UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
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)
September 25, 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 28 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 28 Pages
<PAGE>
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 28 Pages
<PAGE>
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 28 Pages
<PAGE>
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 28 Pages
<PAGE>
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 28 Pages
<PAGE>
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 28 Pages
<PAGE>
SCHEDULE 13D
Item 3. Source and Amount of Funds or Other Consideration
Item 3 of Schedule 13D is hereby amended in its entirety to
read as follows:
The aggregate cost of the Shares beneficially owned by the
Millbrook Reporting Persons was approximately $2,195,432, including
brokerage commissions. All of these Shares were acquired by MMI using its
working capital and general margin financing to MMI from a broker or
brokers pursuant to standard margin agreements. Margin loans used to
acquire Shares by MMI have been repaid using MMI's working capital.
From 1980 through 1991, Mr. Ohnell acquired the Shares reported
as owned by him for an aggregate purchase price of approximately $646,759,
including brokerage commissions. All of such Shares were purchased using
the personal funds of Mr. Ohnell.
The source of funds to be used in acquiring the Shares pursuant
to the Merger Proposal (as defined in Item 4) will be from working capital
of Elliott and from bank financing. The amount of funds to be used by
Elliott in acquiring the Shares will be approximately $40.5 million, plus
retirement of Eastern debt and expenses.
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 business and assets. MMI initially intended to
work with management to effectuate value enhancement strategies for all
stockholders. 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
Page 8 of 28 Pages
<PAGE>
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 Company'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 correspondence to
the Chairman of the Company contained in Exhibits 9 and 10 hereto.
Millbrook anticipates that pursuant to the Merger Proposal, a
wholly-owned direct or indirect subsidiary of Elliott will be merged into
the Company. As a result, the Company will become a wholly-owned
subsidiary of Elliott, and its present Board of Directors, capitalization
and dividend policy will be restructured accordingly. Further, the Shares
will be delisted from trading on the American Stock Exchange and will 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 Company
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%.
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 District 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 special 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
Page 9 of 28 Pages
<PAGE>
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 requesting 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 Company'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 current directors
with a new slate of directors committed to maximizing 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.
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 rendered a decision as to whether the
Company is required to provide 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.
Item 5. Interest in Securities of the Issuer
Item 5 of Schedule 13D is hereby amended in its entirety to
read as follows:
(a) As of October 4, 1996, MMI directly and beneficially owns
(as defined by Rule 13d-3 under the Act) 178,400 Shares, or 6.61% of the
2,699,284 Shares outstanding as of
Page 10 of 28 Pages
<PAGE>
June 29, 1996 as reported by the Company in its Quarterly Report on Form
10-Q for the quarter ended June 29, 1996.
As Manager of MMI, Millbrook has sole power to vote and dispose
of investments held by MMI; therefore, it beneficially owns (as defined by
Rule 13d-3 of the Act) the Shares owned by MMI. Mr. Dyson, Chairman, a
Director and sole stockholder of Millbrook, has the power to direct
Millbrook to vote or dispose of the Shares held by MMI; therefore, he
beneficially owns (as defined by Rule 13d-3 of the Act) the Shares owned by
MMI.
Mr. Ohnell beneficially owns 89,800 Shares, or 3.33% of the
Shares outstanding, including 52,050 Shares held directly by Mr. Ohnell,
9,300 Shares held by the Ohnell Family Foundation of which Mr. Ohnell is
trustee, and 25,450 Shares held by his emancipated adult children and 3,000
Shares held by his wife with respect to which Mr. Ohnell holds an
irrevocable proxy.
(b) As sole owner of the Shares that it holds, MMI has sole
voting and dispositive power over the 178,400 Shares that it owns directly.
As Manager of MMI, Millbrook has the sole power to direct the voting or
disposition of the Shares held by MMI; thus, Millbrook has sole voting and
dispositive power over such Shares. As Chairman, a Director and sole
stockholder of Millbrook, Mr. Dyson has the sole power to direct Millbrook
on the voting or disposition of Shares held by MMI; thus, Mr. Dyson also
has sole voting and dispositive power over such Shares.
