<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13G
Under the Securities Exchange Act of 1934
(Amendment No. 2 )*
-----
Lincoln Logs, Ltd.
---------------------------------------------------
(Name of Issuer)
Common Shares, $ 0.01 Par Value
---------------------------------------------------
(Title of Class of Securities)
533788303
---------------------------------------------------
(CUSIP Number)
Check the following box if a fee is being paid with this statement / /. (A
fee is not required only if the filing person: (1) has a previous statement 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 subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
*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, and for any subsequent amendment containing information which
would alter the disclosures provided in a prior page.
The information required in 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>
CUSIP No. 533788303 13G Page 2 of 12 Pages
- -------------------------------------------------------------------------------
(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
Special Situations Fund III, L.P. ("The Fund")
F13-3737427
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) /x/
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Citizenship or Place of Organization
Delaware
- -------------------------------------------------------------------------------
Number of Shares (5) Sole Voting
Beneficially Power 912,000
Owned by --------------------------------------------------
Each Reporting (6) Shared Voting
Person With Power None
--------------------------------------------------
(7) Sole Dispositive
Power 912,000
--------------------------------------------------
(8) Shared Dispositive
Power None
- -------------------------------------------------------------------------------
(9) Aggregate Amount Beneficially Owned by Each Reporting Person
912,000
- -------------------------------------------------------------------------------
(10) Check Box if the Aggregate Amount in Row (9) Excludes Certain Shares*
- -------------------------------------------------------------------------------
(11) Percent of Class Represented by Amount in Row (9)
36.7%
- -------------------------------------------------------------------------------
(12) Type of Reporting Person*
IV
- -------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 533788303 13G Page 3 of 12 Pages
- -------------------------------------------------------------------------------
(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
MGP Advisers Limited Partnership ("MGP")
F13-3263120
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) /x/
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Citizenship or Place of Organization
Delaware
- -------------------------------------------------------------------------------
Number of Shares (5) Sole Voting
Beneficially Power None
Owned by --------------------------------------------------
Each Reporting (6) Shared Voting
Person With Power None
--------------------------------------------------
(7) Sole Dispositive
Power 912,000
--------------------------------------------------
(8) Shared Dispositive
Power None
- -------------------------------------------------------------------------------
(9) Aggregate Amount Beneficially Owned by Each Reporting Person
912,000
- -------------------------------------------------------------------------------
(10) Check Box if the Aggregate Amount in Row (9) Excludes Certain Shares*
- -------------------------------------------------------------------------------
(11) Percent of Class Represented by Amount in Row (9)
36.7%
- -------------------------------------------------------------------------------
(12) Type of Reporting Person*
IA
- --------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 533788303 13G Page 4 of 12 Pages
- -------------------------------------------------------------------------------
(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
AWM Investment Company, Inc. ("AWM")
11-3086452
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) /x/
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Citizenship or Place of Organization
Delaware
- -------------------------------------------------------------------------------
Number of Shares (5) Sole Voting
Beneficially Power 5,000
Owned by --------------------------------------------------
Each Reporting (6) Shared Voting
Person With Power None
--------------------------------------------------
(7) Sole Dispositive
Power 917,000
--------------------------------------------------
(8) Shared Dispositive
Power None
- -------------------------------------------------------------------------------
(9) Aggregate Amount Beneficially Owned by Each Reporting Person
917,000
- -------------------------------------------------------------------------------
(10) Check Box if the Aggregate Amount in Row (9) Excludes Certain Shares*
- -------------------------------------------------------------------------------
(11) Percent of Class Represented by Amount in Row (9)
36.9%
- -------------------------------------------------------------------------------
(12) Type of Reporting Person*
IA
- --------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 533788303 13G Page 5 of 12 Pages
- -------------------------------------------------------------------------------
(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
Austin W. Marxe
###-##-####
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) /x/
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------
Number of Shares (5) Sole Voting
Beneficially Power 15,500
Owned by --------------------------------------------------
Each Reporting (6) Shared Voting
Person With Power 912,000
--------------------------------------------------
(7) Sole Dispositive
Power 927,000
--------------------------------------------------
(8) Shared Dispositive
Power None
- -------------------------------------------------------------------------------
(9) Aggregate Amount Beneficially Owned by Each Reporting Person
927,500
- -------------------------------------------------------------------------------
(10) Check Box if the Aggregate Amount in Row (9) Excludes Certain Shares*
- -------------------------------------------------------------------------------
(11) Percent of Class Represented by Amount in Row (9)
37.4%
- -------------------------------------------------------------------------------
(12) Type of Reporting Person*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
Page 6 of 12 Pages
Item 1.
