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SCHEDULE 13(d)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Under the Securities Act of 1934
EASTERN BANCORP, INC.
COMMON STOCK
CUSIP NO. 276269107
Date of event which requires filing this statement: November 13, 1996
1. NAME OF REPORTING PERSON: John A. Cobb
c/o Eastern Bancorp, Inc.
537 Central Avenue
P.O. Box 700
Dover, New Hampshire 03820
E. David Humphrey
c/o Eastern Bancorp, Inc.
537 Central Avenue
P.O. Box 700
Dover, New Hampshire 03820
W. Stevens Sheppard
c/o Eastern Bancorp, Inc.
537 Central Avenue
P.O. Box 700
Dover, New Hampshire 03820
James M. Sutton
6402 South Troy Circle
Englewood, CO 80111
(303) 771-6661
2. MEMBER OF GROUP: 2(a)
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2(b) X
------
See Item 4 below
3. SEC USE ONLY:
4. SOURCE OF FUNDS: See Item 3 below
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5. DISCLOSURE OF LEGAL PROCEEDINGS: N/A
6. CITIZENSHIP: Each of the Reporting
Persons is a United States
Citizen
7. SOLE VOTING POWER: See Item 3 below.
8. SHARED VOTING POWER: See Item 3 below.
9. SOLE DISPOSITIVE POWER: See Item 3 below.
10. SHARED DISPOSITIVE POWER: See Item 3 below.
11. AGGREGATE AMOUNT BENEFICIALLY See Item 5 below
OWNED BY REPORTING PERSON:
12. CHECK IF AGGREGATE IN ROW 11. N/A
EXCLUDES CERTAIN SHARES:
13. PERCENTAGE OF BENEFICIAL 18.1%
OWNERSHIP:
14. TYPE OF REPORTING PERSON: Each of the Reporting
Persons is an Individual
(IN)
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ITEM 1. SECURITY AND ISSUER
The class of equity securities to which this Statement on
Schedule 13D relates is the common stock, $.01 par value per share
(the "Common Stock"), of Eastern Bancorp, Inc. (the "Issuer"), a
Delaware corporation, with its principal executive offices located
at 537 Central Avenue, P.O. Box 700, Dover, New Hampshire 03820.
ITEM 2. IDENTITY AND BACKGROUND
This Statement is being filed by certain officers and
directors of the Issuer (collectively, the "Reporting Persons"),
as more fully described below.
John A. Cobb. Mr. Cobb has been a Director and the President
of the Issuer since August 1988 and its Chief Executive Officer
since February 1989. Mr. Cobb is also a Director of Vermont
Federal Bank, FSB, a federally chartered stock savings bank and a
wholly-owned subsidiary of the Issuer ("VFB"). Mr. Cobb's
business address is c/o Eastern Bancorp, Inc., 537 Central Avenue,
P.O. Box 700, Dover, New Hampshire 03820.
E. David Humphrey. Mr. Humphrey has been a Director and
Executive Vice President of the Issuer since 1992. Mr. Humphrey
is also the President, Chief Operating Officer and a Director of
VFB. Mr. Humphrey's business address is c/o Eastern Bancorp,
Inc., 537 Central Avenue, P.O. Box 700, Dover, New Hampshire
03820.
W. Stevens Sheppard. Mr. Sheppard has been a Director of the
Issuer since 1989 and currently serves as its Chairman. Mr.
Sheppard's business address is c/o Eastern Bancorp, Inc., 537
Central Avenue, P.O. Box 700, Dover, New Hampshire 03820.
James M. Sutton. Mr. Sutton has been a Director of the
Issuer since November 1995. Mr. Sutton is the President of
Ameribank and the Chairman of American Bankshares, Inc., and his
address is 6402 South Troy Circle, Englewood, Colorado 80111.
Each of the Reporting Persons is a citizen of the United
States.
During the last five years, none of the Reporting Persons has
been (a) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (b) a party to a civil
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proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject
to a judgement, decree or final order enjoining future violations
of, or prohibiting or mandating activity subject to, federal or
state securities laws or finding any violation with respect to
such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
This Statement relates to an aggregate of 709,409.79 shares
of Common Stock beneficially owned by the Reporting Persons (See
Item 5 hereof). The Reporting Persons acquired such shares of
Common Stock on various dates and for the consideration described
below.
Each of Messrs. Cobb, Humphrey and Sheppard acquired the
shares of Common Stock set forth opposite their name in Item 5
hereof pursuant to (i) the grant and/or exercise of stock options
under the Issuer's stock option plans, and (ii) several of the
Issuer's equity-based compensation plans such as its 401(k)/ESOP.
