-----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, D5R3lztTlS2QxqdDShr5y8m/cjfU38jKUxgljIMv0EKl8qGFsWXvMcoLHWY1Rqbd SeJdGPp1xo+rOC58HOddsA== 0000912057-96-027323.txt : 19961125 0000912057-96-027323.hdr.sgml : 19961125 ACCESSION NUMBER: 0000912057-96-027323 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961113 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961122 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-14853 FILM NUMBER: 96670875 BUSINESS ADDRESS: STREET 1: 537 CENRAL AVE STREET 2: PO BOX 700 CITY: DOVER STATE: NH ZIP: 03820 BUSINESS PHONE: 8028799000 MAIL ADDRESS: STREET 1: 282 WILLISTON ROAD STREET 2: P O BOX 700 CITY: WILLISTON STATE: VT ZIP: 05495-0700 8-K 1 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): November 13, 1996 ----------------- EASTERN BANCORP, INC. - --------------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Delaware - --------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 0-14853 03-0304472 ------- ---------- (Commission File Number) (IRS Employer Identification No.) 537 Central Avenue, P.O. Box 700, Dover, New Hampshire 03820 - --------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (802) 879-9000 - --------------------------------------------------------------------------- Registrant's Telephone Number, Including Area Code Not Applicable - --------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) ITEM 5. OTHER EVENTS. On November 13, 1996, Eastern Bancorp, Inc., a Delaware corporation ("Eastern"), entered into an Agreement and Plan of Reorganization (the "Merger Agreement") by and among Eastern, Vermont Financial Services Corp., a Delaware corporation ("VFSC"), and Vermont Federal Bank, FSB, a federally chartered stock savings bank and a wholly-owned subsidiary of Eastern ("Vermont Federal"). Pursuant to the Merger Agreement, Eastern will merge with and into VFSC (the "Merger"), and Vermont Federal will become a wholly-owned subsidiary of VFSC. In connection with the Merger, each outstanding share of common stock, $.01 par value per share, of Eastern ("Eastern Common Stock") will be entitled to receive merger consideration, payable in cash or shares of common stock, $.01 par value per share, of VFSC ("VFSC Common Stock") or a combination of cash and VFSC Common Stock equal to the sum of (i) $7.25 plus (ii) the product of 0.49 and the average closing bid price per share of VFSC Common Stock on the Nasdaq Stock Market during the 20-trading-day period ending on the fifth business day prior to the effective date of the Merger (the "Average VFSC Closing Price"), subject to the maximum and minimum collars described below. If the Average VFSC Closing Price is equal to or greater than $39.96, the acquisition price per share of Eastern Common stock will be fixed at $26.83 and if the Average VFSC Closing Price is equal to or less than $29.54 but not less than $26.06, the acquisition price per share of Eastern Common Stock will be fixed at $21.72. Assuming the Average VFSC Closing Price is less than or equal to $39.96 and greater than or equal to $29.54, the aggregate consideration to be paid in connection with the Merger will consist of approximately $26.65 million and approximately 1.8 million shares of VFSC Common Stock. The number of shares of VFSC Common Stock will be decreased if the Average VFSC Closing Price equals or exceeds the $39.96 maximum and increased if the Average VFSC Closing Price equals or falls below the $29.54 minimum. If the Average VFSC Closing Price is less than $26.06, Eastern may terminate the Merger unless VFSC agrees to issue additional shares of VFSC Common Stock such that the adjusted acquisition price per share of Eastern Common Stock is equal to $21.72. Eastern's stockholders may elect to receive cash, VFSC Common Stock or a combination of cash and VFSC Common Stock, subject to PRO RATA adjustment as set forth in the Merger Agreement to ensure that the total cash consideration to be paid and the total number of shares of VFSC Common Stock to be issued will equal the aggregate cash amount and share number referred to above. The Merger is intended to constitute a tax-free reorganization, and no gain or loss is expected to be recognized by VFSC, Eastern or Vermont Federal. The Merger will be accounted for as a purchase. -1- The consummation of the Merger and the transactions contemplated by the Merger Agreement are subject to certain conditions customary in transactions