INDEPENDENT BANK CORP.
 

UNITED STATES
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, 2003

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:

Rockland Trust Company Employee Savings and
Profit Sharing Plan

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 25, 2004

 


 

ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN

Financial Statements and Supplemental Schedule

December 31, 2003 and 2002

(With Report of Independent Registered Public Accounting Firm)

 


 

ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN

Table of Contents

         
    Page
Report of Independent Registered Public Accounting Firm
    1  
Statements of Net Assets Available for Benefits as of December 31, 2003 and 2002
    2  
Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2003
    3  
Notes to Financial Statements
    4-8  
Schedule
       
Schedule H, Line 4i – Schedule of Assets (Held at End of Year)
    9-10  

 


 

Report of Independent Registered Public Accounting Firm

The 401(k) Committee of
Rockland Trust Company
Employee Savings and Profit Sharing Plan:

We have audited the accompanying statements of net assets available for benefits of Rockland Trust Company Employee Savings and Profit Sharing Plan as of December 31, 2003 and 2002 and the related statement of changes in net assets available for benefits for the year ended December 31, 2003. 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 audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 audits provide 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, 2003 and 2002 and the changes in its net assets available for benefits for the year ended December 31, 2003 in conformity with U.S. generally accepted accounting principles.

Our audits were 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.

Boston, Massachusetts
May 14, 2004

 


 

ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN

Statements of Net Assets Available for Benefits

December 31, 2003 and 2002

                 
    2003
  2002
Assets:
               
Investments, at fair value (note 3):
               
Collective investment trusts
  $ 6,384,092       5,125,048  
Personal access fund
    122,435       90,575  
Common stock
    7,222,000       6,188,944  
Mutual funds:
               
Bonds
    784,507       634,836  
Equity
    11,806,810       8,375,667  
Participant loans
    748,490       634,562  
 
   
 
     
 
 
 
    27,068,334       21,049,632  
Cash
    12,254       13,862  
 
   
 
     
 
 
Total assets
    27,080,588       21,063,494  
 
   
 
     
 
 
Net assets available for benefits
  $ 27,080,588       21,063,494  
 
   
 
     
 
 

See accompanying notes to financial statements.

2


 

ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN

Statement of Changes in Net Assets Available for Benefits

Year ended December 31, 2003

         
Additions:
       
Additions to net assets attributed to:
       
Investment income:
       
Net appreciation in fair value of investments (note 3)
  $ 4,425,555  
Interest and dividends
    431,024  
 
   
 
 
 
    4,856,579  
Contributions:
       
Participant
    2,007,175  
Employer
    654,565  
 
   
 
 
 
    2,661,740  
 
   
 
 
Total additions
    7,518,319  
 
   
 
 
Deductions:
       
Deductions from net assets attributed to:
       
Benefits paid to participants
    1,501,225  
 
   
 
 
Total deductions
    1,501,225  
 
   
 
 
Net increase
    6,017,094  
Net assets available for benefits:
       
Beginning of year
    21,063,494  
 
   
 
 
End of year
  $ 27,080,588  
 
   
 
 

See accompanying notes to financial statements.

3


 

ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN

Notes to Financial Statements

December 31, 2003 and 2002

(1)   Description of the Plan
 
    The following description of the Rockland Trust Company (Company) Employee Savings and Profit Sharing Plan (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 2003 and 2002.
 
      Effective April 18, 2004, the Company has amended the Plan and will no longer match pre-tax contributions of a participant’s basic elective deferral.
 
  (d)   Benefits and Vesting
 
      Participants are immediately 100% vested in all contributions plus actual earnings thereon upon eligibility.

(Continued)

4


 

ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN

Notes to Financial Statements

December 31, 2003 and 2002

      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.
 
  (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 13 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.

(Continued)

5


 

ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN

Notes to Financial Statements

December 31, 2003 and 2002

      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.
 
      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 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-Dreman High Return Equity Fund
 
      This mutual fund seeks a high rate of return by investing primarily in large-capitalization stocks ($1 billion and greater) in undervalued sectors of the market.
 
      Neuberger Berman Genesis Trust
 
      The mutual fund seeks capital appreciation by investing primarily in common stocks of companies with small market capitalization (small-cap companies). Market capitalization means the total market value of a company’s outstanding common stock.
 
      Templeton Foreign – A
 
      This mutual fund seeks long-term capital growth by investing primarily in the equity securities of companies located outside the United States, including emerging markets. Also, the fund generally invests up to 25% of its total assets in debt securities of companies and governments located anywhere in the world.
 
      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 4.00% to 10.50%, as determined

(Continued)

6


 

ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN

Notes to Financial Statements

December 31, 2003 and 2002

      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, 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 U.S. generally accepted accounting principles 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 date.
 
      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.

