017, the Committee met two times. The Committee’s charter is
available on the Company’s website at
www.communitybancorpvt.com
.
14
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.
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
.
These procedures are in addition to the Board’s general
policy, described below, regarding shareholder communications with
the Board.
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 with assets of $500 million or more. During 2017,
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]; Community Bancorp.—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 2017.
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
2017.
15
Some of
the Company’s directors and executive officers, and some of
the corporations and firms with which these individuals are
associated, are deposit 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.
During
2017 and 2016 Community National Bank had outstanding a commercial
real estate loan to a business enterprise in which former Director
Patrick Malone is a 35% equity owner. Former Director Malone
personally guaranteed repayment to the Bank of 35% of the loan,
which bore interest at the annual rate of 5.35%. The borrower
entity and guarantor Malone worked cooperatively toward a sale of
the collateral and repayment in full of the principal and accrued
interest on the loan, which occurred on December 18, 2017.
During 2017, the largest outstanding principal balance on the loan
was $2,534,696 and payments of principal and interest were
$2,534,696 and $134,851, respectively. During 2016, the
largest outstanding principal balance on the loan was $2,597,629
and payments of principal and interest were $62,933 and $138,209,
respectively. During 2016, a related commercial line of credit to
the same borrower entity was paid off. The largest outstanding
balance on that line of credit during 2016 was $737,237 and
payments of principal and interest were $727,237 and $33,661,
respectively. The line of credit bore interest at a variable annual
rate of prime plus 2%.
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 BerryDunn. BerryDunn has served as the
Company’s registered public accounting firm since 2003 and is
providing such services for 2018.
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, 2017.
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.
16
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 2017 Annual Report on Form 10-K for filing
with the Securities and Exchange Commission.
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
2017.
Submitted
by the Community Bancorp.
Audit
Committee,
Thomas
E. Adams, Chair
David
M. Bouffard
Aminta
K. Conant
Fredric
Oeschger
James
G. Wheeler Jr.
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. Our executive
officers’ 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, 60
|
President,
CEO and Director, Community Bancorp. and Community National
Bank
|
|
|
|
|
Louise
M. Bonvechio, 57
|
Corporate
Secretary and Treasurer, Community Bancorp. and Senior Vice
President,
|
|
|
CFO and
Cashier, Community National Bank
|
|
|
|
|
Terrie
L. McQuillen, 55
|
Vice
President, Community Bancorp. and Senior Vice President and Chief
Credit
|
|
|
Officer,
Community National Bank
|
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 2016 she was also
appointed as Corporate Secretary of the Company and the Bank.
During her 25 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. During
her 25 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,
Ms. Austin made recommendations to the Committee with respect to
the 2017 compensation of the other executive officers, including
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 Ms.
Austin’s case, the Board’s annual review process
included consideration of her self-evaluation covering certain key
elements of her written job description, including strategic
planning, establishment and overall implementation of operating
policies, and regulatory matters. The Board also undertook its own
evaluation of Ms. Austin, 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 Ms. Austin in 2017.
The
annual review and adjustment (if any) of executive officer salaries
takes place at mid-year. Ms. Austin’s base salary was
increased on January 1 from $225,000 to $250,000 and on July
1
st
from
$250,000 to $275,000. In addition, on July 1
st
Ms.
Bonvechio’s base salary was increased from $162,000 to
$172,000 and Ms. McQuillen’s base salary was increased from
$157,000 to $163,000.
A total
of $223,260 was paid in February, 2018, to the Executive Officers
for 2017 performance under the Bank’s Officer Incentive Plan,
pursuant to awards to Ms. Austin, Ms. Bonvechio and
McQuillen.
Submitted
by the Community Bancorp.
Compensation
Committee,
Rosemary
M. Lalime, Chair
Thomas
E. Adams
Kathryn
M. Austin
Aminta
K. Conant
David
P. Laforce
(1)
Stephen
P. Marsh
Fredric
Oeschger
__________________________
(1)
Appointed to the Committee on January 10,
2018.
