[INDEPENDENT BANK LETTERHEAD]
NOTICE OF ANNUAL MEETING
To Be Held on April 9, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Independent Bank Corp. (the "Company") will be held at the Plimoth Plantation,
137 Warren Avenue, Plymouth, Massachusetts 02360 on Thursday, April 9, 1998 at
3:30 p.m., for the following purposes, all of which are more completely set
forth in the accompanying proxy statement:
(1) To elect four directors to serve as Class II Directors, each for a
term of three years and until their successors are elected and
qualified;
(2) To consider and act upon any matters incidental to the foregoing
purposes or any of them, and any other business which may properly
come before the Annual Meeting or any and all adjournments.
Stockholders of record of the Company at the close of business on February
27, 1998 are entitled to receive notice of and to vote at the Annual Meeting and
at any adjournment(s) thereof.
By order of the Board of Directors
Linda M. Campion
Clerk
Rockland, Massachusetts
March 9, 1998
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN TO
BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY
PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THIS MEETING, YOU MAY VOTE
EITHER IN PERSON OR BY YOUR PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN
WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
INDEPENDENT BANK CORP.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished to the holders of the common stock, $.01
par value per share ("Common Stock") of Independent Bank Corp. (the "Company"),
in connection with the solicitation of proxies by the Board of Directors for use
at the Annual Meeting of Stockholders ("Annual Meeting") to be held at the
Plimoth Plantation, 137 Warren Avenue, Plymouth, Massachusetts 02360 on
Thursday, April 9, 1998 at 3:30 p.m., and at any adjournment or adjournments
thereof for the purposes set forth in the Notice of Annual Meeting. This Proxy
Statement is expected to be mailed to stockholders on or about March 9, 1998.
Each proxy solicited hereby, if properly signed and returned to the Company
and not revoked prior to its use, will be voted in accordance with the
instructions contained therein. If no contrary instructions are given, each
proxy received will be voted (1) FOR the election of the four nominees named
herein as Class II Directors, and (2) upon such other matters as may properly
come before the Annual Meeting, in accordance with the best judgment of the
persons appointed as proxies.
Any stockholder giving a proxy has the power to revoke it at any time
before it is exercised by (i) filing with the Clerk of the Company written
notice thereof at the Company's principal executive offices located at 288 Union
Street, Rockland, Massachusetts 02370, (ii) submitting a duly executed proxy
bearing a later date which is received by the Clerk at least one business day
prior to the Annual Meeting, or (iii) appearing at the Annual Meeting and giving
the Clerk notice of his or her intention to vote in person. Proxies solicited
hereby may be exercised only at the Annual Meeting and any adjournment or
adjournments thereof and will not be used for any other meeting.
VOTING PROCEDURE
Only stockholders of record at the close of business on February 27, 1998
("Voting Record Date") will be entitled to vote at the Annual Meeting and any
adjournment or adjournments thereof. On the Voting Record Date, there were
14,844,196 shares of Common Stock of the Company issued and outstanding and the
Company had no other class of equity securities outstanding. Each share of
Common Stock is entitled to one vote at the Annual Meeting on all matters
properly presented at the Annual Meeting. The By-laws of the Company require
that the holders of a majority in interest of all shares of Common Stock then
outstanding and entitled to vote be present in person or be represented by proxy
at the Annual Meeting in order to constitute a quorum for the transaction of
business. A plurality of votes cast by the holders of Common Stock is required
for election of directors. Abstentions and broker non-votes are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business at the meeting. Abstentions are counted as a negative vote in the
tabulations of the votes on proposals presented to stockholders, whereas broker
non-votes are disregarded for
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purposes of determining whether a proposal has been approved. With regard to the
election of directors, votes for which authority to vote is withheld will not be
counted in the vote and will have no effect.
ELECTION OF DIRECTORS
(Notice Item 1)
The Articles of Organization provide that the Board of Directors shall be
divided into three classes as nearly equal in number as possible, and that the
members of each class are to be elected for a term of three years and until
their successors are elected and qualified. One class of directors is to be
elected annually.
The current terms of office of the Class I and Class III Directors do not
expire this year, and each director in these classes continues in office. Such
directors' current terms expire in 2000 and 1999, respectively. Each director
will continue in office until his term expires and until his successor is
elected and qualified or until his earlier death, removal or resignation. Unless
authority to do so has been withheld or limited in the proxy, it is the
intention of the persons named as proxies to vote the shares to which the proxy
relates for the election to the Board of Directors as Class II Directors the
four nominees listed below.
Management knows of no reason why any nominee should not be available for
election to the Board of Directors at the time of the Annual Meeting. However,
should any of the nominees not be available, it is the intention of the persons
named as proxies to act in respect to the filling of that office by voting the
shares to which the proxy relates, unless authority to do so has been withheld
or limited in the proxy, for the election of such other person or persons as may
be designated by the Board of Directors or, in the absence of such designation,
in such other manner as they may, in their discretion, determine. In no event
will the proxy be voted for any number of directors greater than four.
The Company's By-laws govern nominations for election to the Board of
Directors and require all nominations for election to the Board of Directors
other than those made by the Board of Directors to be made by a stockholder of
record who has complied with the notice provisions contained therein. Written
notice of a stockholder's nomination must be communicated to the attention of
the Clerk of the Company and either delivered to, or mailed and received at, the
principal executive offices of the Company not less than 75 nor more than 125
days prior to the anniversary date of the immediately preceding annual meeting
of stockholders of the Company. Such notice shall include specified matters set
forth in the By-laws.
Information About Nominees For Directors and Continuing Directors
The name of each nominee for election as a Class II Director and each
current director who will continue to serve as a director until the annual
meetings of stockholders to be held in 1999 and 2000, his age, and his principal
occupation, are set forth below. The number of full shares of Common Stock
beneficially owned by each nominee and each continuing director at the close of
business on January 31, 1998 is set forth below in the table under "Beneficial
Ownership." No director of the Company is related to any other director or to
any executive officer of the Company by blood, marriage or adoption,
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except Messrs. John F. Spence, Jr., Robert J. Spence and William J. Spence, who
are brothers, and there are no arrangements or understandings between a director
and any other person pursuant to which such person was elected a director.
Rockland Trust Company, the Company's wholly-owned banking subsidiary, is
hereinafter referred to as "Rockland" or the "Bank." Middleborough Trust
Company, which was a wholly-owned banking subsidiary of the Company until its
merger with and into Rockland in 1992, is hereinafter referred to as
"Middleborough."
The Nominees--Class II (Term Expires in 1998)
W. Paul Clark. Age 62. Mr. Clark is the President and General Manager of
Paul Clark, Inc. (Ford and Volkswagen dealership, Brockton, Massachusetts). Mr.
Clark has served as a director of Rockland since 1970 and of the Company since
1986.
Robert L. Cushing. Age 79. Mr. Cushing is President of the Hanna B. G. Shaw
Home for the Aged, Inc. (a non-profit assisted living facility, Middleborough,
Massachusetts). Mr. Cushing was a director of Middleborough from 1957 until 1990
at which time he became an honorary director of Middleborough. Mr. Cushing
became a director of the Company in 1986 and an honorary director of Rockland in
1992.
Benjamin A. Gilmore II. Age 50. Mr. Gilmore is President of Gilmore
Cranberry Co. (cranberry grower, South Carver, Massachusetts) and Vice Chairman
of the Board of Directors of Ocean Spray Cranberries, Inc. (cranberry products,
Lakeville, Massachusetts). Mr. Gilmore became a director of Middleborough in
1989 and a director of the Company and Rockland in 1992.
