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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
COMMISSION FILE NUMBER: 1-9047
A. FULL TITLE OF THE PLAN:
The Rockland Trust Company Employee Savings and
Profit Sharing Plan and Trust
B. Name of the issuer of the securities held pursuant
To the Plan and the
Address of its principal office:
INDEPENDENT BANK CORP.
288 Union Street
Rockland, Massachusetts 02370
As filed on June 28, 2002
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THE ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN AND TRUST
Financial Statements and Supplemental Schedule
December 31, 2001 and 2000
(With Independent Auditors' Report Thereon)
THE ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN AND TRUST
TABLE OF CONTENTS
PAGE
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits as of December 31, 2001 and 2000 2
Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2001 3
Notes to Financial Statements 4 - 8
SCHEDULE
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) 9 - 10
INDEPENDENT AUDITORS' REPORT
The 401(k) Committee of
The Rockland Trust Company
Employee Savings and Profit Sharing Plan and Trust:
We have audited the accompanying statement of net assets available for benefits
of The Rockland Trust Company Employee Savings and Profit Sharing Plan and Trust
as of December 31, 2001 and the related statement of changes in net assets
available for benefits for the year then ended. These financial statements and
the schedule referred to below are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these financial statements and
schedule based on our audit. The statement of net assets available for benefits
of The Rockland Trust Company Employee Savings and Profit Sharing Plan and Trust
as of December 31, 2000 was audited by other auditors, whose report dated May
10, 2001, expressed an unqualified opinion on that statement.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2001 and the changes in its net assets available for benefits for
the year then ended in conformity with accounting principles generally accepted
in the United States of America.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule of Assets
(Held at End of Year) is presented for purpose of additional analysis and is
not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedule has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion,
is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ KPMG LLP
Boston, Massachusetts
June 27, 2002
THE ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN AND TRUST
Statements of Net Assets Available for Benefits
December 31, 2001 and 2000
2001 2000
------------------- -------------------
Assets:
Investments, at fair value (note 3):
Collective investment trusts $ 4,955,093 4,369,054
Personal access fund 131,025 51,207
Common stock 5,707,525 3,416,018
Mutual funds:
Bonds 381,486 184,114
Equity 9,967,022 11,336,325
Participant loans 601,552 579,678
------------------- -------------------
21,743,703 19,936,396
Cash 13,816 13,802
------------------- -------------------
Total assets 21,757,519 19,950,198
------------------- -------------------
Net assets available for benefits $ 21,757,519 19,950,198
=================== ===================
See accompanying notes to financial statements.
2
THE ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN AND TRUST
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2001
Additions:
Additions to net assets attributed to:
Investment (loss) income:
Net depreciation in fair value of instruments (note 3) $ (211,942)
Interest and dividends 437,221
------------------
225,279
Contributions:
Participant 1,695,672
Employer 528,586
------------------
2,224,258
Transfer in 42,313
------------------
Total additions 2,491,850
Deductions:
Deductions from net assets attributed to:
Benefits paid to participants 684,529
------------------
684,529
Total deductions
------------------
Net increase 1,807,321
Net assets available for benefits:
Beginning of year 19,950,198
------------------
End of year $ 21,757,519
==================
See accompanying notes to financial statements.
3
THE ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 2001 and 2000
(1) DESCRIPTION OF THE PLAN
The following description of the Rockland Trust Company (Company)
Employee Savings and Profit Sharing Plan and Trust (the Plan) provides
only general information. Participants should refer to the plan agreement
for a more complete description of the Plan's provisions.
(A) GENERAL
The Plan is a defined contribution plan that is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
The Plan was created on September 9, 1971 and restated effective
January 1, 1989. Effective January 1, 1994, the Plan was amended
to include provisions of the Internal Revenue Code (IRC) Section
401(k) and the Tax Reform Act of 1986. Other subsequent amendments
have also been made to the Plan. The Plan covers employees of the
Company who meet specified eligibility requirements. Scudder
Investments is the custodian and trustee of the Plan. A new plan
document was also adopted effective August 1, 1999.
