<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended September 30, 1995
---------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ______________ to ____________________
Commission file number 0-14853
-----------------
A. Full title of the plan and address of the plan if different from that
of the issuer named below:
Eastern Bancorp, Inc.
401(k) Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office
Eastern Bancorp, Inc.
537 Central Avenue
Dover, NH 03820
<PAGE>
EASTERN BANCORP, INC. 401(K)
PROFIT SHARING PLAN
Financial Statements and Schedules
September 30, 1995 and 1994
(With Independent Auditors' Report Thereon)
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Trustees
Eastern Bancorp, Inc. 401(K) Profit Sharing Plan:
We have audited the statements of net assets available for benefits of the
Eastern Bancorp, Inc. 401(K) Profit Sharing Plan as of September 30, 1995 and
1994, and the related statements of changes in net assets available for benefits
for each of the years in the three-year period ended September 30, 1995. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As discussed in note 1, effective October 1, 1994, the Plan was merged into the
Eastern Bancorp, Inc. 401(K) Stock Bonus Plan, the name of which was changed to
the Eastern Bancorp, Inc. 401(K) & ESOP Plan as of that date.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Eastern
Bancorp, Inc. 401(K) Profit Sharing Plan as of September 30, 1995 and 1994, and
the changes in net assets available for benefits for each of the years in the
three-year period ended September 30, 1995, in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information included in
Schedules 1 and 2 is presented for the purpose of additional analysis and is not
a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The fund information in Schedule 3 is presented for purposes of
additional analysis rather than to present the changes in plan equity of each
fund. The supplemental schedules and fund information have been subjected to
the auditing procedures applied in the audits of the basic financial statements
and, in our opinion, except for the omission of historical cost from the
schedule of assets held for investment purposes, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
KPMG PEAT MARWICK LLP
Boston, Massachusetts
March 14, 1996
<PAGE>
EASTERN BANCORP, INC. 401(K) PROFIT SHARING PLAN
Statements of Net Assets Available for Benefits
September 30, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Assets:
Investments, at fair value (notes 1 and 3) $ 0 3,759,015
Participant loans receivable 0 45,660
---------- ---------
Net assets available for benefits $ 0 3,804,675
---------- ---------
---------- ---------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
EASTERN BANCORP, INC. 401(K) PROFIT SHARING PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended September 30, 1995, 1994 and 1993
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends $ 0 78,100 178,753
Net appreciation in fair value
of investments 0 234,544 484,104
----------- --------- ---------
0 312,644 662,857
----------- --------- ---------
Contributions:
Employer 0 388,228 325,197
Participants 0 310,645 253,382
Rollover 0 6,694 17,737
----------- --------- ---------
0 705,567 596,316
----------- --------- ---------
Total additions 0 1,018,211 1,259,173
Deductions from net assets attributed to:
Transfer of plan assets (note 1) 3,804,675 0 0
Benefits paid to participants 0 254,450 368,620
----------- --------- ---------
Net (decrease) increase (3,804,675) 763,761 890,553
Net assets available for benefits:
Beginning of year 3,804,675 3,040,914 2,150,361
----------- --------- ---------
End of year $ 0 3,804,675 3,040,914
----------- --------- ---------
----------- --------- ---------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
EASTERN BANCORP, INC. 401(K) PROFIT SHARING PLAN
Notes to Financial Statements
September 30, 1995 and 1994
(1) SIGNIFICANT ACCOUNTING POLICIES
The Eastern Bancorp, Inc. 401(K) Profit Sharing Plan (the "Plan") was
established effective October 1, 1988 by Eastern Bancorp, Inc. (the
"Company"). The Plan provides eligible employees of the Company a thrift
incentive and allows them to accumulate and invest funds on a tax
advantageous basis. It is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA"). Effective October 1,
1994, the Plan was merged into the Eastern Bancorp, Inc. 401(K) Stock Bonus
Plan, the name of which was changed to the Eastern Bancorp, Inc. 401(K) &
ESOP Plan as of that date. Therefore, all assets and liabilities held by
the Plan as of October 1, 1994 were transferred as of that date.
The financial statements of the Plan have been prepared on the accrual
basis of accounting.
(a) INVESTMENTS
Investments in mutual funds are valued at the last reported sales
price on the last day of the Plan year. Investments in
certificates of deposits and cash reserves are valued at cost
plus accrued interest which approximates market value.
Investment in the common stock of the Company is stated at fair
value based on the closing over-the-counter quotation on the last
day of the Plan year. Purchases and sales of securities are
recorded on a trade date basis.
