SALISBURY
BANCORP, INC.
5
BISSELL STREET
P.
O. BOX 1868
LAKEVILLE,
CONNECTICUT 06039
(860)
435-9801
NOTICE
OF 2010 ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD ON MAY 12, 2010
NOTICE IS
HEREBY GIVEN that the 2010 Annual Meeting of Shareholders of Salisbury Bancorp,
Inc. (“Salisbury”) will be held at 4:00 p.m. on Wednesday, May 12, 2010 at the
Interlaken Inn, 74 Interlaken Road, Lakeville, Connecticut 06039, for the
following purposes:
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1.
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To
elect three (3) directors for a three (3) year term who, with the six (6)
directors whose terms do not expire at this meeting, will constitute the
full Board of Directors of
Salisbury.
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2.
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To
ratify the appointment of Shatswell, MacLeod & Company, P.C. as
independent auditors for Salisbury for the year ending December 31,
2010.
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3.
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To
approve the Non-binding Advisory Vote on the Compensation of Named
Executive Officers.
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4.
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To
transact such other business as may properly come before the meeting, or
any adjournment(s) thereof.
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Only
those Shareholders of record at the close of business on the 26th day of March,
2010 are entitled to notice of, and to vote at, this Annual Meeting or any
adjournment thereof. In order that you may be represented at the
meeting, please complete, date, sign and mail promptly the enclosed proxy for
which a postage-prepaid return envelope is provided.
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BY
ORDER OF THE BOARD OF DIRECTORS OF
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SALISBURY
BANCORP, INC.
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/s/
Shelly L. Humeston
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Shelly
L. Humeston
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Secretary
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April
9, 2010
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Lakeville,
CT
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SHAREHOLDERS
ARE REQUESTED TO MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY
AS SOON AS POSSIBLE
REGARDLESS OF WHETHER THEY PLAN TO ATTEND THE MEETING. ANY PROXY
GIVEN BY A SHAREHOLDER MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED, AND
ANY SHAREHOLDER WHO EXECUTES AND RETURNS A PROXY AND WHO ATTENDS THE ANNUAL
MEETING MAY WITHDRAW THE PROXY AT ANY TIME BEFORE IT IS VOTED AND VOTE HIS OR
HER SHARES IN PERSON. A PROXY MAY ALSO BE REVOKED BY GIVING NOTICE TO
SHELLY L. HUMESTON, SECRETARY OF SALISBURY, 5 BISSELL STREET, P. O. BOX 1868,
LAKEVILLE, CT 06039, IN WRITING PRIOR TO THE TAKING OF A VOTE.
SALISBURY
BANCORP, INC.
5
BISSELL STREET
P.O.
BOX 1868
LAKEVILLE,
CONNECTICUT 06039
(860)
435-9801
PROXY
STATEMENT
FOR
2010 ANNUAL MEETING OF SHAREHOLDERS
May
12, 2010
INTRODUCTION
The
enclosed proxy card (the “Proxy”) is solicited by the Board of Directors (the
“Board of Directors”) of Salisbury Bancorp, Inc. (“Salisbury”), for use at the
2010 Annual Meeting of Shareholders (the “Annual Meeting”) to be held on
Wednesday, May 12, 2010, at 4:00 p.m., at the Interlaken Inn, 74 Interlaken
Road, Lakeville, Connecticut 06039, and at any and all adjournments
thereof. Any Proxy given may be revoked at any time before it is
actually voted on any matter in accordance with the procedures set forth on the
Notice of Annual Meeting. This Proxy Statement and the enclosed form
of Proxy are being mailed to shareholders (the “Shareholders”) on or about April
9, 2010. The cost of preparing, assembling and mailing this Proxy
Statement and the material enclosed herewith is being borne by
Salisbury. In addition, proxies may be solicited by Directors,
officers and employees of Salisbury and Salisbury Bank and Trust Company (the
“Bank”) personally by telephone or other means. Salisbury will
reimburse banks, brokers, and other custodians, nominees, and fiduciaries for
their reasonable and actual costs in sending the proxy materials to the
beneficial owners of Salisbury’s common stock (the “Common Stock”).
If your
shares are in a brokerage or fiduciary account, your broker or bank will send
you a voting instruction form instead of a Proxy. Please follow the
instructions on such form to instruct your broker or bank how to vote your
shares. If you wish to attend the meeting and vote your shares in
person, you must follow the instructions on the voting instructions form to
obtain a legal proxy from your broker or bank.
OUTSTANDING
STOCK AND VOTING RIGHTS
The Board
of Directors has fixed the close of business on March 26, 2010 as the record
date (the “Record Date”) for the determination of Shareholders entitled to
notice of and to vote at the Annual Meeting. As of the Record Date,
1,686,701 shares of Salisbury’s Common Stock (par value $.10 per share) were
outstanding and entitled to vote and held of record by approximately 1,500
Shareholders of
Record. Each share of Common Stock is entitled to one vote on all
matters to be presented at the Annual Meeting. Votes withheld,
abstentions and broker non-votes are not treated as having voted in favor of any
proposal and are counted only for purposes of determining whether a quorum is
present at the Annual Meeting.
A Proxy
card is enclosed for your use.
YOU ARE SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS TO COMPLETE, DATE, SIGN AND RETURN THE PROXY CARD IN THE
ACCOMPANYING ENVELOPE,
which is postage-prepaid if mailed in the United
States.
If the
enclosed form of Proxy is properly executed and received by Salisbury in time to
be voted at the Annual Meeting, the shares represented thereby will be voted in
accordance with the instructions marked thereon. Executed, but
unmarked proxies will be voted “
FOR
” Proposals 1, 2 and 3
discussed in this Proxy Statement. As of the date of this Proxy
Statement, the Board of Directors and management do not know of any matters
other than those described in the Notice of Annual Meeting that are to come
before the Annual Meeting. If any other matters are properly brought
before the Annual Meeting, the persons named in the Proxy will vote the shares
represented by such Proxy upon such matters as determined by a majority of the
Board of Directors.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON MAY 12, 2010
This Notice, Proxy Statement and
Salisbury’s 2009 Annual Report are available on Salisbury’s website at
www.cfpproxy.com/4607.
Directions to the Interlaken Inn may be
obtained by writing to Shelly L. Humeston, Secretary, Salisbury Bank and Trust
Company, 5 Bissell Street, P.O. Box 1868, Lakeville, Connecticut or by calling
1-860-435-9801 or toll-free at 1-800-222-9801.
The information found on, or otherwise
accessible through, Salisbury’s website is not incorporated by reference into,
and is not otherwise a part of, this Proxy Statement.
SECURITY
OWNERSHIP OF MANAGEMENT AND RELATED SHAREHOLDER MATTERS
The
following table sets forth certain information as of March 26, 2010 regarding
the number of shares of Common Stock beneficially owned by each nominee for
director, directors and executive officers of Salisbury and by all nominees for
director, directors and executive officers of Salisbury as a group.
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Name
of Beneficial Owner
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Amount
and Nature of
Beneficial Ownership
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(1)
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Percent
of Class (2)
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Louis
E. Allyn, II
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1,653
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0.10%
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John
R. H. Blum
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16,585
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(3)
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0.98
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Louise
F. Brown
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3,048
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0.18
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Richard
J. Cantele, Jr.
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3,006
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(4)
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0.18
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Robert
S. Drucker
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8,588
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(5)
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0.51
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Nancy
F. Humphreys
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1,960
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(6)
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0.12
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B.
