Exhibit 10.1

PERFORMANCE AWARD

RESTRICTED STOCK UNITS

 

Granted by

 

SALISBURY BANCORP, INC.

 

under the

 

SALISBURY BANCORP, INC.

2017 LONG TERM INCENTIVE PLAN

 

This Performance Award Agreement for Restricted Stock Units (“Performance Award”
or “Agreement”) is and will be subject in every respect to the provisions of the
2017 Long Term Incentive Plan (the “Plan”) of Salisbury Bancorp, Inc. (the
“Corporation”) which are incorporated herein by reference and made a part
hereof, subject to the provisions of this Agreement. A copy of the Plan has been
provided or made available to each person granted a Performance Award pursuant
to the Plan. The holder of this Performance Award (the “Participant”) hereby
accepts this Performance Award, subject to all the terms and provisions of the
Plan and this Agreement, and agrees that all decisions under and interpretations
of the Plan and this Agreement by the Compensation Committee of the Board of
Directors of the Corporation (“Committee”) will be final, binding and conclusive
upon the Participant and the Participant’s heirs, legal representatives,
successors and permitted assigns. Capitalized terms used herein but not defined
will have the same meaning as in the Plan.

 

1.Name of Participant.______________________________________________    2.Date
of Grant. _________, 20__.     Tangible Book Value. __________, 20___ $_________
(unaudited)    3.Target number of shares of Corporation common stock, $0.10 par
value per share, covered by the Performance Award.
(subject to adjustment pursuant to Section 9 hereof).

4.Restricted Stock Unit.     A Restricted Stock Unit is an Award denominated in
shares of Stock, except that no shares of Stock are actually awarded to the
Participant on the date of grant. The Restricted Stock Units will be credited to
the Participant’s account, subject to the terms of the Plan and this Agreement.
A Restricted Stock Unit will be settled in shares of the Corporation’s Stock.   
5.Performance Goal(s)/Vesting Schedule. Except as otherwise provided in this
Agreement, this Performance Award is earned at the end of the measurement period
(sometimes referred to herein as the “performance period”) based on the level of
achievement of the performance goal(s). The measurement period for the Award is
the three (3) calendar years from 2019 through 2021. The determination date for
purposes of vesting of the Award will be no later than March 15, 2022 (or as
soon thereafter during 2022 as achievement or non-achievement of the performance
measure can be determined, with any earlier or delayed date being deemed the
“determination date”). In order to vest in the Award: (i) the Committee must
certify in writing, the level at which the performance measure was, in fact,
satisfied and (ii) the Participant must be employed on the determination date,
unless vesting is accelerated due to the Participant’s death or Disability or
involuntary termination of service in connection with or following a Change in
Control.     The performance measure for this Award is based on the increase in
the Corporation’s tangible book value (“TBV”) over the three-year measurement
period. The threshold increase in TBV in order to receive an Award is $3.50. No
portion of the Award will be earned if the increase in TBV at the end of the
measurement period is less than $3.50. One Hundred Percent (100%) of the Award
(the “target payout”) will be earned if the increase in TBV for the measurement
period is $5.00, and an Award will be earned in excess of the target payout if
growth in TBV exceeds $5.00. The actual number of Restricted Stock Units earned
will be scaled, based on actual performance over the measurement period versus
the stated goals. For further information regarding the percentage of the Award
that may be earned at various levels of TBV growth, please refer to Appendix A.

6.Terms and Conditions.

6.1Dividend Equivalent Rights. If set forth in the Committee’s grant resolutions
and noted by checking the box below, Dividend Equivalent Rights       ☐ will   ☐
will not       be paid on Restricted Stock Units. If Dividend Equivalent Rights
are to be paid on the Restricted Stock Units, any such Dividend Equivalent
Rights shall be credited by the Corporation to an account for the Participant
and accumulated, with interest for each calendar year (or portion thereof) at an
annual rate equal to the dividend yield rate for the immediately preceding
calendar year, until the date upon which the underlying Restricted Stock Unit
becomes vested.

6.2Voting Rights. The Participant will have no voting right with respect to any
Restricted Stock Unit granted hereunder.

7.Delivery of Shares.     Delivery of shares of Stock under this Performance
Award will comply with all applicable laws (including, the requirements of the
1934 Act), and the applicable requirements of any securities exchange or similar
entity.