(b) USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
Management has made certain estimates and assumptions relating to the
reporting of assets and liabilities and the disclosure of contingent
assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual
results could differ from those estimates.
(2) DESCRIPTION OF THE PLAN
The following description of the Plan, prior to the merger, provides only
general information. Participants should refer to the Plan document for a
more complete description of the Plan's provisions.
ELIGIBILITY
All employees are eligible to participate in the Plan provided they:
(a) have completed one year of service with the Company in a job
classification under which 1,000 hours of vesting service is credited
each Plan year, and
(b) are not a member of a unit of employees that is represented by a
collective bargaining agent.
VESTING
Participants are immediately vested in their voluntary contributions.
Vesting of employer contributions is based on the participant's years of
credited service. A participant is 100% vested after five years of
credited service.
Effective September 30, 1991, all participants became vested in their
account balance in connection with the Voluntary Reduction in Force Program
offered by the Company. Subsequent to September 30, 1991, all company
contributions are subject to the five year vesting rules and dates.
(Continued)
<PAGE>
- 2 -
EASTERN BANCORP, INC. 401(K) PROFIT SHARING PLAN
Notes to Financial Statements
CONTRIBUTIONS
Effective October 1, 1989, each participant may contribute up to ten
percent of his or her pre-tax compensation and up to ten percent of his or
her after tax compensation to the Plan. The Company matches 50% of a
participant's pre-tax contributions up to 6% of pre-tax compensation. In
addition, each year the Company may make discretionary contributions which
are allocated to individual participant's accounts on a pro rata basis in
proportion to the participant's annual compensation compared to total
annual compensation of all eligible participants.
Rollover contributions are the amounts from participant accounts which were
transferred to the Plan from other qualified plans not sponsored by the
Company.
FORFEITURES
Participant forfeitures of non-vested account balances reduce the Company's
liability for contributions.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution
and an allocation of the Company's contributions and Plan earnings.
Participants are entitled to the vested benefit in their account.
INVESTMENT ALTERNATIVES
Effective April 1, 1994 participants may direct the allocation of their
contributions to the purchase of investments in the Fidelity Magellan Fund,
Fidelity Puritan Fund, Fidelity Certificates of Deposit Fund, Fidelity
International Growth & Income Fund, Fidelity Overseas Fund, Fidelity
Managed Income Fund, Fidelity Asset Manager Fund, Fidelity Asset Manager
Growth Fund, Fidelity Blue Chip Growth Fund, Fidelity Growth Company Fund,
Fidelity Contra Fund, or common stock of the Company.
Prior to April 1, 1994 participants could direct the allocation of their
contributions to the purchase of investments in the Fidelity Magellan Fund,
Fidelity Puritan Fund, Fidelity Certificates of Deposit Fund, Fidelity Cash
Reserves Fund, or common stock of the Company.
DISTRIBUTIONS
Upon termination, a participant is entitled to a distribution equal in
value to his or her vested account balance. Amounts not vested at the date
of termination are forfeited. The distribution will be made as soon as
practical upon termination. If a participant's aggregate account balance
exceeds $3,500, the account balance cannot be distributed in whole or in
part until the participant attains the normal retirement age of 65, unless
the participant consents to an earlier distribution.
TERMINATION OF THE PLAN
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
plan termination, participants will become 100% vested in their accounts.
As discussed in note 1, effective October 1, 1994, the Plan was merged and
the assets and liabilities were transferred into the Eastern Bancorp, Inc.
401(K) Stock Bonus Plan. In accordance with Internal Revenue Code Section
414(l), and the regulations thereunder, the transfer of assets and
liabilities constitutes a plan merger and not a plan termination.
ADMINISTRATIVE EXPENSES
All expenses incurred in the administration of the Plan are paid by the
Company.
(Continued)
<PAGE>
- 3 -
EASTERN BANCORP, INC. 401(K) PROFIT SHARING PLAN
Notes to Financial Statements
PLAN CHANGES
Effective October 1, 1994, the Plan was merged into the Eastern Bancorp,
Inc. 401(K) Stock Bonus Plan, at which time the name of the Plan was
changed to the Eastern Bancorp, Inc. 401(K) & ESOP Plan. At the time of
the merger, the Company intended to meet the following Internal Revenue
Code requirements for plan mergers: (1) the sum of the account balances in
each plan equals the fair market value of the entire plan assets (2) the
assets of each plan are combined to form the assets of the plan as merged;
and (3) immediately after the merger, each participant in the plan as
merged has an account balance equal to the sum of the account balances the
participant had in the plans immediately before the merger. The plan
administrator believes that these requirements were met.