Ian McMahon
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800
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0.05
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Holly
J. Nelson
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2,045
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(7)
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0.12
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John
F. Perotti
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10,915
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(8)
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0.65
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Michael
A. Varet
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66,606
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(9)
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3.95
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(All
Nominees for Director, Directors and Executive Officers of Salisbury as a
group of ten (10) persons)
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115,206
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6.83
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(1)
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The
shareholdings also include, in certain cases, shares owned by or in trust
for a director’s spouse and/or children or grandchildren, and in which all
beneficial interest has been disclaimed by the
director. The shareholdings also include shares the
director has the right to acquire within sixty (60) days of March 26,
2010. The definition of beneficial owner includes any person
who, directly or indirectly, through any contract, agreement or
understanding, relationship or otherwise, has or shares voting power or
investment power with respect to such
security.
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(2)
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Percentages
are based upon the 1,686,701 shares of Salisbury’s Common Stock
outstanding and entitled to vote on March 26,
2010.
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(3)
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Includes
4,000 shares owned by John R. H. Blum’s
spouse.
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(4)
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Includes
1,320 shares owned jointly by Richard J. Cantele, Jr. and his spouse and 6
shares owned by Richard J. Cantele, Jr. as custodian for his
daughter.
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(5)
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Includes
1,500 shares owned by Robert S. Drucker’s
spouse.
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(6)
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Includes
1,000 shares owned jointly by Nancy F. Humphreys and her
spouse.
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(7)
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Includes
6 shares owned by Holly J. Nelson as guardian for a minor
child.
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(8)
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Includes
9,514 shares owned jointly by John F. Perotti and his spouse, 1,100 shares
owned by his spouse of which shares owned by his spouse John F. Perotti
has disclaimed beneficial
ownership.
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(9)
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Includes
18,540 shares owned by his spouse and 18,546 shares owned by his children,
of which shares Michael A. Varet has disclaimed beneficial
ownership.
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Principal
Shareholders
With the
exception of Andrew T. Dwyer, management is not aware of any person (including
any “group” as that term is used in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) who owns beneficially more than 5%
of Salisbury’s Common Stock as of the Record Date (March 26,
2010). According to an amended Schedule 13G filed with the Securities
and Exchange Commission on February 4, 2010, Andrew T. Dwyer, whose address is
c/o Airlie Group, 115 East Putnam Avenue, Greenwich, CT 06830, beneficially
owned, including shares owned by a limited liability company of which he is the
sole manager, 84,727 shares of Common Stock of Salisbury, representing 5.02% of
the shares of Common Stock outstanding on the Record Date.
Equity
Compensation Plan Information
Salisbury does not have any equity
compensation plans pursuant to which equity securities are authorized for
issuance for the compensation of Executive Officers. Salisbury has a
2001 Directors’ Stock Retainer Plan, which provides non-employee directors with
shares of the Common Stock as a component of their compensation. Such
Plan is discussed further under “Board of Directors Compensation”
below.
Executive
Officers
The
following table sets forth information regarding the current executive officers
of Salisbury and/or the Bank followed by certain biographical information as of
December 31, 2009.
Executive
officers are appointed by the Board each year following the Annual
Meeting.
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Name
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Position
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Age
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Years
of Service
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Richard
J. Cantele, Jr.
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President
and Chief Executive Officer
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50
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28
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B.
Ian McMahon
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Chief
Financial Officer
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50
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Mr.
Cantele became President and Chief Executive Officer of Salisbury and the Bank
in 2009 upon the retirement of John F. Perotti as Chairman and Chief Executive
Officer of Salisbury and the Bank. Prior to this, Mr. Cantele served as
President and Chief Operating Officer of Salisbury and the Bank since 2005 and
has served as an executive officer of Salisbury since 2001 and of the Bank since
1989. Mr. Cantele also serves as a director of Salisbury and the
Bank.
Mr.
McMahon joined Salisbury in 2009 as Chief Financial Officer of Salisbury and the
Bank. Prior to joining the Bank, from 2008 to 2009 he served as Senior Vice
President, Financial Planning and Analysis, with Doral Financial Corporation, a
$10 billion diversified financial services company headquartered in Puerto Rico,
and from 2006 to 2007 as a financial consultant to Doral Financial Corporation.
From 1992 to 2006 he served as Executive Vice President, Chief Financial Officer
and Treasurer with NewMil Bancorp, Inc., a $900 million full-service community
bank with 20 banking offices serving Connecticut’s Litchfield, Fairfield and New
Haven Counties prior to its acquisition in 2006.
PROPOSAL
1
ELECTION
OF DIRECTORS
The
Certificate of Incorporation and Bylaws of Salisbury provide for a Board of
Directors of not less than seven (7) members, as determined from time to time by
resolution of the Board of Directors. The Board of Directors has set
the number of directorships at nine (9). The Board of Directors of Salisbury is
divided into three (3) classes as nearly equal in number as
possible. Classes of directors serve for staggered three (3) year
terms. A successor class is elected at each annual meeting of
shareholders when the terms of office of the members of one class
expire. Vacant directorships may be filled, until the expiration of
the term of the vacated directorship, by the vote of a majority of the directors
then in office. A plurality of votes cast in favor is necessary for
the election of directors.
Directors
and Nominees for Election for a Three Year Term and Director
Independence
There are
three (3) directorships on the Board of Directors up for election this
year. The following individuals have been nominated to serve for a
three (3) year term: Louis E. Allyn, II, Robert S. Drucker and Michael A.
Varet. The three (3) nominees are presently members of the Board of
Directors. Unless otherwise directed, the enclosed Proxy will be
voted
“FOR”
such
nominees. In the event any one or more nominees is unable or declines
to serve (events which are not anticipated), the persons named in the Proxy may
vote for some other person or persons as the Board of Directors may
recommend.
The
following table sets forth certain information, as of March 26, 2010, with
respect to Salisbury’s directors. All directors are considered “independent”
within the meaning of the NYSE Amex Equities independence standards with the
exception of Richard J. Cantele, Jr., who is an executive officer of Salisbury
and the Bank and John F. Perotti who served as Chairman of the Board of
Directors and an executive officer of Salisbury and the Bank prior to his
retirement in June 2009. Unless otherwise stated, all directors have held the
position described for at least five (5) years.
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Name
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Age
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Position
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Director
Since
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Nominees
for election for terms expiring in 2010
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Louis
E. Allyn, II
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62
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Director
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2004
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Robert
S. Drucker
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68
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Director
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2004
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Michael
A. Varet
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68
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Presiding
Director
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1998
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Continuing
directors whose terms expire in 2011
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Louise
F. Brown
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66
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Director
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1998
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Richard
J. Cantele, Jr.
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50
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President,
Chief Executive Officer, Director
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2005
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Nancy
F. Humphreys
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68
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Director
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2001
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Continuing
directors whose terms expire in 2012
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John
R. H. Blum
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80
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Director
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1998
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Holly
J. Nelson
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56
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Director
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1998
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John
F. Perotti
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63
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Director
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1998
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Director
Qualifications
The Board
of Directors is composed of a diverse group of persons with a variety of
experience, qualifications, attributes and skills that enable it to meet the
needs of Salisbury’s governance. In particular, the Board of
Directors consists of a group of individuals who collectively bring a mix of
skills and knowledge in the areas of banking, finance, accounting and
business. All members of the Board of Directors have an understanding
of finance and accounting, are able to read and understand fundamental financial
statements and generally accepted accounting principles and their application to
the accounting of Salisbury. Each of the director’s previous
experience, analytical aptitude and leadership provides Salisbury with a wealth
of knowledge from which it may draw. In addition, members of the
Board of Directors are active in, and knowledgeable about, the local communities
in which Salisbury operates. These are valuable skills and attributes
for service as a director of Salisbury and the Bank.
