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Committee Charters
Community Bancorp. Audit Committee Charter
Purpose
To assist the Board of Directors in fulfilling its oversight responsibilities for the Company’s accounting and financial reporting process, the system of internal control and the audit process.
Authority
The Audit Committee has authority to conduct or authorize investigations into any matters within its scope of responsibility. It is empowered to:
- Appoint, compensate, and oversee the work of any registered public accounting firm employed by the Company and terminate the engagement of any such firm.
- Resolve any disagreements between management and the auditor regarding financial reporting.
- Pre-approve all audit and permitted non-audit services performed by the Company’s independent auditors. The Committee may delegate this authority to a member of the Committee who will inform the entire Committee of any approval taken pursuant to that delegated authority.
- Pre-approve any outsourced internal audit consulting services. The Committee may delegate this authority to a member of the Committee who will inform the entire Committee of any approval taken pursuant to that delegated authority.
- Retain independent counsel, accountants, or others to advise the Committee or assist in the conduct of an investigation.
- Seek any information it requires from employees—all of whom are directed to cooperate with the Committee's requests—or external parties.
- Meet with Company officers, independent auditors, or outside counsel, as necessary.
- Establish procedures for the receipt, retention, and treatment of complaints regarding accounting, internal accounting controls or auditing matters, including procedures for the confidential anonymous submission by employees of concerns regarding questionable accounting or auditing matters and modify these procedures as deemed necessary.
Composition
The Audit Committee will consist of at least four members of the Board of Directors. The Board will appoint Committee members and the Committee chair. Each Audit Committee member will be independent of management, Community Bancorp. and any subsidiary thereof.
Meetings
The Committee will meet at least four times a year, with authority to convene additional meetings, as circumstances require. The Committee will invite members of management, auditors or others to attend meetings and provide pertinent information, as necessary. It will meet separately, periodically, with management, with internal auditors and with independent auditors. The Committee will also meet periodically in executive session. Meeting agendas will be prepared and provided in advance to members, along with appropriate briefing materials. Minutes will be prepared.
Responsibilities
The Committee will carry out the following responsibilities:
Financial Statements
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Review significant accounting and reporting issues, including complex or unusual transactions and highly judgmental areas, and recent professional and regulatory pronouncements, and understand their impact on the financial statements. - Review with management and the independent auditors the results of the independent audit, including any difficulties encountered.
- Review with the independent auditors any significant disagreements with management, and management’s response.
- Review with management and the independent auditors the financial statements and related footnotes to be included in the Company’s Annual Report, including their judgment about the quality, not just acceptability, of accounting principles, the reasonableness of significant judgments, and the clarity of the disclosures.
- Review other sections of the Annual Report and related regulatory filings before release and consider the accuracy and completeness of the information.
- Review with management and the independent auditors all matters required to be communicated to the Committee under standards of the Public Company Accounting Oversight Board (PCAOB).
- If deemed appropriate after review and discussion, recommend to the Board that the financial statements be included in the Company’s Annual Report on Form 10-K.
- Review interim financial reports with management and the independent auditors prior to the filing of the Company’s Quarterly Report on Form 10-Q (or prior to the press release of results, if possible). The chair of the Committee or his designee may represent the entire Committee for the purposes of this review.
Internal Control
- Discuss with management, the internal auditor, and the independent auditors the adequacy and effectiveness of the Company's accounting and financial controls, including information technology security and control.
- Understand the scope of internal and independent auditors' review of internal control over financial reporting, and obtain reports on significant findings and recommendations, together with management's responses.
Internal Audit
- Review with the Internal Auditor the overall scope and plans, including the adequacy of staffing, of the internal audit function.
- Review and approve the Internal Audit Charter annually.
- Review and approve the risk-based audit plan annually, after discussion with management of the Bank’s upcoming planned activities.
- Evaluate, compensate and replace, if necessary, the Internal Auditor.
- Review the effectiveness of the internal audit function.
- Ensure the Internal Auditor has unrestricted access to all functions, records, property, and communication with any Bank employee.
- On a regular basis, meet separately with the Internal Auditor to discuss any matters that the Committee or internal audit believes should be discussed privately.
Independent Auditors
- Review the independent auditors' proposed audit scope and approach, including coordination of audit effort with internal audit.
- Review the performance of the independent auditors, and exercise final approval on the appointment or discharge of the auditors.
