Salisbury Bancorp, Inc.
Compensation Clawback Policy
 
Overview and Purpose
 
 
The Board of Directors of Salisbury Bancorp, Inc. (the “Company”) believes it to
be in the best interests of the Company and its stockholders to keep current
with “best practices” in compensation matters and risk management.  The Board,
therefore, hereby adopts this Compensation Clawback Policy (this “Policy”) to
increase incentives for senior management to take full account of risks to the
Company and its stockholders in its decision-making, and to reduce such risks
wherever practicable.
 
 
This policy applies to the following “Covered Officers”: the Company’s Chief
Executive Officer, Chief Financial Officer, Chief Lending Officer and any other
Company officer that is designated a “Named Executive Officer,” as determined in
accordance with Item 402(a)(3) or Item 402(m)(2) of Regulation S-K under the
Securities Exchange Act of 1934.
 
 
The Board delegates to the Compensation Committee of the Board the authority and
responsibility to administer this Policy.
 
 
Effect of Restatement of Company Financial Statements
 
 
If the Compensation Committee determines that fraud, material error, gross
negligence, or intentional illegal conduct or misconduct by a Covered Officer
materially contributed to the Company’s restatement of its financial statements
(“Covered Misconduct”), the Compensation Committee shall, in its discretion,
refer such matter and its recommendation as to an appropriate remedy to the full
Board for consideration.  The Board, upon review of the Compensation Committee’s
recommendations and such independent inquiry or investigation as it determines
to be advisable, shall (i) confirm that Covered Misconduct occurred; (ii)
confirm the period in which the Covered Misconduct occurred (the “Covered
Period”); and (iii) determine such action as it deems necessary to remedy the
Covered Misconduct and prevent its recurrence, including the recovery of certain
compensation, as set forth in this Policy.
 
 
Compensation Subject to Recovery; Remedies
 
 
The Compensation Committee and the Board shall have full discretion in remedying
Covered Misconduct under this Policy.  Among other things, to the extent
permitted by applicable law, the Compensation Committee and the Board may
require reimbursement of any performance-based compensation (as defined below)
paid to the Covered Officer, to the extent such payments and grants are
compensation for services performed by the Covered Officer during the Covered
Period, provided that the Compensation Committee or Board determine that the
amount of any such performance-based compensation actually paid or awarded to
the Covered Officer (the “Awarded Compensation”) would have been a lower amount
had it been calculated based on such restated financial statements.
 
 
The Compensation Committee and the Board also may terminate the employment of
the Covered Officer.
 
 
 
 

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Compensation Committee and Board Discretion
 
 
The Compensation Committee and the Board shall have full discretion to decline
to seek recovery under this Policy.  In exercising such discretion, the
Compensation Committee and the Board may consider the following factors: (A) the
likelihood of success in achieving the recovery, given the anticipated cost and
management effort required, (B) whether the assertion of a claim for recovery
may prejudice the interests of the Company, including in any related proceeding
or investigation, (C) the passage of time since the Covered Misconduct, (D) any
pending legal proceeding relating to the Covered Misconduct.
 
 
Due Process Rights
 
 
Before the Compensation Committee or the Board determines to seek recovery
pursuant to this Policy, the Covered Officer will be provided written notice and
the opportunity to be heard at a meeting of the Compensation Committee (which
may be in-person or telephonic, as determined by the Compensation Committee).
 
 
Manner of Repayment
 
 
If the Compensation Committee or Board determines to seek a recovery pursuant to
this Policy, it shall make a written demand for repayment from the Covered
Officer and, if the Covered Officer does not promptly tender repayment in
response to such demand, and the Compensation Committee or Board determines that
he or she is unlikely to do so, the Compensation Committee or Board may engage
counsel and take any action it deems necessary and proper against the Covered
Officer to obtain such repayment.
 
 
Performance-Based Compensation
 
 
For purposes of this policy, the term “performance-based compensation” means all
bonuses and other incentive and equity compensation awarded to a Covered
Officer, the amount, payment and/or vesting of which was calculated based wholly
or in part on the application of objective performance measured during any part
of the period covered by the restatement.
 

Adopted: December 21, 2012