FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended June 30, 1998
Commission File Number 0-10275
EVERGREEN BANCORP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 36-3114735
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
237 GLEN STREET, GLENS FALLS, NEW YORK 12801
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(Address of principal executive offices)
Registrant's telephone number, including area code: (518) 792-1151
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Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securi-
ties Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
----- -----
Indicate the number of shares outstanding of each Issuer's classes of
common stock, as of the latest practicable date:
Class of Common Stock Number of Shares Outstanding
as of July 31, 1998
------------------- -------------------
$3.33 1/3 Par Value 8,785,176
EVERGREEN BANCORP, INC. AND SUBSIDIARIES
INDEX
Page No.
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PART I FINANCIAL INFORMATION
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Item 1 Financial Statements (unaudited):
Consolidated Statements of Income for the Three
Months Ended June 30, 1998, and 1997 1
Consolidated Statements of Income for the Six
Months Ended June 30, 1998, and 1997 2
Consolidated Statements of Financial Condition
as of June 30, 1998, and December 31, 1997 3-4
Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 1998 and 1997 5-6
Notes to Consolidated Interim 7-9
Financial Statements
Report of Independent Auditors 10
Item 2 Management's Discussion and Analysis 11-21
Item 3 Not Applicable
PART II OTHER INFORMATION
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Item 1 Legal Proceedings - None
Item 2 Changes in Securities - None
Item 3 Defaults Upon Senior Securities - None
Item 4 Submission of Matters to a Vote of Security Holders -
Annual meeting of Shareholders, See Attached Item 4 -
Matters
Item 5 Other Information - None
Item 6 Exhibits and reports on Form 8-K
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands)
(Except Per Share Data)
Three Months
Ended June 30,
1998 1997
(Unaudited)
Interest Income:
Interest and Fees on Loans $14,701 $14,484
Interest on Investment Securities 5,073 4,101
Interest on Federal Funds Sold & Bank Deposits 216 475
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Total Interest Income 19,990 19,060
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Interest Expense:
Interest on Deposits:
Regular Savings, Interest Checking and Money
Market Deposit Accounts 2,387 2,431
Other Time 6,530 5,664
Interest on Short-Term Borrowings 121 62
Interest on Long-Term Debt 410 421
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Total Interest Expense 9,448 8,578
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Net Interest Income 10,542 10,482
Provision for Loan Losses 495 450
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Net Interest Income After Provision for
Loan Losses 10,047 10,032
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Other Income:
Trust Department Income 744 640
Service Charges on Deposit Accounts 763 695
Net Gain on Security Transactions 35 9
Other 458 313
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Total Other Income 2,000 1,657
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Other Expense:
Salaries and Employee Benefits 4,191 4,019
Net Occupancy and Equipment Expense 980 1,049
Other Expense 2,670 2,655
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Total Other Expense 7,841 7,723
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Income Before Taxes 4,206 3,966
Applicable Income Taxes 1,264 1,294
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Net Income $ 2,942 $ 2,672
======= =======
Earnings Per Common Share:
Average Shares Outstanding - Basic 8,776 9,010
Basic Income Per Share $ .34 $ .30
Diluted Income Per Share $ .33 $ .29
See accompanying notes to consolidated interim financial statements.
1
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands)
(Except Per Share Data)
Six Months
Ended June 30,
1998 1997
(Unaudited)
Interest Income:
Interest and Fees on Loans $29,464 $29,082
Interest on U.S. Government & Agency Obligations 9,938 7,436
Interest on State & Municipal Obligations 389 843
------- -------
Total Interest Income 39,791 37,361
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Interest Expense:
Interest on Deposits:
Regular Savings, Interest Checking and Money
Market Deposit Accounts 4,771 4,840
Other Time 12,719 10,733
Interest on Short-Term Borrowings 242 113
Interest on Long-Term Debt 819 812
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Total Interest Expense 18,551 16,498
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Net Interest Income 21,240 20,863
Provision for Loan Losses 990 810
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Net Interest Income After Provision for
Loan Losses 20,250 20,053
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Other Income:
Trust Department Income 1,484 1,297
Service Charges on Deposit Accounts 1,509 1,336
Net Gain on Security Transactions 45 9
Other 849 721
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Total Other Income 3,887 3,363
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Other Expenses:
Salaries and Employee Benefits 8,261 8,062
Net Occupancy Expense 2,108 2,130
Equipment Expense 5,114 5,225
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Total Other Expenses 15,483 15,417
------- -------
Income Before Taxes 8,654 7,999
Applicable Income Taxes 2,736 2,645
------- -------
Net Income $ 5,918 $ 5,354
======= =======
Earnings Per Common Share:
Average Shares Outstanding - Basic 8,821 9,047
Basic Income Per Share $ .67 $ .59
Diluted income Per Share $ .66 $ .58
See accompanying notes to consolidated interim financial statements.
2
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands)
6/30/98 12/31/97
(Unaudited)
Assets:
Cash and Cash Equivalents:
Cash and Due From Banks $ 27,286 $ 26,596
Federal Funds Sold 7,200 -
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Total Cash and Cash Equivalents 34,486 26,596
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Securities:
Securities Available For Sale (Amortized
cost of $304,334 and $246,567 at 6/30/98
and 12/31/97, respectively) 305,616 248,245
Securities Held to Maturity (fair value
of $16,488 and $35,586 at 6/30/98
and 12/31/97, respectively) 15,716 34,655
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Total Securities 321,332 282,900
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Loans:
Commercial 223,220 233,296
Mortgage 325,253 310,839
Installment 139,376 136,480
Other 64 263
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Total Loans 687,913 680,878
Less:
Allowance for Loan Losses (12,454) (12,831)
Unearned Income on Loans (1,388) (1,839)
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Loans, Net 674,071 666,208
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Bank Premises and Equipment, net 16,462 16,308
Other Real Estate Owned 1,974 1,067
Other Assets 18,871 17,082
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Total Assets $1,067,196 $1,010,161
========== ==========
(Continued)
3
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
CONTINUED
(Dollars in Thousands)
6/30/98 12/31/97
(Unaudited)
Liabilities:
Deposits:
Demand $ 98,836 $ 102,345
Regular Savings, Interest Checking and
Money Market Deposit Accounts 371,714 339,470
Certificates of Deposit over $100,000 125,661 110,189
Other Time 328,744 301,672
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Total Deposits 924,955 853,676
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Federal Funds Purchased and Other Short
Term Borrowings 10,534 27,208
Accrued Taxes and Other Liabilities 18,685 15,311
Long-Term Debt 25,395 25,710
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Total Liabilities 979,569 921,905
---------- ----------
Stockholders' Equity:
Common Stock $3.33 1/3 Par Value: Authorized-
20,000,000; Shares Issued 9,633,966 at June 30,
1998 and December 31, 1997 32,113 32,113
Surplus 6,787 6,787
Undivided Profits 62,335 59,225
Accumulated Other Comprehensive Income 519 1,007
Treasury Stock (852,156 shares at June 30, 1998
and 727,256 shares at December 31, 1997) (13,664) (10,236)
Common Stock Subscribed by ESOP (463) (640)
---------- ----------
Total Stockholders' Equity 87,627 88,256
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Total Liabilities and Stockholders' Equity $1,067,196 $1,010,161
========== ==========
See accompanying notes to consolidated interim financial statements.
4
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
Six Months
Ended June 30,
1998 1997
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Cash Flows from Operating Activities:
Net Income. . . . . . . . . . . . . . . . . . . $ 5,918 $ 5,354
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Net Change in Unearned Loan Fees. . . . . . . 35 29
Net Change in Other Assets and Liabilities. . 1,634 1,643
Gain on Sale of Loans, Securities & OREO. . . (102) (12)
Increase in Deferred Tax Benefit. . . . . . . (141) (581)
Loss on Write-Down of Other Real Estate . . . 67 -
Depreciation. . . . . . . . . . . . . . . . . 949 873
Provision for Loan Losses . . . . . . . . . . 990 810
Amortization of Premiums & Accretion of
Discounts on Securities, Net. . . . . 703 248
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Net Cash Provided By Operating Activities. 10,053 8,364
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Cash Flows From Investing Activities:
Proceeds From:
Sales of Securities Available for Sale. . . . 13,660 532
Maturities of Securities Available for Sale . 69,492 27,095
Maturities of Securities Held to Maturity . . 18,924 1,928
Purchases of Securities Available for Sale. . . (141,562) (72,791)
Purchases of Securities Held to Maturity. . . . - (21,903)
Proceeds From Sales of Loans. . . . . . . . . . 8,032 375
Change in Credit Card and
Check Overdraft Receivables . . . . . . . . . (120) (123)
Proceeds From Sales of Other Real Estate. . . . 461 246
Net Increase in Loans . . . . . . . . . . . . . (18,178) (5,457)
Capital Expenditures. . . . . . . . . . . . . . (1,103) (1,945)
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Net Cash Used By
Investing Activities . . . . . . . . . . (50,394) (72,043)
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Cash Flows From Financing Activities:
Net Increase in Deposits. . . . . . . . . . . . 71,279 47,750
(Decrease)/Increase in Short-Term Borrowings. . (16,674) 2,960
Payments on Long Term Debt. . . . . . . . . . . (138) (226)
Proceeds From Sale of Treasury Stock. . . . . . 601 307
(Continued)
5
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONTINUED
(Dollars in Thousands)
The Six Months Ended June 30, 1998 1997
(Unaudited)
------- -------
Payments for Purchase of Treasury Stock. . . . (4,184) (2,918)
Dividends Paid . . . . . . . . . . . . . . . . (2,653) (2,361)
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Net Cash Provided By
Financing Activities. . . . . . . . . . 48,231 45,512
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Net Increase/(Decrease) in Cash and
Cash Equivalents . . . . . . . . . . . . . . 7,890 (18,167)
Cash and Cash Equivalents at Beginning of Year 26,596 56,130
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Cash and Cash Equivalents at End of Quarter. . $ 34,486 $ 37,963
======= =======
Supplemental Disclosure of Cash Flows:
Interest Paid. . . . . . . . . . . . . . . . . $ 18,172 $ 16,204
Taxes Paid . . . . . . . . . . . . . . . . . . 1,069 662
Supplemental Schedule of Non-Cash Investing and Financing Activities:
Certain properties which were foreclosed upon were transferred from
loans to other real estate in the amount of $1,426,000 and $561,000
during the six months ended June 30, 1998 and 1997, respectively.