(3) INVESTMENTS
Investments at fair value at September 30, 1994 were as follows:
<TABLE>
<CAPTION>
1994
----
<S> <C>
Fidelity Magellan Fund $1,246,211
Fidelity Puritan Fund 696,410
Fidelity Certificates of Deposit Fund 577,272
Eastern Bancorp, Inc. common stock 866,806
Fidelity International Growth & Income Fund 19,219
Fidelity Overseas Fund 15,789
Fidelity Managed Income Fund 165,112
Fidelity Asset Manager Fund 26,491
Fidelity Asset Manager Growth Fund 32,060
Fidelity Blue Chip Growth Fund 54,982
Fidelity Growth Company Fund 20,713
Fidelity Contra Fund 37,950
----------
$3,759,015
----------
----------
</TABLE>
Of the above investment funds, only the Fidelity Magellan, Fidelity
Puritan, and Fidelity Certificates of Deposit Funds and Eastern Bancorp,
Inc. Common Stock represented 5% or more of the Plan's net assets at
September 30, 1994. As discussed in note 1, all assets of the Plan were
transferred to the Eastern Bancorp, Inc. 401(K) & ESOP Plan effective
October 1, 1994.
(4) PARTY-IN-INTEREST TRANSACTIONS
There were no party-in-interest transactions which are prohibited by ERISA
Section 406 and for which there is no statutory or administrative
exemption.
(5) TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated March 28, 1990, that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code (IRC).
The Plan has been amended since receiving the determination letter.
However, the plan administrator believes that the Plan is designed and is
currently being operated in compliance with the applicable requirements of
the IRC.
<PAGE>
Schedule 1
EASTERN BANCORP, INC. 401(K) PROFIT SHARING PLAN
Item 27d - Schedule of Reportable Transactions
Year ended September 30, 1995
<TABLE>
<CAPTION>
(h) Current
Value
of Asset on (i) Net
(c) Purchase (d) Selling Transaction Gain
(b) Description of Asset Price Price Date (Loss)
------------------------ ----- ----- ---- ------
<S> <C> <C> <C> <C>
None
</TABLE>
Note: Reportable transactions, for the purpose of this schedule, are:
(1) Any single transaction within the Plan year, with respect to any Plan
asset, in excess of 5% of the fair value of Plan assets as of the
beginning of the Plan year; or
(2) Series of transactions within the Plan year with respect to securities
of the same issue that amount in the aggregate to more than 5% of the
fair value of Plan assets at the beginning of the Plan year; or
(3) Any securities transaction within the Plan year with or in conjunction
with a person, if any prior or subsequent securities transaction has
occurred with that same person in an amount in excess of 5% of the
fair value of Plan assets at the beginning of the Plan year.
The above schedule was prepared using the format prescribed by U.S. Department
of Labor Regulations 2520.103-6(d)(2).
<PAGE>
Schedule 2
EASTERN BANCORP, INC. 401(K) PROFIT SHARING PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
September 30, 1995 and 1994
<TABLE>
<CAPTION>
1995 (c) Description/
---- Number (e) Current
(b) Identity of Issue of Shares Value
--------------------- --------- -----
<S> <C> <C>
None
</TABLE>
<TABLE>
<CAPTION>
1994 (c) Description/
---- Number (e) Current
(b) Identity of Issue of Shares Value
--------------------- --------- -----
<S> <C> <C>
Fidelity Certificates of Deposit Fund Certificates of
Deposit $ 577,272
Fidelity International Growth and Income Fund 1,107.094 19,219
Fidelity Overseas Fund 552.270 15,789
Eastern Bancorp, Inc. common stock 38,954.919 866,806
Fidelity Managed Income Fund 165,112.280 165,112
Fidelity Puritan Fund 45,378.710 696,410
Fidelity Asset Manager Fund 1,816.926 26,491
Fidelity Asset Manager Growth Fund 2,304.816 32,060
Fidelity Blue Chip Growth Fund 2,097.743 54,982
Fidelity Growth Company Fund 730.607 20,713
Fidelity Magellan Fund 18,487.032 1,246,211
Fidelity Contra Fund 1,241.427 37,950
-----------
Total investments $ 3,759,015
-----------
-----------
</TABLE>
Note: There were no assets held for investment which were both acquired and
disposed of during the Plan year which would require disclosure.
Note: The cost of assets held for investment purposes is not available.
