-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NzVT6PD8ivMFi8Dwqv86w8YNH9D41didTnDmQteNkdKvRsTtvBHMxwuttW0cWm55 37Eb+aHVuxsaMVDe/MTmVQ== 0000914317-02-000515.txt : 20020508 0000914317-02-000515.hdr.sgml : 20020508 ACCESSION NUMBER: 0000914317-02-000515 CONFORMED SUBMISSION TYPE: 10KSB/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020508 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SALISBURY BANCORP INC CENTRAL INDEX KEY: 0001060219 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 061514263 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-24751 FILM NUMBER: 02637894 BUSINESS ADDRESS: STREET 1: 5 BISSELL ST CITY: LAKEVILLE STATE: CT ZIP: 06039-1868 BUSINESS PHONE: 8604359801 MAIL ADDRESS: STREET 1: 5 BISSELL ST CITY: LAKEVILLE STATE: CT ZIP: 06039-1868 10KSB/A 1 form10ksba-45085.txt 2 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-KSB/A AMENDMENT NUMBER ONE (Mark One) [ X ] ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2001 OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission file number 0-24751 SALISBURY BANCORP, INC. (Name of Small Business Issuer in its charter) Connecticut 06-1514263 - -------------------------------------------------------------------------------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 5 Bissell Street, Lakeville, CT 06039 - ------------------------------------------ ---------- (Address of Principal Executive Offices) (Zip Code) (860) 435-9801 - -------------------------------------------------------------------------------- (Issuer's telephone number, Including area code) Securities registered under Section 12 (b) of the Exchange Act: Name of Each Exchange Title of Each Class on Which Registered ------------------- ------------------- Common stock par value $.10 per share American Stock Exchange ------------------------------------- ----------------------- Securities registered under Section 12 (g) of the Exchange Act: None - -------------------------------------------------------------------------------- (Title of Class) Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant"s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X] The revenues for the issuer's fiscal year ended December 31, 2001 are $19,476,528 State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act). On February 4, 2002: $28,179,255 Note. If determining whether a person is an affiliate will involve an unreasonable effort and expense, the issuer may calculate the aggregate market value of the common equity held by non-affiliates on the basis of reasonable assumptions, if the assumptions are stated. Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15 (d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [ X ] No [ ] APPLICABLE ONLY TO CORPORATE REGISTRANTS The Company had 1,422,358 shares outstanding as of March 8, 2002. Transitional Small Business Disclosure Format (check one): Yes [ ] No [ X ] Documents Incorporated by Reference: None Salisbury Bancorp, Inc. (the "Company") hereby amends its Annual Report on Form 10-KSB, for the year ended December 31, 2001, and dated March 25, 2002. ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K In the original filing of the Company's Annual Report on Form 10-KSB, (dated on March 25, 2002), Exhibit 10.2 (Form of Change in Control Agreement with Executive Officers), and Exhibit 10.3 (Directors Stock Retainer Plan) were inadvertently omitted from the electronically filed document. Consequently, the Company hereby amends Part III, Item 13 in the Annual Report on Form 10-KSB by submitting Exhibits 10.2 and 10.3, respectively, as included herein. (a) The following exhibits are filed as part of this report on Form l0-KSB. Exhibit No. Description ----------- ----------- 3.1 Certificate of Incorporation of Salisbury Bancorp, Inc. (1) 3.2 Bylaws of Salisbury Bancorp, Inc., as amended. (2) 10.1 Pension Supplement Agreement with John F. Perotti. (3) 10.2 Form of Change in Control Agreement with Executive Officers. 10.3 Directors Stock Retainer Plan. 21. Subsidiaries of the Company. (4) (1) Exhibit was filed on April 23, 1998 as Exhibit 3.1 to Company's Registration Statement on Form S-4 (No. 333-50857) and is incorporated herein by reference. (2) Exhibit was filed on March 30, 2001 as Exhibit 3.2 to the Company's Annual Report Form 10KSB for the Fiscal Year ended December 31, 2001 and is incorporated herein by reference. (3) Exhibit was filed on April 23, 1998 as Exhibit 10 to Company's Registration Statement on Form S-4 (No. 333-50857) and is incorporated herein by reference. (4) Exhibit was filed on April 23, 1998 as Exhibit 21 to Company's Registration Statement on Form S-4 (No. 333-50857) and is incorporated herein by reference. (b) Reports on Form 8-K: The following reports on Form 8-K were filed during the fourth quarter of the 2001 fiscal year: On November 26, 2001 the Company filed a Form 8-K reporting the declaration of a $.21 per share quarterly cash dividend for the fourth quarter of 2001. 