18
EXECUTIVE COMPENSATION
The
executive officers of the Company did not receive any compensation
for services rendered to the Company in 2017 or 2016 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 payments,
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.
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.
19
Summary Compensation Table
The
following table summarizes annual compensation earned in 2017 and
2016 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.
2017 Summary Compensation Table
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
Incentive
Plan
|
All
Other
|
|
|
Name and
Principal Position
|
Year
|
Salary
(1)
|
Compensation
(2)
|
Compensation
(3)
|
Total
|
|
Kathryn M.
Austin,
|
2017
|
$
262,500
|
$
100,650
|
$
51,307
|
$
414,457
|
|
President, Chief
Executive Officer
|
2016
|
$
207,000
|
$
76,350
|
$
50,354
|
$
333,704
|
|
and Director,
Community
|
|
|
|
|
|
|
Bancorp. and
Community National Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Louise M.
Bonvechio
|
2017
|
$
167,000
|
$
62,952
|
$
30,688
|
$
260,640
|
| Corporate Secretary and Treasurer, Community |
2016
|
$
157,250
|
$
54,972
|
$
29,863
|
$
242,085
|
| Bancorp., Senior Vice President, Chief Financial |
|
|
|
|
|
| Officer and Cashier, Community National Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrie L.
McQuillen,
|
2017
|
$
160,000
|
$
59,658
|
$
30,853
|
$
250,511
|
|
Vice President,
Community Bancorp.,
|
2016
|
$
154,750
|
$
53,275
|
$
31,244
|
$
239,269
|
|
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 2017 and 2016 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 2017: Ms. Austin, $29,250,
Ms. Bonvechio, $24,289 and Ms. McQuillen $23,336; and for 2016: Ms.
Austin, $28,375, Ms. Bonvechio $25,720 and Ms. McQuillen, $25,236.
Also includes (i) matching employer 401(k) contributions under the
Plan as follows: For 2017: Ms. Austin, $6,750; Ms. Bonvechio,
$4,164; and Ms. McQuillen, $5,385; and for 2016: Ms. Austin,
$6,625; Ms. Bonvechio, $1,961; and Ms. McQuillen, $4,864; (ii) the
taxable portion of employer-provided term life insurance benefits
in excess of $50,000; (iii) for Ms. Austin, includes the
taxable fringe benefit for personal use of a bank-owned
automobile.
|
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 2017
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.
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 2017 performance measures and actual results
used in calculating executive officer bonuses with respect to 2017
performance:
20
|
Criteria/Weight
|
Threshold
|
Target
|
Stretch
|
Actual
|
Earned
|
Multiplier
|
|||||||||||||
|
Return
on Average Assets
|
≥
to .95%
|
≥
1.00%
|
≥
1.05%
|
1.05%
|
150.00%
|
45.00%
|
|||||||||||||
|
Percentage
reward-30%
|
40.00%
|
100.00%
|
150.00%
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
|
I.D.C
Rating
|
Average
|
Excellent
|
Superior
|
Superior
|
150.00%
|
37.50%
|
|||||||||||||
|
Percentage
reward-25%
|
40.00%
|
100.00%
|
150.00%
|
216
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
|
Board
Subjective
|
3.00
|
4.00
|
5.00
|
5.00
|
150.00%
|
30.00%
|
|||||||||||||
|
Percentage
reward-20%
|
40.00%
|
100.00%
|
150.00%
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
|
Overhead
Expense as a % of
|
|
|
|
|
|
|
|||||||||||||
|
Average
Assets
|
3.16%
|
3.08%
|
3.00%
|
2.90%
|
150.00%
|
22.50%
|
|||||||||||||
|
Percentage
reward-15%
|
40.00%
|
100.00%
|
150.00%
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
|
Non-Performing
Loans as a % of
|
|
|
|
|
|
|
|||||||||||||
|
Average
Loans
|
1.50%
|
1.00%
|
0.50%
|
.86%
|
114.00%
|
11.40%
|
|||||||||||||
|
Percentage
reward-10%
|
40.00%
|
100.00%
|
150.00%
|
|
|
|
|||||||||||||
|
Totals
= 100.00%
|
|
|
|
|
|
146.40%
|
|||||||||||||
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, 2017, 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
2017, 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 2017
performance targets, was 146.40%, resulting in a bonus of 36.6% 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 2017.
