Proxy Statement (2005)Full Document 

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                                TABLE OF CONTENTS

                                                                            Page
NOTICE OF MEETING .........................................................    3
INTRODUCTION ..............................................................    4
OUTSTANDING STOCK AND VOTING RIGHTS .......................................    4
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
  AND RELATED STOCKHOLDER MATTERS .........................................    5
MANAGEMENT OF THE COMPANY .................................................    6
     Principal Shareholders of the Company ................................    6
PROPOSAL I- ELECTION OF DIRECTORS .........................................    6
     Nominees and Board of Directors ......................................    7
     Committees of the Board of Directors .................................    8
     Fees .................................................................   10
     Director Attendance ..................................................   10
     Board of Directors'Communications with Shareholders ..................   10
     Compensation Committee Report ........................................   11
     Audit Committee Report ...............................................   12
     Certain Business Relationships .......................................   12
     Indebtedness of Management and Others ................................   12
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS ..........................   13
     Summary Compensation Table ...........................................   13
     Insurance ............................................................   13
     Pension Plan .........................................................   13
     Supplemental Retirement Arrangement ..................................   14
     Directors Stock Retainer Plan ........................................   14
     Change in Control Agreements .........................................   15
     401(k) Plan ..........................................................   15
     Stock Price Performance Graph ........................................   15
     Section 16(a) Beneficial Ownership Reporting Compliance ..............   16
PROPOSAL II - RATIFICATION OF THE APPOINTMENT OF
  INDEPENDENT AUDITORS ....................................................   17
PROPOSAL III - OTHER BUSINESS .............................................   18
SHAREHOLDER PROPOSALS .....................................................   18
SHAREHOLDER INFORMATION ...................................................   19
Appendix A - Audit Committee Charter ......................................   20


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                             SALISBURY BANCORP, INC.
                                5 BISSELL STREET
                                 P. O. BOX 1868
                          LAKEVILLE, CONNECTICUT 06039
                                 (860) 435-9801

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                          TO BE HELD ON APRIL 27, 2005

NOTICE IS HEREBY  GIVEN that the Annual  Meeting of  Shareholders  of  Salisbury
Bancorp, Inc. (the "Company"), will be held at 4:00 p.m. on Wednesday, April 27,
2005 at the Interlaken Inn, 74 Interlaken Road, in Lakeville,  Connecticut,  for
the following purposes:

1.    To elect four (4)  Directors  for a three (3) year term;  to elect two (2)
      Directors for a two (2) year term; to elect one (1) Director for a one (1)
      year term;  who, with the four (4) directors  whose terms do not expire at
      this meeting, will constitute the full Board of Directors of the Company.

2.    To ratify  the  appointment  of  Shatswell,  MacLeod &  Company,  P.C.  as
      independent  auditors  for the Company for the year  ending  December  31,
      2005.

3.    To transact  such other  business as may properly come before the meeting,
      or any adjournment(s) thereof.

      Only those  Shareholders of record at the close of business on the 4th day
of March,  2005 are entitled to notice of, and to vote at this Annual Meeting or
any  adjournment  thereof.  In order that you may be represented at the meeting,
please  complete,  date,  sign and mail promptly the enclosed  proxy for which a
postage-prepaid return envelope is provided.

                                        BY ORDER OF THE BOARD OF DIRECTORS OF
                                        SALISBURY BANCORP, INC.

                                        Richard J. Cantele, Jr.
                                        Secretary

April 4, 2005
Lakeville, CT

SHAREHOLDERS  ARE REQUESTED TO MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY AS
SOON AS POSSIBLE  REGARDLESS  OF WHETHER  THEY PLAN TO ATTEND THE  MEETING.  ANY
PROXY GIVEN BY A SHAREHOLDER  MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED,
AND ANY  SHAREHOLDER WHO EXECUTES AND RETURNS A PROXY AND WHO ATTENDS THE ANNUAL
MEETING  MAY  WITHDRAW  THE PROXY AT ANY TIME BEFORE IT IS VOTED AND VOTE HIS OR
HER  SHARES IN PERSON.  A PROXY MAY BE  REVOKED  BY GIVING  NOTICE TO RICHARD J.
CANTELE,  JR.,  SECRETARY  OF THE COMPANY,  IN WRITING  PRIOR TO THE TAKING OF A
VOTE.