Louis E.
Allyn, II has been a director of the Bank since 2004. Mr.
Allyn is a 1972 graduate of the University of Connecticut School of Business and
has been President and General Manager of Allyndale Corporation since
1990. Allyndale Corporation mines and processes limestone into a
variety of agricultural and lawn and garden products that are distributed
throughout southern New England and New York state. Mr. Allyn
has served as a member of the Board of Finance for the Town of North
Canaan and is currently serving as its Chair. Mr. Allyn’s experience
as a small business owner, as well as his service to the Board of Finance,
brings a unique and valuable perspective to his position on the
Board.
John R.
H. Blum has been a director of the Bank since 1995. Mr. Blum
graduated from the Hotchkiss School in 1947; graduated from Yale University with
a B.A. in 1951; and graduated from Harvard Law School with an LL.B. in
1956. Mr. Blum was elected Presiding Director in 2005, a position he
held until 2007. Prior to 2005, he was Chairman of the Board of Directors of
Salisbury and the Bank since 1998. Mr.Blum is a retired attorney and
former Commissioner of Agriculture for the State of Connecticut. Mr.
Blum previously served as a Director for Vista Mutual Funds and the Dreyfus
Foundation. Mr. Blum’s education and experience and familiarity with
the communities served by the Bank provide the Board with critical insight and
valuable knowledge.
Louise F.
Brown has been a director of the Bank since 1992. Mrs. Brown
graduated from Harvard cum laude in 1965 with a B.A.; Columbia Teacher s College
in 1966 with an M.A.; and cum laude from Boston University School of Law in
1972. Mrs. Brown is a partner in the law firm of Ackerly Brown,
LLP. Mrs. Brown’s education and experience in real estate, as well as
trust and estate administration, provide an additional set of skills to the
Board.
Richard
J. Cantele, Jr. has been a director of the Bank since 2005. Mr.
Cantele graduated from Fairfield University in 1981 with a Bachelor of Science
degree in Finance; and graduated from the Stonier Graduate School of Banking in
1997. Mr. Cantele became President and Chief Executive Officer of
Salisbury and the Bank in 2009, prior to which he served as President and Chief
Operating Office of Salisbury and the Bank since 2005. Mr. Cantele has been an
executive officer of Salisbury since 2001 and the Bank since 1989, serving as
Executive Vice President, Treasurer and Chief Operating Officer of the Bank and
Salisbury and Secretary of Salisbury.
Robert S.
Drucker has been a director of the Bank since 2004. Mr. Drucker
studied Accounting at Pace College and has been in the retail business for more
than 45 years. He is presently proprietor of Barrington
Outfitters. Mr. Drucker was a former Director of Canaan National Bank
for approximately 10 years prior to Salisbury’s acquisition in
2004. Mr. Drucker’s experience operating successful businesses in
Connecticut and Massachusetts and his prior experience as a director of another
financial institution provide valuable knowledge to the Board.
Nancy F.
Humphreys has been a director of the Bank since 2001. Mrs. Humphreys
graduated from Chatham College in 1963 and from Syracuse University, Maxwell
Graduate School in 1965. Mrs. Humphreys retired from Citigroup New
York, Citibank, in February of 2000 as Managing Director and Treasurer of Global
Corporate Investment Bank North America. Mrs. Humphreys finance and
treasury knowledge and experience are great assets, particularly in the area of
asset and liability management as well as with respect to the financial services
industry generally.
Holly J.
Nelson has been a director of the Bank since 1995. Ms. Nelson
graduated from Cornell University with a B.A. in 1979. Ms. Nelson is
a member of Horses North, LLC, a tour operator, and is a member in Oblong
Property Management, LLC. Ms. Nelson has been involved in a variety
of public government positions in the Town of North East, New
York. Ms. Nelson’s education and experience in successfully
operating a small business in the New York market area served by the Bank
provide valuable perspective and leadership skills to the Board.
John F.
Perotti has been a director of the Bank since 1985. Mr. Perotti
attended University of Connecticut at Storrs; graduated from Hartford Institute
of Accounting in 1972; and graduated from Williams College New England School of
Banking and Bank Management. During 2009 he retired as Chairman and
Chief Executive Officer of Salisbury and the Bank, in which capacity he had
served since 2005. Prior to that, he served as President and Chief
Executive Officer of Salisbury and the Bank, Executive Vice President and Chief
Operating Officer of the Bank and Vice President and Treasurer of the
Bank. Mr. Perotti’s lifetime of valuable experience with the Bank and
Salisbury, its shareholders, customers and communities served by the Bank
provide the Bank and Salisbury with valuable experience.
Michael
A. Varet has been a director of the Bank since 1997. Mr. Varet
graduated with a B.S. in Economics from the University of Pennsylvania, Wharton
School in 1962 and from Yale Law School with an LL.B. in 1965. Mr.
Varet was elected Presiding Director in 2007. Mr. Varet is a Senior
Counsel in the law firm of DLA Piper LLP (US). Mr. Varet’s education
and experience enables him to provide valuable knowledge to the Board and his
legal background and analytical skills provide insight into financial services
and corporate governance matters.
THE BOARD
OF DIRECTORS RECOMMENDS A VOTE “
FOR
” THE PROPOSAL TO ELECT
EACH OF THE THREE (3) NOMINEES TO THE BOARD OF DIRECTORS FOR A TERM OF THREE (3)
YEARS. DIRECTORS ARE ELECTED BY A PLURALITY OF THE VOTES CAST BY THE SHARES
ENTITLED TO VOTE AT THE MEETING. PROXIES SOLICITED BY THE BOARD OF
DIRECTORS WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY A CONTRARY CHOICE ON THE
PROXY CARD.
CORPORATE
GOVERNANCE
Meetings
and Committees of the Board of Directors
The Board
of Directors met nineteen (19) times during 2009, and has various committees
including an Executive Committee, Human Resources and Compensation Committee,
Nominating and Governance Committee and Audit Committee. The members
of the committees are appointed by the Board of Directors.
During
2009, no director attended fewer than 75% of the aggregate of (1) the total
number of meetings held by Salisbury’s Board of Directors during the period that
the individual served; and (2) the total number of meetings held by all
committees of Salisbury’s Board of Directors on which he/she
served. Salisbury does not maintain a policy for directors’
attendance at Salisbury’s annual meetings of Shareholders, but encourages all
directors to attend. All directors of Salisbury attended Salisbury’s
annual meeting of Shareholders on May 27, 2009.
Executive
Committee
The
Executive Committee has general supervision over the affairs of Salisbury
between meetings of the Board of Directors. The members of the
Executive Committee are Louis E. Allyn, II, Louise F. Brown, Richard J. Cantele,
Jr. and Michael A. Varet (Chair). The Executive Committee met one (1)
time separately from the Board during 2009.