Payments were made on the ESOP loan in the amount of $177,000 and
$168,000 during the six months ended June 30, 1998 and 1997,
respectively.
As a result of the adoption of Statement of Financial Accounting
Standard No. 115, securities available for sale are recorded at fair
value. The unrealized gain on these securities was $1,282,000 at June
30, 1998. The adjustment to stockholders' equity for the unrealized
gain was $769,000, net of deferred income tax expense of $513,000.
At June 30, 1997, securities available for sale had an unrealized
gain of $352,000. The adjustment to stockholders equity net of
deferred income tax benefit of $141,000, was $211,000.
See accompanying notes to consolidated interim financial statements.
6
EVERGREEN BANCORP, INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. Financial Statement Presentation
The accompanying interim consolidated financial statements consist of
Evergreen Bancorp, Inc. (the "Company") and the financial statements of
its wholly owned subsidiary, Evergreen Bank, N.A. The unaudited consoli-
dated interim financial statements have been prepared according to the
rules of the Securities and Exchange Commission. In the opinion of the
Company, the accompanying unaudited consolidated interim financial
statements contain all adjustments necessary to present fairly the finan-
cial position as of June 30, 1998, the results of operations for the
three and six months ended June 30, 1998 and 1997 and cash flows for the
six months ended June 30, 1998 and 1997. All adjustments are of a normal
recurring nature. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
rules and regulations applicable to interim financial statements.
The accompanying interim consolidated financial statements should be read
in conjunction with the Evergreen Bancorp, Inc. consolidated year-end
financial statements, including notes thereto, which are included in the
Evergreen Bancorp, Inc. 1997 Annual Report and Form 10-K.
2. Proposed Merger
On July 31, 1998, the Company announced that it entered into an
Affiliation Agreement and Plan of Reorganization (the "Affiliation
Agreement") with Banknorth Group, Inc., Burlington, Vermont (Banknorth)
for the merger of the Company with and into Banknorth. Banknorth will be
the surviving corporation, and the Company's principal bank subsidiary,
Evergreen Bank, N.A., would be operated as a separate subsidiary of
Banknorth. In consideration of the merger, each outstanding share of
common stock of the Company will be exchanged for .9 shares of Banknorth
common stock. Consummation of the merger is subject to satisfaction of a
number of conditions, including, among other things, stockholder and
regulatory approval and the receipt of a written fairness opinion by the
Company that the consideration offered pursuant to the Affiliation Agree-
ment is fair from a financial point of view to the stockholders of the
Company. It is currently anticipated that the merger would be consummated
at the end 1998, although no assurances can be given at this time.
The Company announced the termination and rescission of its stock
repurchase program in connection with the Affiliation Agreement. Through
July 31, 1998, the Company had purchased 231,000 shares of its Common
Stock under the most recent program, leaving 251,000 shares remaining to
be purchased at the time the repurchase program was terminated.
Directors of the Company have entered into Stockholder Letter Agreements
with Banknorth stipulating that each direcor will vote those shares which
he or she has sole voting power in favor of the merger.
In connection with the Affilition Agreement, the Company and Banknorth
have entered into a Stock Option Agreement dated July 31, 1998, (the
"Stock Option Agreement") pursuant to which Banknorth has the right to
7
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
(Continued)
purchase up to 1,888,923 shares of Company common stock, not to exceed
19.9% of the outstanding shares, at a price equal to $27.75, per share
exercisable under certain conditions.
Banknorth has filed with the Securities and Exchange Commission a
Schedule 13D, Commission File No. 0-18173, on August 10, 1998, including
as exhibits thereto the Affiliation Agreement, the Stock Option Agree-
ment, the Agreement and Plan of Merger, dated July 31, 1998, and the form
of the Stockholder Letter Agreements entered into by the Company's
Directors.
3. Payment of Dividends
The Company is a legal entity separate and distinct from its bank and
other subsidiaries. The principal source of cash flow of the Registrant,
including cash flow to pay dividends to its stockholders, is dividends
from Evergreen Bank. The subsidiary bank is required to meet various
legal requirements prior to the payment of dividends to the Company.
Without the payment of dividends from Evergreen Bank the Company would
not be able to pay dividends to its stockholders.
4. Comprehensive Income
On January 1, 1998, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income".
This statement establishes standards for reporting and display of compre-
hensive income and its components. Comprehensive income includes the
reported net income of a company adjusted for items that are currently
accounted for as direct entries to equity such as the mark to market
adjustment on securities available for sale, foreign currency items and
minimum pension liability adjustments. At the Company, comprehensive
income represents net income plus other comprehensive income, which
consists of the net change in unrealized gains or losses on securities
available for sale for the period and changes to the minimum pension
liability adjustments. Accumulated other comprehensive income represents
the net unrealized gains or losses on securities available for sale and
the net minimum pension liability adjustments as of the balance sheet
dates.
Comprehensive income for the six months ended June 30, 1998 and June 30,
1997 was $5,430,000 and $5,541,000, respectively.
5. Preferred Stock Purchase Rights Plan
On April 17, 1998, the Board of Directors of the Company adopted a Pre-
ferred Stock Purchase Rights Plan (the "Plan"). The Plan provides for the
distribution of one preferred stock purchase right for each outstanding
share of common stock of the Company. Each right entitles the holder,
following the occurrence of certain events, to purchase a unit, consist-
ing of one-hundredth of a share of Series A Junior Participating Pre-
ferred Stock, at a price of $65 per unit, subject to adjustment. The
rights will not be exercisable or transferable apart from the common
stock except under certain circumstances in which a person or group of
8
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
(Continued)
affiliated persons acquires, or commences a tender offer to aquire, 10%
or more of the Company's common stock. Rights held by such an aquiring
person or persons may thereafter become void. Under certain circumstances
a right may become a right to purchase common stock or assets of the
Company or an acquiring corporation at a substantial discount. Under
certain circumstances, the Company may redeem the rights at $.001 per
right. The rights will expire in May 2008 unless earlier redeemed or
exchanged by the Company.
On July 31, 1998, the Company adopted an amendment to the Plan that
excludes Banknorth and its affiliates from the definition of "Aquiring
Person" for purposes of triggering the exercisability of the Rights.
6. Earnings Per Share
The following table shows the reconciliation of basic to diluted earings
per share:
Computation of Net Income Per Common Share
(Dollars in Thousands, except Per Share Amounts)
Three Months Ended June 30,
1998 1997
Basic Earnings Per Share
Average Shares Outstanding 8,776,000 9,010,000
Net Income $ 2,942 $ 2,672
Basic Earnings Per Share $ .34 $ .30
Diluted Earnings Per Share
Average Shares Outstanding 8,776,000 9,010,000
Dilutive Effect of Stock Options 183,000 106,000
Average Potential Shares 8,959,000 9,116,000
Net Income $ 2,942 $ 2,672
Diluted Earnings Per Share $ .33 $ .29
Six Months Ended June 30,
1998 1997
Basic Earnings Per Share
Average Shares Outstanding 8,821,000 9,047,000
Net Income $ 5,918 $ 5,354
Basic Earnings Per Share $ .67 $ .59
Diluted Earnings Per Share
Average Shares Outstanding 8,821,000 9,047,000
Dilutive Effect of Stock Options 183,000 106,000
Average Potential Shares 9,004,000 9,153,000
Net Income $ 5,918 $ 5,354
Diluted Earnings Per Share $ .66 $ .58
9
Independent Auditors' Review Report
The Board of Directors and Stockholders
Evergreen Bancorp, Inc.:
We have reviewed the consolidated statement of financial condition of
Evergreen Bancorp, Inc. and subsidiaries as of June 30, 1998 and the re-
lated consolidated statements of income for the three-month and six-month
periods ended June 30, 1998 and 1997, and the consolidated statements of
cash flows for the six-month periods ended June 30, 1998 and 1997. These
consolidated financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical pro-
cedures to financial data and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than
an audit conducted in accordance with generally accepted auditing stand-
ards, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express
such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the consolidated financial statements referred to above
for them to be in conformity with generally accepted accounting princip-
les.
We have previously audited, in accordance with generally accepted audit-
ing standards, the consolidated statement of financial condition of
Evergreen Bancorp, Inc. and subsidiaries as of December 31, 1997, and the
related consolidated statements of income, changes in stockholders'
equity, and cash flows for the year then ended (not presented herein);
and in our report dated January 23, 1998, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying consolidated statement of
financial condition as of December 31, 1997, is fairly presented, in all
material respects, in relation to the consolidated statement of financial
condition from which it has been derived.