2 SIGNATURES Pursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment Number One to the Report on Form 10-KSB to be signed on its behalf by the undersigned, thereunto duly authorized, in Lakeville, Connecticut on May 8, 2002. SALISBURY BANCORP, INC. By: /s/ John F. Perotti ----------------------- John F. Perotti President and Chief Executive Officer By: /s/ John F. Foley ----------------------- John F. Foley Chief Financial Officer 3 Exhibit 10.2 FORM OF CHANGE IN CONTROL AGREEMENT WITH EXECUTIVE OFFICERS THIS CHANGE IN CONTROL AGREEMENT (the "Agreement") is made as of ________ ____ _______by and between SALISBURY BANK AND TRUST COMPANY, a Connecticut chartered bank and trust company with is main office in Lakeville, Connecticut (the "Bank") and _________ (the "Executive"). WHEREAS, the Executive is currently rendering services to the Bank and serves as a member of the executive management team of the Bank; WHEREAS, Executive has been employed by the Bank for at least three years; WHEREAS, the Board of Directors of the Bank (the "Board") recognizes that there may be circumstances other than a voluntary disposition by sale or merger of the Bank due to economic or financial exigencies in which an unsought change in control in the Bank or in Salisbury Bancorp, Inc., the parent bank holding company of the Bank, is possible and that the possibility of such a change in control may create uncertainty and may result in the distraction or departure of management personnel to the detriment of the Bank and the stockholders of Salisbury Bancorp, Inc.; WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued dedication of members of the Bank's executive management team, including the Executive to their assigned duties in the face of potential circumstances involving the possibility of such an unsought change in control; WHEREAS, the Bank wishes to avoid any distractions to Executive's performance of services to the Bank, and in that interest the Bank desires to afford certain protection to the Executive in the event of Change in Control. NOW THEREFORE, to further the above recited corporate objectives, and for other good and valuable consideration, the receipt and adequacy of which each party hereby acknowledges, the Bank and the Executive agree as follows: 1. Term of Agreement; Not an Employment Agreement. This Agreement shall take effect when signed by all parties and shall remain in full force and effect for twenty-four (24) months from and after the later of (i) the date hereof, or (ii) for twelve (12) months after the date of any Change in Control (as defined in Section 2) occurring within the twenty-four (24) month period from and after the date thereof. The Executive serves as an employee at will of the Bank. Notwithstanding the terms set forth in this Agreement, in no way shall this Agreement create either an express or implied contract of employment with the Bank or Salisbury Bancorp, Inc. The purpose of this Agreement is to provide certain potential benefits to the Executive solely in the event of a Change in Control (as defined in Section 2) and not to provide a contract for employment. 2. Change in Control. No benefits shall be payable hereunder unless there shall have been a Change in Control as set forth below, and the Executive's employment with the Bank and/or its successor terminates or is reassigned within twenty-four (24) months thereof in accordance with Section 3 below. For purposes of this Agreement, a "Change in Control" shall mean the occurrence of one or more of the following events: (a) any "person" (as such term is used in Section 13 (d) and 14(d) (2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") becomes a "beneficial owner" (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) (other than the Salisbury Bancorp, Inc. any trustee or other fiduciary holding securities under an employee benefit plan of Salisbury Bancorp, Inc. or any corporation owned, directly or indirectly, by the stockholders of Salisbury Bancorp, Inc., in substantially the same proportions as their ownership of stock of Salisbury Bancorp, Inc.), directly or indirectly, of securities of Salisbury Bancorp, Inc. or the Bank representing fifty percent (50%) or more of the combined voting power of the then outstanding securities of Salisbury Bancorp, Inc. or the Bank; or 4 (b) persons, who as of the Effective Date, constituted Salisbury Bancorp, Inc.'s Board of Directors (the "Incumbent Board") cease for any reason including, without limitation, as a result of a tender offer, proxy contest, merger or similar transaction, to constitute at least a majority of Salisbury Bancorp, Inc.'s Board of Directors, provided that any person becoming a director of Salisbury Bancorp, Inc. subsequent to the Effective Date whose election was approved by