William J. Spence. Age 67. Mr. Spence is President of Mass. Bay Lines, Inc.
(excursion boat rentals, Boston, Massachusetts) and President of New Boston
Concessions, Inc. (food and beverage concessionaire, Boston, Massachusetts). Mr.
Spence became a director of Rockland in 1966 and a director of the Company in
1986.
The Board of Directors Recommends That You Vote For
The Election of All Nominees For Directors.
Proxies Solicited by the Board of Directors Will
Be So Voted in the Absence of a Direction to the Contrary.
Directors Continuing in Office
Class I (Term Expires in 2000)
Richard S. Anderson. Age 55. Mr. Anderson is an owner and principal
executive of Anderson-Cushing Insurance Agency, Inc. (insurance broker,
Middleborough, Massachusetts). Mr. Anderson became a director of the Company and
Rockland in 1992 and served as a director of Middleborough from 1980 until its
merger with Rockland.
Lawrence M. Levinson. Age 79. Mr. Levinson is a partner in the law firm of
Burns & Levinson LLP, Boston, Massachusetts and has been a practicing attorney
in Boston since 1948. Mr. Levinson was
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a director of Rockland from 1960 until 1990, at which time he became an honorary
director of Rockland. Mr. Levinson has served as a director of the Company since
1986. Mr. Levinson is also a director of Arrow Automotive Industries, Inc. and
Sonesta International Hotels Corporation.
Richard H. Sgarzi. Age 55. Mr. Sgarzi is the President and Treasurer of
Black Cat Cranberry Corp. (cranberry grower, Plymouth, Massachusetts). Mr.
Sgarzi has served as a director of Rockland since 1980 and of the Company since
1994.
John F. Spence, Jr. Age 71. Mr. Spence is Chairman of the Board of
Directors and Chief Executive Officer of the Company and Chairman of Rockland.
He served as President of the Company from January to December 1991. Mr. Spence
has been a director of Rockland since 1951 and served in various executive
positions with Rockland beginning in 1965, including Chief Executive Officer, a
position he held from 1976 until 1991. He became Chairman of the Board of
Rockland in 1972 and Chairman of the Board of Directors and Chief Executive
Officer of the Company in 1986.
Thomas J. Teuten. Age 57. Mr. Teuten is President of each of A.W. Perry,
Inc. and A.W. Perry Security Corporation (real estate investment, Boston,
Massachusetts). Mr. Teuten has served as a director of Rockland since 1975 and
of the Company since 1986.
Class III (Term Expires in 1999)
Donald K. Atkins. Age 69. Mr. Atkins served as President and Chief
Executive Officer of Winthrop-Atkins Co., Inc. (manufacturer of calendars,
Middleborough, Massachusetts) until his retirement in 1987. Mr. Atkins is also
Treasurer of the Hanna B. G. Shaw Home for the Aged, Inc. (a non-profit assisted
living facility, Middleborough, Massachusetts). Mr. Atkins, a director of the
Company since 1986, became a director of Rockland in 1992 and served as a
director of Middleborough from 1963 until its merger with Rockland.
Douglas H. Philipsen. Age 59. Mr. Philipsen is President of the Company and
President and Chief Executive Officer of Rockland. Mr. Philipsen joined Rockland
in December 1991 as President, Chief Executive Officer and a director. At that
time he also became President and a director of the Company. From October 1987
through November 1990, Mr. Philipsen served as President and Chief Executive
Officer of Bank of New England-Worcester, Worcester, Massachusetts, and its
predecessor financial institutions, Guaranty Bank & Trust and Consumers Savings
Bank.
Robert J. Spence. Age 69. Mr. Spence is President of Albert Culver Co.
(retail fuel company, Rockland, Massachusetts). Mr. Spence has served as a
director of Rockland since 1961 and of the Company since 1986.
Brian S. Tedeschi. Age 47. Mr. Tedeschi is President of Tedeschi Realty
Corp. (real estate development, Rockland, Massachusetts). Mr. Tedeschi has
served as a director of Rockland since 1980 and of the Company since 1991.
Page 4
BENEFICIAL OWNERSHIP
The following table sets forth the beneficial ownership of the Company's
Common Stock as of January 31, 1998, with respect to (i) each director of the
Company, (ii) each of the named executive officers in the Summary Compensation
Table set forth under "Executive Compensation," and (iii) all directors and
executive officers of the Company as a group.
Amount and Nature
Name of of Beneficial Percent of
Beneficial Owner Ownership Class (1)
- ---------------------------------------------------------------------------------------------------------------
John Hancock Mutual Life Insurance Company
P.O. Box 111, Boston, MA 02117 974,000 6.6%
Richard S. Anderson 13,378 (2)
Donald K. Atkins 56,267 (3)(4)
W. Paul Clark 172,180 (5) 1.1%
Robert L. Cushing 72,600 (4)(6)
* Richard F. Driscoll, Executive Vice President, Retail
and Operations Division of Rockland 66,811 (7)
Benjamin A. Gilmore, II 18,808 (8)
* Ferdinand T. Kelley, Executive Vice President,
Commercial Lending Division of Rockland 57,365 (9)
Lawrence M. Levinson 385,239 (10) 2.5%
* Douglas H. Philipsen, President 187,042 (11) 1.2%
* Richard J. Seaman, Chief Financial Officer and
Treasurer 46,740 (12)
Richard H. Sgarzi 138,736 (13)
* John F. Spence, Jr., Chairman and Chief Executive
Officer 172,929 (14)(15) 1.1%
Robert J. Spence 312,437 (14)(16) 2.1%
William J. Spence 266,835 (14)(17) 1.8%
Brian S. Tedeschi 125,190 (18)
Thomas J. Teuten 332,139 (19) 2.2%
Directors and executive officers of the Company as a
group (18 individuals) 2,305,534 (20) 15.2%
* Executive Officer of the Bank
(1) Percentages are not reflected for individuals whose holdings represent less
than 1%. The information contained herein is based on information provided
by the respective individuals and filings pursuant to the Securities
Exchange Act of 1934, as amended ("Exchange Act"). Shares
Page 5
are deemed to be beneficially owned by a person if he directly or
indirectly has or shares (i) voting power, which includes the power to vote
or to direct the voting of the shares, or (ii) investment power, which
includes the power to dispose or to direct the disposition of the shares.
Unless otherwise indicated, all shares are beneficially owned by the
respective individuals. Shares of Common Stock which are subject to stock
options exercisable within 60 days of January 31, 1998 are deemed to be
outstanding for the purpose of computing the amount and percentage of
outstanding Common Stock owned by such person. See "Executive
Compensation."
(2) Includes 6,000 shares which Mr. Anderson has a right to acquire within 60
days of January 31, 1998 through the exercise of stock options granted
pursuant to the Company's 1996 Non-Employee Directors' Stock Option Plan
(the "Directors' Option Plan").
(3) Includes 10,000 shares owned by Mr. Atkins' wife individually over which
Mr. Atkins may be deemed to have shared voting and investment power.
Includes 1,000 shares which Mr. Atkins has a right to acquire within 60
days of January 31, 1998 through the exercise of stock options granted
pursuant to the Directors' Option Plan.
(4) Includes 20,000 shares owned by a non-profit organization of which Messrs.
Atkins and Cushing are officers and directors. In each instance, voting and
dispositive power are shared with respect to such shares.