of this nature, including, among others, approval by the stockholders of each of VFSC and Eastern and receipt of all necessary regulatory approvals. No assurance can be given that the Merger will be consummated. Each party also has the right to terminate the Merger Agreement under certain customary circumstances, including failure to consummate the Merger by November 30, 1997. In conjunction with the parties' signing of the Merger Agreement, Eastern granted VFSC an option, exercisable under certain conditions, to purchase up to 732,425 shares of Eastern Common Stock, at $21.00 per share each, subject to adjustment in certain events. If the option becomes exercisable, then Eastern would also be required to pay to VFSC a cash payment of $1 million. Four of Eastern's nine Directors, including Eastern's chairman, chief executive officer and executive vice president, who currently hold in the aggregate approximately 465,487 shares of Eastern Common Stock (not including options to purchase additional shares), or approximately 12.66% of the currently outstanding shares of Eastern Common Stock, have agreed in a separate letter agreement to vote all of their shares in favor of the Merger and against any other competing transaction. Certain additional information regarding the Merger is contained in Eastern's press release dated November 14, 1996, included as an exhibit hereto and incorporated herein. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. See Index to Exhibits attached hereto. -2- 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 hereunto duly authorized. Date: November 21, 1996 EASTERN BANCORP, INC. (Registrant) /s/ John A. Cobb -------------------------------- By: John A. Cobb, President and Chief Executive Officer -3- INDEX TO EXHIBITS Exhibit Number - ------ 99.1 Press Release of Eastern Bancorp, Inc. dated November 14, 1996. -4- EX-99.1 2 EXHIBIT 99.1 PRESS RELEASE EXHIBIT 99.1 EASTERN BANCORP, INC. John Cobb, CEO or Dave Humphrey, EVP (802) 879-9000 FOR IMMEDIATE RELEASE: VERMONT FINANCIAL SERVICES CORP. AND EASTERN BANCORP, INC. ANNOUNCE MERGER DOVER, NEW HAMPSHIRE/NOVEMBER 14, 1996...Vermont Financial Services Corp. (NASDAW:VFSC) and Eastern Bancorp, Inc. (NASDAQ:EBCP) announced today that they have signed a definitive agreement under which VFSC (VFSC) will acquire EBCP in a tax-free merger involving an exchange of stock and cash. EBCP is the holding company for Vermont Federal Bank, FSB, which operates 15 branches in Vermont and 10 branches in southern New Hampshire through First Savings of New Hampshire, an operating division of Vermont Federal Bank. The acquisition will result in VFSC becoming a $2.1 billion asset bank holding company. The acquisition will add an additional $640 million in retail and commercial deposits to VFSC's existing franchise. Significantly, in Vermont the transaction will give VFSC a 19% statewide deposit market share and a 17% deposit market share in Chittenden County, the state's largest market. In southern New Hampshire, the combined company will continue to do business as First Savings of New Hampshire, providing VFSC with attractive new markets for the full range of its commercial banking products and services. The acquisition, which is expected to close in the second quarter of 1997, will be accounted for by the purchase method of accounting, and is expected to be accretive to VFSC's earnings by 1997 calendar year end. Under the terms of the agreement, EBCP shareholders will receive stock and/or cash equal to the sum of $7.25 plus the product of 0.49 times the average closing bid price of VFSC common stock for a twenty trading day period ending shortly before the effective time of the merger. Prior to closing each EBCP shareholder may elect to receive either stock or cash or a combination of both in exchange for the EBCP shares. The acquisition price will be identical without regard to whether a shareholder has elected to receive stock or cash or a combination. Based on a twenty day average closing bid price of VFSC common stock at November 13, 1996 of $34.66, the transaction would be valued at $89.1 million and EBCP shareholders would be entitled to receive stock and/or cash equal to approximately $24.23 for each share of EBCP common stock. The total amount of cash to be paid and the number of shares to be issued by VFSC in the acquisition are fixed, subject to certain collar adjustments noted below. Based upon EBCP's