|
Name
|
|
Target Award
(1)
|
|
Multiplier
|
|
Bonus
(2)
|
|
Kathryn
M. Austin
|
|
$68,750
|
|
146.40%
|
|
$100,650
|
|
Louise
M. Bonvechio
|
|
$43,000
|
|
146.40%
|
|
$62,952
|
|
Terrie
L. McQuillen
|
|
$40,750
|
|
146.40%
|
|
$59,658
|
|
Total
|
|
|
|
|
|
$223,260
|
|
(1)
|
25% of
base salary at the rate in effect on December 31,
2017.
|
|
|
(2)
|
Earned
for 2017 services and paid in February, 2018.
|
|
For the
2016 performance period, the target award for each of the three
executive officers was 25% of salary and the applicable multiplier,
based on actual attainment of the applicable weighted performance
criteria, was 135.73%, resulting in the following bonuses: Ms.
Austin, $76,350; Ms. Bonvechio, $54,972 and Ms. McQuillen, $53,275.
Incentive bonuses paid to the three executive officers named in the
Summary Compensation Table for services rendered in 2017 and 2016
are included in the “Non-Equity Incentive Plan
Compensation” column of the Table.
21
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 the 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 (2.20% in 2017 and 2.04% for 2016), 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.
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 2017 was $18,000
($24,000 for participants age 50 and older) and is $18,500 ($24,500
for participants age 50 and older) for 2018. During 2017 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 2018. The plan also provides for
discretionary profit sharing contributions by the Company. During
2017 and 2016, 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 2017 and 2016 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.
22
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 each of
our three executive officers named in the 2017 cash compensation
table (Kathryn Austin, Louise Bonvechio and Terrie McQuillen). 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.
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 2017.
23
Potential Payments under Change in Control Agreements
|
Executive
Officer
|
Severance
Payment*
|
|
Kathryn M.
Austin
|
$
726,300
|
|
Louise M.
Bonvechio
|
$
459,904
|
|
Terrie L.
McQuillen
|
$
439,316
|
*
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, 2018. BerryDunn served as the
Company’s independent auditors for 2017 and 2016 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
2018. 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.
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:
|
|
December
31,
|
December
31,
|
|
Fees
|
2017
|
2016
|
|
|
|
|
|
Audit
Fees
|
$
170,803
|
$
137,260
|
|
Audit-Related
Fees
|
5,906
|
1,485
|
|
Tax
Fees
|
20,728
|
13,963
|
|
All Other
Fees
|
0
|
0
|
|
Total
|
$
197,437
|
$
152,708
|
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, 2017 and 2016.
24
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, 2017 and 2016. 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, 2017 and
2016. These services included preparation of federal tax returns,
review of estimated tax payments, review of compliance with
information reporting requirements, tax planning and implementation
of tax law changes.
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, 2017 and
2016.
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, 2017, containing the consolidated financial statements
and the report of BerryDunn thereon, accompanies this proxy
statement.
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 2019 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 15, 2018 and
no later than January 14, 2019.
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 director 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.
25
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 or Assistant 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. As required under the
bylaws, in order to be considered timely for the 2019 annual
meeting, the shareholder-proponent must furnish written notice to
the Company of the proposal or nominee no earlier than November 15,
2018 and no later than January 14, 2019, the same advance notice
period as described above for notice of proposals to be made from
the floor at the annual meeting.
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
2019 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 2019 annual meeting, shareholder proposals must be submitted in
writing to the Secretary of the Company not later than December 6,
2018, 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 Assistant Corporate Secretary,
Community Bancorp., 4811 US Route 5 Newport, Vermont
05855.
