10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

[ x ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2003

OR

[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                to                 

Commission File Number 000-16435

COMMUNITY BANCORP.

Vermont	03-0284070
(State of Incorporation)	(IRS Employer Identification Number)
4811 US Route 5, Derby, Vermont	05829
(Address of Principal Executive Offices)	(zip code)
Registrant' Telephone Number: (802) 334-7915

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file for such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ( X )  No (  )

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  Yes (   )  No (X)

At August 12, 2003 there were 3,777,686 shares outstanding of the Corporation's common stock.

Total Pages - 52 Pages

FORM 10-Q
Table of Contents
	Page
PART I  FINANCIAL INFORMATION
Item I  Financial Statements	4
Item 2  Management's Discussion and Analysis of Financial Condition and Results of Operation	11
Item 3  Quantitative and Qualitative Disclosures About Market Risk	25
Item 4  Controls and Procedures	25
PART II  OTHER INFORMATION
Item 1  Legal Proceedings	25
Item 2  Changes in Securities and Use of Proceeds	25
Item 3  Defaults Upon Senior Securities	25
Item 4  Submission of Matters to a Vote of Security Holders	25
Item 5  Other Information	25
Item 6  Exhibits and Reports on Form 8-K	26
Signatures	26

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements (Unaudited)

The following are the consolidated financial statements for Community Bancorp. and subsidiaries, "the Company".

COMMUNITY BANCORP. AND SUBSIDIARIES
Consolidated Balance Sheets
( Unaudited )	June 30		December 31
	2003		2002
Assets
Cash and due from banks	$12,329,224		$8,957,633
Federal funds sold and overnight deposits	0		5,079,647
Total cash and cash equivalents	12,329,224		14,037,280
Securities held-to-maturity (fair value $23,150,193 at
06/30/03 and $39,359,442 at 12/31/02)	22,833,848		38,969,114
Securities available-for-sale	47,262,004		41,074,804
Restricted equity securities	1,356,850		1,309,050
Loans held-for-sale	5,043,058		6,169,017
Loans	199,236,983		200,913,490
Allowance for loan losses	(2,220,509	)	(2,155,789	)
Unearned net loan fees	(819,816	)	(879,501	)
Net loans	196,196,658		197,878,200
Bank premises and equipment, net	5,322,788		5,292,597
Accrued interest receivable	1,503,558		1,744,805
Other real estate owned, net	58,800		0
Other assets	4,628,645		2,752,738
Total assets	$296,535,433		$309,227,605
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Demand, non-interest bearing	$35,359,586		$32,302,824
NOW and money market accounts	65,887,734		88,786,101
Savings	40,931,930		37,737,157
Time deposits, $100,000 and over	21,327,797		20,591,082
Other time deposits	81,689,292		81,504,466
Total deposits	245,196,339		260,921,630
Federal funds purchased and other borrowed funds	9,336,746		5,040,000
Repurchase agreements	11,041,119		14,069,026
Accrued interest and other liabilities	3,505,928		3,491,847
Total liabilities	269,080,132		283,522,503
Stockholders' Equity
Common stock - $2.50 par value; 6,000,000 shares
authorized and 3,950,199 shares issued at 06/30/03
and 3,939,078 shares issued at 12/31/02	9,875,497		9,847,694
Additional paid-in capital	16,564,428		16,423,022
Retained earnings	2,022,882		625,932
Accumulated other comprehensive income	1,176,975		984,953
Less: treasury stock, at cost; 182,904 shares at 06/30/03
and 182,377 shares at 12/31/02	(2,184,481	)	(2,176,499	)
Total stockholders' equity	27,455,301		25,705,102
Total liabilities and stockholders' equity	$296,535,433		$309,227,605

COMMUNITY BANCORP. AND SUBSIDIARIES
Consolidated Statements of Income
( Unaudited )
For The Second Quarter Ended June 30,	2003		2002
Interest income
Interest and fees on loans	$3,570,895		$3,573,450
Interest on debt securities
Taxable	578,889		756,963
Tax-exempt	235,484		235,553
Dividends	11,098		11,158
Interest on federal funds sold and overnight deposits	4,934		7,827
Total interest income	4,401,300		4,584,951
Interest expense
Interest on deposits	1,276,919		1,550,033
Interest on borrowed funds	63,889		69,887
Interest on repurchase agreements	33,279		72,057
Total interest expense	1,374,087		1,691,977
Net interest income	3,027,213		2,892,974
Provision for loan losses	(18,000	)	(94,000	)
Net interest income after provision	3,009,213		2,798,974
Other operating income
Service fees	247,576		235,558
Other	742,139		936,787
Total other operating income	989,715		1,172,345
Other operating expenses
Salaries and wages	977,477		860,227
Pension and other employee benefits	304,617		248,037
Occupancy expenses, net	445,067		363,727
Other	895,435		1,113,332
Total other operating expenses	2,622,596		2,585,323
Income before income taxes	1,376,332		1,385,996
Applicable income taxes	287,451		437,536
Net Income	$1,088,881		$948,460
Earnings per share on weighted average	$0.29		$0.25
Weighted average number of common shares
used in computing earnings per share	3,767,298		3,730,095
Dividends declared per share	$0.16		$0.16
Book value per share on shares outstanding at June 30,	$7.29		$6.60
Per share data for 2002 restated to reflect a 5% stock dividend declared in December, 2002
and paid in February, 2003.

COMMUNITY BANCORP. AND SUBSIDIARIES
Consolidated Statements of Income
( Unaudited )
For the Six Months Ended June 30,	2003		2002
Interest income
Interest and fees on loans	$7,041,684		$7,164,227
Interest on debt securities
Taxable	1,195,043		1,477,467
Tax-exempt	449,716		460,277
Dividends	22,765		22,506
Interest on federal funds sold and overnight deposits	24,604		30,174
Total interest income	8,733,812		9,154,651
Interest expense
Interest on deposits	2,606,896		3,166,167
Interest on borrowed funds	126,368		164,062
Interest on repurchase agreements	70,031		155,125
Total interest expense	2,803,295		3,485,354
Net interest income	5,930,517		5,669,297
Provision for loan losses	(93,000	)	(226,000	)
Net interest income after provision	5,837,517		5,443,297
Other operating income
Service fees	482,995		459,696
Security gains	142,904		3,648
Other	1,309,846		1,401,717
Total other operating income	1,935,745		1,865,061
Other operating expenses
Salaries and wages	1,951,708		1,819,714
Pension and other employee benefits	610,982		523,797
Occupancy expenses, net	867,950		775,280
Other	1,756,401		2,039,006
Total other operating expenses	5,187,041		5,157,797
Income before income taxes	2,586,221		2,150,561
Applicable income taxes	588,284		586,178
Net Income	$1,997,937		$1,564,383
Earnings per share on weighted average	$0.53		$0.42
Weighted average number of common shares
used in computing earnings per share	3,761,935		3,731,038
Dividends declared per share	$0.32		$0.32
Book value per share on shares outstanding at June 30,	$7.29		$6.60
Per share data for 2002 restated to reflect a 5% stock dividend declared in December, 2002
and paid in February, 2003.

COMMUNITY BANCORP. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
( Unaudited )
For the Six Months Ended June 30,	2003		2002
Reconciliation of Net Income to Net Cash Provided by Operating Activities:
Net Income	$1,997,937		$1,564,383
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation and amortization	317,400		534,786
Provision for loan losses	93,000		226,000
Provision for deferred income taxes	29,123		16,099
Gain on sale of loans	(773,314	)	(158,610	)
Gain on sale of fixed assets	(19,306	)	0
Securities gains	(142,904	)	(3,648	)
Gain on sales of OREO	0		(18,013	)
OREO writedowns	20,700		0
Amortization of bond premium, net	167,888		137,806
Proceeds from sales of loans held for sale	33,671,410		19,117,338
Originations of loans held for sale	(31,772,137	)	(18,359,161	)
(Decrease) increase in taxes payable	(60,839	)	66,356
(Increase) decrease in interest receivable	241,247		(348,239	)
Increase in mortgage service rights	(78,183	)	(116,385	)
Increase in other assets	(775,089	)	(112,377	)
Decrease in unamortized loan fees	(59,685	)	(24,859	)
Decrease in interest payable	(9,022	)	(35,267	)
(Decrease) increase in accrued expenses	(93,908	)	285,251
(Decrease) increase in other liabilities	(57,365	)	290,054
Net cash provided by operating activities	2,696,953		3,061,514
Cash Flows from Investing Activities:
Investments - held to maturity
Maturities and paydowns	23,409,501		5,735,892
Purchases	(7,296,091	)	(3,455,544	)
Investments - available for sale
Sales and maturities	9,213,770		8,000,000
Purchases	(15,113,155	)	(17,216,861	)
Purchase of restricted equity securities	(47,800	)	(84,400	)
Investment in limited partnership, net	(503,408	)	(189,488	)
Decrease (increase) in loans, net	1,506,161		(2,706,610	)
Capital expenditures, net	(328,284	)	(391,163	)
Recoveries of loans charged off	62,566		74,394
Proceeds from sales of other real estate owned	0		124,071
Net cash provided by (used in) investing activities	10,903,260		(10,109,709	)
Cash Flows from Financing Activities:
Net decrease in demand, NOW, money market and savings accounts	(16,646,832	)	(530,941	)
Net increase in certificates of deposit	921,541		1,048,446
Net decrease in short-term borrowings and repurchase agreements	(3,027,907	)	(7,834,220	)
Net increase in borrowed funds	4,296,746		7,819,000
Payments to acquire treasury stock	(7,981	)	(456,083	)
Dividends paid	(843,836	)	(823,752	)
Net cash used in financing activities	(15,308,269	)	(777,550	)
Net decrease in cash and cash equivalents	(1,708,056	)	(7,825,745	)
Cash and cash equivalents:
Beginning	14,037,280		14,700,415
Ending	$12,329,224		$6,874,670
Supplemental Schedule of Cash Paid During the Year
Interest	$2,812,317		$3,520,621
Income taxes	$620,000		$503,724
Supplemental Schedule of Noncash Investing and Financing Activities:
Unrealized gain on securities available-for-sale	$290,943		$451,182
OREO acquired in settlements of loans	$79,500		$136,524
Debentures converted to common stock	$0		$1,000
Investments in limited partnership
Increase in limited partnerships	($1,026,999	)	($10,491	)
Increase in contributions payable	$523,591		($178,997	)
	($503,408	)	($189,488	)
Dividends Paid
Dividends declared	$600,987		$567,273
Decrease in dividends payable attributable to dividends declared	412,057		569,058
Dividends reinvested	(169,208	)	(312,579	)
	$843,836		$823,752

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION AND CONSOLIDATION

     The interim consolidated financial statements of Community Bancorp. and subsidiaries are unaudited. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments necessary for fair presentation of the financial condition and results of operations of the Company contained herein have been made. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2002, contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2002.

NOTE 2. GOODWILL

     Statement of Financial Accounting Standards (SFAS) No. 142 applies to all goodwill and identified intangible assets acquired in a business combination. Under the new standard, all goodwill, including that acquired before initial application of the standard, should not be amortized but should be tested for impairment at least annually. The Company chose to expense the remainder of the goodwill associated with the acquisition of Liberty Savings Bank during the second quarter of 2002. The result was an expense before taxes of $245,575.

NOTE 3.  CRITICAL ACCOUNTING POLICIES

     The Company's critical accounting policies are considered to be the allowance for loan losses and accounting for significant estimates, including valuation of real estate acquired in foreclosure or satisfaction of loans, and accounting for taxes and deferred taxes as described below.

Use of estimates

The preparation of consolidated financial statements in conformity with U. S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ materially from those estimates.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for losses on loans and the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans and deferred tax assets. In connection with the determination of the allowances for losses on loans and foreclosed real estate, management obtains independent appraisals for significant properties. Accordingly, the ultimate collectibility of a substantial portion of the Company's loan portfolio and the recovery of a substantial portion of the carrying amount of foreclosed real estate are susceptible to changes in local market conditions. The amount of the change that is reasonably possible cannot be estimated.

While management uses available information to recognize losses on loans and foreclosed real estate, future additions to the allowances may be necessary based on changes in local economic conditions or other factors beyond the Company's control. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company's allowances for losses on loans and foreclosed real estate. Such agencies may require the Company to recognize additions to the allowances based on their judgments about information available to them at the time of their examination.

Allowance for loan losses

The allowance for loan losses is maintained at a level which, in management's judgment, is adequate to absorb probable credit losses inherent in the loan portfolio. The amount of the allowance is based on management's periodic evaluation of the collectibility of the loan portfolio, including the nature of the portfolio, credit concentrations, trends in historical loss experience, specific impaired loans, and economic conditions. Allowances for impaired loans are generally determined based on collateral values or the present value of estimated cash flows. The allowance is increased by a provision for loan losses, which is charged to expense, and reduced by charge-offs, net of recoveries.

Income taxes

The Company recognizes income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are established for the temporary differences between the accounting basis and the tax basis of the Company's assets and liabilities at enacted tax rates expected to be in effect when the amounts related to such temporary differences are realized or settled. Adjustments to the Company's deferred tax assets are recognized as deferred income tax expense or benefit based on management's judgments relating to the realizability of such asset.

NOTE 4.  RECENT ACCOUNTING DEVELOPMENTS

In April 2003, Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." The Statement amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under Statement 133.

The amendment requires contracts with comparable characteristics be accounted for similarly. This Statement clarifies under what circumstances a contract with an initial net investment meets the characteristic of a derivative as discussed in Statement 133. In addition, it clarifies when a derivative contains a financing component that warrants special reporting in the statement of cash flows and amends certain other existing pronouncements.

SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003, except as stated below, and for hedging relationships designated after June 30, 2003. The guidance should be applied prospectively.