<PAGE>
EASTERN BANCORP, INC. 401(K) PROFIT SHARING PLAN
Supplemental Schedule of Allocation of Plan Income and
Changes in Plan Equity to Investment Programs
Year ended September 30, 1995
<TABLE>
<CAPTION>
Fidelity
Fidelity International Eastern Fidelity
Certificates Growth Fidelity Bancorp, Inc. Managed Fidelity
of Deposit and Income Overseas Common Income Puritan
Fund Fund Fund Stock Fund Fund
---- ---- ---- ----- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net assets available for
benefits at beginning
of year $577,272 19,219 15,789 866,806 165,112 696,410
Transfer of plan assets (577,272) (19,219) (15,789) (866,806) (165,112) (696,410)
-------- ------- ------- -------- -------- --------
Net assets available for
benefits at end of year $ 0 0 0 0 0 0
-------- ------- ------- -------- -------- --------
-------- ------- ------- -------- -------- --------
</TABLE>
<PAGE>
Schedule 3
<TABLE>
<CAPTION>
Fidelity
Fidelity Asset Fidelity Fidelity
Asset Manager Blue Chip Growth Fidelity
Manager Growth Growth Company Magellan
Fund Fund Fund Fund Fund
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net assets available for
benefits at beginning
of year 26,491 32,060 54,982 20,713 1,246,211
Transfer of plan assets (26,491) (32,060) (54,982) (20,713) (1,246,211)
------- ------- ------- ------- ----------
Net assets available for
benefits at end of year 0 0 0 0 0
------- ------- ------- ------- ----------
------- ------- ------- ------- ----------
<CAPTION>
Fidelity Participant
Contra Loan
Fund Fund Total
---- ---- -----
<S> <C> <C> <C>
Net assets available for
benefits at beginning
of year 37,950 45,660 3,804,675
Transfer of plan assets (37,950) (45,660) (3,804,675)
------- ------- ----------
Net assets available for
benefits at end of year 0 0 0
------- ------- ----------
------- ------- ----------
</TABLE>
<PAGE>
EASTERN BANCORP, INC. 401(K) & ESOP PLAN
Financial Statements and Schedules
September 30, 1995 and 1994
(With Independent Auditors' Report Thereon)
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Trustees
Eastern Bancorp, Inc. 401(K) & ESOP Plan:
We have audited the statements of net assets available for benefits of the
Eastern Bancorp, Inc. 401(K) & ESOP Plan (formerly known as the Eastern Bancorp,
Inc. 401(K) Stock Bonus Plan), as of September 30, 1995 and 1994, and the
related statements of changes in net assets available for benefits for each of
the years in the three-year period ended September 30, 1995. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As discussed in note 1, effective October 1, 1994, the Eastern Bancorp, Inc.
401(K) Profit Sharing Plan was merged into the Eastern Bancorp, Inc. 401(K)
Stock Bonus Plan. The name of the Plan was changed to Eastern Bancorp, Inc.
401(K) & ESOP Plan as of that date.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Eastern
Bancorp, Inc. 401(K) & ESOP Plan as of September 30, 1995 and 1994, and the
changes in net assets available for benefits for each of the years in the three-
year period ended September 30,1995, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information included in
Schedules 1 and 2 is presented for the purpose of additional analysis and is not
a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The fund information in Schedule 3 is presented for purposes of
additional analysis rather than to present the changes in plan equity of each
fund. The supplemental schedules and fund information have been subjected to
the auditing procedures applied in the audits of the basic financial statements
and, in our opinion, except for the omission of historical cost from the
schedule of assets held for investment purposes, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
KPMG PEAT MARWICK LLP
Boston, Massachusetts
March 14, 1996
<PAGE>
EASTERN BANCORP, INC. 401(K) & ESOP PLAN
Statements of Net Assets Available for Benefits
September 30, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Assets:
Investments, at fair value (notes 1 and 3) $ 6,516,355 1,022,009
Participant loans receivable 60,713 0
Cash 149,426 1,061
------------ ---------
6,726,494 1,023,070
Liabilities:
Due to broker on pending trades 276,541 0
------------ ----------
Net assets available for benefits $ 6,449,953 1,023,070
------------ ----------
------------ ----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
EASTERN BANCORP, INC. 401(K) & ESOP PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended September 30, 1995, 1994 and 1993
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Additions to net assets attributed to:
Transfer of plan assets (note 1) $ 3,804,675 0 0
------------ ------------ -----------
Investment income:
Interest and dividends 107,233 6,628 3,107
Net appreciation in fair value
of investments 683,866 259,655 335,680
------------ ------------ -----------
791,099 266,283 338,787
------------ ------------ -----------
Contributions:
Employer 960,572 165,763 132,773