(5) Includes 44,752 shares owned by Paul Clark, Inc. and 6,306 shares owned by
Paul Clark Investment Co., as to which Mr. Clark has sole voting and
investment power, and 12,106 shares owned by Mr. Clark's wife, as to which
shares Mr. Clark has shared voting and investment power. Includes 6,000
shares which Mr. Clark has a right to acquire within 60 days of January 31,
1998 through the exercise of stock options granted pursuant to the
Directors' Option Plan.
(6) Includes 3,200 shares owned by Mr. Cushing and his wife, jointly, and 7,200
shares owned by his wife, individually. Mr. Cushing shares voting and
investment power with respect to such shares. Includes 6,000 shares which
Mr. Cushing has a right to acquire within 60 days of January 31, 1998
through the exercise of stock options granted pursuant to the Directors'
Option Plan.
(7) Includes 10,000 shares owned by Mr. Driscoll and his wife, jointly, and
2,196 shares owned by his wife, individually. Mr. Driscoll shares voting
and investment power with respect to such shares. Includes 37,284 shares
which Mr. Driscoll has a right to acquire within 60 days of January 31,
1998 through the exercise of stock options granted pursuant to the
Company's 1987 Incentive Stock Option Plan (the "1987 Plan") and 1997
Employee Stock Option Plan (the "1997 Plan"). See "Executive Compensation."
(8) Includes 312 shares owned by Mr. Gilmore and his wife, jointly, and 2,107
shares owned by his wife, individually. Mr. Gilmore shares voting and
investment power with respect to such shares. Includes 6,000 shares which
Mr. Gilmore has a right to acquire within 60 days of January 31, 1998
through the exercise of stock options granted pursuant to the Directors'
Option Plan.
(9) Includes 49,684 shares which Mr. Kelley has a right to acquire within 60
days of January 31, 1998 through the exercise of stock options granted
pursuant to the 1987 Plan and the 1997 Plan. See "Executive Compensation."
Page 6
(10) Includes 183,668 shares held in a charitable trust, as to which Mr.
Levinson is sole trustee and, as such, has sole voting and investment power
with respect to such shares. Includes 2,412 shares owned by Mr. Levinson's
wife, individually, and 4,008 shares owned by Mr. Levinson's children. Mr.
Levinson shares voting and investment power with respect to the shares
owned by his children but not with respect to the shares owned by his wife.
Includes 6,000 shares which Mr. Levinson has a right to acquire within 60
days of January 31, 1998 through the exercise of stock options granted
pursuant to the Directors' Option Plan.
(11) Includes 9,062 shares owned by Mr. Philipsen's wife, as to which Mr.
Philipsen may be deemed to have shared voting and investment power, and
65,733 shares which Mr. Philipsen has a right to acquire within 60 days of
January 31, 1998 through the exercise of stock options granted pursuant to
the 1987 Plan and the 1997 Plan. See "Executive Compensation."
(12) Includes 110 shares owned by Mr. Seaman and his wife, jointly. Mr. Seaman
shares voting and investment power with respect to such shares, and 37,809
shares which Mr. Seaman has a right to acquire within 60 days of January
31, 1998 through the exercise of stock options granted pursuant to the 1987
Plan and the 1997 Plan. See "Executive Compensation."
(13) Includes 32,000 shares held by Standish Realty Trust of which Mr. Sgarzi is
a Trustee. Includes 6,000 shares which Mr. Sgarzi has a right to acquire
within 60 days of January 31, 1998 through the exercise of stock options
granted pursuant to the Directors' Option Plan.
(14) Includes 61,827 shares held by a trust, of which Messrs. John F. Spence,
Jr., Robert J. Spence and William J. Spence are the trustees and, as such,
share voting and investment power with respect to such shares.
(15) Includes 25,000 shares owned by the wife of John F. Spence, Jr., as to
which Mr. John F. Spence, Jr. may be deemed to have shared investment and
voting power. Mr. Spence disclaims beneficial ownership of such shares.
Also includes 21,850 shares which Mr. Spence has a right to acquire within
60 days of January 31, 1998 through the exercise of stock options granted
pursuant to the 1987 Plan and the 1997 Plan. See "Executive Compensation."
(16) Includes 47,104 shares owned by Robert J. Spence's wife and 22,408 shares
owned by a trust for the benefit of his daughter of which he is trustee.
Mr. Robert J. Spence disclaims beneficial ownership with respect to all of
such shares. Includes 6,000 shares which Mr. Spence has a right to acquire
within 60 days of January 31, 1998 through the exercise of stock options
granted pursuant to the Directors' Option Plan.
(17) Includes 51,090 shares owned by Mr. William J. Spence's wife. Mr. William
J. Spence may be deemed to have shared investment and voting power with
respect to such shares. Mr. Spence disclaims beneficial ownership of such
shares. Includes 6,000 shares which Mr. Spence has a right to acquire
within 60 days of January 31, 1998 through the exercise of stock options
granted pursuant to the Directors' Option Plan.
(18) Includes 1,200 shares owned by Mr. Tedeschi's wife individually, 15,146
shares owned by Mr. Tedeschi's daughter, and 15,146 shares owned by Mr.
Tedeschi's son. Mr. Tedeschi may be
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deemed to have shared voting and investment power with respect to such
shares. Includes 6,000 shares which Mr. Tedeschi has a right to acquire
within 60 days of January 31, 1998 through the exercise of stock options
granted pursuant to the Directors' Option Plan.
(19) Includes 7,717 shares owned by Mr. Teuten's wife individually, 1,500 shares
held in a trust of which Mr. Teuten is a co-trustee and his wife is a
beneficiary, 12,992 shares held in a trust over which Mr. Teuten has
investment power and his wife is a remainderman, and 300,613 shares owned
of record by A.W. Perry Security Corporation, of which Mr. Teuten is
President and a director. Mr. Teuten shares investment and voting power
with respect to such shares. Includes 6,000 shares which Mr. Teuten has a
right to acquire within 60 days of January 31, 1998 through the exercise of
stock options granted pursuant to the Directors' Option Plan.
(20) This total has been adjusted to eliminate any double counting of shares
beneficially owned by more than one member of the group.
1997 Meetings and Standard Fee Arrangements of the Board of Directors and
Committees
During 1997, the Board of Directors of the Company had 13 meetings. The
Company has standing Executive, Audit, and Stock Option Plan Committees of the
Board of Directors. The Bank has a standing Compensation Committee, which
together with the Company's Stock Option Plan Committee determines compensation
for the officers and employees of the Bank. See "Executive Compensation." The
Compensation Committee held nineteen meetings in 1997. Its membership included
permanent members plus the three-member rotating component. In 1997 the
permanent members were Messrs. Clark, Sgarzi, R. Spence, and Teuten. The
rotating component consisted of Messrs. W. Spence, Sullivan, Donovan, Atkins,
Gilmore, Tedeschi, Spurr, Anderson, Hall, Jones and Ms. Bailey. No fees were
paid to any member of the Compensation Committee for attendance at committee
meetings.
No fees were paid to any director who was an employee of the Company or of
Rockland for attendance at meetings of the Board of Directors of the Company in
1997. A payment of a $500 fee per meeting for attendance at meetings of the
Board of Directors of Rockland to directors who were not employees of the
Company or Rockland was made throughout 1997. Each director who was not an
employee of the Company or Rockland and who was a member of the Company's Audit
Committee or Rockland's Executive or Audit Committees, received $500 for each
committee meeting attended. The Chairman of Rockland's Executive Committee
received $675 for each such meeting attended.
Those directors who served as permanent members of the Executive Committee
of Rockland received an annual retainer of $5,000, except that Executive
Committee Chairman Clark received an annual retainer of $8,500. Those directors
who served as rotating members of the Executive Committee of Rockland received
an annual retainer of $4,000.