The provisions of this Statement that relate to Statement 133 Implementation Issues that have been effective for fiscal quarters that began prior to June 15, 2003, should continue to be applied in accordance with their respective effective dates. In addition, certain provisions relating to forward purchases or sales of when-issued securities or other securities that do not yet exist, should be applied to existing contracts as well as new contracts entered into after June 30, 2003. SFAS No. 149 was implemented during the second quarter of 2003 and did not have a material effect on the consolidated financial statements.

FASB derivative implementation guidance for SFAS No. 133 clarifies that loan commitments relating to the origination of mortgage loans that will be held for resale must be accounted for as derivative instruments in accordance with SFAS No. 133. Accordingly, the Company recorded an asset and related income of $217,845 representing the fair value of these loan commitments as of June 30, 2003.

In May 2003, FASB issued Statement No. 150 , "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances).

The requirements of this Statement apply to issuers' classification and measurement of freestanding financial instruments, including those that comprise more than one option or forward contract.

This Statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003, except for mandatorily redeemable financial instruments of nonpublic entities. It is to be implemented by reporting the cumulative effect of a change in an accounting principle for financial instruments created before the issuance date of the Statement and still existing at the beginning of the interim period of adoption.

This Statement is not expected to have a material effect on the Company's consolidated financial statements.

NOTE 5.  TOTAL COMPREHENSIVE INCOME

Accounting principles generally require recognized revenue, expenses, gains, and losses to be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income. Total comprehensive income was $2,189,959 and $1,862,163 for the six months ended June 30, 2003 and 2002, respectively.

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For the Period Ended June 30, 2003

FORWARD-LOOKING STATEMENTS

     The Company's Management's Discussion and Analysis of Financial Condition and Results of Operations may contain certain forward-looking statements about the Company's operations, financial condition and business. When used therein, the words "believes," "expects," "anticipates," "intends," "estimates," "plans," "predicts," or similar expressions, indicate that management of the Company is making forward-looking statements.

     Forward-looking statements are not guarantees of future performance. They necessarily involve risks, uncertainties and assumptions. Future results of the Company may differ materially from those expressed in these forward-looking statements. Although these statements are based on management's current expectations and estimates, many of the factors that could influence or determine actual results are unpredictable and not within the Company's control. Readers are cautioned not to place undo reliance on such statements as they speak only as of the date they are made. The Company claims the protection of the safe harbor for forward-looking statements provided in the Private Securities Litigation Reform Act of 1995.

     Factors that may cause actual results to differ materially from those contemplated by these forward-looking statements include, among others, the following possibilities: (1) competitive pressures increase among financial services providers in the Company's northern New England market area or in the financial services industry generally, including competitive pressures from nonbank financial service providers, from increasing consolidation and integration of financial service providers, and from changes in technology and delivery systems; (2) interest rates change in such a way as to reduce the Company's margins; (3) general economic or monetary conditions, either nationally or regionally, are less favorable than expected, resulting in a deterioration in credit quality or a diminished demand for the Company's products and services; and (4) changes in laws or government rules, or the way in which courts interpret those laws or rules, adversely affect the Company's business.

OVERVIEW

     Community Bancorp. (the "Company") is a bank holding company headquartered in Derby, Vermont, which has one operating commercial bank subsidiary, Community National Bank (the "Bank"). The Bank is a commercial banking institution, which offers a full range of retail banking services to residents and businesses in northeastern and north central Vermont. The Bank has nine offices, five of which are located in Orleans County, one in Essex County, one in Caledonia County and two located in Washington County. The newest office is located in the town of Barre, and is set up in a temporary office on the site adjacent to the permanent office site, presently under construction, with the permanent office scheduled to open in November.

     The Company also owns all of the stock of Liberty Savings Bank ("Liberty"), an inactive New Hampshire guaranty savings bank charter. The Company is negotiating a sale of this charter, which expects to complete during the third quarter of 2003.

     Substantially all of the Company's business is conducted through Community National Bank; therefore, the following narrative is based primarily on the Bank's operations. The balance sheet and statements of income preceding this section are consolidated figures for Community Bancorp. and subsidiaries and should be read in conjunction with the notes and other information and reports following them to provide a more detailed comparison of the information disclosed in the following narrative.

CRITICAL ACCOUNTING POLICIES

The accounting policies the Company feels are most important are discussed in Note 3 of the Notes to Consolidated Financial Statements.

RESULTS OF OPERATIONS

     Income before income taxes of $1.38 million was reported for the second quarter of 2003 compared to $1.39 million for 2002, resulting in a decrease of $9,664. Income before income taxes for the first six months of 2003 was $2.59 million compared to $2.15 million for 2002, an increase of $435,660 or 20.3%. Net income for the second quarter ended June 30, 2003 was $1.1 million, representing an increase of 14.8% over the net income figure of $948,460 for the second quarter ended June 30, 2002. Net income was just under $2 million for the first six months of 2003 compared to $1.56 million for the same period in 2002, an increase of $433,554 or 27.7%. The results of this are earnings per share of $0.29 and $0.25, respectively for the second quarter of 2003 and 2002, and $0.53 and $0.42, respectively for the first six months of 2003 and 2002. Among other factors discussed throughout this narrative, the volume of loans sold on the secondary market continues to be more favorable tha n expected contributing to the increase in income for both periods.

     Return on average assets (ROA), which measures how effectively a corporation uses its assets to produce earnings, reported ratios of 1.42% and 1.32%, respectively for the second quarter ended 2003 and 2002, as well as 1.31% and 1.10%, respectively for the first six months of 2003 and 2002. Return on average equity (ROE), which is the ratio of income earned to average shareholders' equity was 16.18% for the second quarter of 2003 compared to 15.96% for same period in 2002, and 15.16% and 13.31%, respectively for the first six months of 2003 and 2002.

INTEREST INCOME VERSUS INTEREST EXPENSE (NET INTEREST INCOME)

     Net interest income, the difference between interest income and expense, represents the largest portion of the Company's earnings, and is affected by the volume, mix, and rate sensitivity of earning assets as well as by interest bearing liabilities, market interest rates and the amount of non-interest bearing funds which support earning assets. Tables A and B at the end of this narrative provide a visual comparison for each period. Figures presented on these two reports are consolidated and are stated on a tax equivalent basis assuming a federal tax rate of 34%.

As shown in the table below, net interest income on a tax equivalent basis for the six months comparison period was $6.2 million for 2003 compared to $5.9 million for 2002.

	For the six months ended June 30,
(in thousands)	2003	2002
Net interest income as presented	$5,931	$5,669
Effect of tax-exempt income	231	237
Net interest income, tax equivalent	$6,162	$5,906

     The tax equivalent net interest spread, defined as the difference between the yield on earning assets and the rate paid on interest bearing liabilities, was 3.86% for both comparison periods. The interest differential, defined as net interest income divided by average earning assets, was 4.23% and 4.33%, for the respective comparison periods.

     Total interest income for the first six months decreased $426,278 or by 4.5% from $9.4 million in 2002 to $9.0 million in 2003. Interest expense decreased $682,059 or by 19.6% from $3.5 million in 2002 to $2.8 million in 2003. Interest earned on the loan portfolio accounts for approximately 70% of total interest income reporting a decrease of $122,543 or 1.7% for 2003 compared to 2002. In comparison, interest paid on deposits comprises 93% of total interest expense and shows a decrease of $559,272 or 17.7% for the same comparison period. Although an increase is noted in the average volume of earning assets for the first six months of 2003 compared to the same period of 2002, a decrease of 72 basis points is noted in the average yield, contributing to the decrease in income. The average volume of interest bearing liabilities increased, while the rate paid on these accounts decreased 72 basis points as well.

CHANGES IN FINANCIAL CONDITION

     The Company had total average assets of approximately $309 million at June 30, 2003 and $296 million at December 31, 2002. Average earning assets were $294 million for the period ended June 30, 2003, including average loans of $205 million and average investment securities of $84 million. Average earning assets were $283 million for the year ended December 31, 2002 including average loans of $197 million and average investment securities of $81 million. Although the actual balance of the loan portfolio decreased from December 31, 2002 to June 30, 2003, the substantial growth in the loan portfolio during the last quarter of 2002 helped to boost the average volume for the first six months of 2003.

     Average interest bearing liabilities at June 30, 2003 were $246 million, with average time deposits reported totaling $103 million and NOW & money market funds of $86 million. At December 31, 2002, average interest bearing liabilities of $238 million were reported including average time deposits of $100 million and NOW & money market funds at $82 million. An increase in municipal deposits during the last quarter of 2002, generated from the new collateralized deposit product discussed below, helped to boost the average volume on these deposit accounts for the first six months of 2003.

     Additionally, the Bank experienced a one-day decrease in the balance of NOW and money market accounts on June 30, 2003 as municipal customers paid off their borrowings. These borrowings are classified as securities and are held in the Company's portfolio of held to maturity investments, accounting for the decrease in this line item. Most of these borrowings were renewed on July 1, 2003, thereby increasing both the deposit and loan balances.

OTHER OPERATING INCOME AND EXPENSES

     Total other operating income for the second quarter of 2003 was $989,715 compared to $1.2 million for the same quarter in 2002, a decrease of $182,630 or 15.6%. In June 2003, the Company booked income and a related receivable account in the amount of $217,845 in accordance with implementation guidance for SFAS No. 133 mentioned in Note 4 to the Consolidated Financial Statements labeled Recent Accounting Developments. A one-time gain of $617,355 through the sale of the Company's trust operations helped to boost income for the second quarter of 2002. Total other operating income for the first six months amounted to $1.94 million for 2003 compared to $1.87 for 2002. The Company sold four of its investments from the Corporate Bond portfolio netting a gain before taxes of $132,312 contributing to the increase for 2003. Income generated through the sale and servicing of loans sold to the secondary market for the first six months of 2003 constitutes a large portion of other income with figures of $972,158 for the first six months of 2003 compared to $365,711 for 2002.

     In February of 2003, the Company began selling loans under a new program with the Federal Home Loan Bank of Boston (FHLB), the Mortgage Partnership Finance program (MPF). The MPF program offers members a new opportunity to originate and sell investment quality mortgages. While selling loans to the secondary market is not new business for the Company, this partnership with FHLB is different in that the bank shares in the credit risk of each mortgage. These loans meet specific underwriting standards of the FHLB. To date, the Company has funded $11.3 million in loans with MPF.

     Total other operating expenses for the second quarter comparison periods increased to $2.62 million for 2003 from $2.59 million for 2002, with other expenses noting the only decrease for 2003 versus 2002. Expenses of $245,575 were booked in the second quarter of 2002 when the Company chose to expense the remaining goodwill associated with the acquisition of the Liberty Savings Bank charter in 1997. Salaries and wages show the biggest increase due to the opening of the Barre branch mentioned earlier. Total other operating expenses of $5.19 million and $5.16 million, are reported for the first six months of 2003 and 2002, respectively. The only decrease for the comparison period was in other expenses, due in part to trust expense of $34,465 for 2003 versus $95,985 for 2002. Losses on the Company's investment in Limited Partnerships totaled $197,791 for 2003 compared to $225,000 for 2002 further supporting the decrease in other expense for the first six months of 2003 compared to 2 002.

     Management monitors all components of other operating expenses; however, a quarterly review is performed to assure that the accruals for these expenses are accurate. This helps alleviate the need to make significant adjustments to these accounts that in turn affect the net income of the Company.

APPLICABLE INCOME TAXES

     Provisions for income taxes decreased $150,085 with figures of $287,451 for the second quarter of 2003 versus $437,536 for the same period in 2002. The decrease in computed tax expense is a result of additional tax advantages attributable to the Limited Partnerships that were booked in June. Provisions for income taxes for the first six months were reported at $588,284 for 2003 and $586,178 for 2002.

RISK MANAGEMENT

Liquidity Risk - Liquidity management refers to the ability of the Company to adequately cover fluctuations in assets and liabilities. Meeting loan demand (assets) and covering the withdrawal of deposit funds (liabilities) are two key components of the liquidity management process. The repayment of loans and growth in deposits are two of the major sources of liquidity. Other time deposits increased $184,826 as of the end of the first six months of 2003, while time deposits greater than $100,000 increased $736,715. A review of these deposits indicates that they are primarily generated locally and regionally and are established customers of the Company. Savings accounts increased $3.2 million, despite the decrease in the rate earned on these funds. The Company began offering a new interest bearing collateralized deposit account to its municipal account holders during the last part of 2001. This account was well received during 2002, contributing to the increase in NOW and money market funds in that time period. These accounts decreased during the first three months of 2003, and then as anticipated, due to normal municipal tax collection cycles, began to increase during the second quarter of 2003. Despite this progressive increase, the reader will note that NOW and money market funds ended the first six months of 2003 at a balance of $65.9 million, a decrease of almost $23 million compared to December 31, 2002. This is due to the "one-day decrease" mentioned earlier. The Company reports current balances in these accounts at the time of this report totaling approximately $84 million.

     The Company believes that a portion of the increase in deposits is due to the current economic environment, as customers seek a safe haven for their money. This has created a high level of liquidity that the Company considers temporary. The Company has purchased assets, primarily 3-5 year Government Agency securities, attempting to maximize yields and maintain adequate liquidity.

     In January of 2003, the Company entered into an agreement with Promontory Interfinancial Network making it possible to offer FDIC Insured deposits beyond the $100,000 limit. This Certificate of Deposit Account Registry Service (CDARS) uses a deposit-matching engine to match CDARS deposits in other participating banks, dollar- for-dollar. This product is designed to enhance customer attraction and retention, build deposits and improve net interest margins, while providing additional FDIC coverage to customers.

     Due to the nature of the placement of funds, CDARS deposits are defined as "brokered deposits". It has always been the Company's policy not to accept brokered deposits. The Company's Asset Liability policy now states that the Company will not accept brokered deposits, other than through the CDARS program in the Promontory Interfinancial Network.