Mr. Ohnell has sole voting and dispositive power over the
89,800 Shares that he beneficially owns.
(c) The Millbrook Reporting Persons became beneficial owners
for purposes of Rule 13d-3 of more than five percent of the Shares on April
29, 1996. See Exhibit 1 for a list of purchase transactions with respect
to Shares executed by MMI prior to the date of this report. All such
purchases were made on the open market through the facilities of the
American Stock Exchange.
Mr. Ohnell became a Reporting Person on July 16, 1996 upon
execution of the letter agreement contained in Exhibit 5 between Mr. Ohnell
and Millbrook relating to the Proposed Merger. Mr. Ohnell has not acquired
beneficial ownership of any Shares during the 60 day period prior to the
date hereof other than as a result of the execution or July 16, 1996 of the
proxies contained in Exhibits 6, 7 and 8 hereto.
Page 11 of 28 Pages
<PAGE>
(d) No other person has the right to receive or the power to
direct the receipt of dividends from, or proceeds from the sale of, any of
the Shares held by MMI and the 52,050 Shares directly owned by Mr. Ohnell.
The Ohnell Family Foundation and members of Mr. Ohnell's family have the
right to receive dividends or the proceeds from the sale of Shares held by
them.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
Item 6 of Schedule 13D is hereby amended in its entirety to
read as follows:
On July 16, 1996, Millbrook and Mr. Ohnell executed a letter
agreement in which they agreed to cooperate in effecting the Merger
Proposal. Such letter agreement is Exhibit 5 hereto.
In addition, on July 16, 1996, Millbrook sent a letter to the
Chairman of the Company setting forth the Merger Proposal. Such letter is
Exhibit 3 hereto. Additional correspondence from Millbrook to the Company
with respect to the proposal is contained in Exhibits 9 and 10 hereto. The
request for a special meeting of stockholders dated September 25, 1996 is
contained in Exhibit 11 hereto.
On July 16, 1996, each of Mr. Ohnell's wife and children
executed irrevocable proxies to Mr. Ohnell with respect to Shares held by
them. Such proxies are Exhibits 6, 7 and 8 hereto.
Except as otherwise set forth above or in Item 3, none of the
Reporting Persons, and to the knowledge of the Reporting Persons, none of
the Millbrook Principals, has any contract, arrangement, understanding or
relationship (legal or otherwise) with respect to any securities of the
Company, including but not limited to, transfer or voting of any of the
securities, finder's fees, joint ventures, loan or option arrangements, put
or calls, guarantees of profits, division of profits or loss, or the giving
or withholding of proxies.
Page 12 of 28 Pages
<PAGE>
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.
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
Page 13 of 28 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best knowledge and belief
of the undersigned, each of the undersigned certifies 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: October 4, 1996
Page 14 of 28 Pages
<PAGE>
EXHIBIT INDEX
Exhibit 1 Schedule of Transactions. 16
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. 17
Exhibit 12 Letter from Millbrook to Company's
stockholders dated September 20, 1996. 26
__________________________
* 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.
Page 15 of 28 Pages
<PAGE>
Exhibit 1
Schedule of Transactions
Purchases of Common Stock of The Eastern Company
by MMI Investments, L.L.C.
