UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 4)
The Eastern Company
(Name of Issuer)
Common Stock, no par value
(Title of Class of Securities)
276317 10 4
(CUSIP Number)
Clay Lifflander
MMI Investments, L.L.C., RR1, Box 167D, Wing Road, Millbrook, NY 12545
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
November 20, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is fil-
ing this schedule because of Rule 13d-1(b)(3) or (4), check the following box.
[_]
Check the following box if a fee is being paid with the statement. [_]. (A
fee is not required only if the reporting person: (1) has a previous state-
ment on file reporting beneficial ownership of more than five percent of the
class of securities described in Item 1; and (2) has filed no amendment subse-
quent thereto reporting beneficial ownership of five percent or less of such
class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
Page 1 of 15 Pages
<PAGE>
and for any subsequent amendment containing information which would alter dis-
closures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 2 of 15 Pages
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CUSIP No. 276317 10 4
SCHEDULE 13D
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MMI Investments, L.L.C.
TIN 14-1790769
2. CHECK THE APPROXIMATE BOX IF A MEMBER OF A GROUP* (a) [_X_]
(b) [___]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC, OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [___]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7. SOLE VOTING POWER
SHARES 178,400
BENEFICIALLY
OWNED BY 8. SHARED VOTING POWER
EACH 0
REPORTING
PERSON WITH 9. SOLE DISPOSITIVE POWER
178,400
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
178,400
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [___]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.61%
14. TYPE OF REPORTING PERSON*
OO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 3 of 15 Pages
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CUSIP No. 276317 10 4
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Millbrook Capital Management Inc.
TIN 13-3540644
2. CHECK THE APPROXIMATE BOX IF A MEMBER OF A GROUP* (a) [_X_]
(b) [___]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [___]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF 7. SOLE VOTING POWER
SHARES 178,400
BENEFICIALLY
OWNED BY 8. SHARED VOTING POWER
EACH 0
REPORTING
PERSON WITH 9. SOLE DISPOSITIVE POWER
178,400
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
178,400
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [___]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.61%
14. TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 4 of 15 Pages
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CUSIP No. 276317 10 4
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John S. Dyson
SSN ###-##-####
2. CHECK THE APPROXIMATE BOX IF A MEMBER OF A GROUP* (a) [_X_]
(b) [___]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [___]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
NUMBER OF 7. SOLE VOTING POWER
SHARES 178,400
BENEFICIALLY
OWNED BY 8. SHARED VOTING POWER
EACH 0
REPORTING
PERSON WITH 9. SOLE DISPOSITIVE POWER
178,400
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
178,400
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES * [___]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.61%
14. TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 5 of 15 Pages
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CUSIP No. 276317 10 4
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ernst Ohnell
SSN ###-##-####
2. CHECK THE APPROXIMATE BOX IF A MEMBER OF A GROUP* (a) [_X_]
(b) [___]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
PF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [___]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
NUMBER OF 7. SOLE VOTING POWER
SHARES 89,800
BENEFICIALLY
OWNED BY 8. SHARED VOTING POWER
EACH 0
REPORTING
PERSON WITH 9. SOLE DISPOSITIVE POWER
89,800
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
89,800
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [___]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.33%
14. TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 6 of 15 Pages
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CUSIP No. 276317 10 4
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
B.W. Elliott Manufacturing Co.
TIN 15-0585760
2. CHECK THE APPROXIMATE BOX IF A MEMBER OF A GROUP* (a) [_X_]
(b) [___]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC, BK, OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [___]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF 7. SOLE VOTING POWER
SHARES 0
BENEFICIALLY
OWNED BY 8. SHARED VOTING POWER
EACH 0
REPORTING
PERSON WITH 9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [___]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0
14. TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 7 of 15 Pages
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SCHEDULE 13D
Item 4. Purpose of Transaction
Item 4 of Schedule 13D is hereby amended in its
entirety to read as follows:
MMI acquired Shares of the Company because MMI
believes that trading prices of the Shares do not adequately
reflect the potential value of the Company's underlying busi-
ness and assets. MMI initially intended to work with manage-
ment to effectuate value enhancement strategies for all stock-
holders. However, after meeting with management and studying
the Company's operations and industry, MMI determined that the
best means to maximize value for all stockholders is to effect
an acquisition of the Company.