     During the first quarter, the Company had placed three test-Certificates of Deposit in the CDARS program. These were short-term and matured during the reporting period. As of June 30, 2003, the Company reported a total balance of $244,000 in this product. The Company will continue to monitor the development of this product closely and manage any associated risk accordingly.

     The Company's in house loan portfolio decreased $1.7 million over the last six months, and the investment portfolio decreased a total of $9.9 million for the same time period. As of June 30, 2003, the Company held in its investment portfolio securities classified as "Available for Sale" at a fair value of $47.3 million, compared to $41.1 million as of December 31, 2002, an increase of $6.2 million or 15%. Securities classified as "Held to Maturity" ended the first six months of 2003 at a book value of $22.8 million compared to $39.0 million as of the end of the 2002 calendar year. Both of these types of investments mature at monthly intervals as shown on the gap report at the end of this section. Securities classified as "Restricted Equity Securities" are made up of equity securities the Company is required to maintain in the form of Federal Home Loan Bank of Boston (FHLB) and Federal Reserve Bank stock. FHLB stock increased $47,800, increasing the combined restricted stock bala nce to $1.4 million as of June 30, 2003.

     The Company has a $4.3 million credit line with FHLB. Interest is chargeable at a rate determined daily of approximately 25 basis points higher than the rate paid on fed funds sold. Additional borrowing capacity of approximately $95.5 million is available through the FHLB, which is secured by the Company's qualifying loan portfolio. As of June 30, 2003, the Company has advances of just over $5 million against the $95.5 million in borrowing authority at FHLB, and advances of almost $4.3 million against the $4.3 million credit line. Under a separate agreement, the Company has the authority to collateralize public unit deposits, such as the Company's collateralized government agency accounts mentioned above, up to its FHLB borrowing capacity ($95.5 million less outstanding advances) with letters of credit issued by FHLB. At June 30, 2003, approximately $41.5 million was pledged as collateral for these deposits. Interest is charged to the Company quarterly based on the average daily balance outstanding at an annual rate of 20 basis points. At June 30, 2003, an average daily balance of approximately $10.2 million was reported.

Credit Risk - A primary concern of management is to reduce the exposure of credit loss within the portfolio. Management follows established underwriting guidelines, and any exceptions to the policy must be approved by a lender with higher authority than the lender originating the loan. The adequacy of the loan loss coverage is reviewed quarterly by the risk management committee of the Board of Directors. This committee meets to discuss, among other matters, potential exposures, historical loss experience, and overall economic conditions. Existing or potential problems are noted and addressed by senior management in order to assess the risk of probable loss or delinquency. A variety of loans are reviewed periodically by an independent firm in order to assure accuracy of the Company's internal risk ratings and compliance with various internal policies and procedures, as well as those set by the regulatory authorities. The Company also employs a Credit Administration Officer whose duties include monitori ng and reporting on the status of the loan portfolio including delinquent and non-performing loans.

     Specific allocations are made in the allowance for loan losses in situations management believes may represent a greater risk for loss. A quarterly review of various qualitative factors, including levels of, and trends in, delinquencies and non-accruals and national and local economic trends and conditions, helps to ensure that areas with potential risk are noted and coverage increased or decreased to reflect the trends in delinquencies and non-accruals. Residential mortgage loans make up the largest part of the loan portfolio and have the lowest historical loss ratio helping to alleviate the overall risk.

The following table reflects the composition of the Company's loan portfolio for the periods ended June 30:
			2003			2002
(Dollars in Thousands)	Total		% of	Total		% of
	Loans		Total	Loans		Total
Real Estate Loans
Construction & Land Development	7,039		3.45%	4,312		2.21%
Farm Land	2,874		1.41%	2,386		1.22%
1-4 Family Residential	119,431		58.46%	117,012		60.00%
Commercial Real Estate	31,541		15.44%	33,254		17.05%
Loans to Finance Agricultural Production	399		0.19%	337		0.17%
Commercial & Industrial	20,056		9.82%	13,748		7.05%
Consumer Loans	22,609		11.07%	23,702		12.16%
All Other Loans	331		0.16%	263		0.14%
Gross Loans	204,280		100%	195,014		100%
Less:
Reserve for Loan Losses	(2,220	)	-1.09%	(2,195	)	-1.13%
Deferred Loan Fees	(820	)	-0.40%	(926	)	-0.47%
Net Loans	201,240		98.51%	191,893		98.40%

Allowance for loan losses and provisions - The valuation allowance for loan losses of $2.2 million as of June 30, 2003 composed 1.1% of the total gross loan portfolio. As of such date, the Company maintained a residential loan portfolio of $119 million and a commercial real estate portfolio of almost $42 million, accounting for approximately 79% of the total loan portfolio. This volume, together with the low historical loan loss experience in these portfolios, helps to support the Company's basis for loan loss coverage.

The following table summarizes the Company's loan loss experience for the periods ended June 30,
(Dollars in Thousands)	2003	2002
Loans Outstanding End of Period	204,280	195,014
Ave. Loans Outstanding During Period	204,834	192,673
Loan Loss Reserve, Beginning of Period	2,156	2,008
Loans Charged Off:
Real Estate	1	29
Commercial	0	0
Consumer	90	84
Total	91	113
Recoveries:
Real Estate	2	2
Commercial	1	3
Consumer	59	69
Total	62	74
Net Loans Charged Off	29	39
Provision Charged to Income	93	226
Loan Loss Reserve, End of Period	2,220	2,195

     Non-Performing assets for the company are made up of three different types of loans, "90 Days or More Past Due", "Other Real Estate Owned" (OREO), and "Non-Accruing Loans". Loans 90 days or more past due totaled $302,631 and accounted for 18% of the total non-performing assets as of June 30, 2003, compared to a volume of $356,874 comprising 18% as of December 31, 2002. Non-Accruing loans made up 78% of these non-performing assets with a balance of $1.3 million, compared to $1.63 million or 82% for the same comparison periods. As of June 30, 2003, the Company's OREO portfolio consisted of one property with a balance of $58,800, while the 2002 year ended with no OREO properties.

Non-performing assets as of June 30, 2003 and December 31, 2002 were as follows:

	06/30/2003	12/31/2002
Non-Accruing loans	$1,307,790	$1,631,330
Loans past due 90 days or more and still accruing	302,631	356,874
Other real estate owned	58,800	0
Total	$1,669,221	$1,988,204

     Other real estate owned is made up of property that the Company has acquired by deed in lieu of foreclosure or through normal foreclosure proceedings, and property that the Company does not hold title to but is in actual control of, known as in-substance foreclosure. The value of the property is determined prior to transferring the balance to other real estate owned. The balance transferred to OREO is the lesser of the appraised value of the property, or the book value of the loan, less cost to sell. A write-down may be deemed necessary to bring the book value of the loan equal to the appraised value. Appraisals are then done periodically thereafter charging any additional write-downs to the appropriate expense account.

Market Risk and Asset and Liability Management - Market risk is the risk of loss in a financial instrument arising from adverse changes in market prices and rates, foreign currency exchange rates, commodity prices and equity prices. The Company does not have any market risk sensitive instruments acquired for trading purposes. The Company's market risk arises primarily from interest rate risk inherent in its lending and deposit taking activities. Management actively monitors and manages its interest rate risk exposure and attempts to structure the balance sheet to maximize net interest income while controlling its exposure to interest rate risk. The Company's Asset/Liability Committee formulates strategies to manage interest rate risk by evaluating the impact on earnings and capital of such factors as current interest rate forecasts and economic indicators, potential changes in such forecasts and indicators, liquidity, and various business strategies. The Asset/Liability Committee's methods for evaluat ing interest rate risk include an analysis of the Company's interest rate sensitivity "gap", which provides a static analysis of the maturity and repricing characteristics of the entire balance sheet, and a simulation analysis which calculates projected net interest income based on alternative balance sheet and interest rate scenarios, including "rate shock" scenarios involving immediate substantial increases or decreases in market rates of interest.

Interest Rate Sensitivity "Gap" Analysis - An interest rate sensitivity "gap" is defined as the difference between the interest-earning assets and interest-bearing liabilities maturing or repricing within a given time period. A gap is considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate sensitive liabilities. A gap is considered negative when the amount of interest rate sensitive liabilities exceeds the amount of interest rate sensitive assets. During a period of rising interest rates, a negative gap would tend to adversely affect net interest income, while a positive gap would tend to result in an increase in net interest income. During a period of falling interest rates, a negative gap would tend to result in an increase in net interest income, while a positive gap would tend to affect net interest income adversely. Because different types of assets and liabilities with the same or similar maturities may react differently to changes in overall mar ket interest rates or conditions, changes in interest rates may affect net interest income positively or negatively even if an institution were perfectly matched in each maturity category.

     The Company prepares its interest rate sensitivity "gap" analysis by scheduling assets and liabilities into periods based upon the next date on which such assets and liabilities could mature or reprice. The amounts of assets and liabilities shown within a particular period were determined in accordance with the contractual term of the assets and liabilities, except that:

Adjustable-rate loans and certificates of deposit are included in the period when they are first scheduled to adjust and not in the period in which they mature;

Fixed-rate loans reflect scheduled contractual amortization, with no estimated prepayments;

and,

NOW, money markets, and savings deposits, which do not have contractual maturities, reflect estimated levels of attrition, which are based on studies of historical experiences by the Company of the sensitivity of each such category of deposit, to changes in interest rates.

     Management believes that these assumptions approximate actual experience and considers them reasonable. However, the interest rate sensitivity of the Company's assets and liabilities in the tables could vary substantially if different assumptions were used or actual experience differs from the historical experiences on which the assumptions are based. The tables on the following two pages set forth the estimated maturity or repricing of the Company's interest earning assets and interest-bearing liabilities at June 30, 2003, and December 31, 2002.

GAP ANALYSIS
Community Bancorp. & Subsidiaries
June 30, 2003
Cumulative repriced within:
Dollars in thousands,	3 Months	4 to 12		1 to 3	3 to 5	Over 5
by repricing date	or less	Months		Years	Years	Years		Total
Interest sensitive assets:
Federal funds sold	0	0		0	0	0		0
Overnight deposits	0	0		0	0	0		0
Investments -
Available for Sale	0	0		19,338	16,414	11,510		47,262
Held to Maturity	3,006	9,614		2,701	1,981	5,532		22,834
Restricted equity securities	0	0		0	0	1,357		1,357
Loans(1)	50,389	42,955		44,908	14,580	50,140		202,972
Total interest sensitive assets	53,395	52,569		66,947	32,975	68,539		274,425
Interest sensitive liabilities:
Certificates of deposit	15,697	38,331		31,803	17,186	0		103,017
Money markets	2,767	14,948		0	0	20,000		37,715
Regular savings	0	12,932		0	0	28,000		40,932
Now and super now accounts	0	0		0	0	28,173		28,173
Borrowed funds	4.297	0		0	30	5,010		9,337
Repurchase agreements	11,041	0		0	0	0		11,041
Total interest sensitive liabilities	33,802	66,211		31,803	17,216	81,183		230,215
Net interest rate sensitivity gap	19,593	(13,642	)	35,144	15,759	(12,644	)
Cumulative net interest rate
sensitivity gap	19,593	5,951		41,095	56,854	44,210
Cumulative net interest rate
sensitivity gap as a
percentage of total assets	6.61%	2.01%		13.86%	19.17%	14.91%
Cumulative interest sensitivity
gap as a percentage of total
interest-earning assets	7.14%	2.17%		14.97%	20.72%	16.11%
Cumulative interest earning assets
as a percentage of cumulative
interest-bearing liabilities	157.96%	105.95%		131.18%	138.15%	119.20%
(1) Loan totals exclude non-accruing loans amounting to $1,307,790.

GAP ANALYSIS
Community Bancorp. & Subsidiaries
December 31, 2002
Cumulative repriced within:
Dollars in thousands,	3 Months	4 to 12		1 to 3	3 to 5	Over 5
by repricing date	or less	Months		Years	Years	Years		Total
Interest sensitive assets:
Federal funds sold	2,100	0		0	0	0		2,100
Overnight deposits	2,980	0		0	0	0		2,980
Investments -
Available for Sale	0	0		18,066	13,514	9,495		41,075
Held to Maturity	708	22,033		3,686	5,897	6,645		38,969
Restricted equity securities	0	0		0	0	1,309		1,309
Loans(1)	46,225	47,906		47,029	17,298	46,994		205,452
Total interest sensitive assets	52,013	69,939		68,781	36,709	64,443		291,885
Interest sensitive liabilities:
Certificates of deposit	12,331	44,227		25,339	20,199	0		102,096
Money markets	113	32,380		0	0	24,000		56,493
Regular savings	0	7,737		0	0	30,000		37,737
Now and super now accounts	0	0		0	0	32,293		32,293
Borrowed funds	0	0		0	30	5,010		5,040
Repurchase agreements	14,069	0		0	0	0		14,069
Total interest sensitive liabilities	26,513	84,344		25,339	20,229	91,303		247,728
Net interest rate sensitivity gap	25,500	(14,405	)	43,442	16,480	(26,860	)
Cumulative net interest rate
sensitivity gap	25,500	11,095		54,537	71,017	44,157
Cumulative net interest rate
sensitivity gap as a
percentage of total assets	8.25%	3.59%		17.64%	22.97%	14.28%
Cumulative interest sensitivity
gap as a percentage of total
interest-earning assets	8.74%	3.80%		18.68%	24.33%	15.13%
Cumulative interest earning assets
as a percentage of cumulative
interest-bearing liabilities	196.18%	110.01%		140.04%	145.40%	117.82%
(1) Loan totals exclude non-accruing loans amounting to $1,631,330.