Mr. Sutton acquired an aggregate of 5,250 shares of Common Stock
pursuant to (i) the grant and/or exercise of stock options under
the Issuer's stock option plans, and (ii) certain of the Issuer's
equity-based compensation plans such as the Directors' Deferred
Compensation Plan. Mr. Sutton acquired an aggregate of 356,100
shares of Common Stock in open market purchases from May, 1990
through June, 1996 at purchase prices ranging from $3.50 to $23.50
per share.
ITEM 4. PURPOSE OF TRANSACTION.
As stated above, this Statement relates to an aggregate of
709,409.79 shares of Common Stock beneficially owned by the
Reporting Persons (See Item 5 hereof).
On November 13, 1996, the Issuer entered into an Agreement
and Plan of Reorganization (the "Merger Agreement") among the
Issuer, VFB, and Vermont Financial Services Corp., a Delaware
corporation ("VFSC"), pursuant to which the Issuer will be merged
with and into VFSC (the "Merger"). In consideration of, and as a
condition to, VFSC entering into the Merger Agreement, each of the
Reporting Persons executed a Stockholders' Agreement, dated
November 13, 1996, pursuant to which each Reporting Person, among
other things, agreed to vote or cause to be voted all shares of
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Common Stock that such Reporting Person is entitled to vote for
the approval of the Merger and against any other transaction of
this kind involving the Issuer. The Stockholders' Agreement is
attached as Exhibit 1 hereto, and its description herein is
qualified in its entirety by reference thereto.
Other than as described above, none of the Reporting Persons
has any plans or proposals which relate to, or may result in, any
of the matters listed in paragraphs (a) through (j) of Item 4 of
Schedule 13D (although the Reporting Persons reserve the right to
develop such plans).
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
As a result of the Stockholders' Agreement, the Reporting
Persons may be deemed to beneficially own, within the meaning of
Rule 13d-3 of the Securities Exchange Act of 1934, as amended, an
aggregate of 709,409.79 shares of Common Stock of the Issuer,
which would represent approximately 18.1% of the shares of Common
Stock outstanding (based on the number of shares of Common Stock
outstanding on October 31, 1996, as set forth in the Merger
Agreement). The Reporting Persons, individually, beneficially own
the number of shares of Common Stock set forth in the table below.
Each of the Reporting Persons disclaims beneficial ownership of
the shares of Common Stock beneficially owned by the other
Reporting Persons and by VFSC.
Number of Shares Percent of
Name of of Common Stock Outstanding Shares
Reporting Person Beneficially Owned(1) of Common Stock(1)
---------------- --------------------- ------------------
John A. Cobb(2) 195,888.64 5.1%
E. David Humphrey(3) 94,411.15 2.5%
W. Stevens Sheppard(4) 57,760 1.6%
James M. Sutton(5) 361,350 9.8%
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(1) As of October 31, 1996.
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(2) Includes 412 shares of Common Stock owned by Mr. Cobb's wife
with respect to which Mr. Cobb shares voting and dispositive
power. Also includes 157,500 shares of Common Stock issuable
upon the exercise of stock options that are exercisable
within 60 days of October 31, 1996.
(3) Includes 3,000 shares of Common Stock owned by Mr. Humphrey's
wife with respect to which Mr. Humphrey shares voting and
dispositive power. Also includes 75,000 shares of Common
Stock issuable upon the exercise of stock options that are
exercisable within 60 days of October 31, 1996.
(4) Includes 4,500 shares of Common Stock owned by Mr. Sheppard's
wife over which Mr. Sheppard has no voting or dispositive
power. Also includes 8,250 shares of Common Stock issuable
upon the exercise of stock options that are exercisable
within 60 days of October 31, 1996.
(5) Includes 267,750 shares of Common Stock owned by JMS
Investors, Ltd., a Family Limited Partnership of which
Mr. Sutton is the general partner. Mr. Sutton disclaims
beneficial ownership of these shares, except to the extent of
his direct pecuniary interest therein. Also includes an
aggregate of 4,500 shares owned by Mr. Sutton as custodian
for his children. Also includes 3,300 shares owned by
Mr. Sutton's wife and an aggregate of 63,900 shares owned by
Mr. Sutton's wife as custodian for their children over which
Mr. Sutton has no voting or dispositive power. Also includes
5,250 shares owned by American Bankshares, Inc. over which
Mr. Sutton shares voting and dispositive power. Also
includes 5,250 shares of Common stock issuable upon the
exercise of stock options that are exercisable within 60 days
of October 31, 1996.
