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))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Under Rule 14a-12
DEL GLOBAL TECHNOLOGIES CORP.
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(Name of Registrant as Specified in Its Charter)
STEEL PARTNERS II, L.P.
WARREN G. LICHTENSTEIN
WEBFINANCIAL CORPORATION
HENRY PARTNERS, L.P.
MATTHEW PARTNERS, L.P.
HENRY INVESTMENT TRUST, L.P.
CANINE PARTNERS, L.L.C.
DAVID W. WRIGHT
GERALD M. CZARNECKI
SUZANNE M. HOPGOOD
WALLACE BARNES
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(Name of Persons(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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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STEEL PARTNERS II, L.P.
April 29, 2003
Dear Fellow Stockholder:
Steel Partners II, L.P. ("Steel") and certain participants in this
solicitation are the beneficial owners of an aggregate of 1,942,460 shares of
Common Stock of Del Global Technologies Corp. (the "Company"), representing
approximately 18.7% of the outstanding Common Stock of the Company. Steel does
not believe that the current Board of Directors is acting in your best
interests, and is therefore seeking your support for the election of its
nominees to the Board of Directors of the Company at the annual meeting of
stockholders scheduled to be held at the Hilton Rye Town, 699 Westchester
Avenue, Rye Brook, New York 10573 on Thursday, May 29, 2003, at 10:00 A.M.
(local time).
Steel urges you to carefully consider the information contained in
the attached Proxy Statement and then support its efforts to maximize value for
all stockholders by signing, dating and returning the enclosed GOLD proxy today.
The attached Proxy Statement and the enclosed GOLD proxy card are first being
furnished to the stockholders on or about May 1, 2003.
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,
Warren G. Lichtenstein
Steel Partners II, L.P.
[INNISFREE LOGO]
501 Madison Avenue, 20th Floor
New York, New York 10022
CALL TOLL FREE: (888) 750-5834
BANKERS AND BROKERS CALL COLLECT: (212) 750-5833
ANNUAL MEETING OF STOCKHOLDERS
OF
DEL GLOBAL TECHNOLOGIES CORP.
-------------------------
PROXY STATEMENT
OF
STEEL PARTNERS II, L.P.
-------------------------
PLEASE SIGN, DATE AND MAIL THE ENCLOSED GOLD PROXY CARD TODAY
Steel Partners II, L.P. ("Steel") together with certain of its
affiliates is the largest stockholder of Del Global Technologies Corp., a New
York corporation ("Del Global" or the "Company"). Steel is writing to you in
connection with the election of four nominees to the Board of Directors of Del
Global (the "Del Global Board") at the annual meeting of stockholders scheduled
to be held at 10:00 A.M. (local time), on Thursday, May 29, 2003, at the Hilton
Rye Town, 699 Westchester Avenue, Rye Brook, New York 10573, including any
adjournments or postponements thereof and any meeting which may be called in
lieu thereof (the "Annual Meeting"). Steel has nominated four directors in
opposition to Del Global's incumbent directors, whose terms expire at the Annual
Meeting. As further described herein, Steel is seriously concerned with Del
Global's poor financial and stock price performance, distracting government
investigations and other legal proceedings and the deterioration of investor
confidence in the Company. As further described herein, Steel believes that a
more thorough investigation of strategic alternatives, improved corporate
governance policies and maximization of stockholder value will be best achieved
through the election of Steel's nominees. There can be no guaranty that the
election of Steel's nominees will maximize or otherwise enhance stockholder
value or improve corporate governance.
This proxy statement (the "Proxy Statement") and the enclosed GOLD
proxy card are being furnished to stockholders of Del Global by Steel in
connection with the solicitation of proxies from Del Global's stockholders to be
used at the Annual Meeting to elect Steel's nominees, David W. Wright, Gerald M.
Czarnecki, Suzanne M. Hopgood and Wallace Barnes (the "Nominees"), to the Del
Global Board. Steel, Warren G. Lichtenstein, WebFinancial Corporation
("WebFinancial"), Henry Partners, L.P. ("Henry Partners"), Matthew Partners,
L.P. ("Matthew Partners"), Henry Investment Trust, L.P. ("Henry Investment
Trust"), Canine Partners, L.L.C. ("Canine Partners"), David W. Wright, Gerald M.
Czarnecki, Suzanne M. Hopgood and Wallace Barnes are members of a group (the
"Group") formed in opposition to the Del Global Board at the Annual Meeting and
are deemed participants in this proxy solicitation. See "Participant
Information." This Proxy Statement and the GOLD proxy card are first being
furnished to Del Global's stockholders on or about May 1, 2003.
Del Global has set the record date for determining stockholders
entitled to notice of and to vote at the Annual Meeting as April 25, 2003 (the
"Record Date"). The principal executive offices of Del Global are located at One
Commerce Park, Valhalla, New York 10595. Stockholders of record at the close of
business on the Record Date will be entitled to vote at the Annual Meeting.
According to Del Global, as of the Record Date, there were 10,332,548 shares of
common stock, $.10 par value per share (the "Shares"), outstanding and entitled
to vote at the Annual Meeting. Steel, along with all of the participants in this
solicitation, are the beneficial owners of an aggregate of 1,942,460 Shares,
which represents approximately 18.7% of the Shares outstanding (based on
information publicly disclosed by Del Global). The participants in this
solicitation intend to vote such Shares for the election of the Nominees.