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit, standby letters of credit and financial guarantees, interest rate caps and floors written on adjustable rate loans, and commitments to sell loans. Such instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit and financial guarantees written is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. For interest rate caps and floors written on adjustable rate loans, the contract or notional amounts do not represent exposure to credit loss. The Company controls the credit risk of their interest rate cap agreements through credit approvals, limits, and monitoring procedures.

The Company generally requires collateral or other security to support financial instruments with credit risk.

Financial instruments whose contract amount represent credit risk	Contract or
at June 30, 2003 (in thousands)	----Notional Amount----
Mortgage loan commitments	$ 9,223
Unused commercial lines of credit	4,830
Unused portions of construction loans	4,098
Unused portion credit card lines	7,533
Unused home equity lines of credit	2,782
Standby letters of credit	449

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. At June 30, 2003, the Company had binding loan commitments at fixed rates approximating $6.2 million that are included in the "mortgage loan commitments" figure above.

The Company evaluates each customer's credit worthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Company upon extension of credit is based on management's credit evaluation of the counter-party. Collateral held varies but may include real estate, accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties.

Standby letters of credit and financial guarantees written are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers.

The Company enters into a variety of interest rate contracts, including interest rate caps and floors written on adjustable rate loans in managing its interest rate exposure. Interest rate caps and floors on loans written by the Company enable customers to transfer, modify, or reduce their interest rate risk.

AGGREGATE CONTRACTUAL OBLIGATIONS

Contractual Obligations as of June 30, 2003	Payment due by period
	Less than	1-3	3-5	More than
	1 year	years	years	5 years	Total
Operating Leases	$172,017	$294,669	$209,899	$  799,230	$1,475,815
Housing Limited Partnerships	504,267	932,996	0	0	1,437,263
FHLB Borrowings	0	0	30,000	5,010,000	5,040,000
Total	$676,284	$1,227,665	$239,899	$5,809,230	$7,953,078

EFFECTS OF INFLATION

     Rates of inflation affect the reported financial condition and results of operations of all industries, including the banking industry. The effect of monetary inflation is generally magnified in bank financial and operating statements. As costs and prices rise during periods of monetary inflation, cash and credit demands of individuals and businesses increase, and the purchasing power of net monetary assets declines. The Company depends primarily on a strong net interest income to enable it to maintain its purchasing power.

CAPITAL RESOURCES

     The Company periodically repurchases its own common stock under a stock buyback program initially authorized by the Board of Directors in April of 2000. Under the terms of the stock buyback, the Company may repurchase shares of its common stock from time to time in open market purchases and privately negotiated transactions, as market conditions may warrant. The initial authorization for the repurchase of up to 205,000 shares of common stock was extended by the Board of Directors on October 15, 2002 to cover an additional 200,000 shares, with an aggregate limit for such additional share repurchases of $3.5 million. As of June 30, 2003 the Company had repurchased 152,463 shares at a total cost of approximately $1,739,166, including fees and commissions, since the inception of the program.

     The Company's stockholders' equity, which started the year at $25,705,102, increased during the six months ended June 30, 2003, through earnings of $1,997,937; sales of common stock of $169,208 through dividend reinvestment, and adjustments of $192,022 for other comprehensive income pertaining to the valuation of securities. It decreased $7,981 for cash out of fractional shares associated with dividend reinvestment shares and the repurchase of stock through the stock buyback program, and dividends declared totaling $600,987. A cash dividend of $0.16 per share and a 5% stock dividend were declared in December of 2002 and paid in February of 2003. As a result, both dividends along with the dividend reinvestment plan entry and associated shares were booked in 2002 to stockholders' equity. Stockholder's equity ended the first six months of 2003 at $27,455,301 with a book value of $7.29 per share. All stockholders' equity is unrestricted.

     Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined). Management believes, as of June 30, 2003, that the Company meets all capital adequacy requirements to which it is subject.

     As of June 30, 2003, the Company and its Subsidiaries were deemed well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Company must maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since June 30, 2003 that management believes have changed the Company's regulatory capital category. As of June 30, 2003 the Company reported risk-weighted assets of approximately $163 million compared to almost $169 million at December 31, 2002. From time to time the Company may make contributions to the capital of its subsidiary, Community National Bank. At present, regulatory authorities have made no demand on the Company to make additional capital contributions to the Bank's capital.

The Company's actual capital amounts and ratios (000's omitted) are presented in the following table.

					Minimum to be Well
			Minimum		Capitalized Under
			For Capital		Prompt Corrective
	Actual		Adequacy Purposes:		Action Provisions:
	Amount	Ratio	Amount	Ratio	Amount	Ratio
As of June 30, 2003:
Total capital (to risk weighted assets)
Consolidated	$28,272	17.29%	$13,077	8.0%	N/A	N/A
Subsidiary (Community National Bank)	$26,914	16.47%	$13,075	8.0%	$16,344	10.0%
Tier I capital (to risk weighted assets)
Consolidated	$26,226	16.04%	$  6,539	4.0%	N/A	N/A
Subsidiary (Community National Bank)	$24,869	15.22%	$  6,538	4.0%	$  9,806	6.0%
Tier I capital (to average assets)
Consolidated	$26,226	8.50%	$12,341	4.0%	N/A	N/A
Subsidiary (Community National Bank)	$24,869	8.06%	$12,338	4.0%	$15,422	5.0%
As of December 31, 2002:
Total capital (to risk weighted assets)
Consolidated	$26,828	15.91%	$13,487	8.0%	N/A	N/A
Subsidiary (Community National Bank)	$25,350	15.04%	$13,484	8.0%	$16,855	10.0%
Tier I capital (to risk weighted assets)
Consolidated	$24,720	14.66%	$  6,743	4.0%	N/A	N/A
Subsidiary (Community National Bank)	$23,243	13.79%	$  6,742	4.0%	$10,113	6.0%
Tier I capital (to average assets)
Consolidated	$24,720	7.97%	$12,407	4.0%	N/A	N/A
Subsidiary (Community National Bank)	$23,243	7.49%	$12,406	4.0%	$15,507	5.0%

						Table A
AVERAGE BALANCES AND INTEREST RATES
The table below presents the following information:
Average earning assets (including non-accrual loans)
Average interest bearing liabilities supporting earning assets
Interest income and interest expense as a rate/yield
	For the First Six Months Ended:
		2003			2002
	Average	Income/	Rate/	Average	Income/	Rate/
	Balance	Expense	Yield	Balance	Expense	Yield
EARNING ASSETS
Loans (gross)	204,834,261	7,041,684	6.93%	192,672,960	7,164,227	7.50%
Taxable Investment Securities	54,080,777	1,195,043	4.46%	55,024,064	1,477,241	5.41%
Tax Exempt Investment Securities (1)	28,626,743	681,389	4.80%	22,443,921	697,389	6.27%
Federal Funds Sold	1,531,519	9,431	1.24%	1,742,680	15,591	1.80%
Sweep Account	3,149,073	15,173	0.97%	2,152,241	14,583	1.37%
Other Securities	1,334,138	22,765	3.44%	1,286,342	22,732	3.56%
TOTAL	293,556,511	8,965,485	6.16%	275,322,208	9,391,763	6.88%
INTEREST BEARING LIABILITIES
Savings Deposits	39,408,040	148,144	0.76%	35,011,968	241,801	1.39%
NOW & Money Market Funds	86,341,646	782,967	1.83%	80,542,008	1,035,305	2.59%
Time Deposits	102,859,315	1,675,785	3.29%	98,604,141	1,889,062	3.86%
Other Borrowed Funds	5,310,559	122,331	4.65%	5,701,591	164,062	5.80%
Notes Payable	145,856	4,038	5.58%	0	0	0.00%
Repurchase Agreements	12,163,971	70,031	1.16%	12,681,731	155,125	2.47%
TOTAL	246,229,387	2,803,296	2.30%	232,541,439	3,485,355	3.02%
Net Interest Income		6,162,189			5,906,408
Net Interest Spread(2)			3.86%			3.86%
Interest Differential(3)			4.23%			4.33%
(1)  Income on investment securities of state and political subdivisions is stated on a fully taxable basis (assuming a       34% tax rate).
(2)  Net interest Spread is the difference between the yield on earning assets and the rate paid on interest bearing       liabilities.
(3)  Interest differential is net interest income divided by average earning assets.

					Table B
CHANGES IN INTEREST INCOME AND INTEREST EXPENSE
The following table summarizes the variances in income for the first six months of 2003 and 2002
resulting from volume changes in assets and liabilities and fluctuations in rates earned and paid.
	Variance		Variance
RATE / VOLUME	Due to		Due to		Total
	Rate(1)		Volume(1)		Variance
INCOME EARNING ASSETS
Loans	(347,444	)	224,901		(122,543	)
Taxable Investment Securities	(271,824	)	(10,374	)	(282,198	)
Tax Exempt Investment Securities (2)	(111,588	)	95,588		(16,000	)
Federal Funds Sold	(5,514	)	(646	)	(6,160	)
Sweep Account	(2,777	)	3,367		590
Other Securities	(387	)	420		33
Total Interest Earnings	(739,534	)	313,256		(426,278	)
INTEREST BEARING LIABILITIES
Savings Deposits	(108,724	)	15,067		(93,657	)
NOW & Money Market Funds	(289,376	)	37,038		(252,338	)
Time Deposits	(253,777	)	40,500		(213,277	)
Other Borrowed Funds	(37,248	)	(4,483	)	(41,731	)
Notes Payable	4,038		0		4,038
Repurchase Agreements	(83,613	)	(1,481	)	(85,094	)
Total Interest Expense	(768,700	)	86,641		(682,059	)
(1) Items which have shown a year-to-year increase in volume have variances allocated as follows:
Variance due to rate = Change in rate x new volume
Variance due to volume = Change in volume x old rate
Items which have shown a year-to-year decrease in volume have variances allocated as follows:
Variance due to rate = Change in rate x old volume
Variances due to volume = Change in volume x new rate
(2) Income on tax exempt securities is stated on a fully taxable basis. The assumed rate is 34%.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

Incorporated by reference to the section of this report labeled "Risk Management" in Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations.

ITEM 4. Controls and Procedures

     As required by Rule 13a-15 under the Securities Exchange Act of 1934, the Company has evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures as of the end of the period covered by this report. This evaluation was carried out under the supervision and with the participation of the Company's management, including the Company's President and Chief Executive Officer and its Treasurer and Chief Financial Officer. Based upon that evaluation, the President and Chief Executive Officer and the Treasurer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by this report. There were no changes during the Company's last fiscal quarter in the Company's internal control over financial reporting identified in connection with the evaluation of the Company's disclosure controls and procedures that have materially affected, or are reaso nably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

     There are no pending legal proceedings to which the Company is a party or of which any of its property is the subject, other than routine litigation incidental to its banking business.

ITEM 2. Changes in Securities

       NONE

ITEM 3. Defaults Upon Senior Securities

       NONE

ITEM 4. Submission of Matters to a Vote of Security Holders

     The following matters were submitted to a vote of security holders, at the Annual Meeting of Shareholders of Community Bancorp. on May 6, 2003:

To elect three directors to serve until the Annual Meeting of Shareholders in 2006;

To ratify the selection of the independent public accounting firm of Berry, Dunn, McNeil & Parker as the Corporation's external auditors for the fiscal year ending December 31, 2003;

The results are as follows:

			AUTHORITY
			WITHHELD/	BROKER
MATTER	FOR	AGAINST	ABSTAIN	NON-VOTE
Election of Directors:
Elwood G. Duckless	2,940,993.1828	0	15,100.0255	-0-
Rosemary M. Lalime	2,912,826.4651	28,166.7177	15,100.0255	-0-
Anne T. Moore	2,938,468.1828	2,525.0000	15,100.0255	-0-
Selection of Auditors
Berry, Dunn, McNeil & Parker	2,913,520.3442	6,222.4074	36,350.4567	-0-

     In addition to the three directors elected at the annual meeting, the terms of office of seven directors continued beyond the annual meeting of shareholders, as follows: Term expiring at the 2004 annual meeting: Michael H. Dunn, Marcel M. Locke, Stephen P. Marsh and Dale R. Wells; and term expiring at the 2005 annual meeting: Thomas E. Adams, Jacques R. Couture and Richard C. White.

ITEM 5. Other Information

INTERNAL REORGANIZATION OF CERTAIN FUNCTIONS

      After 22 years of service to the Company, Senior Vice President, Rosemary M. Rowe retired on July 3, 2003. As Senior Operations Officer, Rosemary was in charge of the operations function of the bank for many years, and also served as one of the Bank's four Executive Officers constituting the Bank's senior management team. In preparation for her retirement, the Company has restructured the operations area which includes deposit services, loan services and the IT department. The Executive Vice President and Chief Financial Officer will ultimately be responsible for these areas.

     A new position of Deposit Services Supervisor was created to oversee the deposit services area. This position reports to the Vice President of Retail Banking. Another new position, Loan Services Supervisor, was created in the loan support area. All loan support personnel will report, either directly or indirectly to the Vice President of Credit Administration. The Vice President of Retail Banking, the Vice President of Credit Administration, and the Vice Presidents of the IT department will report to the Executive Vice President and Chief Financial Officer.

ITEM 6 Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit 3 (ii) - Amended and restated Bylaws of Community Bancorp. are filed as part of this report.
Exhibit 31.1 - Certification from the Chief Executive Officer of the Company pursuant to section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2 - Certification from the Chief Financial Officer of the Company pursuant to section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1 - Certification from the Chief Executive Officer of the Company pursuant to 18 U.S.C., Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2 - Certification from the Chief Financial Officer of the Company pursuant to 18 U.S.C., Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K

Form 8-K/A dated April 4, 2003, announcing the replacement of the Company's former independent accountants, A.M. Peisch & Company, LLP, with the firm of Berry, Dunn, McNeil & Parker.
Form 8-K dated April 4, 2003 announcing the earnings and other financial information for the period ended March 31, 2003.