Participants 287,842 0 0
Rollover 1,692 0 0
------------ ------------ -----------
1,250,106 165,763 132,773
------------ ------------ -----------
Total additions 5,845,880 432,046 471,560
Deductions from net assets attributed to:
Benefits paid to participants 418,997 66,943 22,514
------------ ------------ -----------
Net increase 5,426,883 365,103 449,046
Net assets available for benefits:
Beginning of year 1,023,070 657,967 208,921
------------ ------------ -----------
End of year $ 6,449,953 1,023,070 657,967
------------ ------------ -----------
------------ ------------ -----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
EASTERN BANCORP, INC. 401(K) & ESOP PLAN
Notes to Financial Statements
September 30, 1995 and 1994
(1) SIGNIFICANT ACCOUNTING POLICIES
The Eastern Bancorp, Inc. 401(K) Stock Bonus Plan was established effective
October 1, 1988 by Eastern Bancorp, Inc. (the "Company"). Effective October
1, 1994, the Eastern Bancorp, Inc. 401(K) Profit Sharing Plan was merged
into the Eastern Bancorp, Inc. 401(K) Stock Bonus Plan. The name of the
Plan was changed to Eastern Bancorp, Inc. 401(K) & ESOP Plan (the "Plan")
as of that date. All assets held by the Eastern Bancorp, Inc. 401(K)
Profit Sharing Plan were transferred into the Plan as of October 1, 1994.
The Plan provides eligible employees of the Company a thrift incentive and
allows them to accumulate and invest funds on a tax advantageous basis. It
is subject to the provisions of the Employee Retirement Income Security Act
of 1974 ("ERISA").
The financial statements of the Plan have been prepared on the accrual
basis of accounting.
(a) INVESTMENTS
Investments in mutual funds are valued at the last reported sales
price on the last day of the Plan year. Investments in
certificates of deposits and cash reserves are valued at cost
plus accrued interest which approximates market value.
Investment in the common stock of the Company is stated at fair
value based on the closing over-the-counter quotation on the last
day of the Plan year. Purchases and sales of securities are
recorded on a trade date basis.
(b) USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
Management has made certain estimates and assumptions relating to
the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial
statements in conformity with generally accepted accounting
principles. Actual results could differ from those estimates.
(2) DESCRIPTION OF THE PLAN
The following description of the Plan provides only general information.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
ELIGIBILITY
All employees are eligible to participate in the Plan provided they:
(a) have completed one year of service with the Company in a job
classification under which 1,000 hours of vesting service is credited
each Plan year, and
(b) are not a member of a unit of employees that is represented by a
collective bargaining agent.
VESTING
Participants are immediately vested in their voluntary contributions.
Vesting of employer contributions is based on the participant's years of
credited service. A participant is 100% vested after five years of
credited service.
Effective September 30, 1991, all participants became vested in their
account balance in connection with the Voluntary Reduction in Force Program
offered by the Company. Subsequent to September 30, 1991, all company
contributions are subject to the five year vesting rules and dates.
(Continued)
<PAGE>
- 2 -
EASTERN BANCORP, INC. 401(K) & ESOP PLAN
Notes to Financial Statements
CONTRIBUTIONS
Prior to the Plan merger effective October 1, 1994 described in note 1, all
contributions to the Plan were discretionary contributions made by the
Company and were allocated to participants' accounts on the basis of
compensation.
Effective October 1, 1994, each participant may contribute up to ten
percent of his or her pre-tax compensation and up to ten percent of his or
her after tax compensation to the Plan. The Company matches 50% of a
participant's pre-tax contributions up to 6% of pre-tax compensation. In
addition, each year the Company may make discretionary contributions which
are allocated to individual participant's accounts on a pro rata basis in
proportion to the participant's annual compensation compared to total
annual compensation of all eligible participants.
Rollover contributions are the amounts from participant accounts which were
transferred to the Plan from other qualified plans not sponsored by the
Company.
FORFEITURES
Participant forfeitures of non-vested account balances reduce the Company's
liability for contributions.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution
and an allocation of the Company's contributions and Plan earnings.
Participants are entitled to the vested benefit in their account.
INVESTMENT ALTERNATIVES
Prior to the Plan merger effective October 1, 1994 described in note 1, all
plan assets were invested in common stock of the Company.
