-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LGFUnuKAQeczIDLXOb9H7m/XavVjyScPFzWQmrG85rnknIONKsy6xYU47ocIlv7M tY+82MHmjVp28SFU79Pi7g== 0000912057-96-005246.txt : 19960328 0000912057-96-005246.hdr.sgml : 19960328 ACCESSION NUMBER: 0000912057-96-005246 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19960327 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: EASTERN BANCORP INC CENTRAL INDEX KEY: 0000793169 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 030304472 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-14853 FILM NUMBER: 96538973 BUSINESS ADDRESS: STREET 1: 282 WILLISTON RD STREET 2: PO BOX 700 CITY: WILLISTON STATE: VT ZIP: 05495-0700 BUSINESS PHONE: 8028799000 MAIL ADDRESS: STREET 1: 282 WILLISTON ROAD STREET 2: P O BOX 700 CITY: WILLISTON STATE: VT ZIP: 05495-0700 11-K 1 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 11-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended September 30, 1995 --------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from ______________ to ____________________ Commission file number 0-14853 ----------------- A. Full title of the plan and address of the plan if different from that of the issuer named below: Eastern Bancorp, Inc. 401(k) Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office Eastern Bancorp, Inc. 537 Central Avenue Dover, NH 03820 EASTERN BANCORP, INC. 401(K) PROFIT SHARING PLAN Financial Statements and Schedules September 30, 1995 and 1994 (With Independent Auditors' Report Thereon) INDEPENDENT AUDITORS' REPORT The Trustees Eastern Bancorp, Inc. 401(K) Profit Sharing Plan: We have audited the statements of net assets available for benefits of the Eastern Bancorp, Inc. 401(K) Profit Sharing Plan as of September 30, 1995 and 1994, and the related statements of changes in net assets available for benefits for each of the years in the three-year period ended September 30, 1995. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As discussed in note 1, effective October 1, 1994, the Plan was merged into the Eastern Bancorp, Inc. 401(K) Stock Bonus Plan, the name of which was changed to the Eastern Bancorp, Inc. 401(K) & ESOP Plan as of that date. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Eastern Bancorp, Inc. 401(K) Profit Sharing Plan as of September 30, 1995 and 1994, and the changes in net assets available for benefits for each of the years in the three-year period ended September 30, 1995, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information included in Schedules 1 and 2 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in Schedule 3 is presented for purposes of additional analysis rather than to present the changes in plan equity of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, except for the omission of historical cost from the schedule of assets held for investment purposes, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. KPMG PEAT MARWICK LLP Boston, Massachusetts March 14, 1996 EASTERN BANCORP, INC. 401(K) PROFIT SHARING PLAN Statements of Net Assets Available for Benefits September 30, 1995 and 1994
1995 1994 ---- ---- Assets: Investments, at fair value (notes 1 and 3) $ 0 3,759,015 Participant loans receivable 0 45,660 ---------- --------- Net assets available for benefits $ 0 3,804,675 ---------- --------- ---------- ---------
See accompanying notes to financial statements. EASTERN BANCORP, INC. 401(K) PROFIT SHARING PLAN Statements of Changes in Net Assets Available for Benefits Years ended September 30, 1995, 1994 and 1993
1995 1994 1993 ---- ---- ---- Additions to net assets attributed to: Investment income: Interest and dividends $ 0 78,100 178,753 Net appreciation in fair value of investments 0 234,544 484,104 ----------- --------- --------- 0 312,644 662,857 ----------- --------- --------- Contributions: Employer 0 388,228 325,197 Participants 0 310,645 253,382 Rollover 0 6,694 17,737 ----------- --------- --------- 0 705,567 596,316 ----------- --------- --------- Total additions 0 1,018,211 1,259,173 Deductions from net assets attributed to: Transfer of plan assets (note 1) 3,804,675 0 0 Benefits paid to participants 0 254,450 368,620 ----------- --------- --------- Net (decrease) increase (3,804,675) 763,761 890,553 Net assets available for benefits: Beginning of year 3,804,675 3,040,914 2,150,361 ----------- --------- --------- End of year $ 0 3,804,675 3,040,914 ----------- --------- --------- ----------- --------- ---------