                                       3


                             SALISBURY BANCORP, INC.
                                5 BISSELL STREET
                               LAKEVILLE, CT 06039
                                 (860) 435-9801

                                 PROXY STATEMENT
                       FOR ANNUAL MEETING OF SHAREHOLDERS
                                 April 27, 2005

                                  INTRODUCTION

      The  enclosed  proxy (the  "Proxy") is solicited by the Board of Directors
(the "Board of Directors") of Salisbury Bancorp,  Inc. (the "Company"),  for use
at the Annual Meeting of Shareholders,  to be held on Wednesday, April 27, 2005,
at 4:00 p.m., at the Interlaken Inn, 74 Interlaken Road, Lakeville,  Connecticut
06039, and at any and all adjournments  thereof.  Any Proxy given may be revoked
at any time before it is  actually  voted on any matter in  accordance  with the
procedures set forth on the Notice of Annual  Meeting.  This Proxy Statement and
the enclosed form of Proxy are being mailed to shareholders (the "Shareholders")
on or about April 4, 2005.  The cost of preparing,  assembling  and mailing this
Proxy  Statement  and the  material  enclosed  herewith  is  being  borne by the
Company.  In  addition,  proxies may be  solicited  by  directors,  officers and
employees  of the Company and the Bank  personally  by telephone or other means.
The Company will reimburse banks, brokers, and other custodians,  nominees,  and
fiduciaries for their reasonable and actual costs in sending the proxy materials
to the beneficial owners of the Company's common stock (the "Common Stock").

      If your shares are in a brokerage  or  fiduciary  account,  your broker or
bank will send you a voting  instructions  form instead of a proxy card.  Please
follow the instructions on such form to instruct your broker or bank how to vote
your  shares.  If you wish to attend the meeting and vote your shares in person,
you must follow the  instructions  on the voting  instructions  form to obtain a
legal proxy from your broker or bank.

                       OUTSTANDING STOCK AND VOTING RIGHTS

      The Board of Directors has fixed the close of business on March 4, 2005 as
the record  date (the  "Record  Date")  for the  determination  of  Shareholders
entitled to notice of and to vote at this Annual Meeting. As of the Record Date,
1,682,401  shares of the Company's  Common Stock (par value $.10 per share) were
outstanding  and  entitled  to vote  and held of  record  by  approximately  742
Shareholders  of Record,  each of which  shares is  entitled  to one vote on all
matters to be presented at this Annual Meeting. Votes withheld,  abstentions and
broker  non-votes  are not treated as having  voted in favor of any proposal and
are counted only for purposes of determining  whether a quorum is present at the
Annual Meeting. Once a quorum is achieved, a plurality of votes cast is all that
is necessary for the election of Directors.

      A proxy card is enclosed for your use. YOU ARE  SOLICITED ON BEHALF OF THE
BOARD OF  DIRECTORS  TO  COMPLETE,  DATE,  SIGN AND RETURN THE PROXY CARD IN THE
ACCOMPANYING ENVELOPE, which is postage-prepaid if mailed in the United States.


                                       4


      If the  enclosed  form of Proxy is properly  executed  and received by the
Company  in time to be voted  at the  Annual  Meeting,  the  shares  represented
thereby  will be  voted in  accordance  with the  instructions  marked  thereon.
Executed,  but  unmarked  proxies will be voted "FOR" each of Proposals I and II
discussed in this Proxy Statement.  As of the date of this Proxy Statement,  the
Board of Directors  and  management  do not know of any matters other than those
described  in the Notice of Annual  Meeting  that are to come  before the Annual
Meeting.  If any other matters are properly  brought before the Annual  Meeting,
the persons  named in the proxy will vote the shares  represented  by such proxy
upon such matters as determined by a majority of the Board of Directors.

               SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT AND
                           RELATED STOCKHOLDER MATTERS

      The  following  table sets forth certain  information  as of March 4, 2005
regarding  the  number  of shares of  Common  Stock  beneficially  owned by each
director and executive officer of the Company and by all directors and executive
officers of the Company as a group.

                                 Number of Shares (1)    Percentage of Class (2)
                                 --------------------    -----------------------
Louis E. Allyn, II                     1,026(3)                   .06%
Dana A. Bartholomew                    2,339(4)                   .14%
John R. H. Blum                       15,696(5)                   .93%
Louise F. Brown                        2,448(6)                   .15%
Richard J. Cantele, Jr                 2,883(7)                   .17%
Robert S. Drucker                      5,979(8)                   .36%
John F. Foley                          5,650(9)                   .34%
Nancy F. Humphreys                     1,360(10)                  .08%
Holly J. Nelson                        1,408(11)                  .08%
John F. Perotti                       10,972(12)                  .65%
Walter C. Shannon, Jr                  3,964(13)                  .24%
Michael A. Varet                      66,006(14)                 3.92%
----------------------------     ---------------                ------
(All Directors and Executive         119,731                     7.12%
Officers of the Company
as a group of (12) persons)

(1)   The shareholdings  also include,  in certain cases,  shares owned by or in
      trust for a director's  spouse and/or  children or  grandchildren,  and in
      which all beneficial interest has been disclaimed by the director.

(2)   Percentages  are based upon the 1,682,401  shares of the Company's  Common
      Stock outstanding and entitled to vote on March 4, 2005. The definition of
      beneficial owner includes any person who, directly or indirectly,  through
      any contract, agreement or understanding, relationship or otherwise has or
      shares voting power or investment power with respect to such security.

(3)   All shares are owned individually by Louis E. Allyn, II.

(4)   Includes 2,005 shares owned jointly by Dana A. Bartholomew and his wife.

(5)   Includes 2,100 shares owned by John R. H. Blum's wife.

(6)   All shares are owned individually by Louise F. Brown.

(7)   Includes  1,197 shares owned  jointly by Richard J.  Cantele,  Jr. and his
      wife and 6 shares owned by Richard J.  Cantele,  Jr. as custodian  for his
      daughter.

(8)   Includes 1,500 shares owned by Robert S. Drucker's wife.

(9)   Includes  1,852 shares owned jointly by John F. Foley and his wife,  1,370
      owned by his wife and 100 shares owned by John F. Foley as  custodian  for
      his children.


                                       5


(10)  Includes 1,000 shares owned jointly by Nancy F. Humphreys and her husband.

(11)  Includes 6 shares owned by Holly J. Nelson as guardian for a minor child.

(12)  Includes  9,514 shares owned jointly by John F. Perotti and his wife,  761
      shares owned by his wife and 564 shares in trust for his son.

(13)  All shares are owned individually by Walter C. Shannon, Jr.

(14)  Includes  18,540  shares  which are owned by Michael A.  Varet's  wife and
      18,546  shares  which  are owned by his  children.  Michael  A.  Varet has
      disclaimed beneficial ownership for all of these shares.

Management of the Company
-------------------------

      The following table sets forth the name and age of each Executive Officer,
his  principal  occupation  for the last five (5) years and the year in which he
was first appointed an Executive Officer of the Company.