26
OTHER MATTERS
As of
the date of this proxy statement, the Board of Directors knows of
no business that may come before the 2018 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 Assistant Corporate Secretary Melissa Tinker 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:
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Melissa
Tinker, Assistant Corporate
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Issuer
Direct Corporation
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Computershare
Investor Services LLC
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Secretary,
Community Bancorp.
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500
Perimeter Park Drive, Suite D
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462
South 4
th
Street, Suite 1600
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4811 US
Route 5
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Morrisville,
NC 27560
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Louisville,
KY 40202
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Newport,
VT 05855
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(919)
481-4000
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(800)
368-5948
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(802)
334-7915
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www.issuerdirect.com
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www.computershare.com
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mtinker@communitynationalbank.com
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27
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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 15, 2018 AT 5:30
PM
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CONTROL ID:
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REQUEST ID:
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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 15, 2018, at 5:30 p.m. at the Elks Club in Derby,
Vermont, and at any adjournment or postponement
thereof.
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(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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VOTING INSTRUCTIONS
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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MAIL:
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Please
mark, sign, date, and return this Proxy Card promptly using the
enclosed envelope.
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FAX:
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Complete
the reverse portion of this Proxy Card and Fax to
202-521-3464.
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INTERNET:
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https://www.iproxydirect.com/CMTV
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PHONE:
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1-866-752-VOTE(8683)
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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:
☒
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PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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Proposal 1
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FOR ALL
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WITHHOLD
ALL
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FOR ALL
EXCEPT
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Election
of Directors to a term that expires at the 2021 Annual
Meeting:
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☐
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☐
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Kathryn
M. Austin
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☐
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David
M. Bouffard
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☐
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CONTROL
ID:
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Aminta
K. Conant
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☐
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REQUEST
ID:
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Rosemary M.
Lalime
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☐
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Proposal 2
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FOR
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AGAINST
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ABSTAIN
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Ratification
of BerryDunn as the Company’s external auditors for
2018.
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☐
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☐
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☐
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MARK “X” HERE IF YOU PLAN
TO ATTEND THE MEETING:
☐
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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.
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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:
________________________, 2018
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(Print
Name of Shareholder and/or Joint Tenant)
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(Signature
of Shareholder)
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(Second
Signature if held jointly)
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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 15, 2018 AT 5:30
PM
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CONTROL ID:
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REQUEST ID:
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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 15, 2018, at 5:30 p.m. at the Elks Club in Derby, Vermont, and
at any adjournment or postponement thereof.
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(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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VOTING INSTRUCTIONS
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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MAIL:
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Please
mark, sign, date, and return this Proxy Card promptly using the
enclosed envelope.
|
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|
|||||
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FAX:
|
Complete
the reverse portion of this Proxy Card and Fax to
202-521-3464.
|
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|
|||||
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INTERNET:
|
https://www.iproxydirect.com/CMTVK
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|||||
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PHONE:
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1-866-752-VOTE(8683)
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ANNUAL
MEETING OF THE SHAREHOLDERS OFCOMMUNITY 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 2021 Annual
Meeting:
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
Kathryn
M. Austin
|
|
|
|
|
|
☐
|
|
|
|
|
|
David
M. Bouffard
|
|
|
|
|
|
☐
|
|
CONTROL
ID:
|
|
|
|
Aminta
K. Conant
|
|
|
|
|
|
☐
|
|
REQUEST
ID:
|
|
|
|
Rosemary M.
Lalime
|
|
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|
☐
|
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|
Proposal 2
|
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
|
|
|
|
Ratification
of BerryDunn as the Company’s external auditors for
2018.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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:
________________________, 2018
|
||||||
|
|
||||||||||
|
|
(Print
Name of Plan Participant)
|
|||||||||
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|
||||||||||
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(Signature
of Plan Participant)
|
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TABLE OF CONTENTS