(Continued)

7


 

ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN

Notes to Financial Statements

December 31, 2003 and 2002

  (e)   Benefits Paid
 
      Benefits are recorded upon distribution.

(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, 2003 and 2002:
                 
    Fair value
Description of investment
  2003
  2002
Independent Bank Corp. Stock, 256,982 and 272,256 shares, respectively
  $ 7,222,000       6,188,944  
Scudder Balanced Fund, 259,539 and 243,147 shares, respectively
    4,339,498       3,528,066  
Scudder Stock Index Fund, 114,554 and 103,376 shares, respectively
    3,739,037       2,627,834  
Scudder Stable Value Fund, 2,645,055 and 2,497,214 shares, respectively
    2,645,055       2,497,214  
Scudder Large Company Growth Fund, 102,346 and 95,436 shares, respectively
    2,303,812       1,718,809  
Janus Mercury Fund, 100,820 and 90,369 shares, respectively
    1,965,984       1,333,845  

    During 2003, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value by $4,425,555 as follows:
         
Collective investment trusts
  $ 803,116  
Mutual funds – Bonds
    5,190  
Mutual funds – Equity
    2,076,661  
Common stock
    1,540,588  
 
   
 
 
Total appreciation, net
  $ 4,425,555  
 
   
 
 

(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 is 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.

8


 

ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

Plan No: 002
E.I.N: 04-1782600

December 31, 2003

                 
Issuer and description
  Shares/Units
  Current value
Collective Investment Trusts:
               
* Scudder Stable Value Fund
    2,645,055     $ 2,645,055  
* Scudder Stock Index Fund
    114,554       3,739,037  
 
           
 
 
 
            6,384,092  
 
           
 
 
Personal Access Fund:
               
Cash and cash equivalents:
               
SSGA Money Market Fund
    40,840       40,840  
Common stock:
               
Applied Materials Inc.
    120       2,694  
Disney Walt Co.
    30       700  
Exodus Communications Inc.
    50        
Home Depot Inc.
    10       356  
Johnson & Johnson
    10       519  
Kimberly Clark Corp.
    51       2,974  
Koninkluke Ahold
    328       2,545  
Microsoft Corp.
    20       551  
State Street Corp.
    10       522  
Sun Microsystems Inc.
    9,000       40,230  
Tenet Healthcare Corp.
    100       1,605  
Texas Instruments Inc.
    15       441  
Travelers Ppty Cas Corp. New Cl A
    4       67  
Travelers Ppty Cas Corp. New Cl B
    8       136  
Tyson Foods Inc.
    201       2,656  
Verizon Communications
    10       355  
Wal Mart Stores Inc.
    25       1,328  
Winn Dixie Stores
    201       2,003  
Worldcom Inc.
    1,150       44  
Mutual funds:
               
American Capital
    246       4,155  
Columbia Acorn USA Class Z
    214       4,489  
Dodge & Cox
    61       4,443  
Fidelity Contrafund
    91       4,495  
Lord Abbett Mid Cap Value Class A
    228       4,287  
 
           
 
 
 
            122,435  
 
           
 
 

(Continued)

9


 

ROCKLAND TRUST COMPANY
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN


Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

Plan No: 002
E.I.N: 04-1782600

December 31, 2003

                 
Issuer and description
  Shares/Units
  Current value
Common stocks:
               
Independent Bank Corp. Stock Fund:
               
* Independent Bank Corp. Mass
    256,982     $ 7,222,000  
 
           
 
 
Mutual funds – Bonds:
               
* Scudder Income Fund
    60,814       784,507  
 
           
 
 
Mutual funds – Equity:
               
* Scudder Balanced Fund
    259,539       4,339,498  
* Scudder Large Company Growth Fund
    102,346       2,303,812  
Janus Mercury Fund
    100,820       1,965,984  
Templeton Foreign — A
    80,841       860,150  
Janus Twenty Fund
    22,261       805,180  
Neuberger Berman Genesis Trust
    18,197       673,837  
* Scudder Large Company Value Fund
    22,491       528,765  
* Scudder–Dreman High Return Equity
    8,632       329,584  
 
           
 
 
 
            11,806,810  
 
           
 
 
Loan fund:
               
Loans to participants, interest rate from 4.00 to 10.50%
            748,490  
 
           
 
 
Total investments held at December 31, 2003
          $ 27,068,334  
 
           
 
 
 
* Represents a party-in-interest to the Plan.
               

See accompanying report of independent registered public accounting firm.

10


 

SIGNATURES

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, Rockland Trust Company Employee Savings and Profit Sharing Plan have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

         
  Rockland Trust Company Employee Savings
and Profit Sharing Plan
   
  (Name of Plan)    
 
       
Date: June 25, 2004
  /s/ Denis K. Sheahan    
 
 
   
  Denis K. Sheahan    
  Chief Financial Officer and Treasurer Independent Bank Corp.    

11