See accompanying notes to financial statements. EASTERN BANCORP, INC. 401(K) PROFIT SHARING PLAN Notes to Financial Statements September 30, 1995 and 1994 (1) SIGNIFICANT ACCOUNTING POLICIES The Eastern Bancorp, Inc. 401(K) Profit Sharing Plan (the "Plan") was established effective October 1, 1988 by Eastern Bancorp, Inc. (the "Company"). The Plan provides eligible employees of the Company a thrift incentive and allows them to accumulate and invest funds on a tax advantageous basis. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Effective October 1, 1994, the Plan was merged into the Eastern Bancorp, Inc. 401(K) Stock Bonus Plan, the name of which was changed to the Eastern Bancorp, Inc. 401(K) & ESOP Plan as of that date. Therefore, all assets and liabilities held by the Plan as of October 1, 1994 were transferred as of that date. The financial statements of the Plan have been prepared on the accrual basis of accounting. (a) INVESTMENTS Investments in mutual funds are valued at the last reported sales price on the last day of the Plan year. Investments in certificates of deposits and cash reserves are valued at cost plus accrued interest which approximates market value. Investment in the common stock of the Company is stated at fair value based on the closing over-the-counter quotation on the last day of the Plan year. Purchases and sales of securities are recorded on a trade date basis. (b) USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS Management has made certain estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. (2) DESCRIPTION OF THE PLAN The following description of the Plan, prior to the merger, provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. ELIGIBILITY All employees are eligible to participate in the Plan provided they: (a) have completed one year of service with the Company in a job classification under which 1,000 hours of vesting service is credited each Plan year, and (b) are not a member of a unit of employees that is represented by a collective bargaining agent. VESTING Participants are immediately vested in their voluntary contributions. Vesting of employer contributions is based on the participant's years of credited service. A participant is 100% vested after five years of credited service. Effective September 30, 1991, all participants became vested in their account balance in connection with the Voluntary Reduction in Force Program offered by the Company. Subsequent to September 30, 1991, all company contributions are subject to the five year vesting rules and dates. (Continued) - 2 - EASTERN BANCORP, INC. 401(K) PROFIT SHARING PLAN Notes to Financial Statements CONTRIBUTIONS Effective October 1, 1989, each participant may contribute up to ten percent of his or her pre-tax compensation and up to ten percent of his or her after tax compensation to the Plan. The Company matches 50% of a participant's pre-tax contributions up to 6% of pre-tax compensation. In addition, each year the Company may make discretionary contributions which are allocated to individual participant's accounts on a pro rata basis in proportion to the participant's annual compensation compared to total annual compensation of all eligible participants. Rollover contributions are the amounts from participant accounts which were transferred to the Plan from other qualified plans not sponsored by the Company. FORFEITURES Participant forfeitures of non-vested account balances reduce the Company's liability for contributions. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contribution and an allocation of the Company's contributions and Plan earnings. Participants are entitled to the vested benefit in their account. INVESTMENT ALTERNATIVES Effective April 1, 1994 participants may direct the allocation of their contributions to the purchase of investments in the Fidelity Magellan Fund, Fidelity Puritan Fund, Fidelity Certificates of Deposit Fund, Fidelity International Growth & Income Fund, Fidelity Overseas Fund, Fidelity Managed Income Fund, Fidelity Asset Manager Fund, Fidelity Asset Manager Growth Fund, Fidelity Blue Chip Growth Fund, Fidelity Growth Company Fund, Fidelity Contra Fund, or common stock of the Company. Prior to April 1, 1994 participants could direct the allocation of their contributions to the purchase of investments in the Fidelity Magellan Fund, Fidelity Puritan Fund, Fidelity Certificates of Deposit Fund, Fidelity Cash Reserves Fund, or common stock of the Company. DISTRIBUTIONS Upon termination, a participant is entitled