at least a majority of the directors then comprising the Incumbent Board shall for purposes of this Section 6(f), be considered a member of the Incumbent Board; or (c) the Board of Directors of Salisbury Bancorp, Inc. for reasons other than a substantial decline in the earnings and/or stock price or multiple or similar indications of economic or financial duress, approve a merger or consolidation of Salisbury Bancorp, Inc. or the Bank with any other corporation of other entity, other than a merger or consolidation which would result in the voting securities of Salisbury Bancorp, Inc. outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power of the voting securities of Salisbury Bancorp, Inc. or such surviving entity outstanding immediately after such merger or consolidation; or (d) the Board of Directors approve a plan of complete liquidation of Salisbury Bancorp, Inc. or the Bank or an agreement for the sale or disposition by Salisbury Bancorp, Inc. of all or substantially all of the assets of Salisbury Bancorp, Inc. or the Bank. 3. Termination Following Change in Control. If any of the events described in Section 2 hereof constituting a Change in Control shall have occurred, the Executive shall be entitled to the benefits provided for in Section 4(a) hereof upon the termination or reassignment of his employment as an officer of the Bank and/or its successor provided in this Section 3, within twelve (12) months after such event, unless such employment is terminated or reassigned: (a) by any regulatory authority (acting with proper jurisdiction); or (b) by the Board of Directors for cause; or (c) because of the Executive's death, retirement or disability. (a) Retirement: Disability. (i) Termination of employment by the Bank based on retirement shall mean the mandatory termination of employment in accordance with the retirement policy of the Bank, including (at the Executive's sole election and as set forth in writing) early retirement, generally applicable to its salaried employees or in accordance with any retirement arrangement established with the Executive's consent with respect to the Executive. (ii) Termination of employment by the Bank based on disability shall mean termination because of inability, as a result of incapacity due to physical or mental illness, to perform the services required as an employee for a period aggregating six (6) months or more within any twelve (12) month period, or because the Executive becomes deemed disabled under any applicable policy providing disability insurance. (b) Notice of Termination. The Bank agrees that in the event of termination it will promptly furnish the Executive with a written Notice of Termination. Any purported termination by the Executive shall be communicated by written Notice of Termination to the Bank. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall include the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated. (c) Date of Termination. "Date of Termination" shall mean the date on which a Notice of Termination is given; provided that, if within five (5) days after any Notice of Termination is given, the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties, by a binding and final arbitration award or by a final judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired and no appeal having been perfected). 5 (d) Reassignment. Reassignment shall mean a reduction in base salary or an involuntary reassignment of the Executive's duties, responsibilities, or benefits inconsistent with those of an officer of a bank or the involuntary relocation of the Executive's primary duties and responsibilities to an office or location greater than fifty (50) miles from Lakeville, Connecticut. 4. Compensation Upon Termination or Reassignment. (a) If, within twelve (12) months after a Change in Control, as defined in Section 2 hereof, shall have occurred, the Executive's employment with the Bank terminates or is reassigned as defined in Section 3, (except for removal by an agency acting with proper jurisdiction, or by a board of directors for cause or as a result of death, retirement or disability) then the Bank and/or its successor shall pay the Executive within thirty (3 0) days after the Date of Termination a lump sum amount equal to the Executive's annual compensation based upon the most recent aggregate base salary paid to the Executive in the twelve (12) month period immediately preceding his termination or reassignment less amounts previously paid to the Executive from the date of Change in Control; plus (b) The Executive shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 4 be reduced by any compensation earned by the Executive as the result of employment after the Date of Termination or Reassignment. (c) It is the intention of the parties to this Agreement that no payments by the Bank to or for the Executive's benefit under this Agreement