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## 14. BORROWINGS 

A summary of the borrowings, including the outstanding balance of lines of credit, from the FHLBB is as follows: 

Short- and long-term borrowings from the FHLBB consist of both fixed and adjustable rate borrowings and are collateralized by all stock in the FHLBB and a blanket lien on qualified collateral consisting primarily of loans with first mortgages secured by one-to-four family properties, certain pledged investment securities and other qualified assets. The carrying value of loans pledged as collateral was $236,254,000 and $194,659,000 at December 31, 2002 and 2001, respectively. The FHLBB at its discretion can call $101,000,000 of the CompanyGLYPH<213>s long-term borrowings. The Company, through its bank subsidiaries, has an available line of credit with FHLBB of $12,980,000 at December 31, 2002 and 2001. The Company had no outstanding balance on its line of credit with the FHLBB at December 31, 2002 or 2001. 

The Company utilizes other borrowings in the form of treasury, tax and loan deposits and repurchase agreements secured by U.S. government or agency securities. Balances outstanding at December 31 are shown in the table below: 

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## 15. EMPLOYEE BENEFIT PLANS 

## Pension and Other Postretirement Plans 

The CompanyGLYPH<213>s postretirement plans provide medical and life insurance to certain eligible retired employees. It is the CompanyGLYPH<213>s policy to fund the cost of postretirement health care and life insurance plans as premiums are paid; therefore, there are no plan assets. 

On October 17, 2000, the Company terminated the defined-benefit noncontributory pension plan, which covered substantially all eligible employees over 21 years of age with 1 year of employment. Total plan assets of $5,168,000 were distributed to eligible 

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## DECEMBER 31, 2002 

## DECEMBER 31, 2001 

employees during the first half of 2001. During 2000, the Company recognized $437,000 of net income due to the over accrual of the benefit obligation at the date of plan termination. 

Information regarding the postretirement benefit plan is as follows: 

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For measurement purposes, a 6.2% annual rate of increase in the per capita cost to cover health care benefits was assumed for 2003. The rate was assumed to decrease gradually to a 6.0% annual growth rate after 3 years, and remain at a 6.0% annual growth rate thereafter. A 1.0% increase or decrease in the assumed health care cost trends rate would not have a material impact on the accumulated postretirement benefit obligation due to a built-in cap on annual benefits. 

The Company also sponsors an unfunded, non-qualified supplemental retirement plan for certain officers. The agreement provides that participants will be paid a life annuity upon retirement or death. Prior to September 1, 1999, the plan provided supplemental retirement payments over 15 years upon retirement or death. 

The expense of this supplemental plan was $403,000, $399,000 and $274,000 in 2002, 2001 and 2000, respectively. The accrued liability of this plan at December 31, 2002 and 2001 was $1,788,000 and $1,562,000, respectively. 

## 401(k) / Profit Sharing Plan 

The Company has a 401(k) plan whereby substantially all employees participate in the plan. Employees may contribute up to 15% of their compensation subject to certain limits based on federal tax laws. The Company makes matching contributions and may make additional contributions subject to the discretion of the Board of Directors. For the years ended December 31, 2002, 2001 and 2000, aggregate expenses under the plan amounted to $772,000, $527,000 and $214,000, respectively. 

## Bank Recognition and Retention Plan 

The Company maintained a Bank Recognition and Retention Plan (GLYPH<210>BRRPGLYPH<211>) as a method of providing certain officers and other employees of the Company with a proprietary interest in the Company. During 1994, the Company contributed funds to the BRRP to enable such Company officers and employees to acquire, in the aggregate, 56,045 shares of common stock of the Company. The Company recognizes expense related to the BRRP based on the vesting schedule. Participants are vested at a rate of 20% per year commencing 1 year from the date of the award. Total expense related to the BRRP was $5,712 for 2002, 2001 and 2000. 