unaudited September 30, 1996 financial statements and the transaction value indicated above, the price payable to EBCP shareholders would represent 1.40 times book value and, excluding the one-time special statutory assessment to be paid by EBCP to capitalize the Savings Association Insurance Fund, 15.6 times trailing twelve month earnings. John D. Hashagen, Jr., President and Chief Executive Officer of VFSC said "This merger creates a $2 billion community banking company with a #1 position in Vermont and smaller positions in its two adjacent states. The improved market position of the combined company, the improved operating efficiencies and the cross-selling opportunities make this a compelling merger story. On top of this, both companies have similar traditions of high quality customer service and commitment to their employees. We are confident that this merger will be beneficial to our customers, employees and shareholders." John Cobb, President and Chief Executive Officer of Eastern Bancorp adds "This merger with Vermont Financial Services Corp. represents a truly extraordinary opportunity for the shareholders and employees of Eastern Bancorp and its subsidiary, Vermont Federal Bank. In combining with VFSC our organization will be recognized as a part of one of the strongest and most profitable emerging regional bank holding companies in New England. Vermont Federal Bank and First Savings customers will now have access to an expanded array of financial services including commercial and small business loans, trust services as well as additional service outlets in which to do business. With a significant presence in Vermont, New Hampshire and western Massachusetts, our current employees will have added opportunities for continued personal and professional growth." In terms of price adjustment provisions to the acquisition price, if VFSC's average closing prices during the applicable twenty-trading day valuation period is between $29.54 and $39.96, each share of EBCP common stock shall become and be converted into stock or cash equal to the sum of $7.25 plus the product of 0.49 times such average closing price of VFSC common stock. If the average VFSC closing price during the valuation period is greater than or equal to $39.96, then the acquisition price shall equal $26.83. If the average VFSC closing price during the valuation period is less than or equal to $29.54 but greater than or equal to $26.06, then the acquisition price shall equal $21.72. If the average VFSC closing price during the valuation period is below $26.06, the acquisition price shall equal the sum of $7.25 plus the product of 0.5553 times such average closing price of VFSC common stock. Notwithstanding the foregoing, if VFSC's average closing price during the valuation period is below $26.06, EBCP can terminate the transaction unless VFSC agrees to adopt $21.72 as the adjusted acquisition price. The definitive agreement has been unanimously approved by the boards of directors of both VFSC and EBCP. The acquisition is now subject to approval by the shareholders of both companies and regulatory authorities, including the Federal Reserve Board, as well as usual and customary closing conditions. EBCP has granted VFSC an option, exercisable under certain conditions, to purchase a number of newly issued shares of EBCP common stock equal to 19.9 percent of the total number of currently outstanding EBCP shares. If the option becomes exercisable, then EBCP would also be required to pay to VFSC a cash payment of $1 million. Tucker Anthony Incorporated is serving as financial adviser to Vermont Financial Services Corp., and McConnell, Budd and Downes, Inc. is representing Eastern Bancorp, in the transaction. Vermont Financial Services Corp., headquartered in Brattleboro, Vermont is the holding company for Vermont National Bank and United Bank, a Massachusetts savings bank. Vermont National Bank and United Bank combined have 38 banking offices extending from western Massachusetts to northern Vermont. VFSC, through its banking subsidiaries, provides a full range of commercial and personal banking products and services to individuals and businesses throughout Vermont, western Massachusetts and adjacent markets. Contacts: John D. Hashagen, President & CEO Vermont Financial Services Corp. (802) 258-4000, or John Cobb, CEO or David Humphrey, EVP Eastern Bancorp, Inc. (802) 879-9000 -----END PRIVACY-ENHANCED MESSAGE-----