8.Change in Control.     8.1In the event of a Participant’s involuntary
termination of service (including a termination for Good Reason) on the
effective date of or within twenty-four (24) months following a Change in
Control, the Participant will vest in a portion or all of this Award, based upon
an assumed achievement of the performance goals at the greater of the target
level or actual achievement level (measured at the date of the Change in
Control) multiplied by a fraction, the numerator of which is the actual whole or
partial months that have expired in the three-year performance period at the
time of the Participant’s termination of service and the denominator of which is
36. In either case, there shall be a prorated payout to the Participant as soon
as reasonably practicable but in no event later than 60 days following the
Participant’s termination of service (unless a later date is required by Section
15.3 of the Plan).

 

8.2In the event of a Change in Control in which the Corporation is not the
surviving entity, if the Participant continues in employment with the surviving
entity and the Performance Awards are assumed by the surviving entity, the
Performance Awards hereunder held by the Participant shall remain outstanding
for the remainder of the three-year performance period and shall be deemed to be
earned at the end of the performance period at the greater of the target level
or actual achievement level (measured at the date of the Change in Control),
subject to accelerated vesting in the event of the Participant’s death (under
Section 10.1(i) below), Disability (under 10.1(ii) below), or involuntary
termination of service (under Section 8.1 above).

 

8.3In the event of a Change in Control in which the Corporation is not the
surviving entity, if the Performance Awards are not assumed by the surviving
entity, then the vesting of the Awards will accelerate and be paid in the same
manner as under Section 8.1 (as if the Participant had an involuntary
termination of service on the date of the Change in Control).

 

8.4A “Change in Control” will be deemed to have occurred as provided in Section
2.1(i) of the Plan.     9.Adjustment Provisions.      This Performance Award
will be adjusted, in accordance with Appendix A, based on actual achievement at
the end of the measurement period.      In addition, this Performance Award,
including the number of shares of Stock subject to the Restricted Stock Units,
will be adjusted upon the occurrence of the events specified in, and in
accordance with the provisions of, Section 13.1 of the Plan. This Performance
Award may also be adjusted, in the sole discretion of the Committee, pursuant to
the terms of Sections 9.2(b) (other than those governing Awards subject to Code
Section 162(m) and13.2 of the Plan).     10.Effect of Termination of Service on
Performance Award.      10.1This Performance Award will vest as follows:

(i)Death. In the event of the Participant’s termination of service by reason of
the Participant’s death, all Restricted Stock Units will vest at the target
level at the date of termination of service.

(ii)Disability. In the event of the Participant’s termination of service by
reason of Disability, all Restricted Stock Units will vest at the target level,
at the date of termination of service.

(iii)Retirement. In the event of the Participant’s termination of service by
reason of retirement, Restricted Stock Units that are granted as Performance
Awards hereunder shall vest as follows: vesting shall not be accelerated to the
retirement date, but at the end of the measurement period, the Participant may
vest in a portion of the remaining Award on a pro rata basis by multiplying: (i)
the number of shares of Stock earned based on the TBV growth achieved over the
measurement period (as set forth on Appendix A) and (ii) the percentage of the
measurement period that the Participant served prior to retirement (i.e., 18
months equals 50%). For these purposes, a participant will be deemed to have a
termination of service due to “retirement” if the Participant terminates Service
voluntarily on or after attainment of age sixty-two (62) with five years of
service with the Corporation or the Bank. Notwithstanding anything herein to the
contrary, the Participant shall not be eligible for, or shall forfeit the entire
Award if the Participant violates the terms of the noncompete requirements set
forth in Section 11.6 hereof.

(iv)Termination for Cause. If the Participant’s Service has been terminated for
Cause, all Restricted Stock Units granted to a Participant hereunder will expire
and be forfeited.

(v)Other Termination. If a Participant terminates Service for any reason other
than due to death, Disability, retirement, for Cause, or an involuntary
termination all shares of Restricted Stock Units awarded to the Participant
hereunder which have not vested as of the date of termination of service will
expire and be forfeited.

11.Miscellaneous.     11.1No Performance Award will confer upon the Participant
any rights as a stockholder of the Corporation prior to the date on which the
individual fulfills all conditions for receipt of such rights and shares of
Stock are transferred to the Participant.

11.2This Agreement may not be amended or otherwise modified unless evidenced in
writing and signed by the Corporation and the Participant.

11.3Restricted Stock Units are not transferable prior to the time such Awards
vest in the Participant.