Human
Resources and Compensation Committee
The Human
Resources and Compensation Committee (the “Compensation Committee”) is
responsible for reviewing Salisbury’s general compensation strategy;
establishing salaries and reviewing benefit programs, including pensions and
incentive compensation plans; and advising the Board of Directors and making
recommendations with respect to such plans. In particular, the Compensation
Committee reviews and approves Salisbury’s compensation strategies and
objectives, reviews and approves Executive Officers’ compensation, administers
incentive plans and reviews and makes recommendations to the Board regarding
general employee pension benefit plans and other benefit plans on an as needed
basis. Salisbury strives for pay packages that are fair. In
determining whether compensation of executive officers is fair, the Compensation
Committee considers each component of compensation including salary and bonus,
stock compensation, amounts to be received from any deferred compensation,
severance, perquisites and others. In establishing levels of
compensation, the Compensation Committee endeavors to take into consideration an
individual’s performance, level of expertise, responsibilities, length of
service and comparable levels of compensation paid to executives of other
companies of comparable size and development within the industry. No
individual executive officer may participate in the review, discussion or
decision of the Compensation Committee regarding his or her compensation or the
compensation of any senior executive officer, but executive officers may
participate in the review, discussion or decision of the Compensation Committee
regarding director compensation. Neither the Compensation Committee
nor Management directly engaged the services of any compensation consultants
during 2009. The members of the Compensation Committee are Louis E. Allyn, II
(Chair), Nancy F. Humphreys, Holly J. Nelson and Michael A. Varet, all of whom
are independent in accordance with the NYSE Amex Equities independence
standards. The Compensation Committee met five (5)
times during
2009.
A copy of
Salisbury’s Human Resources and Compensation Committee Charter, which the
Compensation Committee and Board of Directors review and assess at least
annually, is available on Salisbury’s website at
www.salisburybank.com.
Nominating
and Governance Committee
The
Nominating and Governance Committee is responsible for assisting the Board of
Directors in identifying and evaluating potential nominees for director and
recommending qualified nominees to the Board for consideration. The
Nominating and Governance Committee selects the director nominees to stand for
election at Salisbury’s annual meetings of shareholders. The
Nominating and Governance Committee’s process for identifying and evaluating
nominees for director, including nominees recommended by shareholders, has
historically operated informally and without any differences in the manner in
which nominees recommended by shareholders are evaluated. However,
Salisbury’s Bylaws provide that if the Nominating and Governance Committee or
Board of Directors proposes a nominee age 72 or greater, then such nomination
requires two-thirds approval by the full Board of Directors.
The
Nominating and Governance Committee and the Board of Directors consider factors
such as those summarized below in evaluating director candidates, including any
nominee submitted by shareholders, and believe that Salisbury’s Bylaws,
Nominating and Governance Committee Charter and the qualifications and
considerations such as those enumerated below provide adequate guidance and
flexibility in evaluating candidates. The Nominating and Governance
Committee does not have a policy with regard to the consideration of diversity
in identifying director nominees.
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·
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Sound
business judgment and financial sophistication in order to understand
Salisbury’s financial and operating performance and to provide strategic
guidance to management.
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·
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Business
management experience.
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·
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Integrity,
commitment, honesty and
objectivity.
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·
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A
general familiarity with (i) prudent banking principles; (ii) bank
operations/technology; (iii) pertinent laws, policies and regulations;
(iv) markets and trends affecting the financial services industry; and (v)
local economic and business
opportunities.
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·
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Strong
communication skills in order to function effectively with Salisbury’s
constituencies.
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·
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A
financial interest in Salisbury as a shareholder. Generally,
candidates should not have relationships with Salisbury or the Bank which
would disqualify the candidate from being considered
independent.
|
|
|
·
|
Generally,
candidates should be involved in philanthropic, education, business or
civic leadership positions.
|
|
|
·
|
Generally,
candidates should be familiar with the geographic areas served by
Salisbury.
|
|
|
·
|
Candidates
should evidence a willingness and commitment to devote sufficient time and
energy to prepare for and attend Board of Director and committee meetings
and to diligently perform the duties and responsibilities of service as a
director.
|
|
|
·
|
Candidates
should not have interests which conflict with those of Salisbury or the
Bank.
|
Salisbury
has not paid a fee to any third party or parties to identify or assist in
identifying or evaluating potential nominees. The Board of Directors
and Nominating and Governance Committee do not discriminate on the basis of sex,
race, color, gender, national origin, religion or disability in the evaluation
of candidates.
A copy of
Salisbury’s Nominating and Governance Committee Charter is available on
Salisbury’s website at www.salisburybank.com.
Any
shareholder who wishes to recommend a nominee for director should send the
required information, as set forth in Salisbury’s Bylaws, to the attention of
the Chair of the Nominating and Governance Committee at the address of
Salisbury. See also the information under “Deadline for Submission of
Shareholder Proposals” below.
The
members of the Nominating and Governance Committee are John R. H. Blum (Chair),
Louise F. Brown, Nancy F. Humphreys and Michael A. Varet. All such
members are “independent” in accordance with the independence standards of NYSE
Amex Equities. The Nominating and Governance Committee met twice (2)
during 2009. All nominees for directors at the 2010 Annual Meeting
were nominated by the Nominating and Governance Committee and the Board of
Directors.
Audit
Committee
Salisbury
has a separately-designated standing Audit Committee established by the Board of
Directors in accordance with Section 3(a)(58)(A) of the Securities Exchange Act
for the purpose of overseeing the accounting and financial reporting process of
Salisbury and audits of the financial statements of
Salisbury. Subject to the Audit Committee Charter, the Audit
Committee provides assistance to the Board of Directors in fulfilling its
responsibility to the shareholders, potential shareholders and investment
community relating to corporate accounting, reporting practices of Salisbury,
and the quality and integrity of the financial reports of
Salisbury. In so doing, it is the responsibility of the Audit
Committee to appoint the independent auditors for Salisbury and to maintain free
and open means of communication between the directors, the independent auditors,
the internal auditors and the financial management of Salisbury.
The
responsibilities of the Audit Committee are governed by Salisbury’s Audit
Committee Charter which was adopted by Salisbury’s Board of
Directors. Its members are Louis E. Allyn, II, Nancy F. Humphreys,
Holly J. Nelson (Chair) and Michael A. Varet. The Audit Committee met
seven (7)
times
during 2009. Each of the members of the Audit Committee is an
“independent director” in accordance with the listing standards of the NYSE Amex
Equities. While no member of the Audit Committee qualifies as an
“audit committee financial expert” as such term is defined by federal securities
laws and regulations, the Board of Directors believes the members of the Audit
Committee bring diverse educational, business and professional experience that
is beneficial to the audit committee function of Salisbury and the Bank and
enables the Audit Committee to fulfill its responsibility.
A copy of
Salisbury’s Audit Committee Charter is available on Salisbury’s website at
www.salisburybank.com.
Board
Leadership Structure
Mr.
Perotti served as both Chair and Chief Executive Officer of Salisbury and the
Bank before his retirement in June of 2009. Mr. Varet was selected to
serve as Presiding Director of Salisbury and the Bank prior to Mr. Perotti’s
retirement and has performed the functions of Chair since Mr. Perotti’s
retirement in June 2009.
The Board
of Directors regularly reviews and assesses the effectiveness of its leadership
structure and will implement any changes as it deems appropriate. The
current leadership structure is comprised of a nine-member board of directors
consisting of: a Presiding Director, who is independent and performs the
functions of Chair; the Chief Executive Officer, who also serves as President;
the former Chief Executive Officer; and six other independent
directors. Salisbury has established responsibilities for the
Chair and, if warranted, Presiding Director to ensure that the Board of
Directors is adequately informed about the affairs of Salisbury and the
Bank. Salisbury believes that this leadership structure ensures
appropriate and effective governance of Salisbury and the Bank.
