SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1 )*
Lincoln Logs Ltd.
___________________________________________________
(Name of Issuer)
Common Stock, $0.01 par value
___________________________________________________
(Title of Class of Securities)
533788303
___________________________________________________
(CUSIP Number)
Austin W. Marxe, 153 East 53rd Street, 51st Floor,
New York, New York 10022 (212) 832-5300
___________________________________________________
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
August 6, 1997
___________________________________________________
(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 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box X .
-----
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, and for any subsequent
amendment containing information which would alter
disclosures 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).
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Page 2 of 4 Pages
Item 1. Security and Issuer.
No change.
Item 2. Identity and Background.
No change.
Item 3. Source and Amount of Funds or Other Consideration.
No change.
Item 4. Purpose of Transaction.
The Reporting Persons agreed, as of July 25, 1997,
to form a group for the purpose of seeking representation on
the Board of Directors of the Company. As of August 6,
1997, the Company agreed to postpone its 1997 Annual Meeting
of Shareholders (the "Annual Meeting"), originally scheduled
to be held on August 11, 1997, in order to include two of
the Reporting Persons' nominees as part of the Company's
slate of six directors to be proposed for election at a
rescheduled Annual Meeting to be held no later than
September 12, 1997. The Company will select the remaining
four nominees from the current directors, two of whom will
be Richard C. Farr and John D. Shepherd. In return, the
Reporting Persons have agreed to vote for such slate of
directors at the rescheduled Annual Meeting.
Except as set forth herein, the Reporting Persons
have no plans or proposals to engage in any transactions
involving the Company or the securities of the Company, as
set forth in Items 4(a)-(j) of the form of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
No change.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
No change.
Item 7. Material to be Filed as Exhibits.
Exhibit 1 Letter Agreement, dated August 6, 1997,
between the Company and Special Situations
Fund III, L.P.
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Page 3 of 4 Pages
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
August 14, 1997
Special Situations Fund III, L.P.
By: MGP Advisers Limited Partnership, General Parnter
By: AWM Investment Company, Inc., General Partner
By: /s/Austin W. Marxe
_______________________________________
Austin W. Marxe, President
Special Situations Cayman Fund, L.P.
By: AWM Investment Company, Inc., General Partner
By: /s/Austin W. Marxe
_______________________________________
Austin W. Marxe, President
MGP Advisers Limited Partnership
By: AWM Investment Company, Inc., General Partner
By: /s/Austin W. Marxe
_______________________________________
Austin W. Marxe, President
AWM Investment Company, Inc.
By: /s/Austin W. Marxe
_______________________________________
Austin W. Marxe, President
/s/Austin W. Marxe
____________________________________________
Austin W. Marxe
/s/Davis M. Greenhouse
____________________________________________
David M. Greenhouse
<PAGE>
Page 4 of 4 Pages
EXHIBIT INDEX
Exhibit Description
1 Letter Agreement, dated August 6, 1997,
between the Company and Special Situations
Fund III, L.P.
The Original Lincoln Logs Ltd.
Riverside Drive
Chestertown, NY 12817
August 6, 1997
Special Situations Fund III, L.P.
153 East 53rd Street, 51st Floor
New York, New York 10022
Attn: Austin W. Marxe
Dear Mr. Marxe:
This is to confirm the agreement between Lincoln Logs
Ltd. (the "Company") and you relating to (a) the nomination of
two of your nominees as directors, subject to approval by the
Board of Directors, to be elected as part of the Company's slate
of directors (the "Slate") at the Company's 1997 Annual Meeting
of Shareholders (the "Annual Meeting") and (b) your and our
support of the entire Slate. In connection therewith, the
Company has agreed to postpone the Annual Meeting, originally
scheduled to be held on August 11, 1997, and to reschedule such
Annual Meeting not later than September 12, 1997, in order to
effect the following:
1. establish the size of the Company's Board of
Directors at six directors;
2. select four nominees for election to the Board
from the current directors, two of whom shall be
Richard C. Farr and John D. Shepherd;
3. include two of your nominees in the Slate to be
proposed for election at the rescheduled Annual
Meeting; and
4. have the foregoing subject to and contingent upon
your (and your affiliates') agreement to vote for the
Slate at the Annual Meeting.
In furtherance of the foregoing, the Company will file
with the Securities and Exchange Commission an amendment to its
previously filed proxy materials to its shareholders in
connection with the rescheduled Annual Meeting. The Company will
promptly provide you with all such filings and any press releases
or other documents relating to the foregoing. Promptly
thereafter, you will deliver an irrevocable proxy (subject to our
compliance with the agreement contained herein) consistent with
paragraph (4) of this letter.
Enclosed please find a copy of the minutes of a Special
Meeting of the Board of Directors of the Company held on July 30,
1997, certified by the Secretary of the Company reflecting terms
of the foregoing.
Very truly yours,
/s/ Leslie M. Apple
__________________________
Leslie M. Apple
Member of the Office of
Chief Executive
Acknowledged and Agreed to:
/s/ Austin W. Marxe
__________________________
Austin W. Marxe
Dated: August 14, 1997