to a distribution equal in value to his or her vested account balance. Amounts not vested at the date of termination are forfeited. The distribution will be made as soon as practical upon termination. If a participant's aggregate account balance exceeds $3,500, the account balance cannot be distributed in whole or in part until the participant attains the normal retirement age of 65, unless the participant consents to an earlier distribution. TERMINATION OF THE PLAN Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, participants will become 100% vested in their accounts. As discussed in note 1, effective October 1, 1994, the Plan was merged and the assets and liabilities were transferred into the Eastern Bancorp, Inc. 401(K) Stock Bonus Plan. In accordance with Internal Revenue Code Section 414(l), and the regulations thereunder, the transfer of assets and liabilities constitutes a plan merger and not a plan termination. ADMINISTRATIVE EXPENSES All expenses incurred in the administration of the Plan are paid by the Company. (Continued) - 3 - EASTERN BANCORP, INC. 401(K) PROFIT SHARING PLAN Notes to Financial Statements PLAN CHANGES Effective October 1, 1994, the Plan was merged into the Eastern Bancorp, Inc. 401(K) Stock Bonus Plan, at which time the name of the Plan was changed to the Eastern Bancorp, Inc. 401(K) & ESOP Plan. At the time of the merger, the Company intended to meet the following Internal Revenue Code requirements for plan mergers: (1) the sum of the account balances in each plan equals the fair market value of the entire plan assets (2) the assets of each plan are combined to form the assets of the plan as merged; and (3) immediately after the merger, each participant in the plan as merged has an account balance equal to the sum of the account balances the participant had in the plans immediately before the merger. The plan administrator believes that these requirements were met. (3) INVESTMENTS Investments at fair value at September 30, 1994 were as follows:
1994 ---- Fidelity Magellan Fund $1,246,211 Fidelity Puritan Fund 696,410 Fidelity Certificates of Deposit Fund 577,272 Eastern Bancorp, Inc. common stock 866,806 Fidelity International Growth & Income Fund 19,219 Fidelity Overseas Fund 15,789 Fidelity Managed Income Fund 165,112 Fidelity Asset Manager Fund 26,491 Fidelity Asset Manager Growth Fund 32,060 Fidelity Blue Chip Growth Fund 54,982 Fidelity Growth Company Fund 20,713 Fidelity Contra Fund 37,950 ---------- $3,759,015 ---------- ----------
Of the above investment funds, only the Fidelity Magellan, Fidelity Puritan, and Fidelity Certificates of Deposit Funds and Eastern Bancorp, Inc. Common Stock represented 5% or more of the Plan's net assets at September 30, 1994. As discussed in note 1, all assets of the Plan were transferred to the Eastern Bancorp, Inc. 401(K) & ESOP Plan effective October 1, 1994. (4) PARTY-IN-INTEREST TRANSACTIONS There were no party-in-interest transactions which are prohibited by ERISA Section 406 and for which there is no statutory or administrative exemption. (5) TAX STATUS The Internal Revenue Service has determined and informed the Company by a letter dated March 28, 1990, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. Schedule 1 EASTERN BANCORP, INC. 401(K) PROFIT SHARING PLAN Item 27d - Schedule of Reportable Transactions Year ended September 30, 1995
(h) Current Value of Asset on (i) Net (c) Purchase (d) Selling Transaction Gain (b) Description of Asset Price Price Date (Loss) ------------------------ ----- ----- ---- ------ None
Note: Reportable transactions, for the purpose of this schedule, are: (1) Any single transaction within the Plan year, with respect to any Plan asset, in excess of 5% of the fair value of Plan assets as of the beginning of the Plan year; or (2) Series of transactions within the Plan year with respect to securities of the same issue that amount in the aggregate to more than 5% of the fair value of Plan assets at the beginning of the Plan year; or (3) Any securities transaction within the Plan year with or in conjunction with a person, if any prior or subsequent securities transaction has occurred with that same person in an amount in excess of 5% of the fair value of Plan assets at the beginning of the Plan year. The above schedule was prepared using the format prescribed by U.S. Department of Labor Regulations 2520.103-6(d)(2). Schedule 2 EASTERN BANCORP, INC. 401(K) PROFIT SHARING PLAN Item 27a - Schedule of Assets Held for Investment Purposes September 30, 1995 and 1994
