The Eastern Company Adopts New Shareholder Rights Plan and Redeems Existing Rights
NAUGATUCK, Conn.--(BUSINESS WIRE)--July 22, 1998--The Eastern
Company (AMEX:EML) announced the adoption today of a new Shareholder
Rights Plan and the redemption of the company's existing Rights.
Mr. Leonard F. Leganza, president and CEO of The Eastern Company,
stated, "The new Rights are intended to assure that our shareholders
will receive fair and equal treatment if efforts are ever made to gain
control of The Eastern Company without paying a fair price to all of
our shareholders. The Plan provides for a $120.00 exercise price. We
believe this price reflects the significant improvement in sales and
earnings that have taken place in 1997 and to date in 1998, as well as
management's and the board's continued confidence in the company's
future growth." He added, "The new Rights are not being issued in
response to any known effort to acquire The Eastern Company."
The Rights will be exercisable only if a person or group acquires
10 percent or more of the company's common stock or announces a tender
offer, which if successful, would result in a person or group owning
10 percent or more of the common stock. If a person or group acquires
10 percent or more of the company's common stock, each Right will
entitle its holder (other than the acquiring person or group) to
purchase, at the then current market price, a number of shares of the
company's common stock having an aggregate market value of twice the
exercise price of the Rights.
Prior to any acquisition by a person or group of beneficial
ownership of 10 percent or more of the company's common stock, the
Rights are redeemable for one cent ($0.01) per Right at the option of
of the board of directors.
If the company is acquired in a merger or other business
combination, each Right will entitle its holder to purchase, at the
then current market price, a number of the acquiring company's common
shares having a market value of twice the exercise price of the
The new Rights will be distributed as a dividend on August 21,
1998 to shareholders of record on August 7, 1998. No separate Rights
certificates will be issued on August 21, 1998 because the Rights will
initially trade together with the Company's common stock and will be
represented by the company's common stock certificates.
The Eastern Company will make a payment of one cent ($0.01) per
share for the redemption of each original Right granted under the 1991
program (which the company intends to treat as a dividend for tax
purposes) on August 21, 1998 to common shareholders of record on
August 7, 1998.
The Eastern Company manufactures and markets a broad range of
locks, latches, fasteners and other security hardware that meets
diverse security and safety needs of industrial and commercial
customers. Headquartered in Naugatuck, CT, the company has seven
manufacturing locations in the U.S.A., Canada, Mexico and the Pacific
Rim. It has paid consecutive quarterly dividends since 1940.
Information in this news release contains statements which reflect the
company's current expectations regarding its future operating
performance and achievements. Actual results may differ due to the
many economic uncertainties that affect the company's business
environment. Further information about the potential factors which
could affect the company's financial result are included in the
company's reports and filings with the Securities and Exchange
Commission. The company is not obligated to update or revise the
aforementioned statements for those new developments.
CONTACT: The Eastern Company
John Dibble, (203) 729-2255 ext.241