The Audit Committee of the Board of Directors, none of whose members is an
employee of the Company or Rockland, recommends to the Board of Directors the
appointment of a firm of independent certified public accountants to audit the
financial statements of the Company. It meets with the independent certified
public accountants in connection with the annual and any interim or special
audits of the financial statements of the Company made by the independent
certified public accountants to
Page 8
discuss the scope of the audit to be conducted and other matters relevant to the
audit. The Committee reviews all reports by bank regulatory authorities of their
examinations of the Company and Rockland. The Audit Committee periodically
reports to the full Board of Directors concerning the activities of the Audit
Committee during the year. The Audit Committee held four meetings in 1997.
During 1997, its membership consisted of Messrs. Clark (Chairman), Cushing and
Levinson. Members of the Audit Committee are elected each year following the
annual meeting of stockholders of the Company.
The Stock Option Plan Committee, subject to the provisions of the Company's
1987 Plan and 1997 Plan (the "Plans"), has plenary authority in its discretion
to determine the employees of the Company and Rockland to whom options shall be
granted, the number of options to be granted to each employee, and the time or
times at which options should be granted, to interpret the Plans and to
prescribe, amend and rescind rules and regulations relating to the Plans. The
1987 Plan expired in 1997 and no additional stock options may be granted under
said plan. The Stock Option Plan Committee held five meetings in 1997. During
1997, its membership consisted of Messrs. Clark, Robert J. Spence and Teuten.
Members of the Stock Option Plan Committee are elected each year following the
annual meeting of stockholders of the Company.
Under the Directors' Option Plan, each person who was a non-employee
director of the Company or of Rockland on April 16, 1996 automatically received
a non-qualified stock option to purchase 5,000 shares of Common Stock at the
then fair market value of the Common Stock. Each person who thereafter becomes a
non-employee director of the Company or of Rockland shall receive, on the first
anniversary of his or her election to such Directors, a non-qualified stock
option to purchase 5,000 shares of Common Stock at the then fair market value.
Thereafter, each such non-employee director shall receive a non-statutory stock
option to purchase 1,000 shares of Common Stock upon the later of (a) the
expiration of one year following his or her election to the Board, or (b) the
third business day following the day of the annual meeting of stockholders, at
the then fair market value.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors to file reports on Forms 3, 4, and 5 to indicate ownership and
changes in ownership of Common Stock with the Securities and Exchange Commission
and to furnish the Company with copies of such reports.
Based solely upon a review of the copies of such forms and amendments
thereto and upon written representations that no Forms 5 were required to be
filed, the Company believes that during the year ending December 31, 1997, all
Section 16(a) filing requirements applicable to the Company's executive officers
and directors were complied with, except that Mr. Anderson, a director of the
Company, failed to file a timely Form 4 with respect to two transactions that
occurred in January and July 1997, and Mr. Robert J. Spence, a director of the
Company, failed to file a timely Form 4 with respect to three transactions that
occurred in January and May 1997.
Page 9
Executive Officers of the Company and Rockland
The names, positions, ages, and backgrounds of the executive officers of
the Company and Rockland are set forth below. The term of office of each
executive officer extends until the first meeting of the Board of Directors of
the Company and Rockland following the annual meeting of the Company's
stockholders and until his or her successor is chosen and qualified or until his
or her earlier resignation, death, removal or disqualification. No executive
officer is related to any other executive officer or director by blood, marriage
or adoption, and, other than with respect to the employment agreements with
Messrs. Philipsen, Seaman, Driscoll, Kelley, and Fuerschbach and Ms. Charbonnet
described under "Executive Compensation," there are no arrangements or
understandings between any executive officer and any other person pursuant to
which such person was elected as an executive officer.
Position with
Name the Company and Rockland Age
- ----------------------- ----------------------------------------------------------------- ---
John F. Spence, Jr. Chairman of the Board of Directors and Chief Executive Officer of
the Company; Chairman of the Board of Directors of Rockland 71
Douglas H. Philipsen President of the Company; President and Chief Executive Officer of
Rockland 59
Richard J. Seaman Chief Financial Officer and Treasurer of the Company and
Rockland 39
Richard F. Driscoll Executive Vice President, Retail and Operations Division of
Rockland 54
Ferdinand T. Kelley Executive Vice President, Commercial Lending Division of
Rockland 53
Debra A. Charbonnet Executive Vice President, Trust and Financial Services Division of
Rockland 48
Raymond G. Fuerschbach Senior Vice President and Human Resource Officer of Rockland 47
Information concerning the business experience of Messrs. Spence and
Philipsen, directors of the Company and Rockland, is provided under the section
entitled "Election of Directors."
Richard J. Seaman. Mr. Seaman has been the Chief Financial Officer and
Treasurer of the Company and Rockland since July 1992. From December 1990 to
July 1992, Mr. Seaman was a management consultant with RJS Associates and
Danielson Associates, Inc., Rockville, Maryland, providing consulting to the
financial services industry on, among other matters, troubled bank
rehabilitation.
Richard F. Driscoll. Mr. Driscoll has been Executive Vice President, Retail
and Operations Division of Rockland since March 1992. Prior thereto, Mr.
Driscoll served as Executive Vice President--Dealer Lending Division of Fleet
Bank--Massachusetts, N.A. from July 1991 to March 1992.
Ferdinand T. Kelley. Mr. Kelley has served as Executive Vice President,
Commercial Lending Division of Rockland, since February 1993. Prior thereto, Mr.
Kelley served as Senior Vice President
Page 10
and Credit Administrator of Multibank Financial Corp., Dedham, Massachusetts,
from August 1992 to January 1993. From February 1990 to July 1991, Mr. Kelley
was the Regional President of the Worcester Region (Central Massachusetts) of
Bank of New England, N.A., and continued in that position with Fleet Bank of
Massachusetts, N.A., from July 1991 to August 1992 following the Bank of New
England's acquisition by Fleet Bank.
Debra A. Charbonnet. Ms. Charbonnet has served as Executive Vice President,
Trust and Financial Services Division of Rockland Trust since October 1997.
Prior thereto, Ms. Charbonnet was Vice President, Chief Fiduciary Officer and
Head of Trust Administration for Fidelity Personal Trust Services in Boston,
Massachusetts from 1995 to 1997. From 1987 to 1995, Ms. Charbonnet was Vice
President and Manager, Personal Trust Division, of Shawmut National Corporation,
Hartford, Connecticut.
Raymond G. Fuerschbach. Mr. Fuerschbach has served as Senior Vice
President, Human Resources Division of Rockland, since April 1994. Prior
thereto, Mr. Fuerschbach had been Vice President and Human Resource Officer of
Rockland since November 1992. From January 1991 to October 1992, Mr. Fuerschbach
served as Director of Human Resources for Cliftex Corp., New Bedford,
Massachusetts, a tailored clothing manufacturer.
OTHER MATTERS
(Notice Item 2)
The proxy confers discretionary authority with respect to any other
business which may come before the Annual Meeting, including rules for the
conduct of the Annual Meeting. The Board of Directors knows of no other matter
to be presented at the Annual Meeting. It is the intention of the persons named
as proxies to vote the shares to which the proxies relate according to their
best judgment if any matters not included in this proxy statement do properly
come before the Annual Meeting, unless the contrary is indicated.
