INTERCHANGE FINANCIAL SERVICES CORPORATION
MEMORANDUM
TO: Board of Directors - IFSC & IB DATE: December 7, 2006
Senior Officers
FROM: Charles T. Field SUBJECT: STOCK TRADING
Senior Vice President & CFO -------------
BLACKOUT PERIOD
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1. Please be advised that a BLACKOUT PERIOD for the Interchange Bank Capital
Investment Plan (the "401(k) Plan") will be imposed on transactions involving
Interchange Financial Services Corporation (the "Company") common stock fund
(the "Company stock fund") under the 401(k) Plan. This blackout period,
described in more detail below, is necessary for the 401(k) Plan trustees to
allow the plan recordkeeper time to process, exchange and allocate the Merger
consideration to each participant as contemplated by the Agreement and Plan of
Merger, dated as of April 13, 2006, by and among TD Banknorth Inc. ("TD
Banknorth") and the Company. Under the Sarbanes-Oxley Law enacted in 2002, the
directors and officers of the Company will generally be prohibited from engaging
in transactions involving the Company equity securities (including options and
other derivatives based on Company stock) during this blackout period in
addition to otherwise complying with the Company's Insider Trading Policy.
Dispositions of equity securities of the Company in connection with the Merger,
including your election of merger consideration, are exempt under Sarbanes-Oxley
from the blackout period trading restrictions.
2. As a result of the need to allow the plan recordkeeper time to process,
exchange and allocate the Merger consideration to each participant, during the
blackout period, participants in the 401(k) Plan will be temporarily unable to
(1) make exchanges into or out of the Company stock fund under the 401(k) Plan,
(2) take distributions of money invested in the Company stock fund under the
401(k) Plan, and (3) take loans of money invested in the Company common stock
fund under the 401(k) Plan.
3. The blackout period for the 401(k) Plan is expected to commence at 4:00 P.M.
EASTERN STANDARD TIME ON TUESDAY, DECEMBER 26, 2006, and, assuming the Merger is
completed on January 1, 2007, is currently expected to end on Friday, January
19, 2007. The blackout period will be lifted promptly if the Merger is not
completed. We will notify
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December 7, 2006
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you of any changes that affect the dates of the blackout period. In addition,
you can confirm the status of the blackout period by speaking with me.
4. Generally, during the blackout period, you are prohibited from directly or
indirectly, purchasing, selling or otherwise transferring any equity security of
the Company that you acquired in connection with your service as a director or
an executive officer. "Equity Securities" are defined broadly to include options
and other derivatives. Covered transactions are not limited to those involving
your direct ownership, but include any transaction in which you have a pecuniary
interest. You may be deemed to have an interest in transactions in equity
securities of the Company by your family members. As indicated above, however,
dispositions of equity securities of the Company in connection with the Merger
are excluded from the trading restrictions.
5. The prohibition covers securities acquired "in connection with service as a
director or employment as an executive officer." This includes, among other
things, securities acquired under a compensatory plan or contract (such as under
a stock option, or a restricted stock grant), as a direct or indirect inducement
to employment or joining the Board of Directors, in transactions between the
individual and the Company, and as director qualifying shares. Securities
acquired outside of an individual's service as a director or executive officer
(such as shares acquired when the person was an employee but not yet an
executive officer) are not covered. However, if you hold both covered shares and
non-covered shares, any shares that you sell will be presumed to come first from
the covered shares unless you can identify the source of the sold shares and
show that you use the same identification for all related purposes (such as tax
reporting and disclosure requirements).
6. The following are examples of transactions that you may not engage in during
the blackout period:
o Exercising stock options granted to you in connection with your
service as a director or executive officer;
o Selling Company stock that you acquired by exercising options;
o Selling Company stock that you originally received as a restricted
stock grant.
7. There are certain exemptions, including:
o Purchases or sales under 10b5-1(c) trading plans (so long as you do
not make or modify your election during the blackout period or at a
time when you are aware of the actual or approximate dates of the
blackout);
o Bona fide gifts, bequests and transfers pursuant to domestic relations
orders;
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December 7, 2006
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o Acquisitions and dispositions of equity securities in connection with
a merger, acquisition, divestiture, or similar transaction.
8. If you engage in a transaction that violates these rules, you can be required
to disgorge your profits from the transaction, and you are subject to civil and
criminal penalties.
THE RULES SUMMARIZED ABOVE ARE COMPLEX, AND THE CRIMINAL AND CIVIL PENALTIES
THAT COULD BE IMPOSED UPON DIRECTORS AND EXECUTIVE OFFICERS WHO VIOLATE THEM
COULD BE SEVERE.
I THEREFORE REQUEST THAT YOU CONTACT ME BEFORE ENGAGING IN ANY TRANSACTION
INVOLVING THE COMPANY STOCK OR DERIVATIVES BASED ON THE COMPANY STOCK DURING THE
BLACKOUT PERIOD, OR IF YOU BELIEVE THAT ANY SUCH TRANSACTION IN WHICH YOU HAVE A
PECUNIARY INTEREST MAY OCCUR DURING THE BLACKOUT PERIOD.
If you have any questions, please feel free to call me at (201) 703-2265, Ext.
2033.
Charles T. Field
CTF/par