Effective October 1, 1994 participants may direct the allocation of their
contributions to the purchase of investments in the Fidelity Magellan Fund,
Fidelity Puritan Fund, Fidelity Certificates of Deposit Fund, Fidelity
International Growth and Income Fund, Fidelity Overseas Fund, Fidelity
Managed Income Fund, Fidelity Asset Manager Fund, Fidelity Asset Manager
Growth Fund, Fidelity Blue Chip Growth Fund, Fidelity Growth Company Fund,
Fidelity Contra Fund, or common stock of the Company.
DISTRIBUTIONS
Upon termination, a participant is entitled to a distribution equal in
value to his or her vested account balance. Amounts not vested at the date
of termination are forfeited. The distribution will be made as soon as
practical upon termination. If a participant's aggregate account balance
exceeds $3,500, the account balance cannot be distributed in whole or in
part until the participant attains the normal retirement age of 65, unless
the participant consents to an earlier distribution.
TERMINATION OF THE PLAN
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
plan termination, participants will become 100% vested in their accounts.
ADMINISTRATIVE EXPENSES
All expenses incurred in the administration of the Plan are paid by the
Company.
(Continued)
<PAGE>
- 3 -
EASTERN BANCORP, INC. 401(K) & ESOP PLAN
Notes to Financial Statements
PLAN CHANGES AND AMENDMENTS
The Plan was amended and restated effective October 1, 1989. Effective
October 1, 1994, Eastern Bancorp, Inc. 401(K) Profit Sharing Plan was
merged into Eastern Bancorp, Inc. 401(K) Stock Bonus Plan, at which time
the name of the Plan was changed to the Eastern Bancorp, Inc. 401(K) & ESOP
Plan. At the time of the merger, the Company intended to meet the
following Internal Revenue Code requirements for plan mergers: (1) the sum
of the account balances in each plan equals the fair market value of the
entire plan assets; (2) the assets of each plan are combined to form the
assets of the plan as merged; and (3) immediately after the merger, each
participant in the plan as merged has an account balance equal to the sum
of the account balances the participant had in the plans immediately before
the merger. The plan administrator believes that these requirements were
met.
(3) INVESTMENTS
Investments at fair value at September 30, 1995 and 1994 follow:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Eastern Bancorp, Inc., Common Stock $ 2,507,042 1,022,009
Fidelity Cash Reserves 413,418 0
Fidelity Magellan Fund 1,738,585 0
Fidelity Puritan Fund 866,035 0
Fidelity International Growth and Income Fund 31,125 0
Fidelity Overseas Fund 40,105 0
Fidelity Managed Income Fund 249,227 0
Fidelity Asset Manager Fund 44,581 0
Fidelity Asset Manager Growth Fund 61,024 0
Fidelity Blue Chip Growth Fund 188,174 0
Fidelity Growth Company Fund 43,712 0
Fidelity Contra Fund 63,327 0
Certificates of Deposit:
MBNA America Bank, 5.25%, due
December 4, 1995 90,000 0
Chemical Bank NY, 4.5%, due
February 24, 1997 90,000 0
Lasalle National Bank, 5.05%, due
February 25, 1998 90,000 0
------------ ---------
$ 6,516,355 1,022,009
------------ ---------
------------ ---------
</TABLE>
Of the above investment funds, only the Fidelity Magellan, Fidelity
Puritan, and Fidelity Cash Reserves Funds and Eastern Bancorp, Inc. Common
Stock represent 5% or more of the Plan's net assets at September 30, 1995.
The Eastern Bancorp, Inc. Common Stock represented 5% or more of the Plan's
net assets at September 30, 1994.
(4) PARTY-IN-INTEREST TRANSACTIONS
There were no party-in-interest transactions which are prohibited by ERISA
Section 406 and for which there is no statutory or administrative
exemption.
(5) TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated March 28, 1990, that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code (IRC).
The Plan has been amended since receiving the determination letter.
However, the plan administrator believes that the Plan is designed and is
currently being operated in compliance with the applicable requirements of
the IRC. An application for a favorable determination letter relating to
the Plan, as amended, is pending with the Internal Revenue Service.
(6) SUBSEQUENT EVENT
Effective October 1, 1995, the Plan was amended to recognize participants'
service with First Savings of New Hampshire for purposes of eligibility and
vesting. On that date, First Savings of New Hampshire was merged into
Vermont Federal Bank, FSB, Eastern Bancorp's wholly-owned subsidiary.