(a) NAME OF ISSUER: Lincoln Logs Ltd.
(b) ADDRESS OF ISSUER'S PRINCIPAL EXECUTIVE OFFICES:
Riverside Drive, Chestertown, New York 12817
Item 2.
(a)-(c) NAME OF PERSON FILING; ADDRESS OF PRINCIPAL BUSINESS OFFICE; AND PLACE
OF ORGANIZATION: This statement is filed on behalf of (i) Special
Situations Fund III, L.P., a Delaware limited partnership (the "Fund"),
(ii) MGP Advisers Limited Partnership, a Delaware Limited Partnership
("MGP"), (iii) AWM Investment Company, Inc., a Delaware corporation
("AWM") and (iv) Austin W. Marxe. Each of the foregoing is hereinafter
individually referred to as a "Reporting Person" and collectively as the
"Reporting Persons." The principal office and business address of the
Reporting Persons is 153 East 53rd St., New York, New York 10022. The
busines of the Fund is to acquire, purchase, invest in, sell, convey,
transfer, exchange and otherwise trade in principally equity and equity
related securities. MGP is a general partner of and investment adviser
to the Fund. MGP is registered as a investment adviser under the
Investment Advisers Act of 1940, as amended. The principal business of
MGP is to act as a general partner of and investment adviser to the
Fund. AWM, a Delaware corporation primarily owned by Austin Marxe,
serves as the sole
<PAGE>
Page 7 of 12 Pages
general partner of MGP. AWM is a registered investment adviser under
the Investment Advisers Act of 1940 and also serves as the investment
adviser to, and general partner of, Special Situations Cayman Fund,
L.P., a limited partnership formed under the laws of the Cayman Islands
(the "Cayman Fund"). Austin W. Marxe is also the principal limited
partner of MGP and is the President and Chief Executive Officer of AWM.
Mr. Marxe is principally responsible for the selection, acquisition and
disposition of the portfolio securities by AWM on behalf of MGP, the
Fund and the Cayman Fund. Mr. Marxe individually and beneficially owns
10,500 shares of Common Stock.
2(b) TITLE OF CLASS OF SECURITIES: See cover sheets.
2(c) CUSIP NUMBER: See cover sheets.
Item 3. IF THIS STATEMENT IS FILED PURSUANT TO RULES 13d-1(b), OR
13d-2(b), CHECK WHETHER THE PERSON FILING IS A:
(a) ( ) Broker or Dealer registered under section 15 of the Act
(b) ( ) Bank as defined in section 3(a) (6) of the Act
(c) ( ) Insurance Company as defined in section 3(a) (19) of the Act
(d) (x) Investment Company registered under section 8 of the Investment Company
Act
(e) (x) Investment Adviser registered under section 203 of
<PAGE>
Page 8 of 12 Pages
the Investment Advisers Act of 1940
(f) ( ) Employee Benefit Plan, Pension Fund which is subject to the provisions
of the Employee Retirement Income Security Act of 1974 or Endowment Fund
(g) (x) Parent Holding Company, in accordance with $240.13d
-1 (b) (ii) (G)
(h) ( ) Group, in accordance with $240.13d-1 (b) (1) (ii) (H)
See Exhibit A attached hereto.
Item 4. OWNERSHIP:
(a) AMOUNT BENEFICIALLY OWNED: 927.500 shares of Common Stock are beneficially
owned by Austin W. Marxe and AWM. This amount is composed of 177,500 shares of
Common Stock; of which 162,000 are owned by the Fund, 5,000 are owned by the
Cayman Fund, and 10,500 are owned by Austin Marxe; and Series A convertible
subordinated debentures, owned by the Fund, which entitle the holder to acquire
750,000 shares of Common Stock. 912,000 shares of Common Stock are beneficially
owned by the Fund and MGP. This amount is composed of 162,000 shares of Common
Stock directly owned by the Fund and Series A convertible subordinated
debentures entitling the Fund to acquire an additional 750,000 shares of Common
Stock.