Date Shares Price Per Share
---- ------ ---------------
02/05/96 17,300 $12.25
02/09/96 7,000 12.50
02/12/96 700 12.50
02/14/96 14,200 12.19
02/20/96 4,400 12.00
02/27/96 400 12.00
02/29/96 3,000 12.00
03/04/96 2,000 11.88
03/05/96 10,500 12.00
03/05/96 1,000 11.88
03/07/96 2,000 12.00
03/07/96 3,600 12.13
03/11/96 200 12.00
03/13/96 44,600 12.25
03/22/96 800 11.95
03/25/96 600 12.00
03/26/96 300 12.00
03/27/96 600 12.00
03/28/96 700 12.00
03/29/96 1,000 12.00
04/02/96 1,100 11.88
04/04/96 9,900 12.00
04/09/96 4,100 11.88
04/10/96 1,900 11.75
04/29/96 10,400 11.50
04/30/96 500 11.63
05/01/96 500 11.88
05/02/96 6,100 11.88
05/03/96 6,000 12.39
05/06/96 7,500 12.48
07/08/96 500 11.75
07/16/96 1,000 11.75
07/18/96 10,000 13.88
08/15/96 2,000 13.31
08/15/96 1,000 12.75
09/10/96 1,000 13.38
Page 16 of 28 Pages
<PAGE>
Exhibit 11
[MILLBROOK CAPITAL MANAGEMENT INC. LETTERHEAD]
September 25, 1996
VIA FAX AND OVERNIGHT EXPRESS
- -----------------------------
Mr. Stedman G. Sweet
President
The Eastern Company
112 Bridge Street
Naugatuck, CT 06770
Dear Mr. Sweet:
MMI Investments, L.L.C. submits herewith its letter requesting
that you call a special shareholders' meeting for the purposes described in
Attachment A. You have previously rejected a similar request dated August
22, 1996, to which we would refer you for further information.
In your September 6th letter rejecting our prior request, you
raised concerns that you had not received requests from 10% of the voting
power of The Eastern Company, that 35% of the voting power was a
prerequisite to our request, and that some or all of the purposes set forth
in Attachment A are improper. Respectfully, we disagree with each of your
conclusions. Nevertheless, to avoid dispute with respect to the 10% voting
power requirement, we are today reiterating our request in a manner
designed to satisfy the first of your three concerns.
Thus, we are joined in making our request by Ernst, Patricia,
Carin and Eileen Ohnell, who together own 89,800 shares of Eastern; and
Evelyn Spencer, whom you have informed us owns 2,796 registered shares (she
actually owns a total of 3,796 shares). Since MMI owns 178,400 registered
shares of Eastern, this request is joined by more than 10% of Eastern's
voting power, as follows:
Page 17 of 28 Pages
<PAGE>
Name Number of Shares
MMI 178,400
Ernst Ohnell, Individually 52,050
Ernst Ohnell, Trustee 9,300
(Ohnell Family Foundation)
Patricia Ohnell 3,000
Carin Ohnell 12,850
Eileen Ohnell 12,600
Evelyn Spencer - Registered 2,796
-------
270,996
Copies of the letters of MMI, the Ohnells and Mrs. Spencer are
enclosed for your reference. In total, the shareholders making this
request hold in excess of 10% of the outstanding shares of Eastern, which
exceeds the threshold specified in Section 33-326(c) of the Connecticut
Stock Corporation Act.
The 10% threshold applies because Eastern's March 15, 1988
Proxy Statement plainly states that Bank of Boston Connecticut held 95,750
shares (out of 956,366 shares outstanding) as Trustee under Eastern's
Pension Plans for Salaried and for Hourly Employees or more than 10% of the
voting power of Eastern. According to the proxy statement, it was the
balance of 170,241 shares that were held by Bank of Boston Connecticut or
its nominees in various fiduciary capacities. We are certain that Eastern
would have wanted to be precisely accurate in its 1988 proxy statement and
therefore respectfully request that you double check your present
understanding that no single trustee represented 10% or more of the voting
power of Eastern's shares on February 1, 1988. Further in view of your
very narrow interpretation of the meaning of "voting power," we
respectfully suggest that, irrespective of "beneficial" ownership -- which
you discount -- Bank of Boston Connecticut apparently held the voting power
of shares in addition to the 95,750.
Further, in view of your interpretation of "voting power,"
other individuals or entities may also have held more than 10% of Eastern's
voting power as well. After all, someone was entitled to vote the
additional 1,000 shares Mrs. Spencer owned if, as you claim, she was not.
Please determine whether any brokers or depositories were entitled to vote
more than 10% of Eastern's outstanding shares on February 1, 1988.