On July 16, 1996, Millbrook sent the merger proposal
set forth in Exhibit 3 to the Chairman of the Company to have
Elliott acquire all outstanding Shares of the Company for $15
per Share in cash (the "Merger Proposal"). The Merger Proposal
is subject, among other things, to the approval of the Compa-
ny's Board of Directors, a majority of the Company's public
shareholders indicating support for the transaction and other
customary conditions for transactions of this nature. On July
18, 1996, and July 24, 1996, Millbrook sent additional corre-
spondence to the Chairman of the Company contained in Exhibits
9 and 10 hereto.
Millbrook anticipates that if the Merger Proposal is
put into effect, a wholly-owned direct or indirect subsidiary
of Elliott would be merged into the Company. As a result, the
Company would become a wholly-owned subsidiary of Elliott, and
its present Board of Directors, capitalization and dividend
policy would be restructured accordingly. Further, the Shares
would be delisted from trading on the American Stock Exchange
and would be eligible for termination of registration pursuant
to Section 12(g)(4) of the Securities Exchange Act of 1934, as
amended (the "Act").
On July 25, 1996, the Board of Directors of the Com-
pany rejected the Merger Proposal. On July 29, 1996, the Board
of Directors of the Company amended the Company's bylaws to
increase the vote required for stockholders to amend the bylaws
from 50% to 75%.
Page 8 of 15 Pages
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On July 25, 1996 and August 12, 1996, Millbrook, on
behalf of MMI, sent written demands for a list of the Company's
stockholders to the Company, which the Company rejected. On
July 31, 1996 and August 6, 1996, MMI commenced actions which
were subsequently withdrawn seeking access to the Company's
list of stockholders.
On August 15, 1996, MMI commenced the action which is
currently pending in the Superior Court in the Judicial Dis-
trict of Waterbury, Connecticut (the "Superior Court") to
require the Company to permit MMI to examine and make copies of
the Company's stockholder list for the purpose of permitting
MMI to communicate with other stockholders of the Company.
On August 22, 1996, MMI, Mr. Ohnell (on his own
behalf and on behalf of the Ohnell Family Foundation and his
wife and two children (collectively, the "Ohnell Investors"))
and two other stockholders issued a written request for a spe-
cial meeting of stockholders to the President of the Company.
On September 6, 1996, the Company rejected the request for a
special meeting of stockholders and filed an action requesting
a temporary and permanent injunction and declaratory relief
against MMI calling for a special meeting of stockholders. At
a hearing on September 9, 1996, the Superior Court consolidated
MMI's action filed August 15, 1996 requesting the stockholder
list and the Company's action filed September 6, 1996 request-
ing an injunction against having to call a special meeting of
stockholders.
On September 25, 1996, MMI, the Ohnell Investors and
one other stockholder issued a second written request to the
President of the Company requesting that he call a special
meeting of stockholders in order to (i) consider the Merger
Proposal, (ii) consider a proposal requesting that the Compa-
ny's Board of Directors approve the Merger Proposal, and if no
merger of the Company is consummated by December 31, 1996, the
declaration of a special dividend of $3.00 per share,
(iii) consider amending the bylaws of the Company to repeal the
amendment thereof adopted by the Company's Board of Directors
on July 29, 1996 which increased the required stockholder vote
to amend the bylaws from 50% to 75%, (iv) consider amending the
bylaws to permit the removal of directors by majority vote of
stockholders, and (v) consider a proposal to replace the cur-
rent directors with a new slate of directors committed to maxi-
mizing the current stockholder values pursuant to clauses (i)
and (ii) above. A copy of the request dated September 25, 1996
is annexed hereto as Exhibit 11.