- Review and confirm the independence of the independent auditors by obtaining statements from the auditors on relationships between the auditors and the Company, including non-audit services, and discussing the relationships with the auditors.
- On a regular basis, meet separately with the independent auditors to discuss any matters that the Committee or auditors believe should be discussed privately.
- At least once every five years furnish Requests for Proposals to at least four independent accounting firms and based on the evaluation of those proposals, the Committee shall either retain the current firm or engage a different one.
- Ensure the rotation of the lead audit partner and reviewing partner every five years if the current firm is retained.
Compliance
- Review established procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters.
- Review established procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
Reporting Responsibilities
- Regularly report to the Board of Directors about Committee activities, issues, and related recommendations.
- Provide an open avenue of communication between the Committee and independent auditors and the internal auditor and management of the Company and subsidiaries.
- Report annually to the shareholders in the Company’s proxy statement, describing the Committee's composition, responsibilities and how they were discharged, and any other information required by rule, including pre-approval of audit and non-audit services performed by the independent auditors.
- Include this Charter as an appendix to the proxy statement if there are any material revisions during the year or at least once every three years.
- Review any other reports the Company issues that relate to Committee responsibilities.
Other Responsibilities
- Perform other activities related to this Charter as requested by the Board of Directors.
- Institute and oversee special investigations as needed.
- Review and assess the adequacy of the Audit Committee Charter annually, requesting Board approval for proposed changes, and ensure appropriate disclosure as may be required by law or regulation.
- Confirm annually that all responsibilities outlined in this Charter have been carried out.
- Establish and maintain an environment within the Company that promotes and encourages quality financial reporting, sound business risk practices and ethical behavior.
Last amended and approved by the Board of Directors on March 20, 2007.
Community Bancorp. Compensation Committee Charter
Statement of Policy
The purpose of the Compensation Committee is 1) to assist the Board of Directors in discharging its responsibilities relating to compensation of the Company’s executives, and 2) to discuss with management the executive compensation disclosures contained in the Company’s annual meeting proxy statement and to issue a report thereon for inclusion in the proxy statement.
Membership
The Board believes it is desirable for Directors who are independent to serve on the Committee, with the goal of having at least a majority of the Committee members who are independent directors. For purposes of the Compensation Committee membership, an independent director shall be determined under standards approved by the Board, upon recommendation of the Compensation Committee.
Scope of Powers and Functions
The Compensation Committee shall have such powers and functions as may be assigned to it by the Board of Directors from time to time; however, such functions shall, at a minimum, include the following:
- To review and approve goals and objectives relevant to Chief Executive Officer (“CEO”) compensation, and evaluate the CEO’s performance in light of those goals and objectives, and to make a recommendation to the Board for the CEO’s compensation level based on this evaluation. (At the Board level, any action on such recommendation shall be by independent directors only.)
- To recommend any incentive component of CEO compensation. The Committee should consider the Company’s performance and relative shareholder return, the value of similar incentive awards to CEOs at comparable companies, and the awards given to the Company’s CEO in past years.
- To receive and review reports from the CEO as to corporate goals and objectives relevant to the other executive officers’ compensation and their performance in light of those goals and objectives; to review the CEO’s recommendations for executive officer compensation levels, and to make a recommendation to the board in regard thereto.
- To make recommendations to the Board with respect to incentive compensation plans and equity-based plans [if any].
- To evaluate its own performance periodically and report on such performance to the Board and the Corporate Governance/Nominating Committee.
- To review and discuss with management the executive compensation disclosures contained in the Company’s annual meeting proxy statement under the caption “Compensation Discussion and Analysis” and to issue a report of the Committee with respect to such review.
- The Compensation Committee also has the authority to retain and terminate any compensation consultant or consulting firm to assist in the evaluation of CEO or senior executive compensation, including sole authority to approve the consultant’s fees and other retention terms. The Compensation Committee may also, at its discretion, engage outside legal counsel or other advisers as it deems necessary to carry out its functions.
Administrative
The Compensation Committee shall meet twice per year and shall hold any additional meetings as may be called by the Chairman of the Compensation Committee or management. Members of senior management or others may attend meetings of the Compensation Committee at the invitation of the Compensation Committee and shall provide pertinent information as necessary, but shall not be entitled to vote on any matter acted upon by the Committee. The Chairman of the Compensation Committee shall set the agenda of each meeting and arrange for the distribution of the agenda, together with supporting material, to the Compensation Committee members prior to each meeting. The Chairman will also cause minutes of each meeting to be prepared and circulated to the Committee Members. The Compensation Committee may meet via telephone conference calls. A majority of the members of the Compensation Committee shall constitute a quorum for all purposes.