1995 (c) Description/ ---- Number (e) Current (b) Identity of Issue of Shares Value --------------------- --------- ----- None
1994 (c) Description/ ---- Number (e) Current (b) Identity of Issue of Shares Value --------------------- --------- ----- Fidelity Certificates of Deposit Fund Certificates of Deposit $ 577,272 Fidelity International Growth and Income Fund 1,107.094 19,219 Fidelity Overseas Fund 552.270 15,789 Eastern Bancorp, Inc. common stock 38,954.919 866,806 Fidelity Managed Income Fund 165,112.280 165,112 Fidelity Puritan Fund 45,378.710 696,410 Fidelity Asset Manager Fund 1,816.926 26,491 Fidelity Asset Manager Growth Fund 2,304.816 32,060 Fidelity Blue Chip Growth Fund 2,097.743 54,982 Fidelity Growth Company Fund 730.607 20,713 Fidelity Magellan Fund 18,487.032 1,246,211 Fidelity Contra Fund 1,241.427 37,950 ----------- Total investments $ 3,759,015 ----------- -----------
Note: There were no assets held for investment which were both acquired and disposed of during the Plan year which would require disclosure. Note: The cost of assets held for investment purposes is not available. EASTERN BANCORP, INC. 401(K) PROFIT SHARING PLAN Supplemental Schedule of Allocation of Plan Income and Changes in Plan Equity to Investment Programs Year ended September 30, 1995
Fidelity Fidelity International Eastern Fidelity Certificates Growth Fidelity Bancorp, Inc. Managed Fidelity of Deposit and Income Overseas Common Income Puritan Fund Fund Fund Stock Fund Fund ---- ---- ---- ----- ---- ---- Net assets available for benefits at beginning of year $577,272 19,219 15,789 866,806 165,112 696,410 Transfer of plan assets (577,272) (19,219) (15,789) (866,806) (165,112) (696,410) -------- ------- ------- -------- -------- -------- Net assets available for benefits at end of year $ 0 0 0 0 0 0 -------- ------- ------- -------- -------- -------- -------- ------- ------- -------- -------- --------
Schedule 3
Fidelity Fidelity Asset Fidelity Fidelity Asset Manager Blue Chip Growth Fidelity Manager Growth Growth Company Magellan Fund Fund Fund Fund Fund ---- ---- ---- ---- ---- Net assets available for benefits at beginning of year 26,491 32,060 54,982 20,713 1,246,211 Transfer of plan assets (26,491) (32,060) (54,982) (20,713) (1,246,211) ------- ------- ------- ------- ---------- Net assets available for benefits at end of year 0 0 0 0 0 ------- ------- ------- ------- ---------- ------- ------- ------- ------- ---------- Fidelity Participant Contra Loan Fund Fund Total ---- ---- ----- Net assets available for benefits at beginning of year 37,950 45,660 3,804,675 Transfer of plan assets (37,950) (45,660) (3,804,675) ------- ------- ---------- Net assets available for benefits at end of year 0 0 0 ------- ------- ---------- ------- ------- ----------
EASTERN BANCORP, INC. 401(K) & ESOP PLAN Financial Statements and Schedules September 30, 1995 and 1994 (With Independent Auditors' Report Thereon) INDEPENDENT AUDITORS' REPORT The Trustees Eastern Bancorp, Inc. 401(K) & ESOP Plan: We have audited the statements of net assets available for benefits of the Eastern Bancorp, Inc. 401(K) & ESOP Plan (formerly known as the Eastern Bancorp, Inc. 401(K) Stock Bonus Plan), as of September 30, 1995 and 1994, and the related statements of changes in net assets available for benefits for each of the years in the three-year period ended September 30, 1995. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As discussed in note 1, effective October 1, 1994, the Eastern Bancorp, Inc. 401(K) Profit Sharing Plan was merged into the Eastern Bancorp, Inc. 401(K) Stock Bonus Plan. The name of the Plan was changed to Eastern Bancorp, Inc. 401(K) & ESOP Plan as of that date. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Eastern Bancorp, Inc. 401(K) & ESOP Plan as of September 30, 1995 and 1994, and the changes in net assets available for benefits for each of the years in the three- year period ended September 30,1995, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information included in Schedules 1 and 2 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in Schedule 3 is presented for purposes of additional analysis rather than to present the changes in plan equity of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, except for the omission of historical cost from the schedule of assets held for investment purposes, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. KPMG PEAT MARWICK LLP Boston, Massachusetts March 14, 1996 EASTERN BANCORP, INC. 401(K) & ESOP PLAN Statements of Net Assets Available for Benefits September 30, 1995 and 1994