shall be non-deductible to the Bank by reason of the operation of Section 28OG of the Internal Revenue Code. Accordingly, notwithstanding any other provision hereof if by reason of the operation of said Section 28OG of the Internal Revenue Code, any such payments exceed the amount which can be deducted by the Bank the amount of such payments shall be reduced to the maximum which can be deducted by the Bank. To the extent that payments in excess of the amount which can be deducted by the Bank have been made to and for the Executive's benefit, they shall be refunded with interest at the applicable rate provided under Section 1274(d) of the Internal Revenue Code, or at such other rate as may be required in order that no such payment to or for the Executive's benefit shall be non-deductible pursuant to Section 28OG of the Internal Revenue Code. Any payments made hereunder which are not deductible by the Bank as result of losses which have been carried forward by the Bank for Federal tax purposes shall not be deemed a non-deductible amount for purposes of this Section 4(c). 5. Continuation of Insurance Benefits. Notwithstanding any other provision in this Agreement to the contrary, the Bank and/or its successor shall maintain in full force and effect for Executive's continued benefit, for the twelve (12) month period beginning upon a Change in Control, the same or comparable life insurance, medical, health and accident and disability policies, plans, programs or arrangements as those which were in effect immediately prior to the Change in Control at levels and on terms and conditions which are at least as favorable to Executive as those maintained by the Bank immediately prior to the Change in Control. 6. Successors' Binding Agreement. (a) The Bank will require any successor (whether direct or indirect, by purchase, merger, consolidation, acquisition of assets or assumption of liabilities or otherwise) to all or substantially all of the business and/or assets and/or deposits of the Bank, by agreement, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Bank would be required to perform it if no such succession had taken place. Failure of the Bank to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from the Bank in the same amount and on the same terms as he would be entitled to hereunder if his employment had terminated as a result of a Termination or Reassignment, as provided in Section 3 hereof, after a Change in Control, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, "Bank" shall mean the Bank as hereinbefore defined and any successor to the business, assets, and/or deposits as aforesaid which executes and delivers the agreement provided for in this Section 6 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. 6 (b) This Agreement shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributes, devisees and legatees. If the Executive should die after any rights to receive the amounts contemplated hereby have accrued to the Executive but before such amounts have been paid, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to his devisee, legatee or other designee or, if there be no such designee, to his estate. 7. Notices. All notices and other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the first page of this Agreement provided that all notices to the Bank shall be directed to the attention of the Board with a copy to the Chairman of the Board of the Bank or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt. 8. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such other officer as may be specifically designated by the Board. No waiver by either party at any time of any breach by the other or failure to comply with any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, construction performance of this Agreement shall be governed by the laws of the State of Connecticut. 9. Validity. The invalidity or enforceability of any provision of this Agreement shall into affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 10. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. Agreed to this day of _________ by and between ____________ and Salisbury Bank and Trust Company. SALISBURY BANK AND TRUST COMPANY By: /s/ -------------------------------- 7 EX-10.3 3 exhibit10-3.txt Exhibit 10.3 DIRECTORS STOCK RETAINER PLAN OF SALISBURY BANCORP, INC. 1. NAME AND PURPOSE. 1.1 This plan is the Directors Stock Retainer Plan of Salisbury Bancorp, Inc. (the "Plan"). 1.2 The purposes of the Plan are to enhance the ability of Salisbury Bancorp, Inc.'s ("Salisbury") ability to attract and retain highly qualified individuals to serve as non-employee Directors of Salisbury to provide additional incentives to such Directors to promote the success of Salisbury and its subsidiary bank. The Plan provides non-employee Directors of Salisbury with shares of Restricted Stock of Salisbury as a component of compensation for their services as Directors. 