<PAGE>
Schedule 1
EASTERN BANCORP, INC. 401(K) & ESOP PLAN
Item 27d - Schedule of Reportable Transactions
Year ended September 30, 1995
<TABLE>
<CAPTION>
(h) Current
Value
of Asset on (i) Net
(c) Purchase (d) Selling Transaction Gain
(b) Description of Asset Price Price Date (Loss)
------------------------ ----- ----- ---- ------
<S> <C> <C> <C> <C>
Eastern Bancorp, Inc., common stock $ 818,049 264,237 264,237 0
Fidelity Puritan Fund 202,070 105,080 105,080 12,665
Fidelity Magellan Fund 330,538 280,380 280,380 0
Fidelity Blue Chip Growth Fund 122,591 11,954 11,954 9,256
Fidelity Managed Income Fund 118,632 34,517 34,517 0
Fidelity Cash Reserves 698,637 381,508 381,508 0
</TABLE>
Note: Reportable transactions, for the purpose of this schedule, are:
(1) Any single transaction within the Plan year, with respect to any
Plan asset, in excess of 5% of the fair value of Plan assets as
of the beginning of the Plan year; or
(2) Series of transactions within the Plan year with respect to
securities of the same issue that amount in the aggregate to more
than 5% of the fair value of Plan assets at the beginning of the
Plan year; or
(3) Any securities transaction within the Plan year with or in
conjunction with a person, if any prior or subsequent securities
transaction has occurred with that same person in an amount in
excess of 5% of the fair value of Plan assets at the beginning of
the Plan year.
The above schedule was prepared using the format prescribed by U.S. Department
of Labor Regulations 2520.103-6(d)(2).
<PAGE>
Schedule 2
EASTERN BANCORP, INC. 401(K) & ESOP PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
September 30, 1995 and 1994
<TABLE>
<CAPTION>
1995 (c) Description/
---- Number (e) Current
(b) Identity of Issue of Shares Value
--------------------- --------- -----
<S> <C> <C>
Eastern Bancorp, Inc., common stock 110,296.96 $ 2,507,042
Fidelity Cash Reserves 413,418.24 413,418
Certificates of Deposit:
MBNA America Bank, 5.25%, due December 4, 1995 90,000
Chemical Bank NY, 4.5%, due February 24, 1997 90,000
Lasalle National Bank, 5.05%, due February 25, 1998 90,000
Fidelity International Growth and Income Fund 1,723.431 31,125
Fidelity Overseas Fund 1,375.828 40,105
Fidelity Managed Income Fund 249,227.350 249,227
Fidelity Puritan Fund 51,611.158 866,035
Fidelity Asset Manager Fund 2,881.769 44,581
Fidelity Asset Manager Growth Fund 4,101.089 61,024
Fidelity Blue Chip Growth Fund 5,923.020 188,174
Fidelity Growth Company Fund 1,154.258 43,712
Fidelity Magellan Fund 18,821.968 1,738,585
Fidelity Contra Fund 1,559.394 63,327
-----------
Total investments $ 6,516,355
-----------
-----------
</TABLE>
<TABLE>
<CAPTION>
1994 (c) Description/
---- Number (e) Current
(b) Identity of Issue of Shares Value
--------------------- --------- -----
<S> <C> <C>
Eastern Bancorp, Inc., common stock 45,933 1,022,009
-----------
Total investments $ 1,022,009
-----------
-----------
</TABLE>
Note: There were no assets held for investment which were both acquired and
disposed of during the Plan year which would require disclosure.
Note: The cost of assets held for investment purposes is not available.
<PAGE>
EASTERN BANCORP, INC. 401(K) & ESOP PLAN
Supplemental Schedule of Allocation of Plan Income and
Changes in Plan Equity to Investment Programs
Year ended September 30, 1995
<TABLE>
<CAPTION>
Eastern Eastern Fidelity
Bancorp, Inc. Bancorp, Inc. Fidelity International Fidelity
Common Common Certificates Growth Fidelity Managed
Stock Stock of Deposit and Income Overseas Income
ESOP Fund 401(K) Fund Fund Fund Fund Fund
--------- ----------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net assets available for
benefits at beginning
of year $1,023,070* 0 0 0 0 0
Transfer of plan assets 0 866,806 577,272 19,219 15,789 165,112
Interest and dividends 18,587 16,179 24,119 0 0 13,448
Net appreciation
(depreciation) in fair
value of investments 49,245 41,561 0 2,088 1,281 (1,493)
Contributions 325,354 210,294 128,266 8,856 12,202 54,050
Benefits paid to
participants (71,007) (47,902) (116,164) (206) (580) (24,021)
Interfund transfers 0 81,127 (63,462) 1,168 11,413 42,131
---------- -------- ------- ------ ------- -------
Net assets available for
benefits at end of year $1,345,249* 1,168,065** 550,031** 31,125 40,105 249,227
---------- -------- ------- ------ ------- -------
---------- -------- ------- ------ ------- -------
</TABLE>
* Includes the Plan's cash balances of $149,426 and $1,061 at September 30,
1995 and 1994, respectively.