1995 1994 ---- ---- Assets: Investments, at fair value (notes 1 and 3) $ 6,516,355 1,022,009 Participant loans receivable 60,713 0 Cash 149,426 1,061 ------------ --------- 6,726,494 1,023,070 Liabilities: Due to broker on pending trades 276,541 0 ------------ ---------- Net assets available for benefits $ 6,449,953 1,023,070 ------------ ---------- ------------ ----------
See accompanying notes to financial statements. EASTERN BANCORP, INC. 401(K) & ESOP PLAN Statements of Changes in Net Assets Available for Benefits Years ended September 30, 1995, 1994 and 1993
1995 1994 1993 ---- ---- ---- Additions to net assets attributed to: Transfer of plan assets (note 1) $ 3,804,675 0 0 ------------ ------------ ----------- Investment income: Interest and dividends 107,233 6,628 3,107 Net appreciation in fair value of investments 683,866 259,655 335,680 ------------ ------------ ----------- 791,099 266,283 338,787 ------------ ------------ ----------- Contributions: Employer 960,572 165,763 132,773 Participants 287,842 0 0 Rollover 1,692 0 0 ------------ ------------ ----------- 1,250,106 165,763 132,773 ------------ ------------ ----------- Total additions 5,845,880 432,046 471,560 Deductions from net assets attributed to: Benefits paid to participants 418,997 66,943 22,514 ------------ ------------ ----------- Net increase 5,426,883 365,103 449,046 Net assets available for benefits: Beginning of year 1,023,070 657,967 208,921 ------------ ------------ ----------- End of year $ 6,449,953 1,023,070 657,967 ------------ ------------ ----------- ------------ ------------ -----------
See accompanying notes to financial statements. EASTERN BANCORP, INC. 401(K) & ESOP PLAN Notes to Financial Statements September 30, 1995 and 1994 (1) SIGNIFICANT ACCOUNTING POLICIES The Eastern Bancorp, Inc. 401(K) Stock Bonus Plan was established effective October 1, 1988 by Eastern Bancorp, Inc. (the "Company"). Effective October 1, 1994, the Eastern Bancorp, Inc. 401(K) Profit Sharing Plan was merged into the Eastern Bancorp, Inc. 401(K) Stock Bonus Plan. The name of the Plan was changed to Eastern Bancorp, Inc. 401(K) & ESOP Plan (the "Plan") as of that date. All assets held by the Eastern Bancorp, Inc. 401(K) Profit Sharing Plan were transferred into the Plan as of October 1, 1994. The Plan provides eligible employees of the Company a thrift incentive and allows them to accumulate and invest funds on a tax advantageous basis. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). The financial statements of the Plan have been prepared on the accrual basis of accounting. (a) INVESTMENTS Investments in mutual funds are valued at the last reported sales price on the last day of the Plan year. Investments in certificates of deposits and cash reserves are valued at cost plus accrued interest which approximates market value. Investment in the common stock of the Company is stated at fair value based on the closing over-the-counter quotation on the last day of the Plan year. Purchases and sales of securities are recorded on a trade date basis. (b) USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS Management has made certain estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. (2) DESCRIPTION OF THE PLAN The following description of the Plan provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. ELIGIBILITY All employees are eligible to participate in the Plan provided they: (a) have completed one year of service with the Company in a job classification under which 1,000 hours of vesting service is credited each Plan year, and (b) are not a member of a unit of employees that is represented by a collective bargaining agent. VESTING Participants are immediately vested in their voluntary contributions. Vesting of employer contributions is based on the participant's years of credited service. A participant is 100% vested after five years of credited service. Effective September 30, 1991, all participants became vested in their account balance in connection with the Voluntary Reduction in Force Program offered by the Company. Subsequent to September 30, 1991, all company contributions are subject to the five year vesting rules and dates. (Continued) - 2 - EASTERN BANCORP, INC. 401(K) & ESOP PLAN Notes to Financial Statements CONTRIBUTIONS Prior to the Plan merger effective October 1, 1994 