SCHEDULE 14A (RULE 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) 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 Under Rule 14a-12 SL INDUSTRIES, INC. - -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) THE RORID COMMITTEE STEEL PARTNERS II, L.P. WARREN G. LICHTENSTEIN NEWCASTLE PARTNERS, L.P. MARK E. SCHWARZ GLEN KASSAN JAMES R. HENDERSON STEVEN WOLOSKY - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) 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. (1) Title of each class of securities to which transaction applies: - -------------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: - --------------------------------------------------------------------------------(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: - -------------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: - -------------------------------------------------------------------------------- (5) Total fee paid: - -------------------------------------------------------------------------------- / / 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. (1) Amount Previously Paid: - -------------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: - -------------------------------------------------------------------------------- (3) Filing Party: - -------------------------------------------------------------------------------- (4) Date Filed: - -------------------------------------------------------------------------------- EXPLANATORY NOTE The RORID Committee (the "Committee") is filing materials contained in this Schedule 14A with the Securities and Exchange Commission in connection with a solicitation of proxies in support of the election of the Committee's nominees to the Board of Directors of SL Industries, Inc. ("SL") at the Annual Meeting of Stockholders scheduled to be held on January 22, 2002. TABLE OF CONTENTS Cover letter to Definitive Proxy Statement from the Committee to SL stockholders dated December 14, 2001.....................Item 1 Open letter from the Committee to SL stockholders........................Item 2 PowerPoint presentation to SL stockholders...............................Item 3 ITEM 1 THE RORID COMMITTEE December 14, 2001 Dear Fellow Stockholder: The RORID Committee is composed of individuals representing combined shareholdings of 850,800 shares of SL Industries, Inc. Common Stock. We are convinced that the current board is not acting in your best interests, and we are therefore seeking your support for the election of our five nominees to the SL Board of Directors at the January 22, 2002 Annual Meeting of Stockholders. We urge you to carefully consider the information contained in the attached Proxy Statement and then support the efforts of The RORID Committee to maximize value for all stockholders by signing, dating and returning the enclosed GOLD proxy today. If you have already voted for the incumbent management slate you have every right to change your vote by signing and returning a later dated proxy. If you have any questions or require any assistance with your vote please contact Innisfree M&A Incorporated, which is assisting us, at their address and toll-free numbers below. Thank you for your support, /s/ Warren G. Lichtenstein -------------------------- Warren G. Lichtenstein On behalf of The RORID Committee [INNISFREE M&A INCORPORATED LOGO] 501 MADISON AVENUE, 20TH FLOOR NEW YORK, NEW YORK 10022 CALL TOLL FREE: (888) 750-5834 BANKS AND BROKERS CALL COLLECT: (212) 750-5833 -2- ITEM 2 AN IMPORTANT MESSAGE TO STOCKHOLDERS FROM THE RORID COMMITTEE (RESPONSIBLE OWNERS REPLACING IRRESPONSIBLE DIRECTORS) Dear Fellow Stockholders: We are the owners of 850,800 shares of SL Industries, Inc. ("SL"). We are convinced that the full value of our investment will never be realized under the leadership of the existing Board and management. We are offering stockholders the opportunity to vote for a slate of accomplished, experienced businessmen committed to maximizing the value of SL for all stockholders at the annual meeting of stockholders scheduled to be held on January 22, 2002. A MISERABLE MANAGEMENT RECORD: o Following the fiscal year ended July 31, 1999, the Board changed SL's fiscal year-end from July 31 to December 31. This change in fiscal year served no justifiable business purpose but instead served to obfuscate financial reporting and confuse the comparisons of SL's financial performance with prior periods by creating a 5-month "stub" period. o Since the beginning of the 5-month "stub" period, SL has reported a staggering $18.6 million in restructuring charges through the quarter ended September 30, 2001. Additional restructuring charges of $1.2 million are projected for the quarter ending December 31, 2001, for a total of $19.8 million in charges. The $19.8 million in charges exceeds total cumulative net profits reported by SL since July 31, 1990. o CEO Owen Farren stated in SL's 1999 annual report that "we believe that SL Industries' common stock represents an outstanding investment opportunity." Since then, SL's share price dropped from $12.75 to recent prices of around $6 - a decline of over 50%. o In October 2001, SL's share price sank to a low of $3.76, a price level not seen since 1994. A MISERABLE CORPORATE