2. DEFINITIONS. For purposes of interpreting the Plan and related documents, the following definitions shall apply: 2.1 "Annual Stock Retainer" means the 120 shares of Restricted Salisbury Common Stock payable to each Director of Salisbury on an annual basis as part of each director's compensation for service on the Board of Directors of Salisbury. 2.2 "Annual Meeting Date" means the date of each annual meeting of the shareholders of Salisbury held after the Effective Date. 2.3 "Value" means the value of a share of Stock on the last trading day preceding a Grant Date or other date on which Restricted Stock is issued pursuant to Section 6 of this Plan. 2.4 "Board" means the Board of Directors of Salisbury. 2.5 "Director" means a non-employee member of Salisbury's Board of Directors. 2.6 "Effective Date" means the date the Directors Stock Retainer Plan was approved by the shareholders of Salisbury. 2.7 "Expiration Date" means the 10th anniversary of the day following the date on which the Plan was approved by the shareholders of Salisbury pursuant to Section 12.1 below. 2.8 "Grant Date" means the date on which a grant of Restricted Stock takes effect pursuant to Section 7 of this Plan, which shall be last business day preceding the 2002 Annual Meeting Date and each subsequent Annual Meeting Date before the Expiration Date. 2.9 "Holder" means a person who holds Restricted Stock under this Plan. 2.10 "Pro-Rated Stock Retainer" means a number of shares equal to 120 multiplied by a fraction, the numerator of which is the number of months of such a new non-employee director's service as a member of the Board (rounded to the nearest full month) and the denominator of which is 12, provided, however, that such fraction shall not be in excess of 1.0. 2.11 "Stock" means the Common Stock, par value $.10, of Salisbury. 2.12 "Salisbury" means Salisbury Bancorp, Inc., a Connecticut corporation. 3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the Board. The Board's responsibilities under the Plan shall be limited to taking all legal actions necessary to document the grants of Restricted Stock provided herein, to maintain appropriate records and reports regarding those grants, and to take all acts authorized by this Plan. 4. STOCK SUBJECT TO THE PLAN. 4.1 Subject to adjustments made pursuant to Section 4.2, the maximum number of shares of Stock that may be issued pursuant to the Plan shall not exceed 15,000. 4.2(a) If the outstanding shares of Stock are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of Salisbury by reason of any recapitalization, reclassification, stock split-up, combination of shares, exchange of shares, stock dividend or other distribution payable on capital stock, or other increase or decrease in such shares effected without receipt of consideration by Salisbury, occurring after the Effective Date, the number and kinds of shares for Restricted Stock may be granted under the Plan shall be adjusted proportionately and accordingly by Salisbury. (b) Adjustments under this Section 4.2 related to stock or securities of Salisbury shall be made by the Board, whose determination in that respect shall be final, binding, and conclusive. No fractional shares of Stock or units of other securities shall be issued pursuant to any such adjustment, and any fractions resulting from any such adjustment shall be eliminated in each case by rounding downward to the nearest whole share or unit. (c) The grant of Restricted Stock pursuant to the Plan shall not affect or limit in any way the right or power of Salisbury to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge, consolidate, dissolve or liquidate, or to sell or transfer all of any part of its business or assets. 5. ELIGIBILITY. Eligibility under this Plan is limited to Directors of Salisbury who are not employees of Salisbury or any subsidiary of Salisbury. 6. NUMBER OF SHARES AND GRANT DATE. Subject to approval of the Plan by the shareholders of Salisbury as provided in Section 12.1 and to the availability of shares of Stock under Section 4.1 hereof, on each annual Grant Date beginning with the Grant Date preceding the 2002 Annual Meeting of Shareholders of Salisbury, each Director whose term of office begins with or continues after such Effective Date shall be issued a number of whole shares of Restricted Stock set forth in the Annual Stock Retainer (120 shares). Subject to approval of the Plan by the shareholders of Salisbury as provided in Section 12.1 below and to the availability of shares of Stock under Section 4.1 hereof, each Director who is first elected after the Effective Date to the Board (and who was not then a member of the Board) other than on an Annual Meeting Date shall be granted a number of whole shares of Restricted Stock equal to the Pro-Rated Stock Retainer. 