Page 11
EXECUTIVE COMPENSATION
Report of the Compensation and Stock Option Plan Committees
on Executive Compensation During Fiscal 1997
The executive compensation program of the Company and its subsidiaries has
four primary components: base salary, annual cash incentive compensation, long
term compensation (equity based opportunities) and benefits. The base salary,
cash incentives and benefits are administered by the Compensation Committee of
the Bank. The equity based opportunities are administered by the Stock Option
Plan Committee of the Company. The composition of these Committees includes the
outside directors of the Company or the Bank over whose names this report has
been made. The Committees strive to balance short and long term bank performance
and shareholder returns in establishing performance criteria. The Committees
evaluate executive compensation against these performance criteria and
competitive executive pay practices before determining changes in base salary,
the amount of any incentive payments, option awards and other benefits.
In 1997, the Compensation Committee engaged performance compensation
consultants, Sibson and Company to review the Bank's performance based cash
compensation program for senior executives and other officers of the Bank.
Sibson's review encompassed total compensation, peer compensation levels, and
the linkage between cash incentive compensation, plan results, and bank
performance. Sibson found that Rockland's compensation program is competitive
and has supported performance improvement in the Bank. Sibson's recommendations
were incorporated in the 1997 cash incentive compensation program. Final
determination of cash incentive awards for 1997 performance will be principally
based on the Company's return on average assets and measures of asset quality as
compared to appropriate groups of peer financial institutions. Year-end data for
peer groups are typically not available until the end of March and final 1997
cash incentive compensation plan determinations are made at that time.
During 1995, the Compensation Committee engaged SNL Compensation Services,
Inc. of Virginia ("SNL") to conduct a total remuneration review of the Bank's
executive compensation program. SNL examined all components of executive
compensation and the relative emphasis of short term and long term elements of
the compensation program. SNL compared Rockland's total remuneration of each
executive officer to a peer group of commercial banks in New England and upstate
New York. SNL reported that the Committee had established a well coordinated
executive compensation structure and a solid framework for compensating
executive officers. In their report, SNL indicated that Rockland had struck an
appropriate balance between the elements of its compensation program;
effectively linking executive pay to strategic bank objectives and shareholder
results.
In early 1993, the Compensation Committee engaged Hay Management
Consultants ("Hay") to assist in establishing base salary ranges for the Bank's
senior executives. Hay conducts market analyses of cash compensation and uses
its proprietary job evaluation process to recommend salary ranges that reflect
competitive factors as well as maintain internal equity. The Hay process is used
by management to establish base salary ranges for most officer positions in the
Bank. In January of each year prior to the annual merit reviews of base pay, Hay
makes recommendations for competitive adjustment to salary ranges. Hay's
recommendation of a 3.5% increase to base ranges was approved by the Committee
and implemented in March 1997.
Page 12
In determining the level of compensation for the Chief Executive Officer
("CEO") of the Bank, the Compensation and Stock Option Plan Committees review
the actual performance of the Company as compared to the business plan
objectives and peer financial institutions' performance. The salary paid to Mr.
Philipsen was increased effective April 1997, a performance bonus was awarded
(upon completion of the review of the CEO's 1996 performance in March 1997) and
stock options were granted in December 1997. Mr. Philipsen's 1997 performance
objectives included profitability against forecast, new business generation,
positioning the Company to effectively compete within its market in the future,
and performance of the Bank in comparison to appropriate groups of peer
financial institutions as well as conversion of the Company's data processing
systems. The review of the CEO's performance for 1997 was conducted at executive
sessions of the Board of Directors' meetings in July 1997 and again in January
1998. The review will be completed by the Compensation Committee in March 1998.
In 1994, the Compensation Committee reviewed the objectives of the Bank's
qualified and non-qualified retirement plans in light of the Congressional
Omnibus Budget Reconciliation Act of 1993 provisions as they affect qualified
retirement plan benefits. As a result of such review, the Committee established
that the objective of the Bank retirement program is to replace from all Company
funded sources, inclusive of social security, approximately 60% of the average
of the highest five year annual covered compensation for a full 25 year career,
with proportionate reductions for less than a 25 year career. To accomplish this
objective for Mr. Philipsen, in December 1994, the Committee authorized a
supplemental retirement program utilizing a split dollar insurance arrangement.
Of the other executive officers named in the Summary Compensation Table,
Messrs. Spence, Seaman, Driscoll and Kelley were also granted salary increases
and a performance bonus by the Compensation Committee effective April 1997,
based on the Bank's improved results and individual performance within the
framework of the salary ranges established using the Hay process and the Bank
cash incentive compensation performance program. In October 1997, Mr. Seaman's
salary range and base salary compensation was increased as a result of the added
responsibilities resulting from the sale of certain Trust Preferred Securities
by an affiliate of the Company and an analysis of peer Chief Financial Officer
compensation levels as conducted by Hay Management Consultants. 1997 performance
evaluations for these officers will be completed in March 1998. To accomplish
the objectives of the Bank's retirement program as stated above, in 1995 the
Committee authorized a supplemental retirement program for Messrs. Seaman,
Driscoll, Kelley, and in 1997 for Ms. Charbonnet utilizing a split dollar
insurance agreement, the expenses of which are shown in the Summary Compensation
Table.
Page 13
Each of the executive officers of the Bank named in the Summary
Compensation Table received stock options in December 1997. Each option, as
disclosed in the Summary Compensation Table, provides the right to purchase a
fixed number of shares at the market price on the day of the grant. The number
of shares granted to each executive officer in 1997 reflects the Committee's
assessment of the individual's relative contribution to the Company, the long
term compensation practices prevalent in the industry, the impact of such
options on shareholder dilution, and the number of options granted to the
executive officer in previous periods.
Respectfully submitted by the Respectfully submitted by the
Compensation Committee of Stock Option Plan Committee
Rockland: of the Company:
W. Paul Clark Donald A. Atkins (1) W. Paul Clark
Richard H. Sgarzi Benjamin A. Gilmore (1) Robert J. Spence
Thomas J. Teuten Kevin J. Jones (1) Thomas J. Teuten
Robert J. Spence
February 26, 1998
(1) Rotating members.
Page 14
Summary Compensation Table. The Summary Compensation Table set forth below
includes individual compensation information on the Chief Executive Officer and
the four other most highly compensated executive officers of the Company and/or
its subsidiary whose total annual salary and bonuses exceeded $100,000 for 1997.
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Award
Securities All
Underlying Other
Annual Stock Option Compensation
Name and Principal Position Year Compensation (1) (# of Shares) (3)(4)
- --------------------------------------------------------------------------------------------------------
Salary Bonus
------ -----
John F. Spence, Jr., 1997 $110,727 (2) 7,050 --
Chairman Chief Executive 1996 100,150 39,700 6,600 --
Officer and Director 1995 93,867 33,100 6,450 --
Douglas H. Philipsen 1997 $313,115 (2) 17,900 $69,823
President and Director 1996 290,669 107,100 17,275 71,475
1995 269,231 86,600 16,850 72,469
Richard J. Seaman 1997 $133,542 (2) 10,325 $24,962
Chief Financial Officer 1996 120,293 32,800 8,300 24,700
and Treasurer 1995 112,930 24,500 7,125 24,640
Richard F. Driscoll 1997 $176,722 (2) 10,850 $89,596
Executive Vice President 1996 167,831 41,400 10,475 90,933
Retail & Operations Division
of Rockland 1995 155,398 35,000 10,200 92,040
Ferdinand T. Kelley 1997 $176,937 (2) 10,850 $67,350
Executive Vice President
Commercial Lending Division 1996 168,631 41,400 10,475 68,408
of Rockland 1995 155,398 35,000 10,200 69,257
(1) Does not include the dollar value of certain perquisites and personal
benefits, the aggregate amount of which is the lesser of $50,000 or 10% of
the total annual salary and bonus shown above.