described in note 1, all contributions to the Plan were discretionary contributions made by the Company and were allocated to participants' accounts on the basis of compensation. Effective October 1, 1994, each participant may contribute up to ten percent of his or her pre-tax compensation and up to ten percent of his or her after tax compensation to the Plan. The Company matches 50% of a participant's pre-tax contributions up to 6% of pre-tax compensation. In addition, each year the Company may make discretionary contributions which are allocated to individual participant's accounts on a pro rata basis in proportion to the participant's annual compensation compared to total annual compensation of all eligible participants. Rollover contributions are the amounts from participant accounts which were transferred to the Plan from other qualified plans not sponsored by the Company. FORFEITURES Participant forfeitures of non-vested account balances reduce the Company's liability for contributions. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contribution and an allocation of the Company's contributions and Plan earnings. Participants are entitled to the vested benefit in their account. INVESTMENT ALTERNATIVES Prior to the Plan merger effective October 1, 1994 described in note 1, all plan assets were invested in common stock of the Company. Effective October 1, 1994 participants may direct the allocation of their contributions to the purchase of investments in the Fidelity Magellan Fund, Fidelity Puritan Fund, Fidelity Certificates of Deposit Fund, Fidelity International Growth and Income Fund, Fidelity Overseas Fund, Fidelity Managed Income Fund, Fidelity Asset Manager Fund, Fidelity Asset Manager Growth Fund, Fidelity Blue Chip Growth Fund, Fidelity Growth Company Fund, Fidelity Contra Fund, or common stock of the Company. DISTRIBUTIONS Upon termination, a participant is entitled to a distribution equal in value to his or her vested account balance. Amounts not vested at the date of termination are forfeited. The distribution will be made as soon as practical upon termination. If a participant's aggregate account balance exceeds $3,500, the account balance cannot be distributed in whole or in part until the participant attains the normal retirement age of 65, unless the participant consents to an earlier distribution. TERMINATION OF THE PLAN Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, participants will become 100% vested in their accounts. ADMINISTRATIVE EXPENSES All expenses incurred in the administration of the Plan are paid by the Company. (Continued) - 3 - EASTERN BANCORP, INC. 401(K) & ESOP PLAN Notes to Financial Statements PLAN CHANGES AND AMENDMENTS The Plan was amended and restated effective October 1, 1989. Effective October 1, 1994, Eastern Bancorp, Inc. 401(K) Profit Sharing Plan was merged into Eastern Bancorp, Inc. 401(K) Stock Bonus Plan, at which time the name of the Plan was changed to the Eastern Bancorp, Inc. 401(K) & ESOP Plan. At the time of the merger, the Company intended to meet the following Internal Revenue Code requirements for plan mergers: (1) the sum of the account balances in each plan equals the fair market value of the entire plan assets; (2) the assets of each plan are combined to form the assets of the plan as merged; and (3) immediately after the merger, each participant in the plan as merged has an account balance equal to the sum of the account balances the participant had in the plans immediately before the merger. The plan administrator believes that these requirements were met. (3) INVESTMENTS Investments at fair value at September 30, 1995 and 1994 follow:
1995 1994 ---- ---- Eastern Bancorp, Inc., Common Stock $ 2,507,042 1,022,009 Fidelity Cash Reserves 413,418 0 Fidelity Magellan Fund 1,738,585 0 Fidelity Puritan Fund 866,035 0 Fidelity International Growth and Income Fund 31,125 0 Fidelity Overseas Fund 40,105 0 Fidelity Managed Income Fund 249,227 0 Fidelity Asset Manager Fund 44,581 0 Fidelity Asset Manager Growth Fund 61,024 0 Fidelity Blue Chip Growth Fund 188,174 0 Fidelity Growth Company Fund 43,712 0 Fidelity Contra Fund 63,327 0 Certificates of Deposit: MBNA America Bank, 5.25%, due December 4, 1995 90,000 0 Chemical Bank NY, 4.5%, due February 24, 1997 90,000 0 Lasalle National Bank, 5.05%, due February 25, 1998 90,000 0 ------------ --------- $ 6,516,355 1,022,009 ------------ --------- ------------ ---------