Except as described herein, none of the Reporting Persons
beneficially owns or has acquired any shares of Common Stock of
the Issuer within the past 60 days.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
Except for the Stockholders' Agreement, none of the Reporting
Persons has entered into any contracts, arrangements,
understandings or relationships (legal or otherwise) with any
person with respect to any securities of the Issuer, including,
but not limited to, transfer or voting of any securities, finders
fees, joint ventures, loan or option arrangements, puts or calls,
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guarantees of profits, division of profits or loss, or the giving
or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit No. Description
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1 Stockholders' Agreement, dated
November 13, 1996, among Vermont
Financial Services Corporation and
John A. Cobb, E. David Humphrey, W.
Stevens Sheppard and James M. Sutton.
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SIGNATURE
After reasonable inquiry and to the best of their knowledge
and belief of each of the undersigned, each of the undersigned
certifies, in his individual capacity, that the information set
forth in this Statement is true, complete and correct.
November 25, 1996
/s/ John A. Cobb
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John A. Cobb
/s/ E. David Humphrey
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E. David Humphrey
/s/ W. Stevens Sheppard
-----------------------------------
W. Stevens Sheppard
/s/ James M. Sutton
-----------------------------------
James M. Sutton
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November 13, 1996
Vermont Financial Services Corporation
100 Main Street
Brattleboro, Vermont 05302
Ladies and Gentlemen:
Each of the undersigned (each a "STOCKHOLDER") beneficially
owns and has sole or shared voting power with respect to the
number of shares of the common stock, par value $0.01 per share
(the "SHARES"), of Eastern Bancorp, Inc., a Delaware corporation
(the "SELLER"), indicated opposite such Stockholder's name on
Schedule 1 attached hereto.
Simultaneously with the execution of this letter agreement,
Vermont Financial Services Corporation (the "BUYER"), the Seller
and Seller's wholly owned banking subsidiary, Vermont Federal
Bank, FSB, are entering into an Agreement and Plan of
Reorganization (the "ACQUISITION AGREEMENT") providing, among
other things, for the acquisition of Seller by Buyer by means of a
merger of Seller with and into Buyer (the "Acquisition"). Each of
the undersigned understands that the Buyer has undertaken and will
continue to undertake substantial expenses in connection with the
negotiation and execution of the Acquisition Agreement and the
subsequent actions necessary to consummate the transactions
contemplated by the Acquisition Agreement.
In consideration of, and as a condition to, the Buyer's
entering into the Acquisition Agreement, and in consideration of
the expenses incurred and to be incurred by the Buyer in
connection therewith, each Stockholder and the Buyer agree as
follows:
1. Each Stockholder, while this letter agreement is in
effect, shall vote or cause to be voted all of the Shares that
such Stockholder shall be entitled to so vote, whether such Shares
are beneficially owned by such Stockholder on the date of this
letter agreement or are subsequently acquired, whether pursuant to
the exercise of stock options or otherwise, at any meeting of the
Seller's stockholders that may be called and held following the
date hereof, for the approval of the Acquisition, as contemplated
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under the Acquisition Agreement, and shall vote or cause to be
voted all such Shares, at any such meeting or any other meeting of
the Seller's stockholders following the date hereof, against the
approval of any other agreement providing for a merger,
acquisition, consolidation, sale of a material amount of assets or
other business combination of the Seller or any of its
subsidiaries with any person or entity other than the Buyer or any
subsidiary of the Buyer. Each Stockholder, while this letter
agreement is in effect, shall support at all times, and recommend
for approval by the Seller's stockholders, the Acquisition,
subject only to the Stockholder's fiduciary obligations as a
director of the Seller, to the extent applicable, and each
Stockholder shall conduct himself or herself, both publicly and
privately, in a manner consistent with such support and
recommendation of the Acquisition, subject to the Stockholder's
fiduciary obligations as a director of the Seller as applicable.
