SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: February 22, 2005
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(Date of earliest event reported)
The Eastern Company
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(Exact name of Registrant as specified in its charter)
Connecticut 0-599 06-0330020
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(State of (Commission File Number) (IRS Employer
incorporation) Identification No.)
112 Bridge Street, Naugatuck, Connecticut 06770
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(Address of principal executive offices) (Zip Code)
(203) 729-2255
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2)
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 4d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 3e-4( c) under the
Exchange Act (17 CFR 240.13e-4( c))
Section 1 - Registrant's Business and Operations
ITEM 1.01 - Entry into a Material Definitive Agreement
On February 22, 2005, The Eastern Company executed an
Employment Agreement (the "Agreement") with the Company's
President and Chief Executive Officer, Leonard F. Leganza. The
term of the Agreement will expire on December 31, 2007,
subject to renewal for one or more additional one-year
periods.
Under the terms of the Agreement, Mr. Leganza will serve as
the President and Chief Executive Officer of the Company
through December 31, 2006, and will become the Chairman of the
Board of Directors of the Company on January 1, 2007. During
the term of the Agreement, Mr. Leganza will be entitled to
receive base compensation at a rate determined by the Board of
Directors, and will also be eligible to participate in the
Company's bonus and equity incentive plans.
If Mr. Leganza's employment as President and Chief Executive
Officer terminates for any reason other than for cause (as
defined in the Agreement), Mr. Leganza will be entitled to
receive deferred compensation equal to $100,000 per year for
five years (pro rated if he both ceases to be President and
Chief Executive Officer and terminates his service as a member
of the Board of Directors prior to January 1, 2008). The
deferred compensation will begin on the later of January 1,
2008 or the date on which he ceases to be President and Chief
Executive Officer. However, the deferred compensation will
begin earlier than January 1, 2008 if he both ceases to be
President and Chief Executive Officer and terminates his
service as a member of the Board of Directors prior to that
date.
If Mr. Leganza's employment is terminated without cause, Mr.
Leganza and his spouse will continue to be entitled to
participate in the Company's group medical insurance plan.
If Mr. Leganza's employment is terminated after a change in
control of the Company (as defined in the Agreement), Mr.
Leganza will be entitled to receive a lump sum severance
payment equal to 2.99 times his average adjusted compensation
(as defined in the Agreement). However, this amount will be
reduced to the extent necessary to avoid the applicability of
Section 280G of the Internal Revenue Code. Following a change
in control, Mr. Leganza will also be entitled to receive the
deferred compensation and medical benefits, whether or not his
termination of employment is for cause.
Pursuant to the terms of the Agreement, Mr. Leganza has
entered into certain noncompetition, nonsolicitation and
nondisclosure covenants with the Company.
The Agreement supersedes the terms of the existing severance
agreement between the Company and Mr. Leganza dated February
21, 2001.
A copy of the Agreement is attached as Exhibit 99.
Section 9 - Financial Statements and Exhibits
ITEM 9.01 - (c) Exhibits
(99) Employment Agreement between The Eastern Company and
Leonard F. Leganza executed on February 22, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
The Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
The Eastern Company
Date: February 24, 2005 By: /s/John L. Sullivan III
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John L. Sullivan III
Vice President, Secretary & Treasurer