/s/ KPMG PEAT MARWICK LLP
Albany, New York
August 10, 1998
10
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL REVIEW
----------------
The principal source of earnings for the Company is its single banking
subsidiary, Evergreen Bank, N.A. All discussion herein refers to the
banking activities of the Company's banking subsidiary unless otherwise
noted.
When used in this quarterly report on Form 10-Q, the words or phrases
"will likely result," "are expected to," "will continue," "is anticip-
ated," "estimate," "project" or similar expressions are intended to
identify "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are subject to
certain risks and uncertainties including, changes in economic conditions
in the Company's market area, changes in policies by regulatory agencies,
fluctuations in interest rates, demand for loans in the Company's market
area and competition, disruptions of the operations of the Company or any
governmental or private entity as a result of the "Year 2000 problem",
that could cause actual results to differ materially from historical
earnings and those presently anticipated or projected. The Company
cautions readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made. The factors listed
above could affect the Company's financial performance and could cause
the Company's actual results for future periods to differ materially from
any opinions or statements expressed with respect to future periods in
any current statements.
The Company does not undertake, and specifically disclaims, any obliga-
tion to publicly release the result of any revisions which may be made
to any forward-looking statements to reflect events or circumstances
after the date of such events or to reflect the occurance of anticipated
or unanticipated events.
PROPOSED MERGER
---------------
On July 31, 1998, the Company jointly announced that it entered into an
Affiliation Agreement and Plan of Reorganization (the "Affiliation Agree-
ment") with Banknorth Group, Inc., Burlington, Vermont (Banknorth) for
the merger of the Company with and into Banknorth. See Note 2 to the
Notes to Consolidated Interim Financial Statements.
In April of 1998, the company adopted a Change-in-Control Severance Plan
(the "Severance Plan") applicable to all full-time employees generally,
other than officers who have a separate agreement with the Company. The
Severance Plan generally entitles those employees who are terminated
without Cause, following a Change-in-Control (all as defined in such
plan) with a severance benefit not to exceed fifty-two weeks of pay.
11
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
SUMMARY OF RESULTS OF OPERATIONS
--------------------------------
Net income for the three months ended June 30, 1998, was $2,942,000 as
compared to $2,672,000 in the same quarter last year. This represents an
increase of $270,000. For the six months ended June 30, 1998 net income
was $5,918,000 compared to $5,354,000 in 1997. Basic income per share for
the quarter ended June 30, 1998, was $.34, compared to $.30 for the June
30, 1997 quarter. For the three and six month periods, the primary
reasons for the increases in net income were increases in non-interest
income and a lower effective tax rate.
In 1998, the annualized return on average assets for the six months ended
June 30, was 1.15%, compared to 1.13% for the first six months last year.
The annualized return on average stockholders' equity for the first six
months of 1997 was 13.7%, compared to 12.6% for the same period in 1997.
The increase in the returns on average assets and stockholders' equity
are due primarily to the increased level of net income.
NET INTEREST INCOME
-------------------
Net interest income for the three months ended June 30, 1998 was
$10,542,000, compared to $10,482,000 for the same period of 1997. This
represents an increase of $60,000, or 0.6%. The first six months of 1998
reflects net interest income of $21,240,000, an increase of 1.8% as
compared to $20,863,000 for the same period last year. On a taxable
equivalent basis, net interest income was $10,691,000 for the quarter
ended June 30, 1998 as compared to $10,611,000 for the quarter ended June
30, 1997. This represents an increase of $80,000, or 0.8%. For the first
six months of 1998 taxable equivalent net interest income increased 2.0%
to $21,532,000 from $21,108,000 for the six months ended June 30, 1997.
The increase in net interest income on a taxable equivalent basis
resulted primarily from an increase in the volume of average earning
assets as the net interest margin declined by 34 basis points. Rates paid
on costing liabilities rose by 9 basis points while rates received on
earning assets declined by 25 basis points. The increase in rates paid on
costing liabilities is a result of liability growth being concentrated in
the higher cost time deposit category. Average time deposits increased
$62,598,000. The decrease in rates received on earning assets was
primarily attributable to a larger portion of lower yielding investment
securities. Average taxable investment securities increased $82,023,000.
ALLOWANCE FOR LOAN LOSSES
-------------------------
The Company's allowance for loan losses at June 30, 1998, has decreased
$377,000 to $12,454,000 from the December 31, 1997 balance. The decrease
was caused primarily by a substantial chargeoff related to one commercial
12
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
borrowing relationship which approximated $1,100,000. As a percent of
total loans, net of unearned income, the allowance was approximately 1.8%
at June 30, 1998. The allowance represents approximately 215.6% of total
nonperforming loans at quarter end. The provision for loan losses for the
quarter ended June 30, 1998 was $495,000 compared to $450,000 for the
same period in 1997. For the six months ended June 30, 1998 the provision
totaled $990,000, compared to $810,000 a year earlier. The increased
provision, from year earlier levels, reflects the significant loan growth
incurred over the last year.
The allowance for loan losses represents amounts available for future
credit losses and reflects management's ongoing detailed review of
certain individual credits, as well as analysis of the historic net
chargeoff experience of the portfolio, an evaluation of current and anti-
cipated economic conditions, peer group statistics and other pertinent
factors.
Loans (or portions thereof) deemed uncollectable are charged against
the allowance while recoveries of amounts previously charged off are
added to the allowance. Provisions for loan losses charged to earnings
are added to the allowance. Amounts are charged off once the proba-
bility of loss has been determined, with consideration given to factors
such as the customer's financial condition, underlying collateral
and guarantees, and general and industry economic conditions.
The following table presents information concerning nonperforming
loans and other real estate.
6/30/98 12/31/97
------- --------
(Dollars In Thousands)
Non-Accrual $ 4,890 $ 4,838
Past Due 90 Days 886 951
-------- --------
Total Nonperforming
Loans $ 5,776 $ 5,789
======== ========
Other Real Estate $ 1,974 $ 1,067
======== ========
The majority of the Company's nonperforming loans consist of commercial
and commercial real estate loans. There is no distinct concentration as
to type of borrower within these classifications.
OTHER INCOME AND EXPENSE
------------------------
Other income for the six months ended June 30, 1998, was $3,887,000,
$524,000 more than the $3,363,000 recorded in the same period last year.
13
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
Increases in other income included a $187,000 increase in Trust Depart-
ment income over prior year levels, an increase in deposit service
charges of $173,000 and an increase in other income of $128,000.
Other expense for the three months ended June 30, 1998 was $7,841,000,
compared to $7,723,000 for the same quarter last year, an increase of
$118,000, or 1.5%. Salaries and employee benefits expense, the largest
component of other operating expense, increased $172,000 to $4,191,000
for the three months ended June 30, 1998, from $4,019,000 during the same
period of 1997. The principal cause of increased salaries are merit
increases and the addition of a new branch in March of 1998. Occupancy
and equipment expenses declined modestly and other expense approximated
the levels of the prior year.
INCOME TAX EXPENSE
------------------
Income tax expense for the three month period ended June 30,1998, was
$1,264,000 as compared to $1,294,000 for the quarter ended June 30, 1997.
For the six months ended June 30, 1998, income tax expense was $2,736,000
compared to $2,645,000 in 1997. The effective income tax rate for the
periods ended June 30, 1998 and 1997 were 31.6% and 33.1%, respectively.
The decrease in the effective tax rate is attributable to Company tax
strategies and the continuing re-evaluation of reserves related to
federal deferred tax assets.
CAPITAL AND LIQUIDITY
---------------------
At June 30, 1998, stockholders' equity was $87,627,000 as compared to
$88,256,000 at December 31, 1997, a decrease of $629,000, or .7%. The
decrease in stockholders' equity is a result of the retention of earnings
of $3,265,000, and a reduction of the ESOP balance of $177,000, being
offset by net treasury share transactions of $3,583,000 and a decrease in
the market valuation of securities available for sale, net of deferred
tax expense, of $488,000.
The following table sets forth the Company's risk based capital ratios as
of June 30, 1998 and the regulatory guidelines for well capitalized
institutions.
Evergreen Well Capitalized
Risk-Based Bancorp, Inc. Regulatory
Ratios June 30, 1998 Guidelines
---------- ------------- ----------------
Leverage Ratio 8.1 % 5.0 %
Tier 1 13.2 % 6.0 %
Total Capital 14.4 % 10.0 %
14
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
Average federal funds sold for the six months ended June 30, 1998 was
$14,153,000, as compared to $31,112,000 for the six months ended June 30,
1997. Net cash provided by operating activities was $10,053,000 for the
six months ended June 30, 1998 as compared to net cash provided of
$8,364,000 for the six months ended June 30, 1997. Largely due to
increases in secuities balances, net cash used by investing activities
was $50,394,000 for the six months ended June 30, 1998 as compared to net
cash used of $72,043,000 for the same period last year. Net cash provided
by financing activities was $48,231,000 for the six months of 1998 as
compared to cash used of $45,512,000 for the six months of 1997. The
increase in cash provided by financing activities resulted primarily from
a $57,421,000 net increase in cash inflows from deposit accounts. The
level of cash and cash equivalents was $34,486,000 at June 30, 1998 as
compared to $37,963,000 at June 30, 1997.
Evergreen Bank, N.A. is the principal source of funds to the Company and,
if it cannot pay dividends to the Company, the Company will be unable to
pay dividends to its stockholders.