Finally, with respect to your contention that some of the
purposes for which we have requested a meeting are
Page 18 of 28 Pages
<PAGE>
improper, because you have failed to identify which purposes you contend
are improper and in what respects, we have not in this letter addressed
your concerns. Although we disagree with your conclusions, we continue to
welcome the opportunity for constructive dialogue regarding your concerns.
In the interim, it is your obligation to call a meeting for such proper
purposes as we have specified.
We recognize that under Connecticut law you have 15 days to
consider our request. Nevertheless, should you come to a sooner
determination, we would gratefully appreciate hearing from you, as we are
certain that Judge Fineberg will appreciate whatever progress we can
achieve.
Very truly yours,
/s/ Clay B. Lifflander
-----------------------------
Clay B. Lifflander
President of Millbrook
Capital Management
Inc., Manager of MMI
Investments, L.L.C.
Encl.
Page 19 of 28 Pages
<PAGE>
VIA COURIER SERVICE
Mr. Stedman G. Sweet
President
The Eastern Company
112 Bridge Street
Naugatuck, CT 06770
Dear Sirs:
The undersigned is the holder of 178,400 shares of the Common
Stock of The Eastern Company ("Eastern").
The undersigned hereby requests that you call a special
shareholders' meeting for the purposes described in Attachment A hereto and
cause notice to be given of such meeting.
The undersigned hereby requests that the special meeting be
called as soon as practicable to allow sufficient time for proxy
solicitation.
Dated: September 25, 1996. Very truly yours,
MMI INVESTMENTS, L.L.C.
By: /s/ Clay Lifflander
----------------------
Name: Clay Lifflander
Title: President
Millbrook Capital
Management Inc.
as Manager, MMI
Investments, L.L.C.
Page 20 of 28 Pages
<PAGE>
Mr. Stedman G. Sweet
President
The Eastern Company
112 Bridge Street
Naugatuck, CT 06770
Dear Sir:
The undersigned are the holders of 89,800 shares of the Common
Stock of The Eastern Company ("Eastern"). These shares are held as
follows: Ernst Ohnell - 52,050 shares; Patricia Ohnell - 3,000; Carin
Ohnell - 12,850; Eileen Ohnell - 12,600; and Ohnell Family Foundation,
Ernst Ohnell, Trustee - 9,300 shares. Please be advised that Ernst Ohnell
holds an irrevocable proxy from Patricia, Carin and Eileen Ohnell to attend
all meetings of the shareholders of Eastern and to vote the shares of
Eastern Common Stock beneficially owned by each of them. Patricia Ohnell,
Carin Ohnell and Eileen Ohnell hereby reaffirm that each of them
constituted and approved Ernst Ohnell as their true and lawful agent and
proxy as of July 16, 1996. Accordingly, Ernst Ohnell has the power to act
with respect to all 89,800 shares. Furthermore, Ernst Ohnell in his
capacity as husband and father has our approval to sign any documents on
our behalf.
Solely to obviate previous arguments made on your behalf
seeking to disenfranchise shareholders together holding more than 1.3% of
Eastern's stock, and without waiving our position that Ernst Ohnell is an
agent duly authorized to make the following request on behalf of his wife,
children, and family foundation, the undersigned join together in making
the following request. In conjunction with other shareholders who together
own in excess of 6.7% of the outstanding shares of Eastern, the undersigned
holders of in excess of 3.3% of the outstanding shares of Eastern hereby
request that you call a special shareholders' meeting for the purposes
described in "Attachment A" provided to the undersigned by MMI Investments,
L.L.C. and cause notice to be given of such meeting. In making this
request, the undersigned are not granting a proxy either for or against any
of the proposals in Attachment A.
The undersigned hereby request that the special meeting be
called as soon as practicable to allow time for proxy solicitation.
Page 21 of 28 Pages
<PAGE>
This letter may be signed in duplicate or counterpart to
facilitate obtaining the signatures made necessary by your refusal to
acknowledge the full force and effect of our previous request.