GOVERNANCE RECORD: o Until we took legal action against SL, management did not schedule an annual meeting of stockholders for close to two years. We believe that the Board's failure to schedule an annual meeting of stockholders was intended to entrench management and the Board and to avoid accountability for SL's dismal financial and share price performance. -3- o In 1997, the Board eliminated cumulative voting for the election of directors, a mechanism intended to allow minority stockholders to elect directors. This action which effectively abrogates minority stockholder rights has absolutely no defendable business purpose. A FAILURE OF OVERSIGHT: The Board of Directors of a public company is charged with overseeing the management of the company on behalf of the stockholders. Yet despite SL's disastrous results, the SL Board has recently, and in our opinion ludicrously, awarded management lucrative "golden parachutes." The Board seems blindly loyal to a management out of touch with the realities of SL's business. o Since we announced that we would challenge SL's incumbent directors with our slate of nominees, certain SL executives entered into "change in control" agreements with SL under which they would be entitled to exorbitant payments (over $1.1 million in the case of CEO Owen Farren) and other benefits if the executives are terminated following a change in control of SL. o Management has spent over $30 million in cash on acquisitions since 1998. In making acquisitions, we estimate that SL has increased its long-term debt from $833,000 to over $40 million, substantially increasing the financial risk of SL. o SL is in such a financially distressed state that: o management has discontinued SL's quarterly dividend - a dividend that has been paid for years; o SL's auditors have indicated that they might have to modify their report with respect to SL's ability to continue as a "going concern"; and o the NYSE is threatening to delist SL common stock. A LACK OF COMMITMENT: The directors and executive officers own in the aggregate less than 1% of the outstanding shares of SL. With no significant investment stake in SL, the Board's and management's interests are clearly not aligned with the interests of SL stockholders. A REAL ALTERNATIVE: As the second largest stockholder of SL, The RORID Committee believes that its interests are clearly aligned with yours. We urge you to support our efforts by signing, dating and returning your GOLD proxy card today. If you have already voted for the incumbent management slate you have every right to change your vote by signing and returning a later dated GOLD proxy. If you have any questions or require any assistance with your vote, please contact Innisfree M&A Incorporated, which is assisting us, at the address and toll-free numbers set forth in the enclosed Proxy Statement. -4- Thank you for your support, /s/ Warren G. Lichtenstein - -------------------------- Warren G. Lichtenstein On behalf of The RORID Committee -5- Item 3 THE RORID COMMITTEE "RESPONSIBLE OWNERS REPLACING IRRESPONSIBLE DIRECTORS" THE RORID COMMITTEE o The second largest stockholder of SL Industries. o Believes that SL's historical financial and stock price performance has significantly trailed its peer group. o Believes that recent actions of the SL Board have not been in the best interests of the stockholders. o Has nominated its slate of directors in opposition to the SL Board. o Elections for the Board will be held at the annual meeting of stockholders on January 22, 2002. The RORID Committee -- "Responsible Owners Replacing Irresponsible Directors" THE RORID COMMITTEE o The Committee, along with all of the participants in the solicitation, are the beneficial owners of 850,800 shares (14.9%). o We are committed to giving all SL's stockholders the opportunity to receive the maximum value for their shares. The RORID Committee -- "Responsible Owners Replacing Irresponsible Directors" NOMINEES FOR DIRECTOR o Warren G. Lichtenstein o Mark E. Schwarz o James R. Henderson o Glen Kassan o Steve Wolosky The RORID Committee -- "Responsible Owners Replacing Irresponsible Directors" OUR NOMINEES o Are committed to maximizing shareholder value through a sale of the company or other strategic alternatives. o Are seeking to replace five incumbent directors whose interests, we believe, are not aligned with the interests of SL's stockholders. o Will constitute a majority of the current eight-member board if elected. The RORID Committee -- "Responsible Owners Replacing Irresponsible Directors" SL'S LAGGING SHARE PRICE o We believe that SL's share price over the past several years demonstrates the Board's failure to create value for its stockholders. o During the period from July 31, 1995 through December 31, 2000, SL's stock price performance has lagged its peer group index by 201% with cumulative total returns for the S&P Electrical Equipment group index of approximately 308% compared to cumulative total returns for SL's shares of approximately 107%. The RORID Committee -- "Responsible Owners Replacing Irresponsible Directors" SL'S LAGGING SHARE PRICE o On December 29, 2000, SL shares closed at $11.44. Since then, the share price has fluctuated between $14.90 (February 15, 