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly authorized.
COMMUNITY BANCORP.
DATED: August 12, 2003	By: /s/ Richard C. White
	Richard C. White, President
DATED: August 12, 2003	By: /s/Stephen P. Marsh
	Stephen P. Marsh,
	Vice President & Treasurer

EX-99

Exhibit 31.1

CERTIFICATION

I, Richard C. White, President and Chief Executive Officer, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Community Bancorp.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
		(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		(b) [Omitted]
		(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
		(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
		(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 12, 2003

/s/ Richard C. White                       

President and Chief Executive Officer

EX-99

Exhibit 31.2

CERTIFICATION

I, Stephen P. Marsh, Treasurer and Chief Financial Officer, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Community Bancorp.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
		(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		(b) [Omitted]
		(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
		(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
		(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 12, 2003

/s/ Stephen P. Marsh                      
Treasurer and Chief Financial Officer

EX-99

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U. S. C. SECTION 1350 AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Quarterly Report of Community Bancorp. (the "Company") on Form 10-Q for the period ended June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned Chief Executive Officer of the Company hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and 2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

     A signed original of this written statement required by Section 906 has been provided to Community Bancorp. and will be retained by Community Bancorp. and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ Richard C. White                           

Richard C. White, Chief Executive Officer

August 12, 2003

EX-99

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U. S. C. SECTION 1350 AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Quarterly Report of Community Bancorp. (the "Company") on Form 10-Q for the period ended June 30, 2003, filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned Chief Financial Officer of the Company hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and 2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

     A signed original of this written statement required by Section 906 has been provided to Community Bancorp. and will be retained by Community Bancorp. and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ Stephen P. Marsh                           

Stephen P. Marsh, Chief Financial Officer

August 12, 2003

EX-99.2 BYLAWS

Exhibit 3(ii)

BY-LAWS
OF

COMMUNITY BANCORP.

A Vermont Corporation
(Amended and Restated as of July 8, 2003*)

* Superceding the By-laws as amended and restated through April 5, 1994 and further amended through September 15, 2000 and October 15, 2002.

TABLE OF CONTENTS
	Page
ARTICLE ONE: OFFICES	1
1.01 Registered Office and Agent.	1
1.02 Other Offices.	1

ARTICLE TWO: SHAREHOLDERS	1
2.01 Annual Meetings.	1
2.02 Special Meetings.	1
2.03 Place of Meetings.	2
2.04 Notice.	2
2.05 Voting List.	2
2.06 Voting of Shares.	2
2.07 Quorum.	3
2.08 Majority Vote; Withdrawal of Quorum.	3
2.09 Method of Voting; Proxies.	3
2.10 Acceptance of Votes.	4
2.11 Record Date.	5
2.12 Nominations and Other Business.	5
2.13 Presiding Officials at Meetings.	7
2.14 Inspection of Corporate Records.	7

ARTICLE THREE: DIRECTORS	8
3.01 Management.	8
3.02 Number; Election; Term; Qualification.	9
3.03 Classification.	9
3.04 Vacancies.	9
3.05 Mandatory Retirement.	9
3.06 Removal.	9
3.07 Nominations.	10
3.08 Annual Meeting.	10
3.09 Regular Meetings.	10
3.10 Special Meetings.	10
3.11 Quorum; Majority Vote.	10
3.12 Procedure; Minutes.	10
3.13 Presumption of Assent.	11
3.14 Compensation.	11

ARTICLE FOUR: COMMITTEES	11
4.01 Audit Committee.	11
4.02 Compensation Committee.	11
4.03 Nominating/Corporate Governance Committee.	12
4.04 Other Committees.	12
4.05 Number; Qualification; Term.	12
4.06 Limitation on Authority.	12
4.07 Committee Changes.	13
4.08 Meetings.	13
4.09 Quorum; Majority; Vote.	13
4.10 Minutes.	13
4.11 Compensation.	13
4.12 Responsibility.	13

ARTICLE FIVE: GENERAL PROVISIONS RELATING TO MEETINGS	14
5.01 Manner of Giving Notice.	14
5.02 Waiver of Notice.	14
5.03 Householding of Notices.	14
5.04 Bulk Mail.	14
5.05 Shareholders Without Forwarding Addresses.	15
5.06 Telephone and Similar Meetings.	15
5.07 Action Without Meeting.	15

ARTICLE SIX: OFFICERS AND OTHER AGENTS	15
6.01 Number; Titles; Election; Term.	15
6.02 Removal.	16
6.03 Vacancies.	16
6.04 Authority.	16
6.05 Compensation.	16
6.06 Chairman of the Board.	16
6.07 President.	16
6.08 Vice President.	17
6.09 Treasurer.	17
6.10 Assistant Treasurers.	17
6.11 Secretary.	17
6.12 Assistant Secretaries.	18

ARTICLE SEVEN: CERTIFICATES AND SHAREHOLDERS	18
7.01 Certificates for Shares.	18
7.02 Issuance.	18
7.03 Shares Without Certificates.	19
7.04 Consideration for Shares.	19
7.05 Lost, Stolen, or Destroyed Certificates.	19
7.06 Transfer Agent; Transfer of Shares.	20
7.07 Registered Shareholders.	20

ARTICLE EIGHT: INDEMNIFICATION	21
8.01 Definitions.	21
8.02 Authority to Indemnify.	21
8.03 Mandatory Indemnification in Certain Circumstances.	22
8.04 Advance for Expenses.	22
8.05 Court Ordered Indemnification.	22
8.06 Determination and Authorization of Indemnification.	23
8.07 Indemnification of Officers, Employees and Agents.	24
8.08 Insurance.	24
8.09 Contract Right.	24
8.10 Enforcement of Rights.	25
8.11 Non-Exclusive Rights; Survival.	25
8.12 Severability.	25
8.13 Application of this Article.	25

ARTICLE NINE: EMERGENCY PREPAREDNESS	26
9.01 Emergency.	26
ARTICLE TEN: MISCELLANEOUS PROVISIONS	26
10.01 Distributions.	26
10.02 Reserves.	26
10.03 Books and Records.	27
10.04 Fiscal Year.	27
10.05 Seal.	27
10.06 Resignation.	27
10.07 Securities of Other Corporations.	27
10.08 Amendment.	27
10.09 Invalid Provisions.	28
10.10 Headings.	28

BY-LAWS
OF

COMMUNITY BANCORP.

A Vermont Corporation
(Amended and Restated as of July 8, 2003*)

ARTICLE ONE: OFFICES

1.01 Registered Office and Agent. The registered office and registered agent of Community Bancorp. (the "Corporation") shall be as designated from time to time by the appropriate filing by the Corporation in the office of the Secretary of State of Vermont.

1.02 Other Offices. The Corporation may also have offices at such other places, both within and without the State of Vermont, as the Board of Directors may from time to time determine or the business of the Corporation may require.

ARTICLE TWO: SHAREHOLDERS

2.01 Annual Meetings. The regular annual meeting of shareholders of the Corporation shall be held on the first Tuesday of May of each year, at such time and place as shall be designated by the Board of Directors and stated in the notice of the meeting. The Board of Directors may select a different date for the annual meeting upon a resolution duly adopted by the Board prior to the issuance of the notice of the meeting prescribed in Article 2.04. At such meeting, the shareholders shall elect directors and transact such other business as may properly be brought before the meeting. (As amended November 15, 1983 and September 12, 2000).

2.02 Special Meetings. A special meeting of the shareholders may be called at any time by the President, or by the Board of Directors, or by the Secretary upon the petition of the holders of not less than ten percent of all shares entitled to vote on any issue at such meeting. Only such business shall be transacted at a special meeting as may be stated or indicated in the notice of such meeting.

2.03 Place of Meetings. The annual meeting of shareholders may be held at any place within or without the State of Vermont as may be designated by the Board of Directors. Special meetings of shareholders may be held at any place within the State of Vermont as may be designated by the person or persons calling such special meeting as provided in Section 2.02. If no place for a meeting is designated, it shall be held at the registered office of the Corporation.

2.04 Notice. Written or printed notice stating the place, day, and hour of each meeting of shareholders, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten nor more than 60 days before the date of the meeting, either personally or by mail, by or at the direction of the Board of Directors, the President, the Secretary, or the persons calling the meeting, to each shareholder of record entitled to vote at such meeting.

2.05 Voting List. Beginning two business days after the notice of meeting is given, and continuing through the meeting, the Secretary shall make available for inspection by any shareholder a complete list of shareholders entitled to notice of and to vote at such meeting, arranged in alphabetical order, including the address of each shareholder and the number of voting shares held by each shareholder. Such list shall be kept on file during the time specified at the principal office of the Corporation or at a place identified in the notice in the city in which the meeting is to be held. The list shall be subject to inspection during usual business hours, and upon written demand, by any shareholder of record entitled to vote at that meeting, or his or her agent or attorney, who shall be entitled to copy the list at his or her own expense. Such list shall be produced at such meeting, and at all times during such meeting shall be subject to inspection by any shareholder of record entitled to vote at that m eeting, or his or her agent or attorney. The original stock transfer books shall be prima facie evidence as to who are the shareholders entitled to examine such list or stock transfer books.

2.06 Voting of Shares. Treasury shares, and shares of the Corporation's own stock owned, directly or indirectly by another corporation (other than shares held in a fiduciary capacity) the majority of the voting stock of which is owned or controlled by the Corporation, shall not be shares entitled to vote or to be counted in determining the total number of outstanding shares. Shares held by an administrator, executor, guardian, or conservator may be voted by him, either in person or by proxy, without transfer of such shares into his name so long as such shares form a part of the estate and are in the possession of the estate being served by him. Shares standing in the name of a trustee may be voted by him, either in person or by proxy, only after the shares have been transferred into his name as trustee. Shares standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without transfer of such shares into his name if authority to do so is contained in the court order by which such receiver was appointed. Shares standing in the name of another domestic or foreign corporation of any type or kind may be voted by such officer, agent, or proxy as the By-laws of such corporation may provide or, in the absence of such provision, as the Board of Directors of such corporation shall determine. A shareholder whose shares are pledged shall be entitled to vote such shares until they have been transferred into the name of the pledgee, and thereafter, the pledgee shall be entitled to vote such shares.

2.07 Quorum. The holders of a majority of the outstanding shares entitled to vote on a matter, present in person or represented by proxy, shall constitute a quorum for action on that matter at any meeting of shareholders, except as otherwise provided by law or the Articles of Incorporation. If a quorum shall not be present or represented at any meeting of shareholders, a majority of the shareholders who are present in person or represented by proxy and who are entitled to vote on any issue at the meeting, may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At any reconvening of an adjourned meeting any business as to which a quorum is present or represented by proxy may be transacted which could have been transacted at the original meeting, had a quorum been present or represented.

2.08 Majority Vote; Withdrawal of Quorum. Except as otherwise provided by law or the Articles of Incorporation, if a quorum on a matter is present in person or represented by proxy at any meeting, the action on such matter will be approved if the number of votes cast in favor of the matter exceeds the number of votes cast opposing the matter. The shareholders present at a duly convened meeting may continue to transact business until adjournment, notwithstanding any withdrawal of shareholders which may leave less than a quorum remaining.

2.09 Method of Voting; Proxies. Every shareholder of record shall be entitled at every meeting of shareholders to one vote on each matter submitted to a vote, for every share standing in his name on the original stock transfer books of the Corporation except to the extent that the voting rights of the shares of any class or classes are limited or denied by the Articles of Incorporation or by law. Such books shall be prima facie evidence as to the identity of shareholders entitled to vote. At any meeting of shareholders, every shareholder having the right to vote may vote either in person or by a proxy executed in writing by the shareholder or by his duly authorized secretary-in-fact. Each such proxy shall be filed with the Secretary of the Corporation or other officer or agent authorized to tabulate votes before or at the time of the meeting and shall become effective upon such filing. No proxy shall be valid after 11 months from the date of its execution, unless otherwise expressly provided in the proxy. If no date is stated on a proxy, such proxy shall be presumed to have been executed on the date of the meeting at which it is to be voted. Each proxy shall be revocable unless expressly and conspicuously provided therein to be irrevocable and the appointment as proxy is coupled with an interest, or unless otherwise made irrevocable by law.

2.10 Acceptance of Votes. If the name signed on a vote, consent, waiver, or proxy appointment corresponds to the name of a shareholder, the Corporation if acting in good faith shall be entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholders. If the name signed on a vote, consent, waiver, or proxy appointment does not correspond to the name of its shareholder, the Corporation if acting in good faith shall nevertheless be entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder if:

(1)	the shareholder is an entity as defined in the Vermont Business Corporation Act and the name signed purports to be that of an officer or agent of the entity;
(2)	the name signed purports to be that of an administrator, executor, guardian, or conservator representing the shareholder and, if the Corporation requests, evidence of fiduciary status acceptable to the Corporation has been presented with respect to the vote, consent, waiver, or proxy appointment;
(3)	the name signed purports to be that of a receiver or trustee in bankruptcy of the shareholder and, if the Corporation requests, evidence of this status acceptable to the Corporation has been presented with respect to the vote, consent, waiver, or proxy appointment;
(4)	the name signed purports to be that of a pledgee, beneficial owner, or attorney-in-fact of the shareholder and, if the Corporation requests, evidence acceptable to the Corporation of the signatory's authority to sign for the shareholder has been presented with respect to the vote, consent, waiver, or proxy appointment; or
(5)	two or more persons are the shareholder as co-tenants or fiduciaries and the name signed purports to be the name of at least one of the co-owners and the person signing appears to be acting on behalf of all the co-owners.