Page 9 of 15 Pages
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MMI's request for a stockholders list and the request
for a special meeting of stockholders are the subject of the
litigation before the Superior Court. A trial was held October
2 through October 4, 1996. The Superior Court has not yet ren-
dered a decision as to whether the Company is required to pro-
vide MMI with a stockholders list or as to whether MMI will be
enjoined from calling a special meeting pursuant to the request
dated September 25, 1996.
On September 20, 1996, Millbrook sent a letter to the
Company's stockholders updating them with respect to the status
of the Merger Proposal. A copy of the letter is annexed hereto
as Exhibit 12.
On November 20, 1996, Mr. Ohnell sent to the Secre-
tary of the Company notice that he intends to present at the
Company's 1997 annual meeting of stockholders a stockholder
proposal requesting the Company's Board of Directors to autho-
rize the immediate retention of an investment banking firm to
seek proposals for the sale of the Company to maximize stock-
holder value. A copy of such notice is annexed as Exhibit 13
hereto.
Item 7. Material to Be Filed as Exhibits
Item 7 of Schedule 13D is hereby amended in its
entirety to read as follows:
Exhibit 1 Schedule of Transactions.
Exhibit 2 Amended Joint Filing Agreement dated
July 16, 1996.
Exhibit 3 Letter to Chairman of the Company dated
July 16, 1996.
Exhibit 4 Press Release dated July 17, 1996.
Exhibit 5 Letter Agreement by and between Millbrook
and Mr. Ohnell dated July 16, 1996.
Exhibit 6 Irrevocable Proxy dated July 16, 1996 of
Patricia Ohnell.
Exhibit 7 Irrevocable Proxy dated July 16, 1996 of
Carin M. Ohnell.
Exhibit 8 Irrevocable Proxy dated July 16, 1996 of
Eileen H. Ohnell.
Page 10 of 15 Pages
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Exhibit 9 Letter to Chairman of the Company dated
July 18, 1996.
Exhibit 10 Letter to Chairman of the Company dated
July 24, 1996.
Exhibit 11 Request for special meeting of stockholders
of the Company dated September 25, 1996.
Exhibit 12 Letter from Millbrook to Company's stock-
holders dated September 20, 1996
Exhibit 13 Notice dated November 20, 1996 from
Mr. Ohnell to the Company presenting a pro-
posal to be considered at the 1997 annual
meeting of stockholders.
Page 11 of 15 Pages
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SIGNATURE
After reasonable inquiry and to the best knowledge
and belief of the undersigned, each of the undersigned certi-
fies that the information set forth in this amended statement
is true, complete and correct.
MMI INVESTMENTS, L.L.C.
By: /s/ Clay B. Lifflander
---------------------------
Clay B. Lifflander
as President of Millbrook
Capital Management Inc.,
Manager of MMI Investments,
L.L.C.
MILLBROOK CAPITAL MANAGEMENT INC.
By: /s/ Clay B. Lifflander
---------------------------
Clay B. Lifflander
President
B.W. ELLIOTT MANUFACTURING CO.
By: /s/ George M. Scherer
-------------------------
George M. Scherer
President
/s/ John S. Dyson
-----------------------------
John S. Dyson
Individually
/s/ Ernst Ohnell
------------------------------
Ernst Ohnell
Individually
Dated: November 25, 1996
Page 12 of 15 Pages
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EXHIBIT INDEX
Exhibit 1 Schedule of Transactions. ***
Exhibit 2 Amended Joint Filing Agreement
dated July 16, 1996. *
Exhibit 3 Letter to Chairman of the Company
dated July 16, 1996. *
Exhibit 4 Press Release dated July 17, 1996. *
Exhibit 5 Letter Agreement by and between
Millbrook and Mr. Ohnell dated July
16, 1996. *
Exhibit 6 Irrevocable Proxy dated July 16,
1996 of Patricia Ohnell. *
Exhibit 7 Irrevocable Proxy dated July 16,
1996 of Carin M. Ohnell. *
Exhibit 8 Irrevocable Proxy dated July 16,
1996 of Eileen H. Ohnell. *
Exhibit 9 Letter to Chairman of the Company
dated July 18, 1996. **
Exhibit 10 Letter to Chairman of the Company
dated July 24, 1996. **
Exhibit 11 Request for special meeting of
stockholders of the Company dated
September 25, 1996. ***
Exhibit 12 Letter from Millbrook to Company's
stockholders dated September 20,
1996. ***
Exhibit 13 Notice dated November 20, 1996 from
Mr. Ohnell to the Company present-
ing a proposal to be considered at
the 1997 annual meeting of
stockholders. 14
__________________________
* Filed as an exhibit with Amendment No. 1 to Schedule 13D
dated July 16, 1996.