(2) Performance based compensation for Messrs. Spence, Philipsen, Seaman,
Driscoll, and Kelley for fiscal 1997 results are estimated to be within 10%
of $53,000, $148,110, $56,530, $59,870, $59,870 respectively. The final
determination of these amounts will be made in early 1998 and such amounts
will be disclosed in the Proxy Statement for the next meeting of
stockholders.
(3) Includes the 401(k) Company matching contributions on behalf of these
executive officers. 1997--Mr. Philipsen $4,750, Mr. Seaman $4,018, Mr.
Driscoll $4,750, and Mr. Kelley $4,750; 1996-- Mr. Philipsen $4,750, Mr.
Seaman $3,596, Mr. Driscoll $4,750 and Mr. Kelley $4,750; and 1995--Mr.
Philipsen $4,620, Mr. Seaman $3,387, Mr. Driscoll $4,620 and Mr. Kelley
$4,620.
Page 15
(4) 1997--Consists of $65,073, $20,944, $84,846, and $62,600 in the aggregate
(premium for term life portion and present value of the benefit to Messrs.
Philipsen, Seaman, Driscoll and Kelley, respectively) related to the
purchase of a split dollar life insurance policy for the named executive;
1996--$66,725, $21,104, $86,183, and $63,658 for Messrs. Philipsen, Seaman,
Driscoll and Kelley, respectively and 1995--$67,849, $21,253, $87,420,
$64,637 for Messrs. Philipsen, Seaman, Driscoll and Kelley, respectively.
These policies provide supplemental retirement benefits for the executive
as discussed in the Executive Compensation section. Under the split dollar
agreements the Company has a surety interest in the death benefits or cash
surrender value under the policy equal to the amount of premiums paid by
the Company.
Option Grants in Last Fiscal Year. The following table sets forth
individual grants of options that were made during the last fiscal year to the
executive officers named in the Summary Compensation Table. This table is
intended to allow stockholders to ascertain the number and size of option grants
made during the fiscal year, the expiration date of the grants and the potential
realizable value of such options assuming that the market price of the
underlying security appreciates in value from the date of grant to the end of
the term (ten years) at assumed annualized rates of 5% and 10%.
Potential Realizable
Percent of Value at
Total Assumed Annual
Number of Options Rates of Stock Price
Securities Granted to Appreciation
Underlying Employees Exercise Expiration for Option
Name Option in 1997 Price Date (4) Term
- ----------------------------------------------------------------------------------------------------
5% 10%
-------- --------
John F. Spence, Jr. 7,050 (1) 5.6% $17.7188 12/17/2007 $ 78,560 $199,086
Douglas H. Philipsen 17,900 (2) 14.2% 17.7188 12/17/2007 199,464 505,482
Richard J. Seaman 10,325 (3) 8.1% 17.7188 12/17/2007 115,054 291,570
Richard F. Driscoll 10,850 (3) 8.6% 17.7188 12/17/2007 120,904 306,395
Ferdinand T. Kelley 10,850 (3) 8.6% 17.7188 12/17/2007 120,904 306,395
(1) One-third of such options become exercisable six months and one day
following December 19, 1997, one-third of such options become exercisable
on January 2, 1999 and one-third of such options become exercisable on
January 2, 2000, unless the holder thereof is, following a change of
control, terminated without cause (as defined in the Option Agreement) or
resigns for good reason (as defined in the Option Agreement), in which
case, all of such options become immediately exercisable and remain so for
three months following such termination.
(2) All of these options become exercisable six months and one day following
December 19, 1997.
(3) One-third of such options become exercisable six months and one day
following December 19, 1997, one-third of such
Page 16
options become exercisable on January 2, 1999 and one-third of such options
become exercisable on January 2, 2000, unless the holder thereof is
terminated without cause (as defined in the Option Agreement) or resigns
for good reason (as defined in the Option Agreement), in which case, all of
such options become immediately exercisable and remain so for three months
following such termination.
(4) All of these options may expire earlier than December 17, 2007 under
certain circumstances involving termination of employment, disability or
retirement of the option holder.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values. The following table sets forth, with respect to the executive officers
named in the Summary Compensation Table, information with respect to the
aggregate amount of options exercised during the last fiscal year, any value
realized thereon, the number of unexercised options at the end of the fiscal
year (exercisable and unexercisable) and the value with respect thereto.
Shares Value of Unexercised
Acquired on Value Number of Unexercised in the Money Options
Name Exercise Realized Options at Fiscal Year End at Fiscal Year End (1)
- ---------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
John F. Spence, Jr. 10,000 $ 133,750 17,500 13,600 $212,431 $ 68,011
Douglas H. Philipsen 109,000 1,373,375 78,275 17,900 935,356 11,746
Richard J. Seaman 10,000 117,500 32,667 18,233 424,740 82,846
Richard F. Driscoll 5,000 67,188 35,392 21,233 443,284 107,579
Ferdinand T. Kelley 5,100 37,194 42,792 21,233 549,659 107,579
(1) Based upon a closing market price for the Company's Common Stock as of
December 31, 1997 of $18.375.
RETIREMENT PLAN FOR EMPLOYEES OF ROCKLAND TRUST COMPANY
Final Average
Compensation Years of Service
- ------------- ------------------------------------------------------------
10 15 20 25 30 35
------- ------- ------- ------- ------- -------
$ 50,000 $8,095 $12,143 $16,190 $20,238 $21,488 $22,738
$100,000 $18,095 $27,143 $36,190 $45,238 $47,738 $50,238
$150,000 $28,095 $42,143 $56,190 $70,238 $73,988 $77,738
$160,000 and higher $30,095 $45,143 $60,190 $75,238 $79,238 $83,238
Defined Benefit Pension Plan. In 1994 the Rockland Trust Retirement Plan
(the "Plan") formula was amended for participants who retired in 1995 and
subsequent years of service. The annual normal retirement benefit under the Plan
is equal to (a) 2.0% of final average compensation less (b) .65% of covered
compensation as defined for Social Security purposes ("Covered Compensation")
times (c) years of service to 25. For participants who had completed 20 or more
years of service at
Page 17
December 31, 1994 an additional benefit of .5% times final average compensation
times service in excess of 25 years but not exceeding ten additional years is
provided.
Examples of approximate annual benefits at normal retirement under the
formula are shown above using the 1997 Covered Compensation amount of $29,304
for the offset percentages of the Plan. Benefits consider only the first
$160,000 of compensation earned by an executive. As of December 31, 1997,
Messrs. Philipsen, Seaman, Driscoll and Kelley had 6, 5, 6 and 5 years of
completed credited service, respectively. As of December 31, 1996, Mr. Spence
had 28 years of credited service and as of July 1, 1992, he became a part-time
employee and began receiving $73,344 per year in pension benefits.
The Plan benefit formula for service prior to 1994 is equal to (a) 11/2% of
a participant's final average compensation times his credited service up to 10
years; plus (b) 2% of his final average compensation times his credited service
in excess of 10 years (provided that not more than 20 years of service shall be
considered); plus (c) 1/2% of his final average compensation times his credited
service in excess of 30 years (provided that no more than 5 years of service
over 30 years shall be considered), less the smaller of (i) or (ii) described as
follows: (i) .65% times the participant's years of service up to 35, times the
lesser of his average annual compensation or his Covered Compensation; or (ii)
1/2 the sum of (a), (b) and (c) above, substituting the lesser of average annual
compensation or Covered Compensation for final average compensation, if less.
Plan participants are eligible at normal retirement for the benefit derived from
the current formula or, if greater, the benefit for service under the prior Plan
formula.
