Eastern Bank Foundation ("Foundation"), the philanthropic arm of Boston-based Eastern Bank whose stock holding company is Eastern Bankshares, Inc. (NASDAQ Global Select Market: EBC), today announced it has established a plan to sell a pre-arranged portion of EBC company stock held by the Foundation over an 18-month period. The stock trading plan was established as part of the Foundation's long-term strategy for asset diversification and liquidity and was adopted in accordance with the requirements of Rule 10b5-1 of the Securities Exchange Act of 1934, as amended ("Rule 10b5-1").
In October 2020, 7,470,326 shares of Eastern Bankshares, Inc. common stock were donated to the Foundation as part of the subscription offering of Eastern Bankshares, Inc. common stock ("IPO"), positioning the Foundation to advance its objectives in the communities it serves over the long-term.
Rule 10b5-1 allows shareholders such as the Foundation to adopt a written, pre-arranged stock trading plan in good faith when the shareholder does not have material, non-public information about the issuer. Using these plans, shareholders can diversify their investment portfolios and spread stock trades over an extended period of time to reduce market impact.
Under the Foundation's Rule 10b5-1 Plan, which was established back in mid-September prior to quarter end, the Foundation expects to sell approximately 25,000 shares per week over a period of 18 months beginning at the end of October. If the Foundation completes all the planned sales under the Rule 10b5-1 Plan, the Foundation will beneficially own approximately 5.6 million shares of Eastern Bankshares, Inc. common stock as of the conclusion of the Plan in February 2023.
"Eastern Bank Foundation is committed to be a long-term shareholder of Eastern Bankshares, Inc. stock," said Nancy Huntington Stager, President and CEO of the Eastern Bank Foundation. "Adopting this plan allows the Foundation to diversify its portfolio and meet a fiduciary responsibility to best ensure our support of the communities we serve well into the future."
The trustees of the Foundation are responsible for establishing its grant and donation policies, consistent with the purposes for which it was established. As trustees of a charitable trust, the trustees of the Foundation are at all times bound by their fiduciary duty to advance the Foundation's charitable goals and to act in a manner consistent with the charitable purposes for which the Foundation was established. The trustees also are responsible for directing the activities of the Foundation, including the management and voting of the shares of EBC common stock held by the Foundation. However, as required by Federal Reserve Board regulations, all shares of EBC common stock held by the Foundation must be voted in the same ratio as all other shares of EBC common stock on all proposals considered by EBC shareholders.
About Eastern Bank Foundation
Created in 1994, the Eastern Bank Foundation is the philanthropic arm of Boston-based Eastern Bank. Through philanthropy, employee volunteerism, advocacy and collaborations with other businesses and community partners, Eastern Bank Foundation responds to community needs and supports sustainable solutions to our communities' most vexing challenges across eastern Massachusetts, southern and coastal New Hampshire, and Rhode Island. To learn more, visit easternbank.com/foundation.