Salisbury’s
Bylaws provide that the Board shall elect from among its members a Chair of the
Board, who shall preside at all Board meetings. If the Chair is an
officer of Salisbury or the Bank, the Board shall elect an independent Presiding
Director and shall by resolution set forth the duties and responsibilities of
the Presiding Director. The Board will elect a new Chair, and, if
warranted, a Presiding Director, at Salisbury’s Organizational Meeting following
the Annual Meeting of Shareholders.
Corporate
governance guidelines describe responsibilities for the Chair. The
primary responsibilities of the Chair are to be responsible for the leadership
of the board meetings, preparing the agenda, presiding over meetings and making
committee assignments.
Further,
to assess effective independent oversight, the Board of Directors has adopted
several governance practices, including regular executive sessions of
independent directors and annual performance evaluations of the Chair and Chief
Executive Officer by the independent directors.
Salisbury
recognizes that no single leadership model is right for all companies at all
times. The Board of Directors recognizes that, depending upon the
circumstances, other leadership models might be appropriate at some point, and
the Board of Directors periodically reviews its leadership structure in this
regard.
Board
Role in Risk Oversight
The Board
oversees the risk management of Salisbury through its committees, management
committees and the Chief Executive Officer. The Audit Committee
monitors: (1) the effectiveness of Salisbury’s internal controls; (2) the
integrity of its Consolidated Financial Statements; and (3) compliance with
legal and regulatory requirements. In addition, the Audit Committee
coordinates with the internal audit function and the independent registered
public accountant.
At
the monthly meetings, the Board receives the minutes from each committee meeting
as well as various reports from key senior management. The Board
reviews and discusses these reports with senior managers. The Board
also reviews all classified assets and trends in loan delinquency, and reviews
the allowance for loan losses each quarter. The Board also reviews
the policies and practices of Salisbury and the Bank on a regular
basis. In addition, the Board reviews corporate strategies and
objectives and evaluates business performance.
Code
of Ethics
Salisbury
has adopted a Code of Ethics that applies to Salisbury’s Directors, officers and
employees, including Salisbury’s Chief Executive Officer and Chief Financial
Officer. A copy of such Code of Ethics is available upon request,
without charge, by writing to Shelly L. Humeston, Secretary, Salisbury Bank and
Trust Company, 5 Bissell Street, P. O. Box 1868, Lakeville,
Connecticut 06039.
Board
of Directors’ Communications with Shareholders
Salisbury’s
Board of Directors does not have a formal process for shareholders to send
communications to the Board of Directors. However, the volume of such
communications has historically been de minimus. Accordingly, the
Board of Directors considers Salisbury’s informal process to be adequate to
address Salisbury’s needs. Historically, such informal process has
functioned as follows: any shareholder communication is forwarded to the
President and Chief Executive Officer for appropriate discussion by the Board of
Directors and the formulation of an appropriate
response. Shareholders may forward written communications to the
Board of Directors by addressing such comments to the Board of Directors of
Salisbury Bancorp, Inc., 5 Bissell Street, P. O. Box 1868, Lakeville,
Connecticut 06039.
Audit
Committee Report
The Audit
Committee has reviewed and discussed Salisbury’s audited financial statements
for the fiscal year ended December 31, 2009 with management and has discussed
the matters that are required to be discussed by SAS 61, as amended and as
adopted by the Public Company Accounting Oversight Board in Rule 3200T, with
Shatswell, MacLeod & Company, P.C. (Salisbury’s independent auditors)
(“Shatswell”).
The Audit
Committee has received the written disclosures and the letter from Shatswell
required by applicable requirements of the Public Company Accounting Oversight
Board for independent auditor communications with Audit Committees concerning
independence, and has discussed Shatswell’s independence with respect to
Salisbury with Shatswell.
Based on
the review and discussions referred to above, the Audit Committee recommended to
the Board of Directors that the audited financial statements be
included in Salisbury’s Annual Report on Form 10-K for the year ended December
31, 2009 for filing with the Securities and Exchange Commission (the
“SEC”).
Salisbury
Bancorp, Inc. Audit Committee
|
|
Holly
J. Nelson, Chair
|
Nancy
F. Humphreys
|
|
|
Louis
E. Allyn, II
|
Michael
A. Varet
|
The
foregoing Report of Salisbury’s Audit Committee is provided in accordance with
the rules and regulations of the SEC. Pursuant to such rules and
regulations, this Report shall not be deemed “soliciting material,” filed with
the SEC, subject to Regulation 14A and 14C of the SEC or subject to the
liabilities of Section 18 of the Exchange Act.
EXECUTIVE
COMPENSATION
Executive
Officer Compensation
The
following table shows, for the years ended December 31, 2009 and 2008, the
compensation of the person who served as Chief Executive Officer of Salisbury,
Chief Financial Officer of Salisbury, and each of the three most highly
compensated executive officers of Salisbury and/or the Bank, other than the
Chief Executive Officer and Chief Financial Officer, whose total compensation
exceeded $100,000 in each year. Mr. Perotti retired from Salisbury on June 8,
2009, Mr. Foley passed away during 2009 and Mr. McMahon joined Salisbury on
September 8, 2009. All compensation expense was paid by the Bank.
Summary
Compensation Table
|
Name
and Principal Position
|
Year
|
Salary
|
Bonus
|
Stock
Awards
|
Option
Awards
|
Non-Equity
Incentive
Plan
Compensation
|
Nonqualified
Deferred
Compensation
Earnings
|
All
Other
Compensation
|
Total
|
|
|
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(2)
|
(j)
|
|
Richard
J. Cantele, Jr.,
President
and Chief
Executive
Officer
|
2009
|
186,983
|
-
|
|
-
|
-
|
-
|
-
|
4,765
|
|
191,748
|
|
2008
|
165,082
|
20,000
|
(1)
|
-
|
-
|
-
|
-
|
4,504
|
|
189,586
|
|
John
F. Perotti, Chairman
and
Chief Executive Officer
(retired)
|
2009
|
114,877
|
-
|
|
-
|
-
|
-
|
-
|
59,916
|
(3)
|
174,793
|
|
2008
|
210,000
|
-
|
|
-
|
-
|
-
|
-
|
7,394
|
|
217,394
|
|
Ian
McMahon, Chief
Financial
Officer
|
2009
|
49,808
|
-
|
|
-
|
-
|
-
|
-
|
-
|
|
49,808
|
|
John
F. Foley, Chief
Financial
Officer, Treasurer
and
Secretary (deceased)
|
2009
|
79,373
|
-
|
|
-
|
-
|
-
|
-
|
-
|
|
79,373
|
|
2008
|
112,307
|
7,877
|
(1)
|
-
|
-
|
-
|
-
|
4,043
|
|
124,277
|
|
(1)
|
Bonuses
were accrued in the year indicated and paid in the succeeding fiscal year.
Thus, the bonus earned in 2008 was paid in
2009.
|
|
(2)
|
Includes
for 2009 and 2008, respectively: Mr. Perotti: $0 and $4,550 in 401(k)
matching contributions and and $992 and $2,844 in imputed income on life
insurance benefits; Mr. Cantele: $4,140 and $3,652 in 401(k) matching
contributions and $625 and $852 in imputed income on life insurance
benefits; Mr. Foley: $0 and $2,415 in 401(k) matching contributions and $0
and $1,628 in imputed income on life insurance
benefits.
|
|
(3)
|
Includes
$45,824 in consulting fees and $13,100 in director
fees.
|
Employee
Benefit Plans; Employment and Other Agreements
Salisbury
has no employment agreements with the Named Executive Officers.