RATE VOLUME ANALYSIS
--------------------
For the purposes of the following analysis, Securities Available for Sale
are stated at average amortized cost and Stockholders' Equity is unad-
justed for the effects of SFAS No. 115.
Non-accrual loans are included in the following analysis and the average
balance of these loans is deemed immaterial.
Portions of income earned on certain Commercial Loans, US Government
Obligations, and Obligations of State and Political Subdivisions are
exempt from Federal and/or State taxation. Appropriate adjustments have
been made to reflect the equivalent amount of taxable income that would
have been necessary to generate an equal amount of after tax income. The
taxable equivalent adjustment is based on a marginal Federal income tax
rate of 35.0% in 1998 and 1997 along with a marginal State income tax
rate of 9.0%.
The following table sets forth the dollar amounts of interest income (on
a taxable equivalent basis) and interest expense and changes therein
resulting from changes in volume and changes in rate. The change in
interest due to both rate and volume has been allocated to change due to
volume and change due to rate based on the percentage relationship of
such variances to each other.
15
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
Analysis of Variance in Net Interest Income Due to Volume and Rates
For the three months ended
June 30, 1998 VS June 30, 1997
INCREASE / (DECREASE) TOTAL
DUE TO CHANGE IN INCREASE/
VOLUME RATE (DECREASE)
--------------------- ----------
Interest Earned:
Loans
Taxable $ 483 $ (298) $ 185
Tax-Exempt 49 (3) 46
Investment Securities
Taxable 1,224 (252) 972
Tax-Exempt 7 (1) 6
Federal Funds Sold &
Interest-Bearing Deposits (262) 3 (259)
------ ------ ------
Changes in Total Interest
Income 1,501 (551) 950
------ ------ ------
Less Interest Expense Incurred:
Regular Savings, NOW and MMDAs 81 (125) (44)
Time Deposits 798 68 866
Short-Term Borrowings 63 (4) 59
Long Term Debt (7) (4) (11)
------ ------ ------
Changes in Total Interest
Expense 935 (65) 870
------ ------ ------
Changes in Net Interest
Income $ 566 $ (486) $ 80
====== ====== ======
16
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
Analysis of Variance in Net Interest Income Due to Volume and Rates
For the six months ended
June 30, 1998 VS June 30, 1997
INCREASE / (DECREASE) TOTAL
DUE TO CHANGE IN INCREASE/
VOLUME RATE (DECREASE)
--------------------- ----------
Interest Earned:
Loans and Leases
Taxable $ 854 $ (553) $ 301
Tax-Exempt 123 (3) 120
Investment Securities
Taxable 2,701 (225) 2,476
Tax-Exempt 61 (27) 34
Federal Funds Sold &
Interest-Bearing Deposits (468) 14 (454)
------ ------ ------
Changes in Total Interest
Income 3,271 (794) 2,477
------ ------ ------
Less Interest Expense Incurred:
Regular Savings, NOW and MMDAs 134 (203) (69)
Time Deposits 1,763 223 1,986
Short-Term Borrowings 135 (6) 129
Long Term Debt (15) 22 7
Changes in Total Interest ------ ------ ------
Expense 2,017 36 2,053
------ ------ ------
Changes in Net Interest
Income $1,254 $ (830) $ 424
======= ====== ======
17
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Average Balances Three Months Ended June 30, 1998
Interest Average
Average Income/ Yield/
Balance Expense Rate
Assets: ------- ------- -------
Loans
Taxable $ 663,992 $14,498 8.76%
Tax Exempt 15,299 286 7.50%
Securities
Taxable 307,635 4,934 6.43%
Tax Exempt 9,719 205 8.46%
Federal Funds Sold &
Interest Bearing Deposits 15,673 216 5.53%
--------- -------
Total Earning Assets 1,012,318 20,139 7.98%
-------
Allowance for Loan
Losses (13,336)
Cash and Due from Banks 23,096
Other Non-Earning Assets 35,485
---------
Total Assets $1,057,563
=========
Liabilities and
Stockholders' Equity:
Regular Savings, NOW
and MMDAs $ 360,407 2,387 2.66%
Time Deposits 462,215 6,530 5.67%
Short-Term Borrowings 10,146 121 4.78%
Long Term Debt 25,418 410 6.47%
--------- -------
Total Interest
Bearing Liabilities 858,186 9,448 4.42%
------- -----
Demand Deposits 95,381
Other Liabilities 18,328
Stockholders' Equity 85,668
Total Liabilities and ---------
Stockholders' Equity $1,057,563
=========
Net Interest Income (Tax
Equivalent Basis) 10,691
Tax Equivalent Adjustment (149)
-------
Net Interest Income $10,542
=======
Net Interest Rate Spread 3.56%
=====
Net Interest Margin 4.19%
=====
18
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Average Balances Three Months Ended June 30, 1997
Interest Average
Average Income/ Yield/
Balance Expense Rate
Assets: ------- ------- -------
Loans
Taxable $ 642,039 $ 14,313 8.94%
Tax Exempt 12,659 240 7.60%
Securities
Taxable 232,107 3,962 6.85%
Tax Exempt 9,405 199 8.49%
Federal Funds Sold &
Interest Bearing Deposits 34,683 475 5.49%
-------- -------
Total Earning Assets 930,893 19,189 8.27%
-------
Allowance for Loan
Losses (12,866)
Cash and Due from Banks 23,881
Other Non-Earning Assets 33,957
--------
Total Assets $ 975,865
========
Liabilities and
Stockholders' Equity:
Regular Savings, NOW
and MMDAs $ 348,527 2,431 2.80%
Time Deposits 405,658 5,664 5.60%
Short-Term Borrowings 4,918 62 5.06%
Long Term Debt 25,866 421 6.53%
-------- -------
Total Interest
Bearing Liabilities 784,969 8,578 4.38%
------- -----
Demand Deposits 91,061
Other Liabilities 14,182
Stockholders' Equity 85,653
Total Liabilities and --------
Stockholders' Equity $ 975,865
========
Net Interest Income (Tax
Equivalent Basis) 10,611
Tax Equivalent Adjustment (129)
-------
Net Interest Income $ 10,482
=======
Net Interest Rate Spread 3.89%
=====
Net Interest Margin 4.57%
=====
19
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Average Balances Six Months Ended June 30, 1998
Interest Average
Average Income/ Yield/
Balance Expense Rate
Assets: ------- ------- -------
Loans
Taxable $ 662,225 $ 29,058 8.85%
Tax Exempt 15,451 574 7.49%
Securities
Taxable 293,912 9,658 6.63%
Tax Exempt 9,807 404 8.31%
Federal Funds Sold &
Interest Bearing Deposits 14,153 389 5.54%
--------- -------
Total Earning Assets 995,548 40,083 8.12%
------- -----
Allowance for Loan
Losses (13,167)
Cash and Due from Banks 22,715
Other Non-Earning Assets 35,448
---------
Total Assets $1,040,544
=========
Liabilities and
Stockholders' Equity:
Regular Savings, NOW
and MMDAs $ 356,436 4,771 2.70%
Time Deposits 450,601 12,719 5.69%
Short-Term Borrowings 10,086 242 4.84%
Long Term Debt 25,455 819 6.49%
--------- -------
Total Interest
Bearing Liabilities 842,578 18,551 4.44%
------- -----
Demand Deposits 94,124
Other Liabilities 17,620
Stockholders' Equity 86,222
Total Liabilities and ---------
Stockholders' Equity $1,040,544
=========
Net Interest Income (Tax
Equivalent Basis) 21,532
Tax Equivalent Adjustment (292)
-------
Net Interest Income $ 21,240
=======
Net Interest Rate Spread 3.68%
=====
Net Interest Margin 4.36%
=====
20
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Average Balances Six Months Ended June 30, 1997
Interest Average
Average Income/ Yield/
Balance Expense Rate
Assets: ------- ------- -------
Loans
Taxable $ 642,904 $ 28,757 9.02%
Tax Exempt 12,132 454 7.55%
Securities
Taxable 211,889 7,182 6.84%
Tax Exempt 8,353 370 8.93%
Federal Funds Sold &
Interest Bearing Deposits 31,190 843 5.45%
-------- -------
Total Earning Assets 906,468 37,606 8.37%
------- -----
Allowance for Loan
Losses (12,697)
Cash and Due from Banks 26,840
Other Non-Earning Assets 33,359
--------
Total Assets $ 953,970
========
Liabilities and
Stockholders' Equity:
Regular Savings, NOW
and MMDAs $ 346,680 4,840 2.82%
Time Deposits 388,003 10,733 5.58%
Short-Term Borrowings 4,464 113 5.10%
Long Term Debt 25,925 812 6.32%
-------- -------
Total Interest
Bearing Liabilities 765,072 16,498 4.35%
------- -----
Demand Deposits 89,917
Other Liabilities 13,399
Stockholders' Equity 85,582
Total Liabilities and --------
Stockholders' Equity $ 953,970
========
Net Interest Income (Tax
Equivalent Basis) 21,108
Tax Equivalent Adjustment (245)
-------
Net Interest Income $ 20,863
=======
Net Interest Rate Spread 4.02%
=====
Net Interest Margin 4.70%
=====
21
Item 4. Submission of Matters to a Vote of Security Holders.