Very truly yours,
/s/ Ernst Ohnell
------------------------------
Ernst Ohnell
Individually, as Trustee for the Ohnell
Family
Foundation, and as authorized agent and
proxy for Patricia Ohnell, Carin Ohnell
and Eileen Ohnell
/s/ Patricia Ohnell
------------------------------
Patricia Ohnell
/s/ Carin Ohnell
------------------------------
Carin Ohnell
/s/ Eileen Ohnell
------------------------------
Eileen Ohnell
Dated: September 25, 1996
Attachment
Page 22 of 28 Pages
<PAGE>
VIA COURIER SERVICE
Mr. Stedman G. Sweet
President
The Eastern Company
112 Bridge Street
Naugatuck, CT 06770
Dear Sir:
The undersigned is the holder of 3,796 shares of the Common
Stock of The Eastern Company ("Eastern") held 2,796 by self and 1,000 at
Quick & Reilly.
The undersigned hereby requests that you call a special
shareholders' meeting for the purposes described in Attachment A hereto
provided to the undersigned by MMI Investments L.L.C. and cause notice to
be given of such meeting. In making this request, the undersigned is not
granting a proxy either for or against any of the proposals in
Attachment A.
The undersigned hereby requests that the special meeting be
called as soon as practicable to allow sufficient time for proxy
solicitation.
By submitting this request, the undersigned does not intend to
join any group of shareholders in which Millbrook Capital Management Inc.
and its affiliates is a participant.
Dated: September 18, 1996. Very truly yours,
Evelyn B. Spencer
--------------------------
Name of Shareholder
By /s/ Evelyn B. Spencer
------------------------
Name:
Title:
Page 23 of 28 Pages
<PAGE>
ATTACHMENT A
Purposes for Special Meeting of
the holders of common shares
of The Eastern Company ("Eastern")
I. In order to maximize the value of Eastern for the benefit of all
shareholders:
1. To consider and vote upon the proposal (the "Millbrook
Proposal") of Millbrook Capital Management Inc. ("Millbrook"),
on behalf of B. W. Elliott Manufacturing Company, Inc.
("Elliott"), to acquire all of the shares of Common Stock of
Eastern for $15.00 per share in cash through a merger of
Eastern into a subsidiary of Elliott, subject to a customary
merger agreement. Such agreement shall be subject to, among
other provisions:
` confirmation by Millbrook of the accuracy and
completeness of Eastern's public information;
` customary regulatory approvals; and
` a fiduciary out permitting Eastern to seek higher
offers.
2. To consider and vote upon a proposal requesting the Board of
Directors of Eastern (the "Board") to (a) approve the Millbrook
Proposal and (b) in the event the Board has failed to
consummate any merger by 12/31/96, declare a special dividend
of $3.00 per share.
II. In order to prevent the Board and Management of Eastern from further
entrenching themselves and to ensure Eastern's commitment to maximize
shareholder value:
3. To consider and vote upon a proposal amending the By-laws of
Eastern by repealing the amendment of Article X adopted by the
Board on July 29, 1996 which raised the shareholder vote
required to amend, repeal or add to the By-laws to 75% and
restoring the former
Page 24 of 28 Pages
<PAGE>
Article X authorizing a majority vote of the outstanding voting
stock, as well as a majority of the Board of Directors, to
amend, repeal or add to the By-laws.
4. To consider and vote upon a proposal to amend the By-laws to
allow the shareholders by majority vote to remove the directors
of each class.
5. To consider and vote upon a proposal to remove all current
members of the Board and elect a new slate of directors
committed to maximizing shareholder value pursuant to
proposals 1 and 2 above.