In January 1997 the Plan was joined with The Financial Institutions
Retirement Fund. This merger has provided significant expense reductions which
began impacting the Bank in 1997 while continuing to provide the benefit
structure discussed above.
Comparative Stock Performance Graph
The stock performance graph below compares the cumulative total stockholder
return of the Company's Common Stock from December 31, 1992 to December 31, 1997
with the cumulative total return of the NASDAQ Market Index (U.S. Companies) and
the NASDAQ Bank Stock Index. The lines in the table below represent monthly
index levels derived from compounded daily returns that include all dividends.
If the monthly interval, based on the fiscal year end was not a trading day, the
preceding trading day was used. The index level for all series was set to 100.0
on December 31, 1992.
Page 18
Comparison of Five Year-Cumulative Total Returns
Performance Graph for
INDEPENDENT BANK CORP.
Prepared by the Center for Research in Security Prices
Produced on 01/19/98 including data to 12/31/97
[TABULAR REPRESENTATION OF LINE CHART]
CRSP Total Returns Index For: 12/31/92 12/31/93 12/30/94 12/29/95 12/31/96 12/31/97
- ----------------------------- -------- -------- -------- -------- -------- --------
INDEPENDENT BANK CORP. 100.0 137.0 157.9 227.5 333.4 597.9
Nasdaq Stock Market (US Companies) 100.0 114.8 112.2 158.7 195.2 239.5
Nasdaq Bank Stocks 100.0 114.0 113.6 169.2 223.4 377.4
SIC 6020-6029, 6710-6719 US & Foreign
Page 19
Employment Agreements. In December 1991, Rockland and the Company entered
into an employment agreement with Douglas H. Philipsen pursuant to which Mr.
Philipsen would serve as President of the Company and President and Chief
Executive Officer of Rockland. As amended in 1997, the term of Mr. Philipsen's
employment agreement is a rolling 3 years. The agreement provides Mr. Philipsen
with a base annual salary of $320,660, which may be increased at the discretion
of the Board, the use of a Company-owned automobile, and provides for
participation in the various benefit programs provided by the Company, including
group life insurance, sick leave and disability, retirement plans and insurance
programs. The agreement provides for the establishment by the Company of a Rabbi
Trust for the purpose of funding post-retirement tax and other related expenses
which may result from the split dollar agreement described in footnote 4 of the
Summary Compensation Table and in the report of the Compensation Committee
contained elsewhere herein. In the event of a change of control, the Company is
obligated to immediately fund the payment of the remaining premiums due with
respect to the split dollar agreement. The agreement provides that in the event
of an involuntary termination of Mr. Philipsen, by Rockland or the Company, for
reasons other than cause, as defined, or resignation by Mr. Philipsen for "good
reason," as defined, Mr. Philipsen would (i) continue to receive his base salary
for 3 years, and (ii) be entitled to continue to participate in and receive
benefits under the Company's group health and life insurance programs for 3
years or at his election to receive a grossed up for taxes bonus payment in an
amount equal to the cost to the Company of Mr. Philipsen's participation in such
plans and benefits for such three year period. Also, in the event of a
termination without cause or a resignation for good reason, all the stock
options granted to Mr. Philipsen pursuant to the agreement would remain
exercisable for a period of three months following the date of his termination.
Resignation for "good reason" under the agreement, means, among other things,
the resignation of Mr. Philipsen after (i) the Company or Rockland, without the
express written consent of Mr. Philipsen, materially breaches the agreement to
his substantial detriment; (ii) the Board of the Company or of Rockland, without
cause, substantially changes Mr. Philipsen's core duties or removes his
responsibility for those core duties, so as to effectively cause him to no
longer be performing the duties of Chief Executive Officer and President of
Rockland and President of the Company; (iii) the Board of the Company or of
Rockland without cause, places another executive above Mr. Philipsen in the
Company or Rockland (except for the current designation of John F. Spence, Jr.
as Chief Executive Officer of the Company); or (iv) a change of control, as
defined, occurs. Mr. Philipsen is required to give the Company or Rockland, as
the case may be, 30 days notice and an opportunity to cure in the case of a
resignation effective pursuant to clauses (i) through (iii) above.
In March 1992, July 1992, October 1994, February 1993, July 1994, and
September, 1997 Rockland entered into employment agreements with Richard F.
Driscoll, Richard J. Seaman, Raymond G. Fuerschbach, Ferdinand T. Kelley, and
Debra A. Charbonnet, respectively, pursuant to which Mr. Driscoll serves as
Executive Vice President--Retail Operations Division of Rockland, Mr. Seaman
serves as Chief Financial Officer and Treasurer of the Company and Rockland, Mr.
Kelley serves as Executive Vice President, Commercial Lending Division, and
Senior Commercial Loan Officer of Rockland, Ms. Charbonnet serves as Executive
Vice President, Trust and Financial Services Division, and Senior Trust Officer
of Rockland and Mr. Fuerschbach serves as Senior Vice President and Human
Resources Officer of Rockland. Messrs. Driscoll, Seaman, Kelley, Fuerschbach and
Ms. Charbonnet are herein referred to as the Executive(s). Such agreements, as
subsequently amended, are terminable at will by either party to each agreement.
The agreements provide Messrs. Driscoll, Seaman, Kelley, Fuerschbach and Ms.
Charbonnet with annual base salaries of $158,600, $114,500, $158,600, $84,600
Page 20
and $133,000, respectively, which may be increased at the discretion of the
Board of Directors of the Bank. The agreements also provide for the use of a
Company-owned automobile (except for Mr. Fuerschbach) and participation in
Rockland's various benefit programs, including group life insurance, sick leave
and disability, retirement plans and insurance programs. As amended in 1996, the
agreements further provide that in the event that any Executive is terminated
involuntarily for any reason other than cause, as defined, or if an Executive
resigns for "good reason," as defined, he or she would be entitled to continue
to (i) receive his or her salary for twelve months (unless such termination or
resignation follows a change of control, as defined, in which case the Executive
shall receive a lump sum payment equal to 24 months salary) and (ii) participate
in and receive benefits under Rockland's group health and life insurance
programs for twelve months or, to the extent such plans or benefits are
discontinued and no comparable plans or benefits are established, to receive a
grossed up for taxes bonus payment equal to the cost to Rockland of the
Executive's participation in such plans and benefits for such period (unless
such termination or resignation follows a change of control, in which case the
Executive shall have the right to participate in and receive such benefits for
24 months, or at his or her election, to receive a grossed up for taxes bonus
payment in an amount equal to the cost to Rockland of the Executive's
participation in such plans and benefits for such period. In the event of a
change of control, the Company is obligated to immediately fund the payment of
six years of future premiums due with respect to the split dollar agreement.),
during a 30 day window period 12 months following the occurrence of a change of
control of the Company (as defined) the Executive has the unqualified right to
resign for any reason or for no reason and receive the resignation for good
reason benefit provided for following the occurrence of a change of control. In
addition, in the event an Executive is terminated involuntarily for any reason
other than for cause or if he or she resigns for good reason, all incentive
stock options granted to the Executive would immediately become fully
exercisable and would remain exercisable for a period of three months following
his termination. Resignation for "good reason" under the agreements, means,
among other things, the resignation of the Executive after (i) Rockland, without
the express written consent of the Executive materially breaches the agreement
to the Executive's substantial detriment; or (ii) the Board of Directors of
Rockland, or its President and Chief Executive Officer, without cause,
substantially changes the Executive's core duties or removes his or her
responsibility for those core duties, so as to effectively cause him or her to
no longer be performing the duties for which the Executive was hired. The
Executives are required to give Rockland 30 days notice and an opportunity to
cure in the case of a resignation for good reason.