The Annual Meeting of Stockholders was held on May 7, 1998 to consider
the following matters;
Stockholders of the Company were asked to consider the Company's nominees
for director and to elect directors, each to serve for a term of three
years. The Company's nominees for director were all elected by a
plurality of the votes presented.
Item 6(a) Exhibits - The following exhibits are submitted herewith:
Exhibit 3 - Restated Certificate of Incorporation
Exhibit 10 - Change in Control Severance Plan
Exhibit 27 - Financial Data Schedule
Item(b) Reports on Form 8-K
Current Report on Form 8-K, filed August 10, 1998 (reporting
Item 5, Other Events, announcement of an Agreement of Merger).
Registration Statement on Form 8-A for Preferred Stock Purchase
Rights, filed May 7, 1998.
22
Signatures
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant, has duly caused this report to be signed on its behalf
by the undersigned duly authorized.
EVERGREEN BANCORP, INC.
August 10, 1998 /S/George W. Dougan
--------------- -----------------------------------
Date George W. Dougan
President & Chief Executive Officer
(Principal Executive Officer)
August 10, 1998 /S/George L. Fredette
--------------- --------------------------------
Date George L. Fredette
Executive Vice President, Treasurer
(Chief Financial Officer)
23
EXHIBIT 3
RESTATED CERTIFICATE OF INCORPORATION
OF EVERGREEN BANCORP, INC.
as of May 13, 1998
(Duly adopted under Section 245 of the Delaware General Corporation Law)
The name of the corporation is EVERGREEN BANCORP, INC. (hereinafter called the
"Corporation"). The Corporation was originally incorporated as FIRST GLEN
BANCORP, INC. pursuant to its original certificate of incorporation filed with
the Delaware Secretary of State on November 3, 1980.
1. Name. The name of the corporation is EVERGREEN BANCORP, INC. (hereinafter
called the "Corporation").
2. Address; Registered Agent. The address of the its registered office in the
State of Delaware is Corporation Trust Center, 1209 Orange Street, City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
3. Purposes. The nature of the business and purposes to be conducted or
promoted by the Corporation are to engage in, carry on and conduct any lawful
act or activity for which corporations may be organized under the General
Corporation Law of Delaware.
4. Number and Classes of Shares; Relative Rights, Preferences, and
Limitations. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is Twenty Million, Five Hundred
Thousand (20,500,000), of which Twenty Million (20,000,000) shares of the par
value of Three Dollars, Thirty Three and One Third Cents ($3.33 1/3) each,
amounting in the aggregate to Sixty Six Million Six Hundred Sixty Six Thousand
Six Hundred Sixty Six and Two Thirds Dollars ($66,666,666.67) shall be common
stock and Five Hundred Thousand (500,000) shares of the par value of Ten
Dollars ($10.00) each, amounting in the aggregate to Five Million Dollars
($5,000,000), shall be preferred stock. The preferred stock may be issued from
time to time in one or more series for any proper corporate purpose without
further action by the shareholders. The designations, preferences and other
rights and limitations or restrictions of the preferred stock of each series
(other than such as are stated and expressed herein) shall be such as may be
fixed by the Board of Directors (authority so to do being hereby expressly
granted) and stated and expressed in a resolution or resolutions adopted by
the Board of Directors providing for the initial issue of preferred stock of
such series. Such resolution or resolutions shall (a) fix the dividend rights
of holders of shares of such series, including the dividend rate thereon,
whether such dividends shall be cumulative, and, if so, on what terms, (b)fix
the terms on which stock of such series may be redeemed, including amounts
payable upon redemption if the shares of such series are to be redeemable,
(c) fix the rights of the holders of stock of such series upon dissolution,
liquidation or any distribution of assets, (d) fix the terms or amount of the
sinking fund, if any, to be provided for the purchase or redemption of stock
of such series, (e) fix the terms upon which the stock of such series may be
converted into or exchanged for stock of any other class or classes or of any
one or more series of preferred stock, if the shares of such series are to be
convertible or exchangeable, (f) fix the voting rights, if any, of the shares
of such series and (g) fix such other designations, preferences, and relative,
participating, optional or other special rights and qualifications, limitations
or restrictions thereof desired to be so fixed.
Except to the extent otherwise provided in the resolution or resolutions of
the Board of Directors providing for the initial issue of shares of a
particular series or expressly required by law, holders of shares of preferred
stock of any series shall be entitled to one vote for each share thereof so
held, shall vote share-for-share with the holders of the common stock without
distinction as to class and shall not be entitled to vote separately as a
class or a series of a class. The number of shares of preferred stock may be
increased or decreased from time to time by the affirmative vote of the holders
of a majority of the stock of the Corporation entitled to vote, and the holders
of the preferred stock shall not be entitled to vote separately as a class or
series of a class on any such increase or decrease.
All shares of any one series of preferred stock shall be identical with each
other in all respects except that shares of any one series issued at different
times may differ as to the dates from which dividends thereon shall accumulate,
and all series of preferred stock shall rank equally and be identical in all
respects except as specified in the respective resolutions of the Board of
Directors providing for the initial issue thereof. Subject to the prior and
superior rights of the preferred stock as set forth in any resolution or
resolutions of the Board of Directors providing for the initial issue of a
particular series of preferred stock, such dividends (payable in cash, stock
or otherwise) as may be determined by the Board of Directors may be declared
and paid on the common stock from time to time out of any fund legally
available therefor, and the preferred stock shall not be entitled to
participate in any such dividend.
No holder of stock of the Corporation shall be entitled as a matter of right,
preemptive or otherwise, to subscribe for or purchase any part of any stock
now or hereafter authorized to be issued, or shares thereof held in the
treasury of the Corporation or securities convertible into stock, whether
issued for cash or other consideration or by way of dividend or otherwise.
5. Directors; Election and Classification.
(a) Members of the Board of Directors may be elected either by written ballot
or by voice vote.
(b) The Board shall consist of a minimum of five and a maximum of twenty-five
members. The total number of directors may be changed from time to time
within the above minimum and maximum numbers by vote of the majority of the
total number of directors then in office, provided that such total number of
directors may not be increased by more than two between any two successive
annual meetings of shareholders. Directors need not be stockholders and each
director shall hold office until his successor is elected and qualified or
until his earlier death, resignation or removal.
(c) The Board of Directors shall be divided into three classes. The number
of directors of the first class shall equal one-third (1/3) of the total
number of directors determined in the manner provided in subdivision (b) above
(with fractional remainders to count as one); the number of directors of the
second class shall equal one-third (1/3) of said total number of directors (or
the nearest whole number thereto); and the number of directors of the third
class shall equal said total number of directors minus the aggregate number of
directors of the first and second classes. At the election of the first Board
of Directors, the class of each of three members then elected shall be
designated. The term of office of each member then designated as a director
of the first class shall expire at the annual meeting of the shareholders
next ensuing, that of each member then designated as a director of the second
class at the annual meeting of shareholders one year thereafter, and that of
each member then designated as a director of the third class at the annual
meeting of shareholders two years thereafter. At each annual meeting of
shareholders held after the election and classification of the first Board of
Directors, directors shall be elected for a full term of three (3) years to
succeed those members whose terms then expire.
(d) At a special meeting of shareholders called expressly for that purpose,
any director, or the entire Board of Directors, may be removed from office at
any time, without cause, but only by the affirmative vote of the holders of not
less than eighty percent (80%) of the shares of the Corporation then entitled
to vote in an election of directors. At a special meeting of shareholders
called expressly for that purpose, a director may be removed by the
shareholders for cause by the affirmative vote of the holders of a majority of
the shares then entitled to vote in an election of directors. Except as may
otherwise be provided by law, cause for removal shall be construed to exist
only if the director whose removal is proposed (i) has been convicted of a
felony by a court of competent jurisdiction and such conviction is no longer
subject to direct appeal or (ii) has been adjudged by a court of competent
jurisdiction to be liable for negligence or misconduct in the performance of
his duty to the Corporation in a matter of substantial importance to the
Corporation, and such adjudication is no longer subject to direct appeal.
(e) Notwithstanding any other provision of the Certificate of Incorporation
to the contrary, the affirmative vote of the holders of not less than eighty
percent (80%) of the shares of the Corporation then entitled to vote in an
election of directors shall be required to alter, amend or repeal, or to adopt
any provision inconsistent with the provisions of this Article 5.
6. Adoption, Amendment and/or Repeal of By-Laws. The Board of Directors
may from time to time (after adoption by the undersigned of the original
by-laws of the Corporation adopt, amend or repeal the by-laws of the
Corporation; provided, that any by-laws adopted, amended or repealed by the
Board of Directors may be amended or repealed, and any by-laws may be adopted,
by the stockholders of the Corporation.
7. Compromise and Arrangements. Whenever a compromise or arrangement is
proposed between this Corporation and its creditors or any class of them and/or
between this Corporation and its stockholders or any class of them, any court
of equitable jurisdiction within the State of Delaware may, on the application
in a summary way of this Corporation or of any creditor or stockholder thereof
or on the application of any receiver or receivers appointed for this
Corporation under the provisions of section 291 of Title 8 of the Delaware Code
or on the application of trustees in dissolution or of any receiver or
receivers appointed for this Corporation under the provisions of section 279
of Title 8 of the Delaware Code order a meeting of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, to be summoned in such manner as the said
court directs. If a majority in number representing three-fourths in value of
the creditors or class of creditors, and/or of the stockholders or class of
stockholder of this Corporation, as the case may be, agree to any compromise
or arrangement and to any reorganization of this Corporation as a
consequence of such compromise or arrangement, the said compromise or
arrangement and the said reorganization shall, if sanctioned by the court to
which the said application has been made, be binding on all the creditors or
class of creditors, and/or on all the stockholders or class of stockholders,
of this Corporation, as the case may be, and also on this Corporation.