Of the above investment funds, only the Fidelity Magellan, Fidelity Puritan, and Fidelity Cash Reserves Funds and Eastern Bancorp, Inc. Common Stock represent 5% or more of the Plan's net assets at September 30, 1995. The Eastern Bancorp, Inc. Common Stock represented 5% or more of the Plan's net assets at September 30, 1994. (4) PARTY-IN-INTEREST TRANSACTIONS There were no party-in-interest transactions which are prohibited by ERISA Section 406 and for which there is no statutory or administrative exemption. (5) TAX STATUS The Internal Revenue Service has determined and informed the Company by a letter dated March 28, 1990, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. An application for a favorable determination letter relating to the Plan, as amended, is pending with the Internal Revenue Service. (6) SUBSEQUENT EVENT Effective October 1, 1995, the Plan was amended to recognize participants' service with First Savings of New Hampshire for purposes of eligibility and vesting. On that date, First Savings of New Hampshire was merged into Vermont Federal Bank, FSB, Eastern Bancorp's wholly-owned subsidiary. Schedule 1 EASTERN BANCORP, INC. 401(K) & ESOP PLAN Item 27d - Schedule of Reportable Transactions Year ended September 30, 1995
(h) Current Value of Asset on (i) Net (c) Purchase (d) Selling Transaction Gain (b) Description of Asset Price Price Date (Loss) ------------------------ ----- ----- ---- ------ Eastern Bancorp, Inc., common stock $ 818,049 264,237 264,237 0 Fidelity Puritan Fund 202,070 105,080 105,080 12,665 Fidelity Magellan Fund 330,538 280,380 280,380 0 Fidelity Blue Chip Growth Fund 122,591 11,954 11,954 9,256 Fidelity Managed Income Fund 118,632 34,517 34,517 0 Fidelity Cash Reserves 698,637 381,508 381,508 0
Note: Reportable transactions, for the purpose of this schedule, are: (1) Any single transaction within the Plan year, with respect to any Plan asset, in excess of 5% of the fair value of Plan assets as of the beginning of the Plan year; or (2) Series of transactions within the Plan year with respect to securities of the same issue that amount in the aggregate to more than 5% of the fair value of Plan assets at the beginning of the Plan year; or (3) Any securities transaction within the Plan year with or in conjunction with a person, if any prior or subsequent securities transaction has occurred with that same person in an amount in excess of 5% of the fair value of Plan assets at the beginning of the Plan year. The above schedule was prepared using the format prescribed by U.S. Department of Labor Regulations 2520.103-6(d)(2). Schedule 2 EASTERN BANCORP, INC. 401(K) & ESOP PLAN Item 27a - Schedule of Assets Held for Investment Purposes September 30, 1995 and 1994
1995 (c) Description/ ---- Number (e) Current (b) Identity of Issue of Shares Value --------------------- --------- ----- Eastern Bancorp, Inc., common stock 110,296.96 $ 2,507,042 Fidelity Cash Reserves 413,418.24 413,418 Certificates of Deposit: MBNA America Bank, 5.25%, due December 4, 1995 90,000 Chemical Bank NY, 4.5%, due February 24, 1997 90,000 Lasalle National Bank, 5.05%, due February 25, 1998 90,000 Fidelity International Growth and Income Fund 1,723.431 31,125 Fidelity Overseas Fund 1,375.828 40,105 Fidelity Managed Income Fund 249,227.350 249,227 Fidelity Puritan Fund 51,611.158 866,035 Fidelity Asset Manager Fund 2,881.769 44,581 Fidelity Asset Manager Growth Fund 4,101.089 61,024 Fidelity Blue Chip Growth Fund 5,923.020 188,174 Fidelity Growth Company Fund 1,154.258 43,712 Fidelity Magellan Fund 18,821.968 1,738,585 Fidelity Contra Fund 1,559.394 63,327 ----------- Total investments $ 6,516,355 ----------- -----------
1994 (c) Description/ ---- Number (e) Current (b) Identity of Issue of Shares Value --------------------- --------- ----- Eastern Bancorp, Inc., common stock 45,933 1,022,009 ----------- Total investments $ 1,022,009 ----------- -----------
Note: There were no assets held for investment which were both acquired and disposed of during the Plan year which would require disclosure. Note: The cost of assets held for investment purposes is not available. EASTERN BANCORP, INC. 401(K) & ESOP PLAN Supplemental Schedule of Allocation of Plan Income and Changes in Plan Equity to Investment Programs Year ended September 30, 1995