Change in
Control Agreements - Salisbury has entered into Change in Control Agreements
(the “Agreements”) with each Named Executive Officer, other than Mr. McMahon,
which become effective upon the consummation of a “Change in Control” (as
defined in the Agreements) of Salisbury at which point the Agreements have a
twelve (12) month term. The Agreements provide that if following a
“Change in Control” (as defined in the Agreements) of Salisbury or the Bank, an
Executive Officer is terminated or is reassigned under certain circumstances
defined in the Agreements within a period of twelve (12) months following such
Change in Control, such Executive Officer will be entitled to a lump sum payment
equal to his or her annual compensation based upon the most recent aggregate
base salary paid to the Executive Officer in the twelve (12) month period
immediately preceding his or her termination or reassignment. In
certain cases, the lump sum payment may be deferred for six (6) months pursuant
to the operation of Section 409A of the Internal Revenue Code. In
addition, for twelve (12) months following a Change in Control, certain
specified insurance benefits shall continue in effect on terms and conditions at
least as favorable to the Executive Officer as maintained immediately prior to
the Change in Control. In no event shall such payments be made in an
amount that would cause them to be deemed non-deductible to the Bank by reason
of the operation of Section 280G of the Internal Revenue Code. The
purpose of the Agreement is to provide certain potential benefits to the
Executive Officer solely in the event of a Change in Control and do not provide
a contract for employment. The Agreements expire on September 30,
2010, provided that if a “Change in Control” occurs prior to September 30, 2010,
the Agreements shall remain in effect for twelve (12) months after the date on
which any such Change in Control is consummated.
On March
13, 2009, Salisbury entered into a Letter Agreement including the Securities
Purchase Agreement-Standard Terms, as supplemented by the letter dated March 13,
2009 relating to the American Recovery and Reinvestment Act of 2009,
(together, the “Purchase Agreement”), with the U.S. Treasury
Department (the “Treasury”) pursuant to which Salisbury issued and sold 8,816
shares of its Fixed Rate Cumulative Perpetual Preferred Stock, Series A, under
the Capital Purchase Program (the “CPP”) of the Emergency Economic Stabilization
Act of 2008 (“EESA”). Pursuant to the terms of the Purchase
Agreement, Richard J. Cantele, Jr. and Diane E.R. Johnstone (each a “Senior
Executive Officer”) executed waivers and consents voluntarily waiving any claim
against the Treasury or Salisbury for any changes to such Senior Executive
Officer’s compensation or benefits that are required to comply with Section 111
of EESA, as amended, as implemented by any rules, regulations, guidance or other
requirements issued thereunder, acknowledging that such rules, regulations,
guidance or other requirements may require modification of the compensation,
bonus, incentive and other benefit plans, arrangements and policies and
agreements (including so-called “golden parachute” agreements) as they relate to
the period the Treasury holds any equity or debt securities of Salisbury
acquired through the CPP and consenting to the foregoing
amendments. Further, each of the Senior Executive Officers has
entered a First Amendment to their Change in Control Agreement providing that no
payment will be made or benefit provided under the Change in Control Agreement
if it would violate EESA, as amended, or any regulation thereunder.
Consulting
Agreement
In
connection with Mr. Perotti’s retirement, Salisbury and Mr. Perotti have entered
into a Consulting and Non-Compete Agreement (“Agreement”). Effective
June 9, 2009, through December 31, 2011, Mr. Perotti agrees to make himself
reasonably available at times mutually agreeable to Mr. Perotti and Salisbury to
provide consulting services to Salisbury as may be reasonably requested by
Salisbury in order to facilitate the smooth transition of management for
Salisbury and assist Salisbury in the resolution of strategic objectives and
customer relationships. Mr. Perotti shall generally not be required
to devote more than twenty (20) hours on average per month to his duties under
such Agreement. Salisbury will pay Mr. Perotti for consulting
services rendered during the term of the Agreement. Payments shall be
made in the amount of $7,637.41 on the first day of each month commencing July
1, 2009, and ending February 1, 2012. During 2009 and 2010, Salisbury
will reimburse Mr. Perotti for ordinary and necessary expenses incurred in
connection with participation on Salisbury’s behalf at the Connecticut Bankers
Association and Connecticut Community Bankers Association Annual Meetings, so
long as such expenses are consistent with Salisbury’s policy and do not exceed
an aggregate of $12,000. Salisbury agrees to allow Mr. Perotti and
his spouse to remain in its group health insurance plan and to provide them
coverage under such plan at the same percentage of contribution Mr. Perotti
would have paid if he had remained actively employed, to the extent permitted by
the plan. Mr. and Mrs. Perotti shall remain eligible for such
coverage until Mr. Perotti reaches age 65 and, thereafter, for the period, if
any, specified by COBRA.
Supplemental
Retirement Agreement
The Bank
maintains a supplemental retirement arrangement for Mr. Perotti that has been in
effect since 1994. Following his retirement, Mr. Perotti commenced
receiving monthly payments in January 2010 in the amount of $1,856
(to be adjusted annually to reflect the lesser of a five percent (5%) increase
or “The Monthly Consumer Price Index for All Urban Consumers, United States City
Average, All Items” published by the Bureau of Labor Statistics) for a period of
ten (10) years. The supplemental retirement agreement includes
provisions that would prevent Mr. Perotti from working for a competitor in the
proximity of the Bank.
Retirement
Plans
Salisbury
provides post-employment compensation plans as an incentive to its employees,
including the Named Executive Officers, to remain with
Salisbury. Salisbury maintains a non-contributory tax qualified
Defined Benefit Pension Plan, a 401(k) Retirement Plan and a Change in Control
Plan.
Defined
Benefit Pension Plan
The Bank
maintains a non-contributory defined benefit pension plan for officers and other
salaried employees of the Bank who become participants after attaining age 21
and completing one (1) year of service, and were hired prior to October 1,
2006. The plan was adopted in January 1953. The Named
Executive Officers, other than Mr. McMahon, are participants in this
plan.
Pension
benefits are based upon the annual average of an employee’s total compensation
for the five (5) consecutive plan years of employment during which the
employee’s compensation was the greatest and during which he or she was a
participant. The amount of the annual benefit is 2% of average salary
offset by .65% of the social security wage base per year of service (to a
maximum of 25 years) plus one-half of 1% of average salary for each year of
service over 25 years (to a maximum of ten years). This benefit
formula may be modified to conform to the pension laws. Internal
Revenue Code Section 401(a) (17) limits earnings used to calculate qualified
plan benefits to $245,000 for 2009.
In
September of 2006, a “soft-freeze” was approved by the Board of Directors
eliminating new participation in the Plan. All employees hired on or
after October 1, 2006 are excluded from participation in the Defined Benefit
Pension Plan. Eligible employees hired prior to October 1, 2006 will
continue receiving the benefit as outlined in the Plan.
401(k)
Plan
Salisbury
offers a 401(k) Plan to eligible employees. Under the Plan, eligible
participants may contribute a percentage of their pay subject to IRS
limitations. Salisbury may make discretionary contributions to the Plan.
Discretionary contributions vest in full after five years. Effective
September 1, 2006, the 401(k) Plan was amended to provide that employees hired
or rehired after September 1, 2006 are not eligible to participate in the plan.