8. Shareholder Approval of Business Combinations. The approval of any
Business Combination (as hereinafter defined) shall, in addition to any
affirmative vote required by law or any other provision of this Certificate of
Incorporation, require the affirmative vote of the holders of not less than
eighty percent (80%) of the shares of the Corporation then entitled to vote
generally in the election of directors of the Corporation voting as a single
class, with each share to have one (1) vote; provided, however, that any such
Business Combination may be approved by the affirmative shareholder vote
required by law or otherwise, if:
(a) such Business Combination is approved by not less than eighty percent
(80%) of the entire Board of Directors of the Corporation, or (b) the
consideration to be received per share by holders of Common Stock of the
Corporation and by holders of each other class of stock entitled to vote
generally in the election of directors of the Corporation, if any, is Fair
Consideration (as hereinafter defined).
a. Definitions for the purposes of Article 8:
1. "Business Combination" shall mean as follows:
(i) any merger or consolidation of the Corporation or any Subsidiary (as
hereinafter defined) with (1) any Substantial Shareholder (as hereinafter
defined), or (2) any other corporation which, after such merger or
consolidation, would be a Substantial Shareholder, regardless of which entity
survives;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Substantial Shareholder of all or substantially all of the assets of the
Corporation or any Subsidiary, or both;
(iii) the adoption of any plan or proposal for the liquidation of the
Corporation proposed by or on behalf of a Substantial Shareholder; or
(iv) any transaction involving the Corporation or any Subsidiary, including
any issuance, transfer or reclassification of any securities of, or any
recapitalization of, the Corporation or any Subsidiary, or any merger or
consolidation of the Corporation with any Subsidiary (whether or not involving
a Substantial Shareholder), if the transaction would have the effect, directly
or indirectly, of increasing the proportionate share of the outstanding shares
of any class of equity or convertible securities of the Corporation or any
Subsidiary, of which a Substantial Shareholder is the Beneficial Owner.
2. "Substantial Shareholder" shall mean and include any individual,
corporation, partnership or other person or entity (other than the Corporation
or any Subsidiary) which, together with its "Affiliates" and "Associates" (as
such terms were defined as of December 11, 1984, under Rule 13d-3 under the
Securities Exchange Act of 1934) is the Beneficial Owner (as hereinafter
defined) in the aggregate of more than five percent (5%) of the voting power
of the then-outstanding shares of the Corporation entitled to vote generally
in an election of directors; and any Affiliate or Associate of any such
individual, corporation, partnership or other person or entity.
3. "Beneficial Owner" - The term "Beneficial Owner" shall be defined with
reference to the rules and regulations of the Securities and Exchange
Commission under the Securities and Exchange Act of 1934 as in effect from
time to time provided that in addition thereto a person shall be a Beneficial
Owner of any capital stock or be considered to "Beneficially" own any capital
stock:
(i) which such person or any of its Affiliates and Associates beneficially
owns, directly or indirectly; or
(ii) which such person or any of its Affiliates and Associates has (1) the
right to acquire (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement or understanding
or upon the exercise of conversion rights, exchange rights, warrants or options,
or otherwise, or (2) the right to vote pursuant to any agreement, arrangement
or understanding; or
(iii) which are beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates or Associates has
any agreement, arrangement or understanding for the purposes of acquiring,
holding, voting or disposing of any shares of capital stock.
4. "Subsidiary" shall mean any corporation of which a majority of any class
of equity security is owned, directly or indirectly by the Corporation.
5. "Fair Consideration" shall mean,
(i) in the case of shares of Common Stock of the Corporation, an amount in
cash or readily available funds at least equal to the highest of the following
(whether or not the Substantial Shareholder has previously acquired any such
shares):
(a) the highest per share price paid by the Substantial Shareholder for
any such shares acquired by it within the four-year period immediately
preceding the first public announcement of the proposal of the Business
Combination (hereinafter referred to as the "Announcement Date"), plus an
"Adjustment" of such price, as defined hereafter in this Article 8;
(b) the highest reported per share price at which shares were publicly
traded during the two-year period immediately preceding the Announcement Date,
plus an "Adjustment" of such price, as defined hereafter in this Article 8;
(c) the per share fair market value of such shares on the Announcement
Date, plus an "Adjustment" of such value, as defined hereafter in this Article
8; or
(d) the book value per share of the Common Stock of the Corporation
(determined in accordance with generally accepted accounting principles) as of
the end of the latest fiscal quarter preceding the Announcement Date, plus an
"Adjustment" of such value as defined hereafter in this Article 8.
(ii) and in the case of any other shares of voting stock of the Corporation
outstanding, an amount in cash or readily available funds at least equal to
the highest of the following (whether or not the Substantial Shareholder has
previously acquired any such shares):
(a) the highest per share price paid by the Substantial Shareholder for
any such shares acquired by it within the four-year period immediately
preceding the Announcement Date, plus an "Adjustment" of such price, as
defined hereafter in this Article 8;
(b) the highest reported per share price at which such shares were publicly
traded during the two-year period immediately preceding the Announcement Date,
plus an "Adjustment" of such price, as defined hereafter in this Article 8;
(c) the per share fair market value of such shares on the Announcement Date,
plus an "Adjustment" of such price, as defined hereafter in this Article 8; or
(d) the highest preferential amount per share to which the holders of such
shares are entitled in the event of voluntary or involuntary liquidation or
dissolution of the Corporation.
An "Adjustment" of any price or value per share for shares of stock of the
Corporation under this Article 8 shall equal an amount of interest on such
price or value compounded annually from the Announcement Date until the
consummation of the Business Combination (the "Consummation Date"), or, in the
case of subdivisions (a) and (b) in each of subsections 5(i) and 5 (ii) in this
Article 8, from the date the Substantial Shareholder first became a Substantial
Shareholder (the "Determination Date") until the Consummation Date, at a market
prime rate of interest as may be determined from time to time by a majority of
the Board of Directors of the Corporation, less the aggregate amount of any
cash dividends per share paid on such class of shares during such period up to
but not in excess of such amount of interest.
Notwithstanding any other provision of this Certificate of Incorporation or any
provision of law or any preferred stock designation to the contrary, but
in addition to any affirmative vote of the holders of any particular class or
series of outstanding voting stock of the Corporation required by law or this
Certificate of Incorporation or any preferred stock designation of this
Corporation, the affirmative vote of the holders of at least eighty percent
(80%) of the voting power of the then outstanding shares of the Corporation
then entitled to vote in an election of directors, voting together as a single
class, shall be required to alter, amend or repeal, or to adopt any provision
inconsistent with, this Article 8 or any provision of this Article 8.
9. Director Liability. No director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived
an improper personal benefit.
IN WITNESS WHEREOF, I have signed this Restated Certificate of Incorporation,
on behalf of the Corporation and in the capacity set forth below, and certify
that the foregoing Restated Certificate of Incorporation was duly adopted by
the board of directors and stockholders of the Corporation pursuant to section
245 of the Delaware General Corporation Law.
/s/ Paul A. Cardinal
Paul A. Cardinal
Executive Vice President,
General Counsel & Secretary
EXHIBIT 10
EVERGREEN BANCORP, INC.
CHANGE IN CONTROL SEVERANCE PAY PLAN
The Evergreen Bancorp, Inc. Change in Control Severance Pay Plan, as set forth
herein, is intended to help attract and retain qualified employees and maintain
a stable work environment by making provision for the protection of covered
employees in connection with a Change in Control as set forth herein.
ARTICLE 1
DEFINITIONS
1.1 "Annual Pay" means, in the case of a Salaried Employee, the higher of
(a) the Employee's annual base salary in effect immediately prior to the
Employee's Date of Termination, or (the Employee's highest annual base salary
in effect during the one (1) year period preceding the Change in Control. In
the case of an Hourly Employee, "Annual Pay" means the higher of (a) the
Employee's straight time hourly rate of pay in effect immediately prior to the
Employee's Date of Termination multiplied by 1,950, or (b)the Employee's highest
straight time hourly rate of pay during the one (1) year period preceding the
Change in Control multiplied by 1,950. For purposes of the foregoing, salary
reduction elections pursuant to Sections 125 and 401(k) of the Internal Revenue
Code of 1986, as amended, shall not be taken into account.
1.2 "Bank" means Evergreen Bank, N.A. and any successors thereto.
1.3 "Benefit Period" means, with respect to an Employee, a period equal to
six (6) weeks plus a number of weeks equal to the product of (a) the Employee's
Years of Service and (b) two (2); provided, however, that in no event shall
the Benefit Period exceed fifty-two (52) weeks.
1.4 "Board" means the Board of Directors of the Company.
1.5 "Cause" means
(a) the willful and continued failure of an Employee to
substantially perform the Employee's duties with the Bank (other than any
such failure resulting from incapacity due to physical or mental illness),
after a written demand for substantial performance is delivered to the Employee
by the Employee's supervisor which specifically identifies the manner in which
the Employee's supervisor believes that the Employee has not substantially
performed the Employee's duties; or
(b) the willful engaging by the Employee in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Bank.