Last amended and approved by the Board of Directors on June 5, 2007.
Corporate Governance/Nominating Committee
of the Board of Directors of Community Bancorp.
Charter
Statement of Policy
The purpose of the Corporate Governance/Nominating Committee (the Committee) is to provide that the Board of Directors and its Committees are appropriately constituted to meet their legal obligations to the shareholders and the Company. To this end, the Committee is responsible for 1) identifying and nominating individuals qualified to become board and committee members; 2) maintaining that a majority of the Board members are independent and that all the members of the Audit, Compensation and Corporate Governance/Nominating Committees are independent as required; 3) developing and recommending to the Board a set of corporate governance principles applicable to the Company; and 4) generally to address corporate governance issues for the Board.
Composition
The Corporate Governance/Nominating Committee will consist of at least four members of the Board of Directors. The Board will appoint the committee members and the Committee Chair. Each Corporate Governance/Nominating Committee member will be independent of management, Community Bancorp. and any subsidiary thereof.
Scope of Powers and Functions
The Committee shall have such powers and functions as may be assigned to it by the Board of Directors from time to time; however, such functions shall, at a minimum, include the following:
· to establish the criteria for Board membership, which may include one or more of the following:
Experience in the management or leadership of a substantial private business enterprise, educational, religious or not-for-profit organization, or such other professional experience as the Committee shall determine shall qualify an individual for Board service.
In establishing these criteria, the Committee shall make every effort to ensure that the Board and its committees include at least a majority of independent directors, as that term is defined by applicable standards promulgated by the Securities and Exchange Commission.
· to consider, recommend and recruit candidates for election to the Board at each annual meeting of stockholders; to review candidates recommended by shareholders, to monitor the process set forth in Article 2.12 of the bylaws by which such shareholder candidates or proposals will be considered by the Committee and publish these procedures in the Company’s annual meeting proxy statement; to conduct the appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates;
· to establish criteria for Advisory Board membership and to act upon management recommendations for advisory board appointments;
· to monitor and recommend the functions and review the performance of the Board, and the various Committees of the Board, including the Committee, periodically;
· to monitor and evaluate the performance of the Advisory Boards and their functions, periodically;
· to recommend the appointment and removal of members and chairs of the committees of the Board of Directors;
· to advise on changes in Board and Advisory Board compensation;
· to make recommendations on the structure of Board meetings and to oversee the Company’s processes for providing information to the Board;
· to consider matters of corporate governance and to review and publish, periodically, to the extent required or considered desirable, the Company’s corporate governance principles and Code of Conduct and Code of Ethics for Senior Financial Officers (as required by rules adopted by Securities and Exchange Commission);
· to review, periodically, any plans adopted by the Company that might impact the rights of shareholders or the election of directors; and
· to establish director retirement policies;
The Committee also has the authority to retain and terminate any compensation consultant or consulting firm to assist in the evaluation of board or advisory board compensation, including sole authority to approve the consultant’s fees and other retention terms. The Committee may also, at its discretion, engage outside legal counsel or other advisers as it deems necessary to carry out its functions.
Administrative
The Committee shall meet at least twice per year and shall hold any additional meetings as may be called by the Chairman of the Committee or management. Members of senior management or others may attend meetings of the Committee at the invitation of the Committee and shall provide pertinent information as necessary. The Chairman of the Committee shall set the agenda of each meeting and arrange for the distribution of the agenda, together with supporting material, to the Committee members prior to each meeting. The Chairman will also cause minutes of each meeting to be prepared and circulated to the Committee Members. The Committee may meet via telephone conference calls. A majority of the members of the Committee shall constitute a quorum for all purposes.
Approved by the Committee on 2/5/08.
Amended and approved by the Board of Directors on 3/9/2004.
Shareholder Communications with the Board
The Board welcomes communications from shareholders on matters relating to the Company's business operations and corporate governance. Shareholders may communicate with the Board, or its committees or individual directors by writing to the following address:
Board of Directors (or board committee or name of individual director) Shareholders Communications
c/o Corporate Secretary Community Bancorp.
PO Box 259
Derby, VT 05829
The corporate secretary will forward communications to the Board or appropriate committee or individual director. Email correspondence may be addressed to cbumps@communitynationalbank.com.
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