425: Eastern-HarborOne Merger: 401(k) Election Details

HarborOne 401(k) participants receive detailed instructions for electing cash, stock, or a combination for their shares in the upcoming merger with Eastern Bankshares.

Summary

• Eastern Bankshares, Inc. and HarborOne Bancorp, Inc. have entered into an agreement to merge, with Eastern as the surviving entity.
• HarborOne 401(k) plan participants holding HarborOne common stock are entitled to elect to receive 0.765 shares of Eastern common stock, $12.00 in cash, or a combination for each HarborOne share.
• The merger consideration is subject to proration, ensuring that no less than 75% but no more than 85% of HarborOne shares are exchanged for Stock Consideration.
• The HarborOne Bank 401(k) Plan will be terminated immediately prior to the merger, while the HarborOne Mortgage Retirement Plan is anticipated to merge into the Eastern 401(k) Plan in the first quarter of 2026.
• Post-merger, participants in the terminated 401(k) plan will have options to roll over their account balances to an Eastern 401(k), an IRA, another qualified plan, or take a cash distribution.
• A blackout period for investment activity into and out of the HarborOne Stock Fund will be implemented from October 23, 2025, 5:00 p.m. Eastern Time, until on or after November 6, 2025, to process elections.

Sentiment

Score: 5

Explanation: The document is purely informational, providing necessary procedural details for 401(k) participants regarding an already announced merger. It does not convey positive or negative sentiment about the companies' performance, but rather outlines required steps and options.

Positives

• HarborOne 401(k) participants are entitled to the same merger consideration elections (cash, stock, or a combination) as all other HarborOne shareholders, providing equitable treatment.
• Participants have flexibility to choose between cash, stock, or a mix, allowing for personalized financial planning based on their investment preferences and tax situation.
• The establishment of an Eastern Bankshares, Inc. Stock Fund within the 401(k) Plan allows for continued equity investment in the combined entity for those electing stock.
• Multiple options for rolling over 401(k) balances (to an Eastern 401(k), IRA, or another qualified plan) provide flexibility and continuity for participants' retirement savings.

Negatives

• The merger consideration is subject to proration, meaning participants may receive a different mix of cash and stock than initially elected, depending on aggregate shareholder elections.
• The HarborOne Bank 401(k) Plan will be terminated, requiring participants to make active decisions about their account balances and potentially navigate new plan structures.
• A blackout period will temporarily restrict investment activity within the HarborOne Stock Fund, potentially limiting participants' ability to make changes during that time.
• Cash distributions from the 401(k) Plan may be subject to applicable tax withholdings and penalties, which could reduce the net amount received by participants.

Risks

• **Proration Risk**: Participants may not receive their elected proportion of cash or stock due to aggregate shareholder elections, potentially altering their desired investment outcome.
• **Tax Implications**: Cash distributions from the 401(k) Plan are subject to tax withholdings and penalties, which could reduce the net amount received by participants, requiring consultation with a tax advisor.
• **Blackout Period Impact**: The temporary inability to transfer funds into or out of the HarborOne Stock Fund during the blackout period could limit participants' flexibility to react to market changes or access funds.
• **Uncertain Merger Timing**: The exact timing for merger completion is not guaranteed, as it is subject to regulatory approvals and satisfaction of other closing conditions, which could affect the schedule for 401(k) plan changes and distributions.

Future Outlook

The merger between Eastern Bankshares and HarborOne Bancorp is anticipated to be completed on October 31, 2025, pending regulatory approvals and satisfaction of closing conditions. Following the merger, the HarborOne Bank 401(k) Plan will be terminated, and participants will receive options for their account balances. The HarborOne Mortgage Retirement Plan is expected to merge into the Eastern 401(k) Plan in the first quarter of 2026, with participants being advised if this date changes.

Management Comments

• Eastern and HarborOne share deep local roots and a strong commitment to their colleagues, their customers, and the communities they serve.
• We anticipate merging the HarborOne Mortgage Retirement Plan into the Eastern 401(k) Plan in the first quarter of 2026.
• At this time, HarborOne and Eastern anticipate that the merger will be completed on October 31, 2025, assuming receipt by then of all regulatory approvals and satisfaction of other closing conditions.

Industry Context

This filing details the operational and employee benefit plan integration aspects of a regional bank merger, a common occurrence in the U.S. banking sector driven by consolidation trends, economies of scale, and market expansion strategies. The focus on 401(k) plan transitions highlights the importance of employee retention and benefit harmonization in such transactions, which are critical for successful post-merger integration.

Stakeholder Impact

• **Shareholders (HarborOne 401(k) participants)**: Will exchange HarborOne common stock for Eastern stock, cash, or a combination, subject to proration. They will need to make decisions regarding their 401(k) account balances post-merger.
• **Employees (HarborOne 401(k) participants)**: Will experience changes to their retirement plan structure, including the termination of the HarborOne Bank 401(k) Plan and the eventual merger of the HarborOne Mortgage Retirement Plan, requiring active participation in election and rollover processes.
• **Eastern Bankshares**: Will integrate HarborOne's operations and employee benefit plans, expanding its market presence and requiring administrative efforts for plan transitions.

Next Steps

• HarborOne 401(k) participants must make a merger consideration election (cash, stock, or combination) by October 23, 2025, 5:00 p.m. Eastern Time.
• Participants should review the email communication from administrator@tabulationsplus.com on or around September 24, 2025, for detailed election instructions.
• Participants should review the Blackout Notice for the specific terms of the blackout period affecting the HarborOne Stock Fund.
• After the merger, participants in the terminated HarborOne Bank 401(k) plan will receive further communications regarding options for their account balances (rollover or cash distribution).
• HarborOne Mortgage Retirement Plan participants will be advised if the anticipated Q1 2026 merger date into the Eastern 401(k) Plan changes.
• Participants are advised to consult a tax advisor for questions regarding cash distributions and their specific tax situation.

Key Dates

Keywords

Eastern Bankshares, HarborOne Bancorp, Merger, Acquisition, 401(k) Plan, Stock Consideration, Cash Consideration, Proration, Blackout Period, Retirement Plan, SEC Filing, Banking Industry