For purposes of the preceding clauses (a) and (b), no act or failure to act,
on the part of the Employee, shall be considered "willful" unless it is done,
or omitted to be done, by the Employee in bad faith or without reasonable
belief that the Employee's action or omission was in the best interests of the
Company and/or the Bank. Any act, or failure to act, based upon the
instructions or with the approval of the Employee's superior shall be
conclusively presumed to be done, or omitted to be done, by the Employee in good
faith and in the best interests of the Bank and the Company.
1.6 "Change in Control" means a change in control of the Company of a nature
that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A (or in response to any similar item on any similar schedule
or form) promulgated under the Exchange Act, whether or not the Company is then
subject to such reporting requirement; provided, however, that without
limitation, a Change in Control shall be deemed to have occurred if:
(a) any Person, excluding employee benefit plans of the Company, is or becomes
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act), directly or indirectly, of securities of the Company representing twenty-
five percent (25%) or more of the combined voting power of the Company's then
outstanding securities;
(b) the Company consummates a merger, consolidation, share exchange,
division or other reorganization or transaction of the Company (a "Fundamental
Transaction") with any other corporation, other than a Fundamental Transaction
that results in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) at least sixty
percent (60%) of the combined voting power immediately after such Fundamental
Transaction of (i) the Company's outstanding securities, (ii) the surviving
entity's outstanding securities, or (iii) in the case of a division, the
outstanding securities of each entity resulting from the division;
(c) the shareholders of the Company approve a plan of complete liquidation
or winding-up of the Company or an agreement for the sale or disposition (in
one transaction or a series of transactions) of all or substantially all of
the Company's assets;
(d) as a result of a proxy contest, individuals who, prior to the conclusion
thereof, constituted the Board (including for this purpose any new director
whose election or nomination for election by the Company's shareholders in
connection with such proxy contest was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who were directors prior to such
proxy contest) cease to constitute at least a majority of the Board (excluding
any Board seat that is vacant or otherwise unoccupied);
(e) during any period of twenty-four (24) consecutive months, individuals who
at the beginning of such period constituted the Board (including for this
purpose any new director whose election or nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who were directors at the beginning of
such period) cease for any reason to constitute at least a majority of the
Board (excluding any Board seat that is vacant or otherwise unoccupied); or
(f) the Board determines that a Change in Control has occurred.
1.7 "Company" means Evergreen Bancorp, Inc., a Delaware corporation and any
successors thereto.
1.8 "Coverage Period" means the period commencing on the date on which a
Change in Control occurs and ending on the second anniversary thereof.
1.9 "Date of Termination" means the date on which the employment of an
Employee terminates.
1.10 "Disability" means the absence of the Employee from the Employee's
duties with the Bank on a full-time basis for 180 consecutive business days as
a result of incapacity due to mental or physical illness which is determined
to be total and permanent by a physician selected by the Bank or its insurers
and acceptable to the Employee or the Employee's legal representative (such
agreement as to acceptability not to be withheld unreasonably), provided that
such absence shall constitute "Disability" only if the Employee is entitled to
long-term disability benefits for the period of his disability after such 180
day period at least equal to fifty percent (50%) of the Employee's Annual Pay.
1.11 "Employee" means any employee of the Bank, whether compensated on a
salaried or hourly basis, other than an employee who (a) is regularly scheduled
to work less than 37 hours per week or (b) has entered into an individual
written agreement with the Company providing for the payment of severance
benefits in the event of a qualifying termination of employment with the
Company and/or the Bank following a "Change in Control."
1.12 "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
1.13 "Good Reason" means, with respect to an Employee:
(a) a reduction by the Company and/or the Bank in the Employee's annual base
salary (in the case of a Salaried Employee) or straight time hourly rate of pay
(in the case of an Hourly Employee) as in effect on the date of the adoption of
this Plan or as the same may be increased from time to time;
(b) the Company's and/or the Bank's requiring the Employee (i) to be based
at any office or location that is more than thirty-five (35) miles from the
Employee's office or location immediately prior to the Change in Control, or
(ii) to travel on business to a substantially greater extent than required
immediately prior to the Change in Control;
(c) the failure by the Company and/or the Bank, without the Employee's
consent, to pay to the Employee any portion of the Employee's current
compensation, or to pay to the Employee any portion of an installment of
deferred compensation under any deferred compensation program of the Bank or
the Company within seven (7) days of the date such compensation is due;
(d) the failure by the Company and/or the Bank to continue in effect any
compensation plan in which the Employee participates immediately prior to the
Change in Control which is material to the Employee's total compensation,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the failure by
the Company and/or the Bank to continue the Employee's participation therein
(or in such substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided and the level of
the Employee's participation relative to other participants, as existed at the
time of the Change in Control;
(e) the failure by the Company and/or the Bank to continue to provide the
Employee with benefits substantially similar to those enjoyed by the Employee
under any of the Company's or the Bank's pension, life insurance, medical,
health and accident, or disability plans in which the Employee was
participating at the time of the Change in Control, the taking of any action
by the Company and/or the Bank which would directly or indirectly materially
reduce any of such benefits or deprive the Employee of any material fringe
benefit enjoyed by the Employee at the time of the Change in Control, or the
failure by the Company and/or the Bank to continue to provide the Employee
with the number of paid vacation days to which the Employee is entitled on the
basis of Years of Service with the Bank in accordance with the Bank's vacation
policy in effect at the time of the Change in Control; or
(f) any failure by the Company to comply with and satisfy Section 2.4 hereof.
1.14 "Hourly Employee" means an Employee who is compensated on an hourly basis.
1.15 "Person" shall have the meaning given in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d)(3) and 14(d) thereof.
1.16 "Plan" means the Evergreen Bancorp, Inc. Change in Control Severance Pay
Plan, as set forth herein, as may be amended from time to time.
1.17 "Plan Administrator" means the Bank.
1.18 "Salaried Employee" means an Employee who is compensated on a salaried
basis.
1.19 "Subsidiary" means any corporation or other entity controlled by
Evergreen Bancorp, Inc.
1.20 "Weekly Pay" means, with respect to an Employee, an Employee's Annual
Pay divided by fifty-two (52).
1.21 "Years of Service" means, for purposes of this Plan, each year or
fraction thereof during which an Employee was employed by the Company and/or
the Bank, including any periods during which an employee was on vacation or
authorized sick leave, or, if greater, the Employee's years of service credited
under the Employee's Retirement Plan of Evergreen Bancorp, Inc.
ARTICLE 2
EMPLOYEE BENEFITS AND RIGHTS
2.1 General Termination Rights and Benefits. If an Employee's employment by
the Bank is terminated during the Coverage Period for any reason (whether by
the Company, the Bank, or by the Employee), the Company shall pay (or cause
the Bank to pay) to the Employee the payments and benefits described in
paragraphs (a) through (c) below.
(a) Previously Earned Wages. The Company shall pay (or cause the Bank to pay)
the Employee's full salary or hourly wages to the Employee through the
Employee's Date of Termination, together with all compensation and benefits
payable to the Employee through the Date of Termination under the terms of any
compensation or benefit plan, program or arrangement maintained by the Company
and/or the Bank during such period.
(b) Previously Earned Benefits. The Company shall pay (or cause the Bank to
pay) the Employee's normal post-termination compensation and benefits to the
Employee as such payments become due. Such post-termination compensation and
benefits shall be determined under, and paid in accordance with, the Company's
and/or the Bank's retirement, insurance and other compensation or benefit plans,
programs and arrangements.
(c) Vacation. The Company shall pay (or cause the Bank to pay) to the
Employee a lump sum cash amount equal to the product of (i) the Employee's
number of unused vacation days and (ii) the Employee's Daily Earnings. An
Employee's Daily Earnings shall be an amount equal to the Employee's Weekly Pay
divided by five (5).
2.2 Severance Benefits. In addition to the payments provided for by Section
2.1(a) hereof, the Company shall pay (or cause the Bank to pay) to the
Employee the payments and benefits described in Sections 2.2(a) and 2.2(b)
below (the "Severance Benefits") upon termination of the Employee's employment
by the Bank during the Coverage Period, unless such termination is (a) by the
Bank for Cause, (b) by reason of the Employee's death or Disability, or (c) by
the Employee without Good Reason.
(a) Severance Payments. The Company shall pay (or cause the Bank to pay) to
the Employee the Employee's Weekly Pay for the Employee's Benefit Period.
(b) Continued Benefits. After an Employee's Date of Termination, the Company
shall provide (or cause the Bank to provide) the Employee with life and health
insurance benefits substantially similar to those which the Employee is
receiving immediately prior to the Employee's Date of Termination (without
giving effect to any reduction in such benefits subsequent to the Change in
Control which reduction constitutes or may constitute Good Reason) for a period
equal to the Employee's Benefit Period. Benefits otherwise receivable by an
Employee pursuant to this Section 2.2(b) shall be reduced to the extent
comparable benefits are actually received by or made available to the Employee
by any other employer(s) during the same time period for which such benefits
would be provided pursuant to this Section 2.2(b) at a cost to the Employee
that is commensurate with the cost incurred by the Employee immediately prior
to the Employee's Date of Termination (without giving effect to any increase
in costs paid by the Employee after the Change in Control which constitutes or
may constitute Good Reason); provided, however, that if the Employee becomes
employed by a new employer which maintains a medical plan that either (i) does
not cover the Employee or a family member or dependent with respect to a
preexisting condition which was covered under the applicable Company or Bank
medical plan, or (ii) does not cover the Employee or a family member or
dependent for a designated waiting period, the Employee's coverage under the
applicable Company or Bank medical plan shall continue until the earlier of
the end of the applicable period of noncoverage under the new employer's plan
or the end of the Employee's Benefit Period. The Employee shall be entitled
to elect to change his level of coverage and/or his choice of coverage options
(such as Employee only or family medical coverage) with respect to the benefits
to be provided by the Company (or by the Bank at the Company's direction) to
the Employee to the same extent that active employees of the Bank are permitted
to make such changes; provided, however, that in the event of any such change
the Employee shall pay the amount of any cost increase that would actually be
paid by an active employee of the Bank by reason of making the same change in
his level of coverage or coverage options. Any such benefits actually received
by or made available to an Employee from such other employer(s) shall be
reported to the Bank by the Employee.
