425: HarborOne Equity Award Holders Elect Merger Consideration

HarborOne equity award holders are offered an election to receive cash, Eastern stock, or a mix for their unvested awards in the merger with Eastern Bankshares.

Summary

• HarborOne Bancorp, Inc. equity award holders are eligible to elect their preferred consideration for unvested Restricted Stock Awards (RSAs) and Performance Restricted Stock Units (PSUs) in connection with the merger with Eastern Bankshares, Inc.
• Eligible equity award holders can choose to receive 0.765 shares of Eastern common stock (Stock Consideration), $12.00 in cash per share (Cash Consideration), or a combination of both.
• All unvested HarborOne equity awards will accelerate and vest in full immediately prior to the merger closing.
• Performance-based vesting conditions on PSUs will be deemed achieved at the target level performance (100%).
• Tax withholdings related to accelerated vesting will be satisfied through netting of shares and/or withholding of cash.
• The actual merger consideration received by individual holders may be adjusted from their elections to meet an overall target ratio of 75%-85% Stock and 15%-25% Cash for the aggregate merger consideration.
• The deadline for making or modifying equity award elections is Thursday, October 23, 2025, at 5:00 pm EST.

Sentiment

Score: 7

Explanation: The filing provides clear, detailed instructions for HarborOne equity award holders regarding their options in the upcoming merger, offering flexibility and accelerated vesting. While there is a risk of proration, the process is transparent and beneficial for award holders.

Positives

• Unvested HarborOne equity awards (RSAs and PSUs) will accelerate and vest in full upon the merger closing.
• Performance-based vesting conditions for PSUs will be deemed achieved at the target level (100%).
• Equity award holders have the flexibility to elect to receive cash, Eastern common stock, or a combination for their unvested awards.

Negatives

• Individual equity award elections may be subject to proration adjustments to ensure the overall merger consideration meets a target ratio of 75%-85% Stock and 15%-25% Cash.
• If more than 85% of aggregate shares elect Stock Consideration, those who elected stock may receive proportionately fewer Eastern shares, and those who did not make an election will receive Cash Consideration.
• If less than 75% of aggregate shares elect Stock Consideration, those who elected cash may receive proportionately less cash and more Eastern shares, and those who did not make an election will receive Stock Consideration or a mix.

Risks

• No guarantee can be made as to the value of the stock consideration received relative to the value of the HarborOne equity awards and shares of HarborOne common stock being exchanged.
• All elections are subject to review and approval by HarborOne and Eastern once submitted.
• The actual Merger Consideration received may be adjusted from individual elections to meet the overall required target ratio in the merger agreement.

Future Outlook

The merger between Eastern Bankshares and HarborOne Bancorp is subject to pending regulatory approval. Following the conversion, participants will no longer hold outstanding HarborOne equity awards and will receive Eastern common stock and/or cash in their brokerage accounts.

Management Comments

• "If you have any additional questions about your HarborOne equity awards, please reach out to Mary Jane Williams, HR Dept. at 508-895-1337 or mwilliams@harborone.com or Emily Carmo, HR Dept. at 508-895-1335 or ecarmo@harborone.com."

Industry Context

This filing details a standard procedural step in the integration of employee equity compensation following a bank merger. It reflects the operational aspects of combining two financial institutions, specifically addressing how unvested equity awards are handled for employees of the acquired entity.

Stakeholder Impact

• **HarborOne Equity Award Holders (Employees/Shareholders):** Directly impacted by the election process for their unvested equity awards, with options for cash, stock, or a mix, and accelerated vesting. Potential for proration of elected consideration.
• **Eastern Bankshares Shareholders:** The overall merger consideration ratio (75%-85% stock, 15%-25% cash) impacts the dilution and cash outlay for the acquiring company.

Next Steps

• HarborOne equity award holders must make their election by October 23, 2025, 5:00 pm EST.
• The merger will proceed, subject to pending regulatory approval.
• Following the merger, Eastern common stock and/or cash will be distributed to brokerage accounts of former HarborOne equity award holders.
• Vested shares of HarborOne common stock will be handled through a separate election process, with communications expected from the relevant brokerage.

Key Dates

Keywords

Eastern Bankshares, HarborOne Bancorp, Merger, Acquisition, Equity Awards, Restricted Stock Awards, Performance Restricted Stock Units, Cash Consideration, Stock Consideration, SEC Filing 425, Employee Benefits