The Corporation shall be entitled to reject a vote, consent, waiver, or proxy appointment if the Secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the shareholder. The Corporation and its officer or agent who accepts or rejects a vote, consent, waiver, or proxy appointment in good faith and in accordance with the standards of this section are not liable in damages to the shareholder for the consequences of the acceptance or rejection. Corporate action based on the acceptance or rejection of a vote, consent, waiver, or proxy appointment under this section is valid unless a court of competent jurisdiction determines otherwise.

2.11 Record Date. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any reconvening thereof or entitled to receive payment of any dividend or in order to make a determination of shareholders for any other proper purpose, the Board of Directors may fix in advance a date as the record date. Such record date shall not be more than 70 days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken. If no record date is so fixed by the Board for the determination of shareholders entitled to notice of, or to vote at a meeting of shareholders, or shareholders entitled to receive a share dividend or other distribution, the record date for determination of such shareholders shall be at the close of business on:

(a)	With respect to an annual shareholder meeting or any special shareholder meeting called by the Board or any person specifically authorized by the Board or these bylaws to call a meeting, the day before the first notice is delivered to shareholders;
(b)	With respect to a special shareholder's meeting demanded by the shareholders, the date the first shareholder signs the demand;
(c)	With respect to the payment of a share dividend, the date the Board authorizes the share dividend;
(d)	With respect to actions taken in writing without a meeting, the date the first shareholder signs a consent;
(e)	And with respect to a distribution to shareholders, other than one involving a repurchase or reacquisition of shares, the date the Board authorizes the distribution.

When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof unless the Board of Directors fixes a new record date. The Board of Directors shall fix a new record date if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.

2.12 Nominations and Other Business. Nominations for the election of Directors and other proposals for action at an annual meeting of shareholders may be made only (a) pursuant to the Corporation's notice of such meeting, (b) by the presiding officer at the meeting, (c) by or at the direction of a majority of the Board of Directors, or (d) by one or more shareholders in accordance with applicable rules of the Securities and Exchange Commission and the provisions of this Section 2.12. A proposal for action at an annual meeting must be a proper matter for shareholder action.

(a) Time for Submission. A nomination for the election of a Director or a proposal for action at an annual meeting may be made by a shareholder only if a written notice of such nomination or proposal has been received by the Secretary at the Corporation's principal office on a timely basis. To be timely, such notice must be received not later than:

(1)

120 days prior to such annual meeting; or

(2)

If the annual meeting is to be held on a date other than the first Tuesday in May, the close of business on the tenth day following the first public disclosure of the date of such meeting. The first public disclosure of the date of any annual meeting of shareholders shall be when public disclosure of such meeting date is first made in a filing by the Corporation with the Securities and Exchange Commission, in any notice given to The Nasdaq Stock Market, or other securities self-regulatory organization, or in a news release reported by any national news service.

(b) Information Required - General. Each such notice from a shareholder shall set forth:

(1)	As to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the notice is given (i) the name and address of such shareholder and of such beneficial owner; and (ii) the class and number of shares of the Corporation which are owned of record and beneficially by such shareholder and such beneficial owner; and
(2)	A representation that the shareholder is a beneficial owner of stock of the Corporation entitled to vote at such meeting and intends to be present at the meeting in person or by proxy to make such nomination or proposal.

(c) Information Required - Nominations. Each notice of nomination for the election of a Director from a shareholder also shall set forth:

(1)	The name and address of the person to be nominated;
(2)	A description of all arrangements or understandings between the shareholder and the nominee and any other person or persons (naming such person or persons) pursuant to which the nomination is to be made by the shareholder;
(3)	Such other information regarding the nominee as would be required to be included in proxy materials filed under applicable rules of the Securities and Exchange Commission had the nominee been nominated by the Board of Directors; and
(4)	The written consent of the nominee to serve as a Director if so elected.

(d) Information Required - Other Business. Each notice of a proposal for action at an annual meeting from a shareholder also shall set forth:

(1)	A brief description of the proposal;
(2)	The reasons for making such proposal; and
(3)	Any direct or indirect interest of the shareholder, or any person on whose behalf the shareholder is acting, in making such proposal.

(e) Compliance Mandatory. The presiding officer at the meeting may refuse to permit any nomination for the election of a Director or proposal to be made at an annual meeting by a shareholder who has not complied with all of the foregoing procedures and requirements.

2.13 Presiding Officials at Meetings. Unless some other person is elected by a vote of a majority of the shares then entitled to vote at a meeting of shareholders, or is designated by the Board of Directors, the President shall preside at and the Secretary shall prepare minutes of each meeting of shareholders.

2.14 Inspection of Corporate Records.

(a) Minutes and Accounting Records. The Corporation shall keep as permanent records minutes of all meetings of its shareholders and Board of Directors, a record of all actions taken by the shareholders or Board of Directors without a meeting, and a record of all actions taken by a committee of the Board of Directors in place of the Board of Directors on behalf of the Corporation. The Corporation shall maintain appropriate accounting records.

(b) Absolute Inspection Rights of Records Required at Principal Office. Upon written demand to the Corporation made at least five business days before the date on which he wishes to inspect and copy, a shareholder (or his agent or attorney) shall be entitled to inspect and copy, during regular business hours, any of the following records, all of which the Corporation is required to keep at its principal office:

(1)	its Articles or Restated Articles of Incorporation and all amendments to them currently in effect;
(2)	its bylaws or restated bylaws and all amendments to them currently in effect;
(3)	the minutes of all shareholders' meetings, and records of all action taken by shareholders without a meeting, for the past three years;
(4)	all written communications to shareholders generally within the past three years, including the financial statements furnished for the past three years to the shareholders;
(5)	a list of the names and business addresses of its current directors and officers; and
(6)	its most recent annual report delivered to the Secretary of State.

(c) Conditional Inspection Right. A shareholder (or his agent or attorney) shall be entitled to inspect and copy, during regular business hours at a reasonable location specified by the Corporation, any of the records specified below in this paragraph (c), provided that (i) such shareholder gives the Corporation a written demand made in good faith, at least five business days before the date on which he wishes to inspect and copy, (ii) the demand is for a proper purpose and the written demand describes with reasonable particularity the purpose for the request and the records he or she desires to inspect, and (iii) the records are directly connected with the shareholder's purpose. The right of inspection specified in this paragraph (c) shall apply to the following records of the Corporation:

(1)	accounting records of the Corporation; and
(2)	the record of shareholders (compiled no earlier than the date of the shareholder's demand).

(d)	Copy Costs. The right to copy records includes, if reasonable, the right to receive copies made by photocopy or other means. The Corporation may impose a reasonable charge, covering the costs of labor and material, for copies of any documents provided to the shareholder. The charge may not exceed the estimated cost of production or reproduction of the records.
(e)	Shareholder Includes Beneficial Owner. For purposes of this Section 2.13, the term "shareholder" shall include a beneficial owner whose shares are held in a voting trust or by a nominee on the beneficial owner's behalf.

ARTICLE THREE: DIRECTORS

3.01 Management. The business and affairs of the Corporation shall be managed by the Board of Directors, subject to the restrictions imposed by law, the Articles of Incorporation, or these By-laws.

3.02 Number; Election; Term; Qualification. Subject to Section 3.06 below, the Board of Directors shall consist of not less than 9 nor more than 25 shareholders, the exact number and the terms of office of which shall be fixed from time to time by the Board of Directors pursuant to a resolution adopted by a majority of the full Board of Directors. Such exact number may be increased or decreased by the affirmative vote of the holders of at least seventy-five percent (75%) of the combined voting power of all of the then-outstanding shares of the Corporation's capital stock entitled to vote generally in the election of directors, (other than directors, if any, elected under Article Fifteen of the Articles of Incorporation). Election of directors shall be by vote of a majority of the shares represented in person or by proxy at a meeting at which a quorum is present.

3.03 Classification. The directors (other than directors, if any, elected under Article Fifteen of the Articles of Incorporation) shall be classified, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible. Upon their initial election, the members of the first class shall hold office for a term expiring at the next annual meeting of the shareholders after their election, the members of the second class shall hold office for a term expiring at the second annual meeting of the shareholders after their election, and the members of the third class shall hold office for a term expiring at the third annual meeting of shareholders after their election. At each annual meeting of shareholders following such initial classification and election, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of shareholders after their election.

3.04 Vacancies. Subject to Section 3.06 below, any vacancies in the Board of Directors resulting from death, resignation, retirement, or removal from office of a director may be filled by the Board of Directors, acting by resolution of a majority of the directors then in office (other than directors, if any, elected under Article Fifteen of the Articles of Incorporation), although less than a quorum. Any director chosen to fill a vacancy as provided herein shall hold office until the next election of the class for which such director shall have been elected and shall have qualified. No decrease in the number of directors shall shorten the term of any incumbent director.

3.05 Mandatory Retirement. No person whether or not a director in office shall be elected as a member of the Board of Directors after his or her seventieth birthday. Any director who passes the age of seventy while in office may continue to serve until the next annual meeting.

3.06 Removal. Subject to Section 3.07 below, any director, or the entire Board of Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least seventy-five percent (75%) of the combined voting power of all of the then-outstanding shares of the Corporation's capital stock entitled to vote generally in the election of directors.

3.07 Nominations. Nominations for election to the Board of Directors shall be made by the Nominating/ Corporate Governance Committee of the Board of Directors, or by the shareholders, in compliance with the procedures set forth in Section 2.12 of these By-laws.

3.08 Annual Meeting. The Board of Directors shall hold its annual meeting for the purpose of organization and the transaction of business, if a quorum is present, at its first regularly scheduled meeting following the annual meeting of shareholders, unless an earlier special meeting for that purpose is convened by the Chairman of the Board.

3.09 Regular Meetings. Regular meetings of the Board of Directors shall be held without notice at such times and places as may be designated from time to time by resolution of the Board of Directors and communicated to all directors.

3.10 Special Meetings. A special meeting of the Board of Directors shall be held whenever called by the President of the Corporation or by any three directors at such time and place as the President or directors shall designate in the notice of such special meeting. The person or persons calling any special meeting shall cause notice of such special meeting to be given to each director at least 24 hours before such special meeting. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice or waiver of notice of any special meeting, except for proposed amendments to the By-laws.

3.11 Quorum; Majority Vote. At all meetings of the Board of Directors, a majority of the directors fixed in the manner provided in these By-laws shall constitute a quorum for the transaction of business. If a quorum is not present at a meeting, a majority of the directors present may adjourn the meeting from time to time, without notice other than an announcement at the meeting, until a quorum is present. The vote of a majority of the directors present at a meeting at which a quorum is in attendance shall be the act of the board of directors, unless the vote of a different number is required by law, the Articles of Incorporation or these By-laws.

3.12 Procedure; Minutes. At meetings of the Board of Directors, business shall be transacted in such order as the Board of Directors may determine from time to time. The President of the Corporation, or in his absence a designated Vice-President, shall preside at each meeting of the Board of Directors provided that in the absence of the President and any qualified Vice-President the Board of Directors may appoint a person to preside at the meeting. The Secretary of the Corporation or an Assistant Secretary designated by the Board shall act as secretary of each meeting provided that in the absence of the Secretary and any qualified Assistant Secretary, the Board of Directors shall appoint at each meeting a person to act as Secretary of the meeting. The Secretary of the meeting shall prepare minutes of the meeting which shall be delivered to the Secretary of the Corporation for placement in the minutes books of the Corporation.

3.13 Presumption of Assent. A director of the Corporation who is present at any meeting of the Board of Directors at which action on any matter is taken shall be presumed to have assented to the action unless (i) he shall object at the beginning of the meeting (or promptly following his arrival) to holding the meeting or transacting business at the meeting, or (ii) his dissent or abstention shall be entered in the minutes of the meeting or (iii) he shall file his written dissent or abstention to such action with the presiding officer of the meeting before the adjournment thereof. Such right to dissent shall not apply to a director who voted in favor of such action.

3.14 Compensation. Unless otherwise provided in the Articles of Incorporation, by resolution of the Board of Directors, each director may be paid his expenses, if any, of attendance at each meeting of the Board of Directors, and may be paid a stated salary or retainer as director or a fixed sum for attendance at each meeting of the Board of Directors, or both. No such payment shall preclude any director from serving the Corporation in any capacity and receiving compensation therefor.

ARTICLE FOUR: COMMITTEES

4.01 Audit Committee. There shall be an Audit Committee consisting entirely of such outside independent Directors as shall from time to time be appointed by resolution of the Board of Directors. The Audit Committee shall be responsible for the selection and appointment of the Corporation's independent accountants and for approving their compensation and any non-audit services performed by them; reviewing the scope and results of the audit plans of the independent accountants and internal auditors; overseeing the scope and adequacy of internal accounting control and record-keeping systems; reviewing the objectivity, effectiveness and resources of the internal audit function; conferring independently with management, the internal auditors and the independent accountants; and overseeing the Corporation's system of financial disclosure. The Audit Committee shall have such other duties and responsibilities as shall be set forth in a charter approved annually by the Board of Directors.

4.02 Compensation Committee. There shall be a Compensation Committee consisting entirely of such outside independent Directors as shall from time to time be appointed by resolution of the Board of Directors. The Compensation Committee shall be responsible for reviewing and approving the Chief Executive Officer's compensation, and the compensation of other executive officers, whether paid directly by the Corporation, or indirectly by the Corporation's subsidiaries; and establishing compensation policies for the Corporation's directors. The Compensation Committee shall have such other duties and responsibilities as shall be set forth in a charter approved annually by the Board of Directors.

4.03 Nominating/Corporate Governance Committee. There shall be a Nominating/ Corporate Governance Committee consisting entirely of such outside independent Directors as shall from time to time be appointed by resolution of the Board of Directors. The Nominating/Corporate Governance Committee shall be responsible for screening and recommending to the Board of Directors persons to be candidates for election or appointment as Directors; evaluating the performance of the Board, including the training and orientation of directors; and reviewing corporate policies such as Code of Conduct, stock ownership guidelines and insider trading policies. The Nominating/ Corporate Governance Committee shall have such other duties and responsibilities as shall be set forth in a charter approved annually by the Board of Directors.

