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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to ss. 240.14a-11(c) or Section
240.14a-12
THE EASTERN COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
MMI INVESTMENTS, L.L.C.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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[LOGO]
March 19, 1997
Dear Fellow Eastern Shareholder:
The annual meeting is one week away and the Board of Eastern, led by Stedman
Sweet, continues to rely on mischaracterizations and already broken promises to
try to avoid being held accountable. Ask yourself why they do not offer any
substance to dispute our points? Please consider the facts when evaluating our
platform:
INDEPENDENT RECOMMENDATION
The ISS (Institutional Shareholder Services), an INDEPENDENT research group,
has issued its analysis of the matters before Eastern's stockholders at the 1997
annual meeting. Their review included discussions held with both MMI and
Eastern. You should be interested to know that ISS has recommended a vote for
MMI's directors and against Stedman Sweet and the incumbent directors up for
election. IF YOU ARE TORN--LISTEN TO AN INDEPENDENT VOICE:
- Regarding the so called strategic plan--"ISS BELIEVES THAT ADEQUATE TIME
HAS PASSED FOR EASTERN'S STRATEGIC PLAN TO YIELD DEMONSTRATED IMPROVEMENT
IN SHAREHOLDER VALUE--AND IT HAS FAILED TO DO SO."
- Regarding MMI's qualifications as directors--"WE THEREFORE CONCLUDE THAT A
BOARD SHAKEUP IS NEEDED. ALTHOUGH THE DISSIDENTS WILL ONLY HAVE THREE OUT
OF NINE BOARD SEATS, WE BELIEVE THEY HAVE RELEVANT EXPERTISE TO CONTRIBUTE
TO THE COMPANY IN M&A, MANUFACTURING, AND BUSINESS AND WILL SERVE TO PUT
PRESSURE ON THE BOARD TO ACT ON SHAREHOLDERS' BEHALF."
- Regarding the dividends--EASTERN SHAREHOLDERS "COULD BE EARNING A HIGHER
RETURN ON VIRTUALLY ANY OTHER INVESTMENT, INCLUDING LOW-RISK TREASURY
SECURITIES."
- Regarding our platform for change--THE MMI NOMINEES "HAVE PUT FORTH A
SOUND ACTION PLAN TO IMPROVE EASTERN'S PERFORMANCE, ADDRESSING
EXPENDITURES, CUSTOMER SERVICE, NEW PRODUCT LINES, ACQUISITIONS, AND
MANAGEMENT INCENTIVES."
ISS works for professional investors in need of an INDEPENDENT view of how
to vote in proxy contests. Consider the advice given to professional investors.
THE BOARD'S TRUE INTEREST
The current leadership of Eastern wants you to believe that their economic
interest is aligned with yours. Examine the facts:
- THE BOARD'S COMMITMENT TO EASTERN'S STOCK IS SIMPLY NOT REAL. LOOK AT
THEIR OWN PROXY STATEMENTS! AS OF FEBRUARY 24, 1996 THE BOARD CLAIMED
BENEFICIAL OWNERSHIP OF 323,326 SHARES. AS OF FEBRUARY 28, 1997, THEIR
OWNERSHIP HAS DROPPED BY OVER 5,000 SHARES TO 318,306. STEDMAN SWEET DID
NOT INCREASE HIS OWNERSHIP BY EVEN 1 SHARE! WE BOUGHT 178,400 SHARES IN
1996 AT MARKET PRICE WITH HARD EARNED CASH!
- In fact, Russell McMillen has such low faith in the Company that he let a
over 10,000 of his sweetheart Company options lapse last summer. Indeed,
the Board
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is so panic stricken they have yet to choose a new Chairman. THEIR
COMMITMENT TO THE STOCK IS PHONY AND IS BASED ON ULTERIOR MOTIVES.
- They are asking shareholders to rubber stamp their new "DIRECTORS FEE
PROGRAM." In fact, they have already implemented the plan and are prepared
to vote the shares you have yet to approve for them. THIS STINKS!
STEDMAN SWEET'S LEGACY
In 1988 Stedman Sweet became Chief Executive Officer--THAT'S 9 YEARS AGO!
Let's look at his track record to date:
<TABLE>
<CAPTION>
1988 1996 CHANGE
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
SALES................ $74 million $58 million Down $16 million
NET INCOME........... $2.6 million $0.9 million Down $1.7 million
EMPLOYEES............ 714 494 Down 220 people
RETURN ON EQUITY..... 12% 3% Down 9%
SWEET'S
COMPENSATION......... $189,901 $273,176 UP $83,375 (44%)
</TABLE>
STEDMAN SWEET'S SO CALLED "STRATEGIC PLAN" HAS FAILED THE COMPANY, ITS
SHAREHOLDERS AND ITS EMPLOYEES. We favor change, including a search from within
the Company for a new CEO!
Before it is too late--it is up to the shareholders to stand-up for the
great legacy of The Eastern Company. You can still vote for the future of The
Eastern Company. Even if you already voted, vote against multi-millionaire
Stedman Sweet--RETURN THE ENCLOSED BLUE CARD TODAY!
Sincerely,
<TABLE>
<S> <C> <C>
[] [] []
John S. Dyson Clay B. Lifflander George M. Scherer
</TABLE>
IMPORTANT
Be sure to vote on the BLUE proxy card. Vote "FOR" the MMI nominees and
"FOR" the stockholder proposal. We urge you not to sign any proxy card which
is sent to you by Eastern, even as a protest vote against the Board of
Directors. Remember, each properly executed proxy you submit revokes all
prior proxies.
If you have questions or need assistance in voting your shares, please
contact:
D.F. KING & CO., INC.
1-800-859-8511 (TOLL-FREE)