Salisbury has established a second 401(k) Plan to provide a discretionary match
to employees hired or rehired on or after September 1, 2006 who satisfy certain
eligibility requirements. Salisbury’s 401(k) Plan contribution
expense for 2009, 2008 and 2007 was $120,000, $105,000 and $100,000,
respectively.
BOARD
OF DIRECTORS COMPENSATION
Directors
who are employees receive no additional compensation for Board service. The
compensation received by employee directors as employees of Salisbury (Messrs.
Cantele and Perotti) is shown in the Summary Compensation Table earlier in this
Proxy Statement. As a result of his retirement on June 8, 2009, Mr. Perotti
became classified as a ‘non-employee director’ and therefore, began receiving
compensation for Board service. The following table summarizes the compensation
paid to non-employee directors for the year ended December 31,
2009.
2009
Director Compensation Table
|
Name
|
Fees
Earned or
Paid
in Cash
|
Stock
Awards
|
Option
Awards
|
Non-Equity
Incentive
Plan
Compensation
|
Nonqualified
Deferred
Compensation
Earnings
|
All
Other
Compensation
|
Total
|
|
|
($)
|
(1)
|
($)(9)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|
Louis
E. Allyn, II
|
26,467
|
(2)
|
2,700
|
-
|
-
|
-
|
-
|
29,167
|
|
John
R. H. Blum
|
20,475
|
|
2,700
|
-
|
-
|
-
|
-
|
23,175
|
|
Louise
F. Brown
|
23,858
|
(3)
|
2,700
|
-
|
-
|
-
|
-
|
26,558
|
|
Richard
J. Cantele, Jr.
|
-
|
(4)
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Robert
S. Drucker
|
23,100
|
|
2,700
|
-
|
-
|
-
|
-
|
25,800
|
|
Nancy
F. Humphreys
|
29,150
|
(5)
|
2,700
|
-
|
-
|
-
|
-
|
31,850
|
|
Holly
J. Nelson
|
25,316
|
(6)
|
2,700
|
-
|
-
|
-
|
-
|
28,016
|
|
John
F. Perotti
|
-
|
(7)
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Michael
A. Varet
|
39,050
|
(8)
|
2,700
|
-
|
-
|
-
|
-
|
41,750
|
|
(1)
|
Directors’
fees are paid in cash.
|
|
(2)
|
Includes
$3,125 paid to Mr. Allyn for his services as Chairperson of the Human
Resources and Compensation
Committee.
|
|
(3)
|
Includes
$1,875 paid to Mrs. Brown for her services as Chairperson of the Trust
Committee (term beginning May 27,
2009).
|
|
(4)
|
As
an officer of Salisbury, Mr. Cantele does not receive fees for serving as
a director.
|
|
(5)
|
Includes
$2,083 paid to Mrs. Humphreys for her services as Chairperson of the Audit
Committee (term ending May 27, 2009) and $2,917 for her services as
Chairperson of the ALCO/Investment Committee (term beginning May 27,
2009).
|
|
(6)
|
Includes
$2,917 paid to Ms. Nelson for her services as Chairperson of the Audit
Committee (term beginning May 27,
2009).
|
|
(7)
|
Mr.
Perotti’s fees are included in the Summary Compensation
Table.
|
|
(8)
|
Includes
$17,000 paid to Mr. Varet for his services as Presiding
Director.
|
|
(9)
|
Represents
120 shares of Salisbury’s common stock issued on May 27, 2009 pursuant to
the 2001 Directors’ Stock Retainer Plan, valued at $22.50 per
share.
|
Directors’
Fees
During
2009, each non-employee director received an annual retainer of
$6,000. In addition, non-employee directors received $500 for each
Board of Directors meeting attended and $350 for each committee meeting
attended. The Presiding Director received an annual retainer of
$17,000, the Chairpersons of the Audit Committee and the ALCO/Investment
Committee received an annual retainer $5,000 and the Chairpersons of the Human
Resources and Compensation Committee and the Trust Committee received an annual
retainer of $2,500.
2001
Directors’ Stock Retainer Plan
The
shareholders of Salisbury voted to approve the Directors Stock Retainer Plan of
Salisbury Bancorp, Inc. (the “Plan”) at the 2001 Annual Meeting of
Shareholders. The Plan provides non-employee directors of Salisbury
with shares of Common Stock as a component of their compensation for services as
non-employee Directors. The maximum number of shares of Common Stock
that may be issued pursuant to the Plan is 15,000. Each year
Salisbury grants 120 shares of Common Stock under the Plan to each non-employee
director who served for twelve months and a prorated number of shares to reflect
the number of months served for any new non-employee director. On May
27, 2009, 840 shares were issued pursuant to the Plan. The next grant
date under the Plan will immediately precede the Annual Meeting on May 12, 2010,
and will be in the amount of 120 shares per director. All such
issuances shall be exempt from registration under the Securities Act of 1933, as
amended, pursuant to Section 4(2) thereunder, as they are transactions by
Salisbury not involving a public offering.
Transactions
with Management and Others
Salisbury
and the Bank have had, and expect to have in the future, transactions in the
ordinary course of business with certain directors, officers and their
associates on substantially the same terms as those available for comparable
transactions with others.
Indebtedness
of Management and Others
Some of
the directors and executive officers of Salisbury and the Bank, as well as firms
and companies with which they are associated, are or have been customers of the
Bank, and as such, have had banking transactions with the Bank. As a
matter of policy, loans to directors and executive officers were, and in the
future will be, made in the ordinary course of business on substantially the
same terms, including interest rates, collateral and repayment terms, as those
prevailing at the time for comparable transactions with other persons not
related to Salisbury and the Bank and did not, and in the future will not,
involve more than the normal risk of collectibility or present other unfavorable
features.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Exchange Act requires Salisbury’s executive officers, directors and
other persons who own more than ten percent (10%) of Salisbury’s Common Stock to
file with the SEC reports of ownership and changes in ownership of Salisbury’s
Common Stock and to furnish Salisbury with copies of all such reports that they
file.
Based
solely on a review of copies of reports filed with the SEC since January 1, 2007
and of written representations by executive officers and directors, all persons
subject to the reporting requirements of Section 16(a) are believed by
management to have filed the required reports on a timely basis.
PROPOSAL
2
RATIFICATION
OF THE APPOINTMENT OF INDEPENDENT AUDITORS
Shareholders
are asked to consider and ratify the appointment of Shatswell, MacLeod &
Company, P.C. (“Shatswell”) as independent auditors to audit the consolidated
financial statements of Salisbury for the fiscal year ending December 31,
2010. If shareholders do not ratify the appointment of Shatswell, the
Audit Committee will consider the vote of shareholders in selecting the
independent auditors in the future. Shatswell served as the
independent auditors for Salisbury for the fiscal year ended December 31,
2009. A representative of Shatswell is expected to attend the Annual
Meeting, and he or she will be provided an opportunity to make a statement if he
or she desires to do so and will be available to respond to appropriate
questions.
Relationship
with Independent Public Accountants
Audit
Fees
The
aggregate fees billed for professional services rendered for the audit of
Salisbury’s annual financial statements as presented on Forms 10-K for the last
two (2) fiscal years and the reviews of the financial statements included in
Salisbury’s Forms 10-Q for the quarters of the fiscal years ended December 31,
2009 and December 31, 2008 were $120,237 and $116,490,
respectively.
Audit-Related
Fees
The
aggregate fees billed for services rendered in each of the last two (2) years
for assurance and related services by Shatswell that are reasonably related to
regulatory audit requirements of the Trust Department were $6,000 for the fiscal
years ended December 31, 2009 and December 31, 2008.