Page 25 of 28 Pages
<PAGE>
Exhibit 12
[MILLBROOK CAPITAL MANAGEMENT INC. LETTERHEAD]
September 20, 1996
UPDATE FOR EASTERN SHAREHOLDERS
Dear Fellow Shareholder:
On July 16, Millbrook Capital Management Inc. ("MCM") proposed
to purchase The Eastern Company ("Eastern" or the "Company") for $15 cash
per share, representing a 30% premium to the closing price for the prior 30
trading days. MCM is an investment firm owned by John S. Dyson. Mr. Dyson
and his family have been successfully acquiring and managing middle market
companies for over 40 years. MCM through an affiliated entity controls
178,400 shares, approximately 6.6%, of Eastern's outstanding shares.
The Board of Directors of Eastern, without any concern for its
shareholders, rejected MCM's offer and has refused to engage in any
constructive dialogue with respect to maximizing shareholder value. The
purpose of this letter is to update you regarding the course of events and
to inform you that MCM has not gone away and intends to see shareholder
value maximized for all shareholders of Eastern.
WHAT EASTERN HAS DONE SINCE MCM'S OFFER
Eastern's Board rejected our offer despite our expressed
willingness to increase the offer. We are unaware of any independent
professional financial advice that the Board relied upon. Since then:
` Eastern has refused to meet to discuss our proposal to
maximize value.
` Eastern has refused to provide us the list of fellow
shareholders so we could call a meeting of the owners of
Eastern to consider the situation.
` Eastern's Board further entrenched itself and
disenfranchised shareholders by increasing the vote
required to amend the by-laws from 50% to 75%, and did
not bother to mention this in their press release issued
the same day.
Page 26 of 28 Pages
<PAGE>
` Eastern's management has wasted many thousands of dollars
on litigation to block shareholders from communicating in
order to preserve management's executive positions and
director fees.
` Eastern has even tried in court papers to disenfranchise
a fellow shareholder of several decades, who requested a
shareholder meeting to consider our proposal.
` Eastern's Board and Chief Executive Officer have
abdicated their responsibility to maximize value to a
group of expensive New York lawyers.
Based upon the current Board's track record, we are convinced
that they are opposed to maximizing shareholder value. We believe the
Eastern directors should be held accountable to you - the true owners of
the Company - for their actions.
MCM IS TAKING THE HIGH ROAD
The good news is that MCM is not deterred by Eastern's
entrenched position. Remember, MCM's proposal is designed to assure the
best possible value for all of Eastern's shareholders.
` A minimum of $15 cash per share;
` More, if Eastern can find higher offers; and
` A $3.00 per share special dividend if Eastern fails to
conclude a sale by December 31, 1996.
WHY YOUR BOARD DOES NOT WANT A MEETING
What harm can come of the owners convening to consider
maximizing value in the face of the track record of the current management
and board? The only harm is to management in exposing their dismal record
and in highlighting the fact that shareholders would have been better off
investing in certificates of deposits or money market funds. Despite a
highly touted "strategic plan":
` Eastern's stock, and your investment, have grossly
underperformed the stock market in total return over the
past 8 years.
` Eastern's management has watched earnings fall since
1991;
` Eastern has overseen a 34% drop in employment;
Page 27 of 28 Pages
<PAGE>
` Eastern has rewarded its Board and Management with more
money in eight years than the shareholders have received.
Did you know the Chairman of the Board stepped down in April?
MCM considers this important information. They certainly didn't tell us
until we sued them. Who is at the helm?
NEXT STEPS
The trial to return to the owners of Eastern their rightful
powers will be held on October 2 in Waterbury Superior Court and is open to
the public. We are seeking access to the shareholders list to better
communicate with you. We are also fighting Eastern's effort to prevent the
shareholders from meeting to consider our proposal.
In the meantime, if you know of fellow shareholders who do not
receive this letter (because Eastern won't tell us who you are), please
share your copy. If you want to add your name to the shareholders list
that we are creating, then call 1-800-662-9463 and give your name, address,
phone number and number of shares or fax us at 212-586-0340.
Sincerely,
/s/ Clay B. Lifflander
--------------------------------
Clay B. Lifflander
President, Millbrook Capital
Management, Inc.
Page 28 of 28 Pages