(b) PERCENT OF CLASS: 37.4 percent of the Common Stock are beneficially owned
by Austin Marxe, and 36.9% by AWM. 36.7 percent of the Common Stock are
beneficially owned by MGP and the Fund.
<PAGE>
Page 9 of 12 Pages
(c) NUMBER OF SHARES AS TO WHICH SUCH PERSON HAS RIGHTS TO
VOTE AND/OR DISPOSE OF SECURITIES: The Fund has the sole power to vote or
to direct the vote and to dispose or to direct the disposition of all
securities reported hereby which are beneficially owned by the Fund. MGP
has the sole power to dispose or to direct the disposition of all
securities reported hereby which are beneficially owned by MGP. AWM has
the the sole power to vote or to direct the vote of securities reported
hereby which are beneficially owned by AWM by virtue of it being the
Investment Adviser to the Special Situations Cayman Fund, L.P.. AWM has
the sole power to dispose or to direct the disposition of all securites
reported hereby which are beneficially owned by AWM. Austin Marxe has the
sole power to vote or to direct the vote of securities reported hereby
which are beneficially owned by Austin Marxe by virtue of being the primary
owner of and President and Chief Executive Officer of AWM. Austin W. Marxe
has shared power to vote or to direct the vote of all shares beneficially
owned by Austin Marxe by virtue of being an Individual General Partner of
the Fund. Austin W. Marxe has the sole power to dispose or to direct the
disposition of all securities reported hereby which are beneficially owned
by Austin Marxe.
Item 5. OWNERSHIP OF FIVE PERCENT OR LESS OF A CLASS: If this statement is
being filed to report the fact that as of
<PAGE>
Page 10 of 12 Pages
the date hereof the reporting person has ceased to be the beneficial owner
of more that five percent of the class of securities, check the following
___.
Item 6.OWNERSHIP OF MORE THAN FIVE PERCENT ON BEHALF OF ANOTHER PERSON: The
Fund and the Cayman Fund as owners of the securities in question, have the
right to receive any dividends from, or proceeds from the sale of, such
securities.
Item 7. IDENTIFICATION AND CLASSIFICATION OF THE SUBSIDIARY WHICH ACQUIRED THE
SECURITY BEING REPORTED ON BY THE PARENT HOLDING COMPANY: See Exhibit A
attached hereto.
Item 8. IDENTIFICATION AND CLASSIFICATION OF MEMBERS OF THE GROUP: Not
applicable
Item 9. NOTICES OF DISSOLUTION OF GROUP: Not applicable.
Item 10.CERTIFICATION: Each of the undersigned certifies that, to the best
of its or his knowledge and belief, the securities referred to above were
acquired in the ordinary course of business and were acquired for the purpose
of and do not have the effect of changing or influencing the control of the
issuer of such securities and were not acquired in connection with or as a
participant in any transaction having such purpose or effect.
<PAGE>
Page 11 of 12 Pages
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief, each
of the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: 1/4/96
-------------
SPECIAL SITUATIONS FUND III, L.P.
By:/s/ Austin W. Marxe
-------------------
Austin W. Marxe
Individual General Parnter
MGP ADVISERS LIMITED PARTNERSHIP
By: AWM Investment Company, Inc.
By:/s/ Austin W. Marxe
-------------------
Austin W. Marxe
President and Chief Executive Officer
AWM INVESTMENT COMPANY, INC.
By:/s/ Austin W. Marxe
-------------------
Austin W. Marxe
President and Chief Executive Officer
/s/ Austin W. Marxe
-------------------
AUSTIN W. MARXE
<PAGE>
Page 12 of 12 Pages
EXHIBIT A
This Exhibit explains the relationship between the Reporting Persons. AWM
is the sole general partner of MGP, a registered investment adviser under the
Investment Advisers Act of 1940, as amended. MGP is a general partner of and
investment adviser to the Fund. AWM is a registered investment adviser under
the Investment Advisers Act of 1940 and also serves as the general partner of,
and investment adviser to, the Cayman Fund. Austin W. Marxe is the principal
owner and President of AWM.