Tax
Fees
The
aggregate fees billed in each of the last two (2) years for professional
services rendered by Shatswell for tax preparation for the fiscal years ended
December 31, 2009 and December 31, 2008 were $11,974 and $12,046,
respectively.
All
Other Fees
There
were no aggregate fees billed for services rendered by Shatswell, other than the
services covered above, for the fiscal years ended December 31, 2009 and
December 31, 2008.
Independence
The Audit
Committee of the Board of Directors of Salisbury has considered and determined
that the provision of services rendered by Shatswell relating to matters 2
through 4 above is compatible with maintaining the independence of such
auditors.
Audit
Committee Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Auditors
The Audit
Committee’s policy is to pre-approve all audit and non-audit services provided
by the independent auditors, other than those listed under the de minimus
exception. These services may include audit services, audit-related
services, tax services and other services. Pre-approval is detailed
as to a particular service or category of services, and is generally subject to
a specific budget. The Audit Committee has delegated pre-approval
authority to its Chairman when expeditious delivery of services is
necessary. The independent auditors and management are required to
report to the full Audit Committee regarding the extent of services provided by
independent auditors in accordance with this pre-approval and the fees for the
services performed to date. In 2009, there were no fees paid to
Shatswell that were approved by the Audit Committee pursuant to §17 C.F.R.
210.2-01(c)(7)(i)(C) with respect to waivers of preapproval
requirements.
THE BOARD
OF DIRECTORS RECOMMENDS A VOTE “
FOR
” THE RATIFICATION OF
PROPOSAL 2. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS SHAREHOLDERS SPECIFY A CONTRARY CHOICE ON THE PROXY
CARD. THE PROPOSAL TO RATIFY THE APPOINTMENT OF SHATSWELL, MACLEOD
& COMPANY, P.C. WILL BE APPROVED IF THE AFFIRMATIVE VOTES CAST EXCEED THE
VOTES CAST OPPOSING THE PROPOSAL.
PROPOSAL
3
NON-BINDING
ADVISORY VOTE ON THE COMPENSATION OF NAMED EXECUTIVE OFFICERS
As a
result of Salisbury’s participation in the United States Department of the
Treasury’s Troubled Assets Relief Program’s Capital Purchase Program, Salisbury
is subject to the provision of the Emergency Economic Stabilization Act of 2008
(the “EESA”), which was recently amended by the American Recovery and
Reinvestment Act of 2009 to provide additional executive compensation
requirements. As a result, Salisbury is required to submit to its
shareholders a non-binding proposal to approve the compensation of named
executive officers, as disclosed pursuant to the compensation disclosure rules
of the SEC in this Proxy Statement, including the executive compensation tables
and any related disclosure. Shareholders are encouraged to carefully
review the executive compensation sections of this Proxy Statement outlining
Salisbury’s executive compensation program.
Accordingly,
the Board of Directors hereby submits for shareholder consideration, the
proposal set forth below, commonly known as a “say-on-pay
proposal”:
“Resolved,
that the shareholders approve the compensation of named executive officers as
reflected in this Proxy Statement for the 2010 Annual Meeting of Shareholders
and as disclosed pursuant to the applicable compensation disclosure rules of the
Securities and Exchange Commission, which disclosure includes the compensation
tables and all related material”.
The Board
of Directors believes that Salisbury’s compensation policies and procedures are
centered on a pay-for-performance culture and are strongly aligned with the
long-term interests of shareholders, and, accordingly, recommends a vote in
favor of this proposal.
In the
event this non-binding proposal is not approved by our shareholders, such a vote
shall not be constructed as overruling a decision by the Board of Directors or
the Human Resources and Compensation Committee, or create or imply any
additional fiduciary duty by the Board of Directors or the Human Resources and
Compensation Committee, and such a vote shall not be construed to restrict or
limit the ability of our shareholders to make proposals for inclusion in proxy
materials related to executive compensation. Notwithstanding the
foregoing, the Board of Directors and Compensation Committee will consider the
non-binding vote of shareholders on this proposal when reviewing compensation
policies and practices in the future.
THE BOARD
OF DIRECTORS RECOMMENDS A VOTE
“FOR”
THE APPROVAL OF PROPOSAL
3. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED
UNLESS SHAREHOLDERS SPECIFY A CONTRARY CHOICE ON THE PROXY CARD. THE PROPOSAL
WILL BE APPROVED IF THE AFFIRMATIVE VOTES CAST EXCEED THE VOTES CAST OPPOSING
THE PROPOSAL, HOWEVER, THE RESULTS OF SUCH VOTE SHALL BE
NON-BINDING.
OTHER
BUSINESS
Salisbury
is not aware of any business to be acted upon at the Annual Meeting other than
that which is discussed in this Proxy Statement. In the event that
any other business requiring a vote of the Shareholders is properly presented at
the meeting, the holders of the Proxies will vote your shares in accordance with
their best judgment and the recommendations of a majority of the Board of
Directors.
You are
encouraged to exercise your right to vote by marking the appropriate boxes and
dating and signing the enclosed Proxy card. The Proxy card may be
returned in the enclosed envelope, postage-prepaid if mailed in the United
States. In the event that you are later able to attend the Annual
Meeting, you may revoke your Proxy and vote your shares in person. A
prompt response will be helpful and your cooperation is
appreciated.
A copy of
the Annual Report to Shareholders for the year ended December 31, 2009, which
includes the consolidated financial statements of Salisbury for the year ended
December 31, 2009, is being mailed with this Proxy Statement to all shareholders
entitled to vote at the Annual Meeting.
DEADLINE
FOR SUBMISSION OF SHAREHOLDER PROPOSALS
Any
proposal that a Salisbury shareholder wishes to have included in Salisbury’s
Proxy Statement and form of Proxy relating to Salisbury’s 2011 Annual Meeting of
Shareholders under Rule 14a-8 of the SEC must be received by Salisbury’s
Secretary at 5 Bissell Street, Lakeville, CT 06039 by December 10,
2010. Nothing in this paragraph shall be deemed to require Salisbury
to include in its Proxy Statement and form of Proxy for such meeting any
shareholder proposal which does not meet the requirements of the SEC in effect
at the time. In addition, under Salisbury’s Bylaws, shareholders who
wish to nominate a director or bring other business before an annual meeting
must comply with the following:
You must
be a shareholder of record and must have given notice in writing to the
Secretary of Salisbury (a) not less than twenty (20) days nor more than one
hundred thirty (130) days prior to the meeting with respect to matters other
than the nomination of directors and (b) not less than thirty (30) days nor more
than fifty (50) days prior to the meeting with respect to the nomination of
directors.
Your
notice must contain specific information required in Salisbury’s
Bylaws.
SHAREHOLDER
INFORMATION
Salisbury’s
Annual Report on Form 10-K for the year ended December 31, 2009 as filed with
the SEC is also available on Salisbury’s website at www.salisburybank.com.
Copies may be obtained without charge by any shareholder upon written request
to: Shelly L. Humeston, Secretary, Salisbury Bancorp, Inc., 5 Bissell Street, P.
O. Box 1868, Lakeville, Connecticut 06039-1868.
Salisbury’s
Annual Report for the year ended December 31, 2009 accompanies this document and
is not incorporated by reference.
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By
Order of the Board of Directors
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/s/
Shelly L. Humeston
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Shelly
L. Humeston
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Secretary
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Lakeville,
Connecticut
April 9,
2010