4.04 Other Committees. The Board of Directors may, at any time and from time to time, appoint such other standing or special committees with such duties and responsibilities as the Board of Directors shall determine, including, without limitation, an executive committee possessing and authorized to exercise, between meetings of the Board, all of the powers of the Board in the management of the business and affairs of the Corporation, except as may be limited by resolution of the Board, by Section 4.06 of these By-laws, or otherwise by applicable law.

4.05 Number; Qualification; Term. Each committee shall consist of two or more directors appointed by resolution adopted by a majority of the entire Board of Directors. The number of committee members may be increased or decreased from time to time by resolution adopted by a majority of the entire Board of Directors. Committee members shall serve at the pleasure of the Board of Directors.

4.06 Limitation on Authority. Notwithstanding anything to the contrary in the By-laws, or in any committee or resolution of the Board appointing such committee, no committee shall have the authority of the Board of Directors in reference to:

(a)	amending the Articles of Incorporation;
(b)	approving a plan of merger not requiring shareholder approval;
(c)	approving or proposing to shareholders action that the Vermont Business Corporation Act requires be approved by the shareholders;
(d)	amending, altering, or repealing these By-laws or adopting new By-laws;
(e)	filling vacancies in or removing members of the Board of Directors or of any committee;
(f)	electing or removing officers or committee members;
(g)	fixing the compensation of any committee member;
(h)	altering or repealing any resolution of the full Board of Directors;
(i)	declaring dividends or authorizing any other form of distribution to shareholders, or authorizing the issuance of shares of the Corporation; or
(j)	authorizing or approving the issuance or sale of shares or the reacquisition of shares, except according to a formula or method prescribed by the Board of Directors.

4.07 Committee Changes. The Board of Directors shall have the power at any time to fill vacancies in, to change the membership of, and to discharge any committee.

4.08 Meetings. Regular and special meetings of any committee may be held without notice at such times and places as may be designated from time to time by resolution of the committee and communicated to all committee members.

4.09 Quorum; Majority; Vote. At all meetings of any committee, a majority of the number of committee members designated by the Board of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at a meeting of any committee, a majority of the committee members present may adjourn the meeting from time to time, without notice other than an announcement at the meeting, until a quorum is present. The vote of a majority of the committee members present at any meeting at which a quorum is in attendance shall be the act of a committee, unless the vote of a different number is required by the Articles of Incorporation or these By-laws.

4.10 Minutes. Each committee shall cause minutes of its proceedings to be prepared and shall report the same to the Board of Directors upon the request of the Board of Directors. The minutes of the proceedings of each committee shall be delivered to the Secretary of the Corporation for placement in the minute books of the Corporation.

4.11 Compensation. Committee members may, by resolution of the Board of Directors, be allowed a fixed sum and expenses of attendance, if any, for attending any committee meetings or a stated salary.

4.12 Responsibility. The designation of any committee and the delegation of authority to it shall not operate to relieve the Board of Directors or any director of any responsibility imposed upon it or such director by law.

ARTICLE FIVE: GENERAL PROVISIONS RELATING TO MEETINGS

5.01 Manner of Giving Notice. Any notice required to be given to any person under the provisions of the Articles of Incorporation, these Bylaws or by law shall be given to the person either personally or by sending a copy thereof:

(a)

By first class or express mail, postage prepaid, or courier service, charges prepaid, to such person's postal address appearing on the books of the Corporation or, in the case of Directors, supplied by such Director to the Corporation for the purpose of notice. Notice pursuant to this subsection shall be deemed to have been given to the person entitled thereto when deposited in the United States mail or with a courier service for delivery to that person; or

(b)

With respect to directors (but not shareholders), by telephone, facsimile transmission, e-mail or other electronic communication to such person's facsimile number or address for e-mail or other electronic communications supplied by such person to the Corporation for the purpose of notice. Notice pursuant to this subsection shall be deemed to have been given to the person entitled thereto when sent.

A notice of meeting shall specify the date, time and place, if any, of the meeting and any other information required by law or these Bylaws.

5.02 Waiver of Notice. Whenever by law, the Articles of Incorporation, or these By-laws, any notice is required to be given to any person, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time notice should have been given, shall be equivalent to the giving of such notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except where such person attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

5.03 Householding of Notices. Any material delivered to a shareholder in a manner consistent with the delivery requirements contained in Regulation 14A or 14C under the Securities Exchange Act of 1934 shall be deemed to be delivered to the shareholder entitled to such delivery.

5.04 Bulk Mail. Notice of any regular or special meeting of the shareholders, or any other notice required by law, the Articles of Incorporation or these Bylaws to be given to all shareholders or to all holders of a class or series of shares, may be given by any class of mail, postage prepaid, if the notice is deposited in the United States mail at least 20 days prior to the day named for the meeting or any corporate or shareholder action specified in the notice.

5.05 Shareholders Without Forwarding Addresses. Notice or other communications need not be sent to any shareholder with whom the Corporation has been unable to communicate for more than 24 consecutive months because communications to the shareholder are returned unclaimed or the shareholder has otherwise failed to provide the Corporation with a current address. Whenever the shareholder provides the Corporation with a current address, the Corporation shall commence sending notices and other communications to the shareholder in the same manner as to other shareholders.

5.06 Telephone and Similar Meetings. Directors or committee members may participate in and hold a meeting by means of a conference telephone or similar communications equipment by means of which persons participating in the meeting can hear each other. Participation in such a meeting shall constitute presence in person at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

5.07 Action Without Meeting. Any action which may be taken, or is required by law, the Articles of Incorporation, or these By-laws to be taken, at a meeting of directors, or committee members may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the directors, or committee members, as the case may be, entitled to vote with respect to the subject matter thereof and such consent shall have the same force and effect as a unanimous vote of such directors or committee members, as the case may be, and may be stated as such in any document filed with the Secretary of State of Vermont or in any certificate or other document delivered to any person. The consent may be in one or more counterparts so long as each director, or committee member signs one of the counterparts. The signed consent shall be placed in the minute books of the Corporation and shall take effect as of the date of the last signature, unless a different date is specified in the co nsent.

ARTICLE SIX: OFFICERS AND OTHER AGENTS

6.01 Number; Titles; Election; Term. The Corporation shall have a president, one or more vice presidents (and, in the case of each vice president, with such descriptive title, if any, as the Board of Directors shall determine), a secretary, a treasurer, and such other officers and agents as the Board of Directors may deem desirable. The Board of Directors shall elect one of its members as President of the Corporation and shall also elect one or more vice-presidents, a treasurer, and a secretary at its first meeting at which a quorum shall be present after formation of the Corporation and after each annual meeting of shareholders, or whenever a vacancy exists. The Board of Directors then, or from time to time, may also elect or appoint one or more other officers or agents as it shall deem advisable. Each officer and agent shall hold office for the term for which he is elected or appointed and until his successor has been elected or appointed and qualified. Unless otherwise provided in t he resolution of the Board of Directors electing or appointing an officer or agent, his term of office shall extend to and expire at the meeting of the Board of Directors following the next annual meeting of shareholders or, if earlier, at his death, resignation, or removal. Any two or more offices may be held by the same person, except that the President and the Secretary shall not be the same person. No officer or agent except the President of the Corporation need be a shareholder, a director, a resident of the State of Vermont, or citizen of the United States. The President must be a shareholder and duly elected or appointed director of the Corporation.

6.02 Removal. Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors, at any time, with or without cause, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

6.03 Vacancies. Any vacancy occurring in any office of the Corporation may be filled by the Board of Directors.

6.04 Authority. Officers shall have such authority and perform such duties in the management of the Corporation as are provided in these By-laws or as may be determined by resolution of the Board of Directors not inconsistent with these By-laws.

6.05 Compensation. The compensation, if any, of officers shall be fixed, increased, or decreased from time to time by the Board of Directors; provided, that the Board of Directors may by resolution delegate to any one or more officers of the Corporation, or to a committee of the Board, the authority to fix such compensation.

6.06 Chairman of the Board. The President of the Corporation shall be the Chairman of the Board and shall perform such executive, supervisory, and management functions and duties as may be assigned to him from time to time by the Board of Directors.

6.07 President. The President shall be the chief executive officer of the Corporation and, subject to the supervision of the Board of Directors, shall have general management of the business and affairs of the Corporation in the ordinary course of its business with all such powers with respect to such business and affairs as may be reasonably incident to such responsibilities, including, but not limited to, the power to employ, discharge, or suspend employees and agents of the Corporation, to fix the compensation of employees and agents, and to suspend, with or without cause, any officer of the Corporation pending final action by the Board of Directors with respect to continued suspension, removal, or reinstatement of such officer. The President shall see that all orders and resolutions of the Board of Directors are carried into effect and shall perform such other duties and have such other authority and powers as the Board of Directors may from time to time prescribe.

6.08 Vice President. Each vice president shall have such powers and duties as may be prescribed from time t o time by the Board of Directors or as may be delegated from time to time by the President. The Board shall designate one vice president to exercise the powers of the President in the event of that officer's absence or inability to act.

6.09 Treasurer. The Treasurer shall have custody of the Corporation's funds and securities, shall keep full and accurate accounts of receipts and disbursements, and shall deposit all moneys and valuable effects in the name and to the credit of the Corporation in such depository or depositories as may be designated by the Board of Directors. The Treasurer shall audit all payrolls and vouchers of the Corporation, receive, audit, and consolidate all operating and financial statements of the Corporation and its various departments and shall supervise the accounting and auditing practices of the Corporation. Additionally, the Treasurer shall have the power to endorse for deposit, collection or otherwise all checks, drafts, notes, bills of exchange, and other commercial paper payable to the Corporation and to give proper receipts and discharges for all payments to the Corporation. The Treasurer shall perform such other duties as may be prescribed from time to time by the Board of Directors or as may be dele gated from time to time by the President.

6.10 Assistant Treasurers. Each Assistant Treasurer shall perform such duties as may be prescribed from time to time by the Board of Directors or as may be delegated from time to time by the President or Treasurer. The Assistant Treasurer shall exercise the powers of the Treasurer during that officer's absence or inability to act. In the event more than one Assistant Treasurer is appointed, the President shall designate one Assistant Treasurer to exercise the powers of the Treasurer as herein set forth.

6.11 Secretary. In addition to any other duties required by law or by the Board of Directors from time to time, the Secretary shall perform the following duties:

(a)	record all votes and proceedings of the shareholders and directors or any committee thereof;
(b)	have the custody of the corporate seal, and of the corporate records within this State;
(c)	keep a record book, which shall always be available for the inspection and copying by the shareholders, containing the names of the shareholders, their places of residence, the number of shares held by each, the time when they respectively acquired the shares, and the time of any transfers thereof, except that such record book may be kept by a transfer agent rather than the Secretary when such transfer agent is approved by the vote of a majority of the shareholders of the Corporation;
(d)	procure and file in his own office certified copies of all papers required by law to be filed with the Secretary of State.

6.12 Assistant Secretaries. Each Assistant Secretary shall perform such duties as may be prescribed from time to time by the Board of Directors or as may be delegated from time to time by the President or Secretary. The Assistant Secretary shall exercise the powers of the Secretary during that officer's absence or inability to act. In the event more than one Assistant Secretary is appointed, the President shall designate one Assistant Secretary to exercise the powers of the Secretary as herein set forth.

ARTICLE SEVEN: CERTIFICATES AND SHAREHOLDERS

7.01 Certificates for Shares. The certificates for shares of stock of the Corporation shall be in such form as shall be approved by the Board of Directors in conformity with law. The certificates shall be consecutively numbered, shall be entered as they are issued in the books of the Corporation or in the records of the Corporation's designated transfer agent, if any, and shall state the shareholder's name, the number of shares, and such other matters as may be required by law. The certificates shall be signed, either manually or by facsimile, by the President or any Vice-President and by the Secretary or the Treasurer and shall be sealed with the seal of the Corporation or facsimile thereof.

7.02 Issuance. Shares with or without par value may be issued for such consideration and to such persons as the Board of Directors may from time to time determine, except in the case of the shares with par value the consideration must be at least equal to the par value of such shares. Shares may not be issued until the full amount of the consideration has been paid.

7.03 Shares Without Certificates.

(a)	Issuing Shares Without Certificates. Unless the Articles of Incorporation provide otherwise, the Board of Directors may authorize the issue of some or all the shares of its capital stock without certificates. The authorization does not affect shares already represented by certificates until they are surrendered to the Corporation.
(b)	Information Statement Required. Within a reasonable time after the issue or transfer of shares without certificates, the Corporation shall send the shareholder a written statement containing at a minimum:

(1)	the name of the issuing corporation and that it is organized under the laws of Vermont;
(2)	the name of the person to whom issued; and
(3)	the number and class of shares and the designation of the series, if any, of the issued shares.

(c) Procedures. The procedures in Section 7.06 shall not apply to uncertificated shares. The Board may adopt such alternative procedures concerning such shares as it deems necessary or appropriate.

7.04 Consideration for Shares. The consideration for the issuance of shares shall consist of money paid, labor done (including services actually performed for the Corporation), or property (tangible or intangible) actually received, including other securities of the Corporation, and, in the discretion of the Board of Directors, one or more promissory notes. The promise of future services shall not constitute payment for shares. In the absence of fraud in the transaction, the judgment of the Board of Directors as to the value of consideration received shall be conclusive. When consideration, fixed as provided by law, has been paid, the shares shall be deemed to have been issued and shall be considered fully paid and nonassessable. The consideration received for shares shall be allocated by the Board of Directors, in accordance with law, between stated capital and capital surplus accounts.