(B) ELIGIBILITY
An employee becomes a participant in the Plan upon completion of
one year of service (1,000 or more hours of service during the
plan year). In order to share in the Company's contribution to the
Plan for any year, a participant must:
1. Have worked 1,000 or more hours during the year.
2. Be employed by the Company on the last business day of the
year. However, those participants whose employment
terminated during the year because of retirement under the
Company's retirement plan or because of disability, death or
for any reason after the attainment of age 65 shall share in
the Company's contribution.
(C) CONTRIBUTIONS
Each year, employees who participate in the Plan may contribute up
to 15% of their salary (6% as a basic elective deferral and 9% as
a supplementary elective deferral), on a pretax basis, and up to
an additional 10% of their salary on an after-tax basis. The
Company matches pre-tax contributions equal to 50% of a
participant's basic elective deferral. The Company may also make
discretionary profit sharing contributions. No such discretionary
contributions were made in 2001.
(D) BENEFITS AND VESTING
Participants are immediately 100% vested in all contributions plus
actual earnings thereon upon eligibility.
Upon termination of service due to death, disability, or
retirement, a participant may elect to receive an amount equal to
the value of the participant's interest in his or her account. The
form of payment is a lump-sum distribution (rollover treatment, if
eligible), a stream of payments to be paid in monthly installments
over a 10- to 15-year period, or installment payments in a fixed
amount.
(Continued)
4
THE ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 2001 and 2000
(E) PARTICIPANT'S ACCOUNTS
Each participant's account is credited with the participant's
contribution and allocations of (i) the Company's contribution and
(ii) Plan earnings. Allocations are based on participant earnings
or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from
the participant's vested account.
(F) INVESTMENT OPTIONS
Participants are offered 12 investment portfolios into which
they can direct their contributions.
Employer matching contributions are allocated among options in the
same percentages as the employee contributions. A description of
each investment option is provided below:
SCUDDER STABLE VALUE FUND
This fund seeks to provide principal stability, a
competitive yield and reliable liquidity from a portfolio of
high-quality instruments, including guaranteed insurance
contracts (GICs), bank investment contracts (BICs),
synthetic contracts, private placements, and cash
equivalents.
SCUDDER STOCK INDEX FUND
This fund seeks to match the total return of the Standard &
Poor's (S&P) 500 Stock Index. The S&P 500 is an index of 500
common stocks of U.S. companies that is often used as a
benchmark for the U.S. stock market.
PERSONAL ACCESS FUND
This is an investment option that provides investment
flexibility to participants by enabling them to set up their
own brokerage account through State Street Brokerage. It
allows participants to buy and sell other securities and/or
mutual funds not available through the Plan. The participant
pays all brokerage fees.
SCUDDER INCOME FUND
This mutual fund seeks high current income by investing
primarily in high-grade corporate bonds.
SCUDDER BALANCED FUND
This mutual fund seeks a balance of growth and current
income as well as long-term preservation of capital through
a diversified portfolio of stocks of larger, seasoned
companies.
SCUDDER LARGE COMPANY GROWTH FUND
This mutual fund seeks to provide long-term growth of
capital through investing primarily in the equity securities
of seasoned, financially strong U.S. companies.
(Continued)
5
THE ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 2001 and 2000
SCUDDER LARGE COMPANY VALUE FUND
This mutual fund seeks to maximize long-term growth of
capital by investing primarily in common stocks.
JANUS MERCURY FUND
This mutual fund seeks long-term growth of capital primarily
through investments in the common stock of issuers of any
size, which may include well established issuers and/or
smaller emerging-growth companies.
JANUS OVERSEAS FUND
This mutual fund seeks long-term growth of capital by
investing primarily in the common stocks of companies
outside the United States of America.
JANUS TWENTY FUND
This mutual fund seeks long-term growth of capital,
primarily through investments in a core position of 20-30
common stocks of U.S. and foreign issuers of any size.