7. VESTING. Restricted Stock shall become fully vested upon issuance following approval of the Plan by shareholders in accordance with Section 12.1 hereof. 8. SHAREHOLDER RIGHTS. Except as provided in Section 11 hereof, the Holder shall have all of the rights of a shareholder with respect to shares of Restricted Stock, including the right to vote such shares and the right to receive dividends thereon. No Holders shall have any right to compel Salisbury to file a Registration Statement with respect to shares of Restricted Stock issued pursuant to the Plan. 9. CONTINUATION OF SERVICE. Nothing in the Plan shall confer upon any person any right to continue to serve as a Director, or to receive shares of stock issued pursuant to this Plan if such person is not serving as a Director on a Grant Date. 10. WITHHOLDING. Salisbury shall have the right to withhold, or require a Holder to remit to Salisbury, an amount sufficient to satisfy any applicable federal, state, local or foreign withholding tax requirements imposed with respect to the grant of Restricted Stock or the payment of dividends thereon. 11. NONTRANSFERABILITY; LEGEND. No shares of Restricted Stock granted pursuant to this Plan shall be transferable by the Holder without compliance with the registration requirements of applicable law or exemptions thereto. All share certificates issued hereunder shall bear an appropriate legend reflecting the foregoing restrictions and limitations on transfer. 12. ADOPTION, AMENDMENT, SUSPENSION AND TERMINATION OF THE PLAN. 12.1 The Plan shall be effective as of the date of adoption by the shareholders of Salisbury present, or represented, and entitled to vote at a meeting duly held in accordance with applicable law. 12.2 Subject to the limitation of Section 12.2, the Board may at any time suspend or terminate the Plan, and may amend it from time to time in such respects as the Board may deem advisable; provided, however, the Board shall not amend the Plan in the following respects without the approval of shareholders then sufficient to approve the Plan in the first instance: (a) To materially increase the benefits accruing to participants under the Plan (for example, to increase the number of shares of Restricted Stock that may be granted to any Director). (b) To increase the maximum number of shares of Stock that may be issued under the Plan; (c) To materially modify the requirements as to eligibility for participation in the Plan. 12.3 No Restricted Stock may be granted during any suspension or after the termination of the Plan, and no amendment, suspension or termination of the Plan shall, without the Holder's consent, alter or impair any rights or obligations under any Restricted Stock previously issued into under the Plan. This Plan shall terminate upon the Expiration Date, unless previously terminated by the Board pursuant to this Section 12. 13. REQUIREMENTS OF LAW. 13.1 Salisbury shall not be required to issue any shares of Stock hereunder if the issuance of such shares would constitute a violation by the Holder or Salisbury of any provisions of any law or regulation of any governmental authority, including without limitation any federal or state securities laws or regulations. Any determination in this connection by the Board shall be final, binding, and conclusive. Salisbury shall not be obligated to take any affirmative action in order to cause the issuance of shares pursuant to the Plan to comply with any law or regulation of any governmental authority. As to any jurisdiction that expressly imposes the requirement that shares of Stock shall not be issued hereunder unless and until the shares of Stock are registered or are subject to an available exemption from registration, the grant of Restricted Stock (under circumstances in which the laws of such jurisdiction apply) shall be deemed conditioned upon the effectiveness of such registration or the availability of such an exemption. 13.2 The intent of this Plan is to qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To the extent any provision of the Plan or action by the Plan administrators does not comply with the requirements of Rule 16b-3, it shall be deemed inoperative, to the extent permitted by law and deemed advisable by the Plan administrators, and shall not affect the validity of the Plan. In the event Rule 16b-3 is revised or replaced, the Board may exercise discretion to modify this Plan in any respect necessary to satisfy the requirements of the revised exemption or its replacement. 14. GOVERNING LAW. The validity, interpretation and effect of this Plan, and the rights of all persons hereunder, shall be governed by and determined in accordance with the laws of Connecticut. This Plan was duly approved by the Board at a meeting held on the 26th day of February 2001 and by the shareholders of Salisbury at a meeting held on the 28th day of April, 2001. -----END PRIVACY-ENHANCED MESSAGE-----