Compensation Committee and Stock Option Plan Committee Interlocks and
Insider Participation. During 1997, Messrs. W. Paul Clark, R. Sgarzi, Robert J.
Spence and Thomas J. Teuten, directors of the Company, participated as members
of the Compensation Committee of the Bank and/or the Stock Option Plan Committee
of the Company in the determination of executive compensation.
Rockland leases 2,500 square feet of operations space in Rockland,
Massachusetts from A.W. Perry, Inc. for which Rockland paid annual total rent of
approximately $38,621 for 1997. Rockland leases 1,606 square feet of space for
its North Pembroke lending center and 122 square feet of space for an automated
teller machine site from Brigantine Village Realty Trust. During 1997, the total
rent for these premises was approximately $46,424. Mr. Teuten is the President
of A.W. Perry, Inc. and a trustee of Brigantine Village Realty Trust. Mr. Spurr
is the Senior Vice President and Treasurer of A. W. Perry, Inc. These amounts
did not exceed 5% of that firm's gross revenues for 1997.
Page 21
In August 1989, A.W. Perry, Inc., a real estate developer, and Rockland
entered into a joint venture agreement to develop an office building on a parcel
of land containing approximately 186,300 square feet located in Hanover,
Massachusetts. Mr. Teuten, a director of the Company, and Mr. Spurr, a director
of Rockland, are President and Senior Vice President and Treasurer of A.W.
Perry, Inc., respectively. Rockland's Trust and Financial Services Division is
located in this office building. Rental payments for this property in 1997 were
approximately $296,635. These amounts did not exceed 5% of that firm's gross
revenues for 1997. In November 1997 the aforementioned joint venture entered
into a triplet net, 99 year ground lease with A.W. Perry with respect to a
portion of such land (on which a separate building had been constructed). All of
the base rent due with respect to such lease ($450,000) was paid to the joint
venture upon execution of the lease. In November 1997, the joint venture made a
distribution of such proceeds to Rockland and A.W. Perry, in accordance with
their respective 50% joint venture interests.
Rockland provides custodial and trust account services to Burns & Levinson
LLP, a law firm of which Mr. Levinson is a partner. During the year ended
December 31, 1997, Burns & Levinson LLP paid approximately $112,126 to Rockland
for such services. Burns & Levinson LLP furnished legal services to the Company
and the Bank for which it received fees that did not exceed 5% of that firm's
gross revenues for 1997. It is anticipated that Burns & Levinson LLP will
continue to furnish such legal services in the future.
During 1997, Rockland paid Paul Clark, Inc. of which Mr. Clark, a director
of the Company, is President, $75,668 for repair services, storage and sales
performed for Rockland on vehicles which Rockland repossessed from defaulted
borrowers, and the purchase by Rockland of one automobile. These amounts did not
exceed 5% of that firm's gross revenues for 1997.
Rockland leases the 2,500 square feet of space at which its Kingston branch
is located from Kingston Associates for which Rockland paid total rent of
approximately $44,509 in 1997. Rockland leases the 2,195 square feet of space at
which its Whitman branch is located from Whitman Associates for which Rockland
paid total rent of approximately $25,729 in 1997. The 2,400 square foot
Middleborough Square facility is leased from Middleborough Associates for which
Rockland paid total rent of approximately $59,884 in 1997. The 2,400 square foot
Cranberry Plaza branch in Wareham is leased from the Darman-Tedeschi Trust for
which total rent of approximately $45,343 was paid in 1997. Rockland leases
1,800 square feet at which its Rockland Plaza branch is located from the
Rockland Plaza Inc. Nominee Trust for which Rockland paid a total rent of
approximately $23,987 in 1997. Rockland leases 2,600 square feet at which its
Hanover branch is located from Tedeschi Realty Corporation for which Rockland
paid a total rent of approximately $25,225 in 1997. Mr. Brian S. Tedeschi, a
director of the Company, is affiliated with each of the foregoing lessors.
In the opinion of management of the Company, the terms of the foregoing
transactions were no less favorable to the Company than those it could have
obtained from an unrelated party providing comparable premises or services.
Certain Other Transactions. Some of the directors and executive officers of
the Company, as well as members of their immediate families and the companies,
organizations, trusts, and other entities with which they are associated are, or
during 1997 were, also customers of Rockland in the ordinary course of business,
or had loans outstanding from such bank during 1997, including loans of $60,000
or
Page 22
more, and it is anticipated that such persons and their associates will continue
to be customers of and indebted to Rockland in the future. All such loans were
made in the ordinary course of business, did not involve more than normal risk
of collectibility or present other unfavorable features, were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the same time for comparable transactions with unaffiliated
persons and, where required by law, were prior approved by the respective Board
of Directors of Rockland. At December 31, 1997, such loans amounted to
approximately $17 million (18.3% of total stockholders' equity). None of these
loans to directors, executive officers, or their associates are nonperforming.
In the opinion of management of the Company, the terms of the foregoing
transactions were no less favorable to the Company than those it could have
obtained from an unrelated party providing comparable premises or services.
INDEPENDENT ACCOUNTANTS
The Board of Directors selected the firm of Arthur Andersen LLP to serve as
independent auditors of the Company for 1998. Arthur Andersen LLP served as
independent auditors for the Company during 1997. A representative of Arthur
Andersen LLP is expected to be present at the Annual Meeting to respond to
appropriate questions and will have the opportunity to make a statement if he or
she so desires.
SUBMISSION OF STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
Any proposal which a stockholder wishes to have presented for consideration
by all of the Company's stockholders at the next annual meeting of stockholders
of the Company will be required pursuant to Rule 14a-8 under the Exchange Act to
deliver the proposals to the Company on or prior to November 7, 1998. Please
forward any stockholder proposals to the Clerk, Independent Bank Corp., 288
Union Street, Rockland, Massachusetts 02370.
EXPENSES OF SOLICITATION
The Company will bear the cost of preparing, assembling and mailing the
Notice, proxy statement and form of proxy for the 1998 Annual Meeting of
Stockholders. Solicitation of proxies will be made primarily through the use of
mails, but regular employees of Rockland may solicit proxies by personal
interview or by telephone without additional compensation therefor. The Company
will also provide persons, firms, banks and corporations holding shares in their
names, or in the names of their nominees, which in either case are beneficially
owned by others, proxy material for transmittal to such beneficial owners and
reimburse such record holders for their reasonable expenses in so doing. In
addition, the Company has retained Corporate Investor Communications, Inc.,
Carlstadt, New Jersey, a professional proxy solicitation firm, to assist in the
solicitation of proxies. The fee for such services is $4,000 plus certain
additional charges and reimbursement for out-of-pocket expenses.
ANNUAL REPORTS
A copy of the Company's Annual Report to Stockholders for the year ended
December 31, 1997 is being mailed with this proxy statement to all stockholders
of the Company.
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10-K REPORT
Upon receipt of a written request, the Company will furnish to any
stockholder, without charge, a copy of the Company's Annual Report to the
Securities and Exchange Commission on Form 10-K for the year ended December 31,
1997, and a list of the exhibits thereto, which is required to be filed with the
Securities and Exchange Commission under the Exchange Act. Such written request
should be directed to the Clerk, Independent Bank Corp., 288 Union Street,
Rockland, Massachusetts 02370. The Form 10-K is not part of the proxy
solicitation material.
By order of the Board of Directors
Linda M. Campion
Clerk
Dated: March 9, 1998
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IBCCM-PS-98