SCUDDER VALUE FUND
This mutual fund seeks long-term growth of capital by
investing primarily in common stocks of medium to large U.S.
companies that are considered "undervalued."
INDEPENDENT BANK CORP. STOCK
This investment is exclusively in the common stock of
Independent Bank Corp., the parent company of Rockland Trust
Company.
(G) LOANS TO PARTICIPANTS
Participants may borrow from their fund accounts a minimum loan
amount of $500 up to a maximum of $50,000 (reduced by the highest
outstanding loan balance in the previous 12 months) or 50% of the
participants' account balances, whichever is less. The loans are
secured by the balance in the participant's account and bear
interest at rates that range from 4.75% to 9.00%, as determined by
the plan administrator, which are commensurate with local
prevailing rates. Loans must be repaid within five years; however,
loans for the purchase of a primary residence must be repaid
within 30 years.
(H) PRIORITIES OF THE PLAN UPON TERMINATION
Although it has not expressed any intent to do so, the Company has
the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions of ERISA.
In the event of plan termination, the trustee shall liquidate the
entire investment in the Plan after payment of all expenses and
after proportional adjustment of accounts to reflect such
expenses, portfolio losses or profits, and reallocations to the
date of liquidation. Each participating employee,
(Continued)
6
THE ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 2001 and 2000
retired participating employee, and beneficiary of each deceased
participating employee shall be entitled to receive any amounts
outstanding to the credit of the participating employee's account
as of the date of liquidation.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF ACCOUNTING
The accompanying financial statements are prepared on the accrual
basis of accounting. Contributions, interest, and other income are
recorded as earned on the accrual basis.
(B) EXPENSES
The Company pays all expenses of the Plan at the option of the
Company.
(C) USE OF ESTIMATES
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and changes
therein, and disclosure of contingent assets and liabilities.
Actual results could differ from those estimates.
(D) INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Quoted market
prices are used to value investments. Shares of mutual funds are
valued at the net asset value of shares held by the Plan at
year-end.
Purchases and sales of securities are recorded on a trade-date
basis. Dividends are recorded on the ex-dividend rate.
The variety of investment options are exposed to various risks,
such as interest rate risk, credit and overall market volatility
risks. Due to the level of risk associated with certain investment
securities, it is reasonably possible that changes in the values
of investment securities will occur in the near term and that such
changes could materially affect the amounts reported in the
statements of net assets available for benefits.
(E) NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued
SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities" (SFAS No. 133). SFAS No. 133 requires that
an entity recognize all derivatives and measure those
instruments at fair value.
SFAS No. 133 is effective for fiscal years beginning after
June 15, 2000. Pursuant to SFAS No. 137, the Plan is required
to adopt SFAS No. 133 effective January 1, 2001. The impact of
SFAS No. 133 on the Plan financial statements was not material
at January 1, 2001.
(Continued)
7
THE ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 2001 and 2000
(3) INVESTMENTS
The following presents investments in the accompanying statements of net
assets available for benefits for which the fair value exceeded 5% of the
Plan's net assets as of plan years ended December 31, 2001 and 2000:
DESCRIPTION OF INVESTMENT FAIR VALUE
----------------------------------------------------------------------- -------------------------------------------
2001 2000
-------------------- --------------------
Independent Bank Corp. Stock, 265,590 and 277,469 $ 5,707,525 3,416,018
shares, respectively
Scudder Balanced Fund, 240,268 and 231,836 4,199,888 4,462,853
shares, respectively
Scudder Stock Index Fund, 91,356 and 84,408 2,988,248 3,141,655
shares, respectively
Scudder Large Company Growth Fund, 93,378 and 85,053 2,391,409 2,816,116
shares, respectively
Scudder Stable Value Fund, 1,966,845 and 1,227,399 1,966,845 1,227,399
shares, respectively
Janus Mercury Fund, 88,414 and 80,091 shares, respectively 1,838,131 2,376,312
During 2001, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) depreciated
in value by $211,942 as follows:
Collective investment trusts $ (389,423)
Mutual funds - Bonds (3,163)
Mutual funds - Equity (2,300,445)
Common stock 2,481,089
-------------------
Total depreciation, net $ (211,942)
===================
(4) RELATED-PARTY TRANSACTIONS
Certain Plan investments are shares of common stock of Independent Bank
Corp. and collective investment trusts and mutual funds managed by
Scudder Investments. Independent Bank Corp. is the parent company of
the Company, and Scudder Investments is the trustee as defined by the
Plan. Therefore, these transactions qualify as party-in-interest
transactions.