** Filed as an exhibit with Amendment No. 2 to Schedule 13D
dated July 24, 1996.
*** Filed as an exhibit with Amendment No. 3 to Schedule 13D
dated September 25, 1996
Page 13 of 15 Pages
Exhibit 13
November 20, 1996
The Eastern Company
112 Bridge Street
Naugatuck, CT 06770
Attention: Donald E. Whitmore, Jr.
Secretary
Re: Shareholder notice to The Eastern Company (the "Company")
The undersigned, being the record holder of 52,050 shares of
Common Stock of the Company and a beneficial holder of such
shares of Common Stock of the Company for more than one year
from the date hereof (constituting at least 1% and over $1,000
of value of the securities entitled to vote), hereby gives
notice pursuant to Rule 14a-8(a) promulgated under the Securi-
ties Exchange Act of 1934, as amended (the "Act"), that the
undersigned intends to present at the Company's 1997 annual
meeting of stockholders the proposal attached hereto, and that
such proposal should be included in the Company's proxy mate-
rial for such meeting in accordance with the Act. The under-
signed hereby affirms that the undersigned intends to continue
to beneficially own 52,050 shares of Common Stock of the Com-
pany through the date of such annual meeting. The proposal
seeks to have the Company's Board of Directors consider for
approval the retention of an investment banking firm to seek
proposals for the sale of the Company to maximize shareholder
value.
/s/Ernst Ohnell
Ernst Ohnell
260 West Avenue
Stamford, CT 06902
Page 14 of 15 Pages
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PROPOSED RESOLUTION
RESOLVED, that the stockholders of The Eastern Company
(the "Company") hereby request and recommend that the Board of
Directors authorize the immediate retention of an investment
banking firm to seek proposals for the sale of the Company to
maximize shareholder value.
SUPPORTING STATEMENT OF THE PROPONENT
I am the record holder of 52,050 shares of the Company. I
believe there is great underlying value in the Company that can
be realized if an investment banking firm were hired to seek
proposals for the sale of the Company.
Notwithstanding the Company's strategic plan, the Compa-
ny's common stock has significantly underperformed the stock
market in total return over the past eight years, income from
continued operations peaked in 1991 and there has been approxi-
mately a 34% drop in employment by the Company since 1988.
Earlier this year, a stockholder of the Company made an
offer, which I supported, to the Company's Board of Directors
for an affiliate of such stockholder to acquire by merger all
of the outstanding shares of common stock of the Company for
$15.00 per share in cash, subject to customary conditions.
Even though the stockholder stated in its offer that it would
consider improving the offer if evidence of additional value
were provided, the Company's Board rejected the offer without
even discussing it with the stockholder.
Consistent with state law and the proxy rules, this pro-
posal is merely a recommendation to the Board and its passage
cannot compel action. However, a substantial shareholder vote
in favor should, in my opinion, be regarded as a mandate to the
Board to develop a program to truly maximize value for share-
holders. If a proxy card is returned without voting instruc-
tions or marked "abstain", it may be counted against this pro-
posal. Do not let that happen. SEND A STRONG MESSAGE TO
MANAGEMENT AND THE BOARD. VOTE "FOR" THE PROPOSAL TO RECOMMEND
THAT THE BOARD ENGAGE AN INVESTMENT BANKING FIRM TO SEEK PRO-
POSALS FOR THE SALE OF THE COMPANY, WHICH IS DESIGNED TO UNLOCK
VALUE FOR ALL SHAREHOLDERS.
Page 15 of 15 Pages