2001) and $3.72 (October 9, 2001), representing a stunning 67% decrease since December 29, 2000. STOCK PERFORMANCE GRAPH PRICE HISTORY - SL (1/1/2001 - 12/14/2001) DATE: 1/1/2001 4/2/2001 7/2/2001 10/1/2001 12/14/2001 PRICE: $11.4375 $13.00 $11.00 $5.69 $6.10 The RORID Committee -- "Responsible Owners Replacing Irresponsible Directors" CONTINUED LOSSES o SL realized net losses of approximately $7.5 million for the nine month period ended September 30, 2001. o SL recorded losses from the restructuring plan of approximately $8.2 million and $4.1 million in the second and third fiscal quarters of 2001, respectively. o SL expects to record approximately $1.2 million in losses from the restructuring plan in the fourth fiscal quarter of 2001. The RORID Committee -- "Responsible Owners Replacing Irresponsible Directors" GOING CONCERN o We are extremely concerned with SL's ability to continue as a going concern. o SL has exhausted the availability of funds under its credit facility with $38.8 million of principal outstanding, as of September 30, 2001, of the maximum $40 million availability. o SL has advised its banks that it was in default of the financial covenants in its credit facility at September 30, 2001. o The auditors have advised SL that failure to resolve these matters prior to the completion of their fiscal year 2001 audit may result in a modification of their audit report with respect to the company's ability to continue as a going concern. The RORID Committee -- "Responsible Owners Replacing Irresponsible Directors" REASONS FOR THE SOLICITATION o We question whether the interests of the SL Board and management are aligned with the interests of SL stockholders in view of their limited ownership of securities of SL. Directors and executive officers own outright a total of 47,828 shares (less than 1%). o We believe that the SL Board must promptly explore other alternatives to maximize stockholder value including a sale of the entire company. The RORID Committee -- "Responsible Owners Replacing Irresponsible Directors" REASONS FOR THE SOLICITATION o On November 15, 2001, SL announced that the regular semi-annual cash dividend payment has been suspended. o SL has been in violation of NYSE listing criteria, due to its failure to comply with market capitalization requirements. On December 11, 2001, SL announced that it submitted a plan of compliance to the NYSE. If the NYSE rejects this plan, SL will be subject to delisting, which would adversely affect stockholders' liquidity. The RORID Committee -- "Responsible Owners Replacing Irresponsible Directors" CHANGE IN CONTROL AGREEMENTS o The SL Board Compensation Committee has stated in public filings that it "believes that executive compensation should be linked to value delivered to shareholders." o On May 1, 2001, certain executive officers of SL (Owen Farren, David Nuzzo and Jacob Cherian) entered into change in control agreements with SL indicating to the Committee that current management's interests may not be aligned with the interests of SL stockholders. o These agreements are inconsistent with the philosophy of the Compensation Committee. The RORID Committee -- "Responsible Owners Replacing Irresponsible Directors" CHANGE IN CONTROL AGREEMENTS o Under the agreements, each officer will be entitled to receive two times (2.99 times for Mr. Farren) the average of his combined annual salary and cash bonus for each of the previous three full calendar years and benefits for up to 24 months (36 months for Mr. Farren) in the event the executive is terminated within one year following a "change in control." The RORID Committee -- "Responsible Owners Replacing Irresponsible Directors" SL BOARD'S RESTRUCTURING PLAN o We believe that the SL Board's restructuring plan is not in the best interests of the stockholders. o On March 19, 2001, SL announced that it had engaged Credit Suisse First Boston (CSFB) to explore a sale of the company. o In November 2001, SL's Board announced that it did not believe that it was in the best interests of the stockholders to sell the entire company. o In November 2001, the Board also announced that it was in the process of negotiating the sale of two subsidiaries of SL. The RORID Committee -- "Responsible Owners Replacing Irresponsible Directors" THE COMMITTEE'S VIEW ON THE SL BOARD'S RESTRUCTURING PLAN o We believe that SL should be sold at the current time. o We are concerned that the potential sale of these two subsidiaries will be for substantial losses and will not maximize stockholder value for the SL stockholders in the immediate future. The RORID Committee -- "Responsible Owners Replacing Irresponsible Directors" PROXY VOTE o Stockholders of record at the close of business on December 5, 2001 are entitled to vote at the annual meeting. o Vote for Nominees committed to a sale of the company. o Vote the GOLD Proxy. A vote on management's white proxy card, even voting against the management slate, will cancel a previous vote for the Committee. The RORID Committee -- "Responsible Owners Replacing Irresponsible Directors"
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DFAN14A Filing
Steel Partners Ii Inactive DFAN14AAdditional proxy materials by non-management
Filed: 21 Dec 01, 12:00am