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

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

Summary

• Eastern Bankshares, Inc. (Eastern) and HarborOne Bancorp, Inc. (HarborOne) have entered into a merger agreement, with Eastern as the surviving entity.
• HarborOne 401(k) Plan participants holding HarborOne shares are entitled to elect to receive Eastern stock, cash, or a combination for their shares.
• For each HarborOne common stock share, participants can elect 0.765 shares of Eastern common stock (Stock Consideration) or $12.00 in cash (Cash Consideration).
• The merger agreement stipulates that no less than 75% and no more than 85% of HarborOne common stock will be exchanged for Stock Consideration, potentially leading to proration of individual elections.
• The election period for 401(k) participants ends at 5:00 p.m. Eastern Time on Thursday, October 23, 2025.
• Failure to make an election will result in plan trustees making the election proportionally on behalf of the participant.
• Immediately prior to the merger's completion, the HarborOne Bank 401(k) Plan will be terminated, offering participants options for rollovers or cash distributions.
• The HarborOne Mortgage Retirement Plan will not be terminated but is anticipated to merge into the Eastern 401(k) Plan in the first quarter of 2026.
• A blackout period for investment activity into and out of the HarborOne Stock Fund will commence after October 23, 2025, and is anticipated to end on or after November 6, 2025.
• The merger is anticipated to be completed on October 31, 2025, subject to regulatory approvals and other closing conditions.

Sentiment

Score: 7

Explanation: The filing provides clear and comprehensive guidance for 401(k) participants regarding a significant corporate event, which is positive for transparency and participant understanding. While it outlines potential complexities like proration and blackout periods, the overall tone is informative and proactive in addressing participant concerns.

Positives

• Provides clear and detailed instructions for HarborOne 401(k) participants regarding their merger consideration elections.
• Offers participants flexibility with options to elect cash, stock, or a combination for their HarborOne shares.
• Outlines post-merger options for 401(k) account balances, including rollovers to other plans or IRAs, and cash distributions.

Negatives

• Individual election outcomes may differ from participant choices due to proration rules, which mandate 75%-85% stock consideration.
• A blackout period will temporarily restrict investment activity within the HarborOne Stock Fund, impacting participants' ability to transfer funds.
• Cash distributions from the 401(k) Plan are subject to applicable tax withholdings and penalties, requiring participants to consult tax advisors.

Risks

• Proration risk: Participants may receive a different mix of cash and stock than elected if aggregate elections fall outside the 75%-85% stock consideration range.
• Tax implications: Cash distributions from the 401(k) Plan are subject to tax withholdings and potential penalties, varying by location.
• Uncertainty of exact merger timing: While anticipated for October 31, 2025, the completion date is subject to regulatory approvals and other conditions, which cannot be guaranteed.

Future Outlook

The merger between Eastern and HarborOne is anticipated to complete on October 31, 2025. Following the merger, the HarborOne Bank 401(k) Plan will be terminated, and participants will be provided options for their account balances, including rollovers to Eastern's 401(k) or other retirement accounts. The HarborOne Mortgage Retirement Plan is expected to merge into the Eastern 401(k) Plan in Q1 2026.

Management Comments

• Eastern and HarborOne share deep local roots and a strong commitment to their colleagues, customers, and communities.
• The companies cannot predict or guarantee the exact timing for completion of the merger, though it is anticipated for October 31, 2025.

Industry Context

This filing details the procedural aspects for 401(k) participants in the context of a bank merger, reflecting ongoing consolidation trends within the financial services industry where larger institutions acquire smaller ones to expand market share and achieve operational efficiencies.

Stakeholder Impact

• HarborOne 401(k) participants: Directly impacted by election choices, potential proration, 401(k) plan termination, and blackout period.
• HarborOne Mortgage Retirement Plan participants: Will see their plan merge into Eastern's 401(k) in Q1 2026.
• Shareholders (via 401(k) stock fund): Will exchange HarborOne shares for Eastern stock, cash, or a combination.

Next Steps

• HarborOne 401(k) participants to review email communication from administrator@tabulationsplus.com around September 24, 2025.
• HarborOne 401(k) participants to make their Merger Consideration election by October 23, 2025, 5:00 p.m. ET.
• John Hancock to implement a blackout period on investment activity into and out of the HarborOne Stock Fund after October 23, 2025.
• Completion of the merger between Eastern and HarborOne, anticipated on October 31, 2025.
• Post-merger, additional communications will be sent to 401(k) participants regarding distribution options.
• HarborOne Mortgage Retirement Plan to merge into the Eastern 401(k) Plan in Q1 2026.

Key Dates

Keywords

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