(5) TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated March 15, 1995 that the Plan and related trust are designed
in accordance with applicable sections of the IRC. Although the Plan has
been amended since receiving the determination letter, the Plan
administrator believes that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the IRC.
(Continued)
8
THE ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN AND TRUST
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
Plan No: 002
E.I.N: 04-1782600
December 31, 2001
ISSUER AND DESCRIPTION SHARES/UNITS CURRENT VALUE
-------------------------------------------------------------------------------- ------------------- -------------------
Collective Investment Trusts:
* Scudder Stable Value Fund 1,966,845 $ 1,966,845
* Scudder Stock Index Fund 91,356 2,988,248
-------------------
4,955,093
Personal Access Fund:
Cash and cash equivalents:
SSGA Money Market Fund, 6.28% 34,346 34,346
Common stock:
AOL Time Warner 100 3,210
Allstate Corp 100 3,370
Applied Materials Inc 60 2,406
Bristol Meyers Squibb 50 2,550
Broadvision Inc 50 137
CVS Corp Del 120 3,552
Disney Walt Co Del 30 621
Dominion Resources Inc 50 3,005
Exodus Communications Inc 50 --
Fleetboston Finl Corp 75 2,737
Ford Mtr Co Del Com 150 2,358
Fortune Brands Inc 70 2,771
Home Depot Inc 5 255
Kimberly Clark Corp 50 2,990
Kroger Corp 200 4,174
McDonalds Corp 100 2,647
Merck & Co Inc 50 2,940
Microsoft Corp 10 663
Mirant Corp 100 1,602
Pfizer Inc 50 1,993
Phillips Petroleum Corp 50 3,013
SBC Communications 70 2,742
State Street Corp 10 523
9
THE ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN AND TRUST
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
Plan No: 002
E.I.N: 04-1782600
December 31, 2001
ISSUER AND DESCRIPTION SHARES/UNITS CURRENT VALUE
-------------------------------------------------------------------------------- ------------------- -------------------
Sun Microsystems Inc 2,000 24,601
Texas Instruments Inc 5 140
Verizon Communications 10 475
Wal Mart Stores Inc 25 1,439
Worldcom Inc 180 2,286
Zimmer Hldgs Inc 5 149
Check Point Software Tech Ltd 15 598
Mutual funds:
Berger Mid Cap Value 937 15,900
Gabelli Growth Shares Ben Int 22 624
Janus Orion Fund 35 208
-------------------
131,025
Common stocks:
Independent Bank Corp. Stock Fund:
* Independent Bank Corp. Mass. 265,590 5,707,525
Mutual funds - Bonds:
* Scudder Income Fund 30,470 381,486
Mutual funds - Equity:
* Scudder Balanced Fund 240,268 $ 4,199,888
* Scudder Large Company Growth Fund 93,378 2,391,409
* Scudder Large Company Value Fund 8,728 195,340
Janus Mercury Fund 88,414 1,838,131
Janus Overseas Fund 36,961 750,300
Janus Twenty Fund 15,391 591,954
-------------------
9,967,022
*Participants loans, interest rates from 4.75% to 9.00% 0 601,552
-------------------
Total investments held at December 31, 2001 $ 21,743,703
===================
* Represents a party-in-interest to the Plan.
See accompanying independent auditors' report.
10