** Includes $133,387 and $280,031 invested in Fidelity Cash Reserves in the
Eastern Bancorp, Inc. Common Stock 401(K) Fund and the Fidelity Certificates
of Deposit Fund, respectively, at September 30, 1995.
<PAGE>
Schedule 3
<TABLE>
<CAPTION>
Fidelity
Fidelity Asset Fidelity Fidelity
Fidelity Asset Manager Blue Chip Growth Fidelity
Puritan Manager Growth Growth Company Magellan
Fund Fund Fund Fund Fund Fund
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net assets available for
benefits at beginning
of year 0 0 0 0 0 0
Transfer of plan assets 696,410 26,491 32,060 54,982 20,713 1,246,211
Interest and dividends 22,017 1,130 651 103 234 6,075
Net appreciation
(depreciation) in fair
value of investments 85,300 3,646 4,836 31,811 10,300 442,217
Contributions 138,529 7,278 9,567 38,833 10,743 289,241
Benefits paid to
participants (59,097) (6,259) (86) (1,530) (112) (87,479)
Interfund transfers (17,124) 12,295 13,996 63,975 1,834 (157,680)
------- ------- ------- ------- ------- --------
Net assets available for
benefits at end of year 866,035 44,581 61,024 188,174 43,712 1,738,585
------- ------- ------- ------- ------- --------
------- ------- ------- ------- ------- --------
<CAPTION>
Fidelity Participant
Contra Loan
Fund Fund Total
---- ---- -----
<S> <C> <C> <C>
Net assets available for
benefits at beginning
of year 0 0 1,023,070
Transfer of plan assets 37,950 45,660 3,804,675
Interest and dividends 0 4,690 107,233
Net appreciation
(depreciation) in fair
value of investments 13,074 0 683,866
Contributions 16,893 0 1,250,106
Benefits paid to
participants (2,904) (1,650) (418,997)
Interfund transfers (1,686) 12,013 0
------- ------- ---------
Net assets available for
benefits at end of year 63,327 60,713 6,449,953
------- ------- ---------
------- ------- ---------
</TABLE>
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this report to be signed on their behalf by the undersigned hereunto
duly authorized.
EASTERN BANCORP, INC
401(k) PLAN
Date: March 27, 1996 By: /s/ Robert K. Hamme
-------------------------- --------------------
Robert K. Hamme
Trustee
By: /s/ John A. Cobb
--------------------
John A. Cobb
Trustee
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Identity of Exhibit
- ------ ---------------------------------------------------
1 Independent Auditors' Consent, dated March 14, 1996.
<PAGE>
Exhibit 1
INDEPENDENT AUDITORS' CONSENT
The Trustees
Eastern Bancorp, Inc. 401(K) Profit
Sharing Plan and Eastern Bancorp, Inc.
401(K) & ESOP Plan:
We consent to incorporation by reference in the registration statements Nos.
33-5502, 33-19280, 33-31021, and 33-9116 on Forms S-8 and No. 33-66754 on Form
S-3 of Eastern Bancorp, Inc. of our reports dated March 14, 1996, relating to
the statements of net assets available for benefits of Eastern Bancorp, Inc.
401(K) Profit Sharing Plan and Eastern Bancorp, Inc. 401(K) & ESOP Plan
(formerly Eastern Bancorp, Inc. 401(K) Stock Bonus Plan) as of September 30,
1995 and 1994, and the related statements of changes in net assets available for
benefits for each of the years in the three-year period ended September 30,
1995, which reports appear in the September 30, 1995, annual report on Form 11-K
of Eastern Bancorp, Inc. 401(K) Plan.
The audits referred to in our reports dated March 14, 1996, included the related
supplemental schedules. These supplemental schedules are the responsibility of
the Plans' management. Our responsibility is to express an opinion on these
supplemental schedules based our audits. In our opinion, except for the
omission of historical cost data from the supplemental schedules of assets held
for investment purposes, such supplemental schedules, when considered in
relation to the basic financial statements taken as a whole, present fairly in
all material respects the information set forth therein.
KPMG PEAT MARWICK LLP
Boston, Massachusetts
March 14, 1996