11.4This Performance Award will be governed by and construed in accordance with
the laws of the State of Connecticut.

11.5This Performance Award is subject to all laws, regulations and orders of any
governmental authority which may be applicable thereto and, notwithstanding any
of the provisions hereof, the Corporation will not be obligated to issue any
shares of Stock hereunder if the issuance of such shares would constitute a
violation of any law, regulation or order or any provision thereof.

11.6In order to be eligible for any portion of this Performance Award following
a termination of service due to retirement, the Participant shall not, for a
period of one year after termination of service, become an officer, employee,
consultant, director, independent contractor, agent, sole proprietor, joint
venturer, greater than 5% equity-owner or stockholder, partner or trustee of any
savings bank, savings and loan association, savings and loan holding company,
credit union, bank or bank holding company, insurance company or agency, any
mortgage or loan broker or any other entity that has headquarters or offices
within fifteen (15) miles of the locations in which the Bank or its affiliates
has business operations or has filed an application for regulatory approval to
establish an office as of the date of Participant’s termination; provided,
however, that this restriction shall not apply if the Participant’s retirement
occurs contemporaneously with or following a Change in Control.

11.7The granting of this Performance Award does not confer upon the Participant
any right to be retained in the employ of the Corporation or any subsidiary.

11.8Subject to written consent by the Committee, the Participant shall have the
right to direct the Corporation (or an Affiliate) to collect federal, state and
local income taxes and the employee portion of FICA taxes (Social Security and
Medicare) with respect to any Restricted Stock Unit Award in accordance with
Section 15.2 of the Plan. Notwithstanding the foregoing, the Corporation shall
have the right to require the Participant to pay the Corporation (or Affiliate)
the amount of any tax that the Corporation (or Affiliate) is required to
withhold with respect to the settlement of the Restricted Stock Unit or sell
without notice, a sufficient number of shares of Stock received upon settlement
of the Restricted Stock Unit to cover the maximum amount required to be withheld
under applicable law.

11.9To the extent any provision of this Agreement conflict with the terms of the
Plan, the terms of the Plan shall control, provided, however, that the
provisions of Section 9.2(c) of the Plan pertaining to Section 162(m) of the
Code shall not apply to this Performance Award.

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed in
its name and on its behalf as of the date of grant of this Performance Award set
forth above.

SALISBURY BANCORP, INC.

By: __________________________

Its: __________________________

 

PARTICIPANT’S ACCEPTANCE

The undersigned hereby accepts the foregoing Performance Award and agrees to the
terms and conditions hereof, including the terms and provisions of the 2017 Long
Term Incentive Plan. The undersigned hereby acknowledges receipt of a copy of
the Corporation’s 2017 Long Term Incentive Plan.

 

Participant

______________________________

 

 

 

 

APPENDIX A

Grant:                1,000 Restricted Stock Units (Performance Based)

 

TBV

Growth

Payout

%

 

Shares

$3.50 75.00% 750 $3.60 76.67% 767 $3.70 78.33% 783 $3.80 80.00% 800 $3.90 81.67%
817 $4.00 83.33% 833 $4.10 85.00% 850 $4.20 86.67% 867 $4.30 88.33% 883 $4.40
90.00% 900 $4.50 91.67% 917 $4.60 93.33% 933 $4.70 95.00% 950 $4.80 96.67% 967
$4.90 98.33% 983 $5.00 100% 1,000 $5.10 101.67% 1,017 $5.20 103.33% 1,033 $5.30
105.00% 1,050 $5.40 106.67% 1,067 $5.50 108.33% 1,083 $5.60 110.00% 1,100 $5.70
111.67% 1,117 $5.80 113.33% 1,133 $5.90 115.00% 1,150 $6.00 116.67% 1,167 $6.10
118.33% 1,183 $6.20 120.00% 1,200 $6.30 121.67% 1,217 $6.40 123.33% 1,233 $6.50
125% 1,250 $6.60 126.67% 1,267 $6.70 128.33% 1,283 $6.80 130.00% 1,300 $6.90
131.67% 1,317 $7.00 133.33% 1,333 $7.10 135.00% 1,350 $7.20 136.67% 1,367 $7.30
138.33% 1,383 $7.40 140.00% 1,400 $7.50 141.67% 1,417 $7.60 143.33% 1,433 $7.70
145.00% 1,450 $7.80 146.67% 1,467 $7.90 148.33% 1,483 $8.00 150% 1,500