2. Each Stockholder will not sell, assign, transfer or
otherwise dispose of (including, without limitation, by the
creation of a Lien (as defined in paragraph 4 below)), or permit
to be sold, assigned, transferred or otherwise disposed of, any
Shares owned by such Stockholder, whether such Shares are held by
the Stockholder on the date of this letter agreement or are
subsequently acquired, whether pursuant to the exercise of stock
options or otherwise, except (a) transfers by will or by operation
of law (in which case this letter agreement shall bind the
transferee), (b) transfers pursuant to any pledge agreement
(subject to the pledgee agreeing in writing to be bound by the
terms of this letter agreement), (c) transfers, in connection with
estate planning purposes, to members of the Stockholder's
immediate family, trusts or charitable organizations, subject to
the transferee agreeing in writing to be bound by the terms of
this letter agreement, and (d) such other transfers (subject to
the transferee agreeing in writing to be bound by the terms of
this letter agreement) as may be consented to by the Buyer, which
consent shall not be unreasonably withheld. The Buyer shall have
the option to elect to have any existing certificates representing
Shares subject to this letter agreement canceled and reissued
bearing the following legend:
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THIS CERTIFICATE, AND THE SHARES REPRESENTED
HEREBY, ARE SUBJECT TO CERTAIN VOTING AND TRANSFER
RESTRICTIONS CONTAINED IN A VOTING AGREEMENT BY AND
BETWEEN VERMONT FINANCIAL SERVICES CORPORATION AND
THE BENEFICIAL OWNER OF THESE SHARES AND MAY BE
TRANSFERRED ONLY IN COMPLIANCE THEREWITH. COPIES
OF THE ABOVE-REFERENCED AGREEMENT ARE ON FILE AT
THE OFFICES OF VERMONT FINANCIAL SERVICES
CORPORATION
3. The agreements contained herein are intended to relate to
restrictions on transferability and to continue only for such time
as may reasonably be necessary to obtain all necessary approvals,
including all necessary shareholder and governmental approvals, of
the Acquisition and all other transactions contemplated by the
Acquisition Agreement.
4. Each Stockholder represents that such Stockholder has the
complete and unrestricted power and the unqualified right to enter
into and perform the terms of this letter agreement. Each
Stockholder further represents that this letter agreement
(assuming this letter agreement constitutes a valid and binding
agreement of the Buyer) constitutes a valid and binding agreement
with respect to the Stockholder, enforceable against the
Stockholder in accordance with its terms, except as enforcement
may be limited by general principles of equity whether applied in
a court of law or a court of equity and by bankruptcy, insolvency
and similar laws affecting creditors' rights and remedies
generally. Except as may be set forth in Schedule 1, each
Stockholder represents that such Stockholder beneficially owns the
number of Shares indicated opposite such Stockholder's name on
said Schedule 1, free and clear of any liens, claims, charges or
other encumbrances or restrictions of any kind whatsoever
("Liens"), and has sole or shared, and otherwise unrestricted,
voting power with respect to such Shares.
5. Notwithstanding anything herein to the contrary, the
agreements contained herein shall remain in full force and effect
until the earlier of (a) the consummation of the Acquisition or
(b) the termination of the Acquisition Agreement in accordance
with Article VIII thereof.
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6. Each Stockholder has signed this letter agreement
intending to be bound hereby. Each Stockholder expressly agrees
that this letter agreement shall be specifically enforceable in
any court of competent jurisdiction in accordance with its terms
against such Stockholder. All of the covenants and agreements
contained in this letter agreement shall be binding upon, and
inure to the benefit of, the respective parties and their
permitted successors, assigns, heirs, executors, administrators
and other legal representatives, as the case may be.
7. This letter agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of
which together shall constitute one and the same instrument.
8. No waivers of any breach of this letter agreement
extended by the Buyer to any Stockholder shall be construed as a
waiver of any rights or remedies of the Buyer with respect to any
other Stockholder with respect to Shares held by such other
Stockholder or with respect to any subsequent breach of the
Stockholder or any other Stockholder hereunder.
9. This letter agreement is deemed to be signed as a sealed
instrument and is to be governed by the laws of the State of
Delaware, without giving effect to the principles of conflicts of
laws thereof. If any provision hereof is deemed unenforceable,
the enforceability of the other provisions hereof shall not be
affected.
If the foregoing accurately reflects your understanding of
the subject matter intended to be contained herein, please confirm
your agreement by signing this letter where indicated below.
Very truly yours,
/s/ John A. Cobb /s/ E. David Humphrey
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John A. Cobb E. David Humphrey
/s/ W. Stevens Sheppard /s/ James M. Sutton
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W. Stevens Sheppard James M. Sutton
AGREED TO AND ACCEPTED BY AS
OF THE DATE FIRST ABOVE WRITTEN
VERMONT FINANCIAL SERVICES CORPORATION
By:/s/ John D. Hashagen, Jr.
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John D. Hashagen, Jr.
President and Chief Executive Officer
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SCHEDULE I
Number of Shares
Name of of Common Stock Shares
Stockholder Beneficially Owned* Subject to Pledge
--------------- ------------------- ------------------
John A. Cobb(2) 195,888.64 0
E. David Humphrey(3) 94,411.15 0
W. Stevens Sheppard(4) 57,801 0
James M. Sutton(5) 361,350 0
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* Includes the following number of shares subject to stock
options: Mr. Cobb; 157,500; Mr. Humphrey: 75,000;
Mr. Sheppard: 8,250; and Mr. Sutton: 5,250.