                                                                        Executive Officer
      Name                       Age     Position                       of the Company since:
      ----                       ---     --------                       ---------------------
                                                                      
      John F. Perotti            58      Chairman and                          1998(1)
                                         Chief Executive Officer

      Richard J. Cantele, Jr.    45      President, Chief Operating            2001(2)
                                         Officer and Secretary

      John F. Foley              54      Chief Financial Officer               1998(3)
                                         and Treasurer


(1)   Mr. Perotti is also the Chairman and Chief  Executive  Officer of the Bank
      and has been an Executive Officer of the Bank since 1982.

(2)   Mr. Cantele is also the President and Chief Operating  Officer of the Bank
      and has been an Executive Officer of the Bank since 1989.

(3)   Mr. Foley is also the Chief  Financial  Officer and  Treasurer of the Bank
      and has been an Executive Officer of the Bank since 1986.

Principal Shareholders of the Company
-------------------------------------

      Management is not aware of any person  (including any "group" as that term
is used in Section 13 (d) (3) of the Exchange  Act) who owns  beneficially  more
than 5% of the Company's Common Stock as of the Record Date.

                                   PROPOSAL I

                              ELECTION OF DIRECTORS

      The Certificate of  Incorporation  and Bylaws of the Company provide for a
Board of Directors of not less than seven (7) members,  as determined  from time
to time by resolution of the Board of Directors.  The Board of Directors has set
the  number of  directorships  at eleven  (11).  The Board of  Directors  of the
Company is divided into three (3) classes as nearly equal in number as possible.
Classes of directors serve for staggered three (3) year terms. A successor class
is to be elected at each annual meeting of shareholders when the terms of office
of the members of one class expire.  Vacant  directorships may be filled,  until
the  expiration  of the  term  of the  vacated  directorship,  by the  vote of a
majority of the directors then in office.


                                       6


      There are seven (7)  directorships  on the Board of Directors which are up
for election this year. The following  individuals  have been nominated to serve
for a three (3) year term: John R. H. Blum, Louise F. Brown, Richard J. Cantele,
Jr., and Nancy F. Humphreys.  The following  individuals  have been nominated to
serve for a two (2) year term:  Louis E. Allyn,  II and Robert S.  Drucker.  The
following  individual has been nominated to serve for a one (1) year term:  Dana
A.  Bartholomew.  The seven (7)  nominees  are members of the  present  Board of
Directors.  Unless  otherwise  directed,  the enclosed proxy will be voted "FOR"
such  nominees.  In the event any one or more  nominees is unable or declines to
serve  (events  which are not  anticipated),  the persons named in the proxy may
vote for some other person or persons.

      The following table sets forth certain  information,  as of March 4, 2005,
with respect to the directors of the Company.

                              NOMINEES FOR ELECTION
                              ---------------------

                                     Positions Held          Director     Term
         Name              Age      with the Company          Since     Expiring

Louis E. Allyn, II         57     Director                    2004        2005

Dana A. Bartholomew        65     Director                    2004        2005

John R. H. Blum            75     Presiding Director          1998        2005

Richard J. Cantele, Jr.    45     President, Chief            2005        2005
                                  Operating Officer,
                                  Secretary and Director

Robert S. Drucker          63     Director                    2004        2005

Louise F. Brown            61     Director                    1998        2005

Nancy F. Humphreys         63     Director                    2001        2005

                              CONTINUING DIRECTORS
                              --------------------

Holly J. Nelson            51     Director                    1998        2006

Walter C. Shannon, Jr.     69     Director                    1998        2006

John F. Perotti            58     Chairman                    1998        2007
                                  Chief Executive Officer
                                  and Director

Michael A. Varet           62     Director                    1998        2007

      Presented below is additional  information concerning the directors of the
Company. Unless otherwise stated, all directors have held the position described
for at least five (5) years.

      Louis E.  Allyn,  II has been a  director  of the Bank since  2004.  He is
President of Allyndale Corporation.


                                       7


      Dana A.  Bartholomew  has been a director of the Bank since 2004,  when he
was elected by the Board to fill a vacancy  created by the resignation of Gordon
C. Johnson, D.V.M. He is President of Sheffield Water Company.

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