2.3 Timing of Severance Payments. The payments provided for by this Article 2
shall be paid in accordance with usual payroll practices applicable to Bank
Employees.
2.4 Successors. In addition to any obligations imposed by law upon any
successor to the Company, the Company shall be obligated to require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume the Company's obligations under this Plan in the
same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place.
ARTICLE 3
PLAN ADMINISTRATION
3.1 Authority to Plan Administrator. The Plan shall be interpreted,
administered and operated by the Plan Administrator, subject to the express
provisions of the Plan.
3.2 Delegation of Duties. The Plan Administrator may delegate any of its
duties hereunder to such person or persons from time to time as it may
designate.
3.3 Engagement of Third Parties. The Plan Administrator is empowered, on behalf
of the Plan, to engage accountants, legal counsel and such other personnel as
it deems necessary or advisable to assist it in the performance of its duties
under the Plan. The functions of any such persons engaged by the Plan
Administrator shall be limited to the specified services and duties for which
they are engaged, and such persons shall have no other duties, obligations or
responsibilities under the Plan. Such persons shall exercise no discretionary
authority or discretionary control respecting the management of the Plan. All
reasonable expenses hereof shall be borne by the Company.
ARTICLE 4
CLAIMS
4.1 Claims Procedure. Claims for benefits under the Plan shall be filed with
the Plan Administrator. If any Employee or other payee claims to be entitled
to a benefit under the Plan and the Plan Administrator determines that such
claim should be denied in whole or in part, the Plan Administrator shall
notify such person of its decision in writing. Such notification will be
written in a manner calculated to be understood by such person and will
contain (a) specific reasons for the denial, (b) specific reference to
pertinent Plan provisions, (c) a description of any additional material or
information necessary for such person to perfect such claim and an explanation
of why such material or information is necessary, and (d) information as to the
steps to be taken if the person wishes to submit a request for review. Such
notification will be given within ninety (90) days after the claim is received
by the Plan Administrator. If such notification is not given within such
period, the claim will be considered denied as of the last day of such period
and such person may request a review of his claim.
4.2 Review Procedure. Within sixty (60) days after the date on which
a person receives a written notice of a denied claim (or, if applicable,
within sixty (60) days after the date on which such denial is considered to
have occurred) such person (or his duly authorized representative) may (a)file
a written request with the Plan Administrator for a review of his denied claim
and of pertinent documents and (b)submit written issues and comments to the
Plan Administrator. The Plan Administrator will notify such person of its
decision in writing. Such notification will be written in a manner calculated
to be understood by such person and will contain specific reasons for the
decision as well as specific references to pertinent Plan provisions. The
decision on review will be made within sixty (60) days after the request for
review is received by the Plan Administrator. If the decision on review is
not made within such period, the claim will be considered denied.
4.3 Claims and Review Procedures Not Mandatory. The claims procedure and
review procedure provided for in this Article 4 are provided for the use and
benefit of Employees who may choose to use such procedures, but compliance
with the provisions of this Article 4 are not mandatory for any Employee
claiming benefits under the Plan. It shall not be necessary for any Employee
to exhaust these procedures and remedies prior to bringing any legal claim or
action, or asserting any other demand, for payments or other benefits to which
such Employee claims entitlement hereunder.
ARTICLE 5
MODIFICATION AND TERMINATION
The Plan may be amended or terminated by the Board at any time; provided,
however, that the Plan may not be terminated or amended in a manner adverse to
the interests of any Employee (without the consent of the Employee) during the
Coverage Period. Upon the expiration of the Coverage Period, the Plan may not
be amended in any manner which would adversely affect the rights of any
Employee to receive any and all payments or benefits pursuant to Article 2
hereof by reason of a termination of the Employee's employment during the
Coverage Period, and the Company's obligations to make such payments and
provide such benefits shall survive any termination of the Plan.
ARTICLE 6
MISCELLANEOUS
6.1 No Right to Continued Employment. Nothing in the Plan shall be deemed
to give any Employee the right to be retained in the employ of the Bank, or to
interfere with the right of the Bank to discharge him or her at any time and
for any lawful reason, with or without notice, subject to the terms of this
Plan.
6.2 No Assignment of Benefits. Except as otherwise provided herein or by law,
no right or interest of any Employee under the Plan shall be assignable or
transferable, in whole or in part, either directly or by operation of law or
otherwise, including without limitation by execution, levy, garnishment,
attachment, pledge or in any manner; no attempted assignment or transfer
thereof shall be effective; and no right or interest of any Employee under the
Plan shall be liable for, or subject to, any obligation or liability of such
Employee.
6.3 Death. This Plan shall inure to the benefit of and be enforceable by an
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If an Employee shall
die while any amount would still be payable to the Employee hereunder (other
than amounts which, by their terms, terminate upon the death of the Employee)
if the Employee had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Plan to the
executors, personal representatives or administrators of the Employee's estate.
6.4 Incompetency. Any benefit payable to or for the benefit of a minor, an
incompetent person or other person incapable of giving a receipt therefor shall
be deemed paid when paid to such person's guardian or to the party providing
or reasonably appearing to provide for the care of such person, and such
payment shall fully discharge the Company, the Bank, the Plan Administrator
and all other parties with respect thereto.
6.5 Enforceability. If any provision of the Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof, and the Plan shall be construed and enforced as if such
provisions had not been included.
6.6 Effective Date. The Plan shall be effective as of the date it is adopted
by the Board and shall remain in effect unless and until terminated by the
Board, subject to the requirements of Article 5 hereof.
6.7 Mitigation. An Employee is not required to seek other employment or to
attempt in any way to reduce any amounts payable to the Employee by the Company
or by the Bank hereunder. Further, the amount of any payment or benefit
provided for in Article 2 hereof (other than to the extent provided in Section
2.2(b) hereof) shall not be reduced by any compensation earned by the Employee
as the result of employment by another employer, by retirement benefits, by
offset against any amount claimed to be owed by the Employee to the Company or
the Bank, or otherwise.
6.8 Modification, Waiver. A waiver by an Employee at any time of any breach
of the terms of this Plan or of compliance with any condition or provision of
this Plan to be performed by the Company or the Bank shall not be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.
6.9 Withholding Taxes. Any payments provided for hereunder shall be paid net
of any applicable withholding required under federal, state or local law and
any additional withholding to which the Employee has agreed.
6.10 Headings. The headings and captions herein are provided for reference
and convenience only, shall not be considered part of the Plan, and shall not
be employed in the construction of the Plan.
6.11 Notices. Any notice or other communication required or permitted pursuant
to the terms hereof shall be deemed to have been duly given when delivered or
mailed by United States Mail, first class, postage prepaid, addressed to the
intended recipient at his, her or its last known address.
6.12 Governing Law. This Plan shall be construed and enforced according to
the laws of the State of New York to the extent not preempted by Federal law,
which shall otherwise control.
IN WITNESS WHEREOF, the Company has caused the Plan to be duly adopted this
20th day of April, 1998.
EVERGREEN BANCORP, INC.
By: /s/ George W. Dougan
George W. Dougan,
Chairman and Chief Executive Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27 - FINANCIAL DATA SCHEDULE
<ARTICLE> 9
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1998
<CASH> 26,979
<INT-BEARING-DEPOSITS> 307
<FED-FUNDS-SOLD> 72,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 305,616
<INVESTMENTS-CARRYING> 15,716
<INVESTMENTS-MARKET> 16,488
<LOANS> 689,301
<ALLOWANCE> 12,454
<TOTAL-ASSETS> 1,067,196
<DEPOSITS> 924,955
<SHORT-TERM> 10,534
<LIABILITIES-OTHER> 18,685
<LONG-TERM> 25,395
<COMMON> 32,113
0
0
<OTHER-SE> 55,514
<TOTAL-LIABILITIES-AND-EQUITY> 982,234
<INTEREST-LOAN> 29,464
<INTEREST-INVEST> 9,938
<INTEREST-OTHER> 389
<INTEREST-TOTAL> 39,791
<INTEREST-DEPOSIT> 17,490
<INTEREST-EXPENSE> 18,551
<INTEREST-INCOME-NET> 21,240
<LOAN-LOSSES> 990
<SECURITIES-GAINS> 45
<EXPENSE-OTHER> 15,483
<INCOME-PRETAX> 8,654
<INCOME-PRE-EXTRAORDINARY> 8,654
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,918
<EPS-PRIMARY> .67
<EPS-DILUTED> .66
<YIELD-ACTUAL> 4.36
<LOANS-NON> 4,890
<LOANS-PAST> 886
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 12,831
<CHARGE-OFFS> 1,827
<RECOVERIES> 460
<ALLOWANCE-CLOSE> 12,454
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 12,454
</TABLE>