Eastern Eastern Fidelity Bancorp, Inc. Bancorp, Inc. Fidelity International Fidelity Common Common Certificates Growth Fidelity Managed Stock Stock of Deposit and Income Overseas Income ESOP Fund 401(K) Fund Fund Fund Fund Fund --------- ----------- ---- ---- ---- ---- Net assets available for benefits at beginning of year $1,023,070* 0 0 0 0 0 Transfer of plan assets 0 866,806 577,272 19,219 15,789 165,112 Interest and dividends 18,587 16,179 24,119 0 0 13,448 Net appreciation (depreciation) in fair value of investments 49,245 41,561 0 2,088 1,281 (1,493) Contributions 325,354 210,294 128,266 8,856 12,202 54,050 Benefits paid to participants (71,007) (47,902) (116,164) (206) (580) (24,021) Interfund transfers 0 81,127 (63,462) 1,168 11,413 42,131 ---------- -------- ------- ------ ------- ------- Net assets available for benefits at end of year $1,345,249* 1,168,065** 550,031** 31,125 40,105 249,227 ---------- -------- ------- ------ ------- ------- ---------- -------- ------- ------ ------- -------
* Includes the Plan's cash balances of $149,426 and $1,061 at September 30, 1995 and 1994, respectively. ** Includes $133,387 and $280,031 invested in Fidelity Cash Reserves in the Eastern Bancorp, Inc. Common Stock 401(K) Fund and the Fidelity Certificates of Deposit Fund, respectively, at September 30, 1995. Schedule 3
Fidelity Fidelity Asset Fidelity Fidelity Fidelity Asset Manager Blue Chip Growth Fidelity Puritan Manager Growth Growth Company Magellan Fund Fund Fund Fund Fund Fund ---- ---- ---- ---- ---- ---- Net assets available for benefits at beginning of year 0 0 0 0 0 0 Transfer of plan assets 696,410 26,491 32,060 54,982 20,713 1,246,211 Interest and dividends 22,017 1,130 651 103 234 6,075 Net appreciation (depreciation) in fair value of investments 85,300 3,646 4,836 31,811 10,300 442,217 Contributions 138,529 7,278 9,567 38,833 10,743 289,241 Benefits paid to participants (59,097) (6,259) (86) (1,530) (112) (87,479) Interfund transfers (17,124) 12,295 13,996 63,975 1,834 (157,680) ------- ------- ------- ------- ------- -------- Net assets available for benefits at end of year 866,035 44,581 61,024 188,174 43,712 1,738,585 ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------- -------- Fidelity Participant Contra Loan Fund Fund Total ---- ---- ----- Net assets available for benefits at beginning of year 0 0 1,023,070 Transfer of plan assets 37,950 45,660 3,804,675 Interest and dividends 0 4,690 107,233 Net appreciation (depreciation) in fair value of investments 13,074 0 683,866 Contributions 16,893 0 1,250,106 Benefits paid to participants (2,904) (1,650) (418,997) Interfund transfers (1,686) 12,013 0 ------- ------- --------- Net assets available for benefits at end of year 63,327 60,713 6,449,953 ------- ------- --------- ------- ------- ---------
SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized. EASTERN BANCORP, INC 401(k) PLAN Date: March 27, 1996 By: /s/ Robert K. Hamme -------------------------- -------------------- Robert K. Hamme Trustee By: /s/ John A. Cobb -------------------- John A. Cobb Trustee INDEX TO EXHIBITS Exhibit Number Identity of Exhibit - ------ --------------------------------------------------- 1 Independent Auditors' Consent, dated March 14, 1996. EX-1 2 EXHIBIT 1 Exhibit 1 INDEPENDENT AUDITORS' CONSENT The Trustees Eastern Bancorp, Inc. 401(K) Profit Sharing Plan and Eastern Bancorp, Inc. 401(K) & ESOP Plan: We consent to incorporation by reference in the registration statements Nos. 33-5502, 33-19280, 33-31021, and 33-9116 on Forms S-8 and No. 33-66754 on Form S-3 of Eastern Bancorp, Inc. of our reports dated March 14, 1996, relating to the statements of net assets available for benefits of Eastern Bancorp, Inc. 401(K) Profit Sharing Plan and Eastern Bancorp, Inc. 401(K) & ESOP Plan (formerly Eastern Bancorp, Inc. 401(K) Stock Bonus Plan) as of September 30, 1995 and 1994, and the related statements of changes in net assets available for benefits for each of the years in the three-year period ended September 30, 1995, which reports appear in the September 30, 1995, annual report on Form 11-K of Eastern Bancorp, Inc. 401(K) Plan. The audits referred to in our reports dated March 14, 1996, included the related supplemental schedules. These supplemental schedules are the responsibility of the Plans' management. Our responsibility is to express an opinion on these supplemental schedules based our audits. In our opinion, except for the omission of historical cost data from the supplemental schedules of assets held for investment purposes, such supplemental schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. KPMG PEAT MARWICK LLP Boston, Massachusetts March 14, 1996 -----END PRIVACY-ENHANCED MESSAGE-----