7.05 Lost, Stolen, or Destroyed Certificates. The Corporation shall issue a new certificate in place of any certificate for shares previously issued if the registered owner of the certificate:

(a)	Claim. Makes proof in affidavit form that a previously issued certificate for shares has been lost, destroyed, or stolen;
(b)	Timely Request. Requests the issuance of a new certificate before the Corporation has notice that the certificate has been acquired by a purchaser for value in good faith and without notice of an adverse claim;
(c)	Bond. Gives a bond in such form, and with such surety or sureties, with fixed or open penalty, as the Board of Directors may direct, in its discretion, to indemnify the Corporation (and its transfer agent and registrar, if any) against any claim that may be made on account of the alleged loss, destruction, or theft of the certificate; and
(d)	Other Requirements. Satisfies any other reasonable requirements imposed by the Corporation.

Notwithstanding the foregoing, the Corporation may waive any or all of the foregoing requirements in its discretion. When a certificate has been lost, destroyed, or stolen, and the shareholder of record fails to notify the Corporation within a reasonable time after he has notice of it, and the Corporation registers a transfer of the shares represented by the certificate before receiving such notification, the shareholder of record is precluded from making any claim against the Corporation for the transfer or for a new certificate.

7.06 Transfer Agent; Transfer of Shares.

(a)

Transfer Agent. The Corporation may act as its own registrar and transfer agent for any class of the Corporation's debt or equity securities, or it may designate an affiliated or non-affiliated third party for such purpose, as the Board of Directors may determine in its discretion.

(b)

Transfer of Shares. Shares of stock of the Corporation shall be transferable only on the books of the Corporation by the shareholders of record thereof in person or by their duly authorized attorneys or legal representatives. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate representing shares, duly endorsed or accompanied by executed stock powers or other proper evidence of succession, assignment, or authority to transfer, the Corporation or its transfer agent shall issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction upon its books. The Board of Directors may make such additional rules and regulations as it may deem necessary or appropriate concerning the issue, transfer and registration of share certificates.

7.07 Registered Shareholders. The Corporation shall be entitled to treat the shareholder of record as the shareholder in fact of any shares and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not it shall have actual or other notice thereof, except as otherwise provided by law.

ARTICLE EIGHT: INDEMNIFICATION

8.01 Definitions. Terms not otherwise defined in this Article shall have the meaning ascribed in the Vermont Business Corporation Law, Title 11A of the Vermont Statutes Annotated, as in effect from time to time.

8.02 Authority to Indemnify.

(a) Except as provided in section 8.02(d) and subject to section 8.06, this Corporation shall indemnify an individual who is made a party to a proceeding because he is or was a director against liability incurred in the proceeding if:

(1)	he conducted himself in good faith; and
(2)	he reasonably believed:

(i)	in the case of conduct in his official capacity with the Corporation, that his conduct was in its best interest; and
(ii)	in all other cases, that his conduct was at least not opposed to its best interests; and

(3) in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful.

(b)	A director's conduct with respect to an employee benefit plan for a purpose he reasonably believed to be in the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of section 8.02(a)(2)(ii).
(c)	The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the standard of conduct described in this section.
(d)	The Corporation may not indemnify a director under this section:

(1)	in connection with a proceeding by or in the right of the Corporation in which the director was adjudged liable to the Corporation; or
(2)	in connection with any other proceeding charging improper personal benefit to him, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him.

(e) Indemnification permitted under this section in connection with a proceeding by or in the right of the Corporation is limited to reasonable expenses incurred in connection with the proceeding.

8.03 Mandatory Indemnification in Certain Circumstances. This Corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which he was a party because he is or was a director of the Corporation against reasonable expenses incurred by him in connection with the proceeding.

8.04 Advance for Expenses.

(a) The Corporation may pay for or reimburse the reasonable expenses incurred by a director who is or was a party to a proceeding in advance of final disposition of the proceeding if:

(1)	the director furnishes the Corporation a written affirmation of his good faith belief that he has met the standard of conduct described in section 8.02;
(2)	the director furnishes the Corporation a written undertaking, executed personally or on his behalf, to repay the advance if it is ultimately determined that he did not meet the standard of conduct; and
(3)	a determination is made that the facts then known to those making the determination would not preclude indemnification under this Article Eight.

(b) The undertaking required by section 8.04(a)(2) must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment.

8.05 Court Ordered Indemnification. A director of this Corporation who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court after giving any notice the court considers necessary may order indemnification if it determines:

(1)	the director is entitled to mandatory indemnification under section 8.03, in which case the court shall also order the Corporation to pay the director's reasonable expenses incurred to obtain court-ordered indemnification; or
(2)	the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not he met the standard of conduct set forth in section 8.02 or was adjudged liable as described in section 8.02(d), but if he was adjudged so liable his indemnification is limited to reasonable expenses incurred.

8.06 Determination and Authorization of Indemnification.

(a)	The Corporation may not indemnify a director under section 8.02 unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because he has met the standard of conduct set forth in Section 8.02.
(b)	The determination referred to in section 8.06(a) shall be made:

(1)	by the Board of Directors by majority vote of a quorum consisting of directors not at the time parties to the proceeding;
(2)	if a quorum cannot be obtained under subdivision (1), by majority vote of a committee duly designated by the Board of Directors (in which designation directors who are parties may participate), consisting solely of two or more directors not at the time parties to the proceeding;
(3)	by special legal counsel:

(i)	selected by the Board of Directors or its committee in the manner prescribed in subdivision (1) or (2); or
(ii)	if a quorum of the Board of Directors cannot be obtained under subdivision (1) and a committee cannot be designated under subdivision (2), selected by majority vote of the full Board of Directors (in which selection directors who are parties may participate); or

(4) by the shareholders, but shares owned by or voted under the control of directors who are at the time parties to the proceeding may not be voted on the determination.

Notwithstanding the foregoing, if a "change in control" (as defined in the federal Bank Holding Company Act of 1956, as amended) of the Corporation shall have occurred within the preceding two years, the determination shall be made by special legal counsel, unless otherwise expressly agreed by the person claiming indemnification.

(c) Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under section 89.06(b)(3) to select counsel.

If it is determined under this Section 89.06 that the claimant is entitled to indemnification, payment to the claimant shall be made within 15 days after such determination or demand.

8.07 Indemnification of Officers, Employees and Agents.

(a)	An individual who is made a party to a proceeding because he is or was an officer of the Corporation is entitled to mandatory indemnification under section 8.03 and is entitled to apply for court-ordered indemnification under section 8.05, in each case to the same extent as a director.
(b)	The Corporation shall indemnify and advance expenses under section 8.02 and 8.04 to an individual who is made a party to a proceeding because he is or was an officer of the Corporation, subject to the same conditions and limitations and to the same extent that these By-laws provide for indemnification and advancement of expenses to a director.
(c)	In the discretion of the Board of Directors, the Corporation may indemnify and advance expenses under Sections 8.02 and 8.04 to an individual who is made a party to a proceeding because he is or was an employee or agent of the Corporation, subject to the same conditions and limitations and to the same extent that these By-laws provide for indemnification and advancement of expenses to a director.

8.08 Insurance. The Corporation may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee, or agent of the Corporation or who, while a director, officer, employee, or agent of the Corporation, is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, against liability asserted against or incurred by him in that capacity or arising from his status as a director, officer, employee, or agent, whether or not the Corporation would have power to indemnify him against the same liability under section 8.02 or 8.03.

8.09 Contract Right. The right of indemnification conferred upon directors and officers in this By-law shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any proceeding in advance of its final disposition. The right to indemnification under this Section 8.09 shall be deemed to vest upon the occurrence of the event giving rise to the claim for indemnification and no subsequent modification or repeal of this Article Eight or other action on the part of the Corporation or otherwise shall operate to limit or impair such right. Nothing in this Section 8.09 shall be deemed to create any vested contract right to indemnification or advance of expenses in favor of any person for whom indemnification or advancement of expenses is merely permissive and not required under applicable law or this Article Eight.

8.10 Enforcement of Rights. In any action brought by a claimant to enforce the right to indemnification under this Article Eight, it shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the requirements of Section 8.04 have been met), that the claimant has not met the standard of conduct which makes it permissible under the Vermont Business Corporation Law for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation.

8.11 Non-Exclusive Rights; Survival. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article Eight shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, other provision of the Articles of Association or By-laws, contract, vote of stockholders or Directors or otherwise. No repeal or modification of this Article Eight shall in any way diminish or adversely affect the rights of any director, officer, employee or agent of the Corporation hereunder in respect of any occurrence or matter arising prior to any such repeal or modification.

8.12 Severability. If any provision or provisions of this Article Eight shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (i) the validity, legality and enforceability of the remaining provisions of this Article Eight (including, without limitation, each portion of any section of this Article Eight containing any such provision held to be invalid, illegal or unenforceable, that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (ii) to the fullest extent possible, the provisions of this Article Eight shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

8.13 Application of this Article.

(a)	These provisions do not limit the Corporation's power to pay or reimburse expenses incurred by a director, officer or other person in connection with his appearance as a witness in a proceeding at a time when such individual has not been made a named defendant or respondent to the proceeding.
(b)	It is the intent of this Article Eight that the Corporation (i) shall indemnify and advance expenses to directors and officers of the Corporation and (ii) shall have the right to indemnify and advance expenses to any employee or agent, in each case, to the fullest extent permitted by applicable law. In the event that, after this Article Eight becomes effective, any such applicable law is amended to permit expanded powers to indemnify or advance expenses, the Corporation shall be deemed to have and may exercise all such expanded powers, notwithstanding any contrary provision of these By-laws.
(c)	It is the intent of this Article Eight that it shall apply to acts and omissions that occurred prior to its adoption, even though suit is not filed or a claim is otherwise asserted until after such adoption.

ARTICLE NINE: EMERGENCY PREPAREDNESS

9.01 Emergency. If there is an emergency declared by governmental authorities or otherwise subsisting as the result of a regional or national disaster or act of war or terrorism, and of such severity as to prevent the normal conduct and management of the affairs of the Corporation and its subsidiaries:

(a)

Temporary Executive Committee. If it is impractical for the Board of Directors, or the Executive Committee (if one has been appointed) to meet, any three available Directors shall constitute an Emergency Executive Committee authorized to exercise the full authority of the Board of Directors, except as limited by applicable law, until such time as the appointed Executive Committee or the Board of Directors can again assume full responsibility and control of the Corporation; and

(b)

The available officers and employees of the Corporation shall continue to conduct the affairs of the Corporation, with such guidance as may be available to them from the Board of Directors, the Executive Committee or the Temporary Executive Committee constituted under Section 9.01(a) hereof, subject to conformance with any governmental directives during the emergency.

ARTICLE TEN: MISCELLANEOUS PROVISIONS

10.01 Distributions. Subject to provisions of the statutes and the Articles of Incorporation, dividends or other distributions may be declared by the Board of Directors at any meeting and may be paid in cash, in property, or in shares of stock of the Corporation. Such declaration and payment shall be at the discretion of the Board of Directors.

10.02 Reserves. The Board of Directors may create out of funds of the Corporation legally available therefor such reserve or reserves as the Board of Directors from time to time, in its discretion, considers proper to provide for contingencies, to equalize dividends or to repair or maintain any property of the Corporation, or for such other purposes as the Board of Directors shall consider beneficial to the Corporation. The Board of Directors may modify or abolish any such reserve.

10.03 Books and Records. The Corporation shall keep correct and complete books and records of account, shall keep as permanent records the minutes of the proceedings of its shareholders, Board of Directors, and any committee, and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of the shares held by each shareholder.

10.04 Fiscal Year. The fiscal year of the Corporation shall be as provided in the Articles of Incorporation.

10.05 Seal. The seal, if any, of the Corporation shall be in such form as may be approved from time to time by the Board of Directors.

10.06 Resignation. A director, committee member, officer, or agent may resign by so stating at any meeting of the Board of Directors or by giving written notice to the Board of Directors, the President, or the Secretary, or other officer responsible for recording the minutes of the meetings of the shareholders and directors. Such resignation shall take effect at the time specified therein, or immediately if no time is specified. Unless it specifies otherwise, a resignation is effective without being accepted.

10.07 Securities of Other Corporations. Except as may be otherwise provided by resolution of the Board of Directors, the President, the Secretary, or any Vice-President of the Corporation shall have the power and authority to transfer, endorse for transfer, vote, consent, or take any other action with respect to any securities of another issuer which may be held or owned by the Corporation and to make, execute, and deliver any waiver, proxy, or consent with respect to any such securities. For purposes of this section, the term "securities" shall include, without limitation, any membership interest the Corporation may hold in any limited liability company or similar venture.

10.08 Amendment. Except as hereinafter provided in this Section 10.08, or by law or in the Articles of Incorporation, these By-laws may be altered, amended or repealed by the directors acting by resolution of a majority of the directors then in office or by resolution of the shareholders. Notwithstanding any other provision of these By-laws or of the Articles of Incorporation and notwithstanding the fact that some lesser percentage may be specified by law, the affirmative vote of the holders of 75% or more of the combined voting power of the then-outstanding shares of the Corporation's capital stock entitled to vote generally in the election of directors shall be required to amend, alter, change, or repeal, in whole or in part, Sections 3.02, 3.03, 3.04, 3.05, or 3.06 of these By-laws.

10.09 Invalid Provisions. If any part of these By-laws shall be held invalid or inoperative for any reason, the remaining parts, so far as it is possible and reasonable, shall remain valid and operative.

10.10 Headings. The headings used in these By-laws are for convenience only and do not constitute matter to be construed in the interpretation of these By-laws.

The undersigned, the Secretary of the Corporation, hereby certifies that the foregoing By-laws, as amended and restated, were adopted by the Board of Directors of the Corporation, as of the 15th day of October, 2002 and as further amended by July 8, 2003.

/s/ Christianne Bumps

Secretary

Community Bancorp.

(Seal)