THIS SOLICITATION IS BEING MADE BY STEEL AND NOT ON BEHALF OF THE BOARD OF
DIRECTORS OR MANAGEMENT OF DEL GLOBAL. STEEL IS NOT AWARE OF ANY OTHER MATTERS
TO BE BROUGHT BEFORE THE ANNUAL MEETING OTHER THAN THE APPROVAL OF THE COMPANY'S
2003 EQUITY INCENTIVE PLAN AND THE RATIFICATION OF THE APPOINTMENT OF THE
COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS. SHOULD OTHER MATTERS, WHICH STEEL IS
NOT AWARE OF A REASONABLE TIME BEFORE THIS SOLICITATION, BE BROUGHT BEFORE THE
ANNUAL MEETING, THE PERSONS NAMED AS PROXIES IN THE ENCLOSED GOLD PROXY CARD
WILL VOTE ON SUCH MATTERS IN THEIR DISCRETION.
STEEL URGES YOU TO SIGN, DATE AND RETURN THE GOLD PROXY CARD IN FAVOR OF THE
ELECTION OF ITS NOMINEES DESCRIBED IN THIS PROXY STATEMENT.
IF YOU HAVE ALREADY SENT A PROXY CARD FURNISHED BY DEL GLOBAL MANAGEMENT TO THE
DEL GLOBAL BOARD, YOU MAY REVOKE THAT PROXY AND VOTE FOR THE ELECTION OF STEEL'S
NOMINEES BY SIGNING, DATING AND RETURNING THE ENCLOSED GOLD PROXY CARD. THE
LATEST DATED PROXY IS THE ONLY ONE THAT COUNTS. ANY PROXY MAY BE REVOKED AT ANY
TIME PRIOR TO THE ANNUAL MEETING BY DELIVERING A WRITTEN NOTICE OF REVOCATION OR
A LATER DATED PROXY FOR THE ANNUAL MEETING TO STEEL, C/O INNISFREE M&A
INCORPORATED WHICH IS ASSISTING IN THIS SOLICITATION, OR TO THE SECRETARY OF DEL
GLOBAL, OR BY VOTING IN PERSON AT THE ANNUAL MEETING.
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IMPORTANT
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU
OWN. STEEL URGES YOU TO SIGN, DATE, AND RETURN THE ENCLOSED GOLD PROXY CARD
TODAY TO VOTE FOR THE ELECTION OF STEEL'S NOMINEES.
The Nominees are committed, subject to their fiduciary duties to Del
Global's stockholders, to giving all Del Global's stockholders the opportunity
to achieve the maximum value for their Shares. A vote FOR the Nominees will
enable you - as the owners of Del Global - to send a message to the Del Global
Board that you are committed to maximizing the value of your Shares.
o If your Shares are registered in your own name, please sign and
date the enclosed GOLD proxy card and return it to Steel, c/o
Innisfree M&A Incorporated, in the enclosed envelope today.
o If any of your Shares are held in the name of a brokerage firm,
bank, bank nominee or other institution on the Record Date, only
it can vote such Shares and only upon receipt of your specific
instructions. Accordingly, please contact the person responsible
for your account and instruct that person to execute on your
behalf the GOLD proxy card. Steel urges you to confirm your
instructions in writing to the person responsible for your
account and to provide a copy of such instructions to Steel, c/o
Innisfree M&A Incorporated, who is assisting in this
solicitation, at the address and telephone numbers set forth
below, and on the back cover of this proxy statement, so that we
may be aware of all instructions and can attempt to ensure that
such instructions are followed.
If you have any questions regarding your proxy,
or need assistance in voting your Shares, please call:
[INNISFREE LOGO]
501 Madison Avenue, 20th Floor
New York, New York 10022
CALL TOLL FREE: (888) 750-5834
BANKERS AND BROKERS CALL COLLECT: (212) 750-5833
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PROPOSAL NO. 1 - ELECTION OF DIRECTORS BY HOLDERS OF COMMON STOCK
REASONS FOR THE SOLICITATION
We are asking you to support our Nominees so as to:
o ELECT NOMINEES WHO WILL SUPPORT ACTIONS THAT WE BELIEVE WOULD
IMPROVE THE FINANCIAL RESULTS AND CORPORATE GOVERNANCE OF THE
COMPANY;
o ELECT NOMINEES WHO WILL PROMOTE INTEGRITY AND ACCOUNTABILITY AT
THE BOARD LEVEL AND FROM MANAGEMENT;
o ELECT NOMINEES WHO WILL SUPPORT ACTIONS THAT THE NOMINEES BELIEVE
WOULD GIVE STOCKHOLDERS THE GREATEST OPPORTUNITY TO MAXIMIZE THE
VALUE OF THEIR SHARES; AND
o ELECT INDEPENDENT DIRECTORS WHO HAVE NO AFFILIATION WITH THE
CURRENT DEL GLOBAL BOARD AND MANAGEMENT.
As further described below, Steel believes that the election of the
Nominees represents the best means for Del Global's stockholders to maximize the
value of their Shares. Steel and certain participants in this solicitation,
together, the largest stockholder group of Del Global, have a vested interest in
the maximization of the value of the Shares. Additionally, Steel's Nominees have
extensive experience in private and public investment, corporate governance and
business management. If elected to the Board, the Nominees will use their
experience to oversee the Company under current management with the goal of
achieving consistent profitability while exploring all available alternatives to
maximize stockholder value. There can be no assurance that the election of our
nominees will maximize or otherwise enhance stockholder value or improve
corporate governance.
DEL GLOBAL NEEDS TO IMPROVE CORPORATE GOVERNANCE
WE BELIEVE THAT DEL GLOBAL HAS BEEN SLOW TO IMPLEMENT FUNDAMENTAL CORPORATE
GOVERNANCE PRACTICES, INCLUDING ITS FAILURE TO HOLD AN ANNUAL MEETING OF
STOCKHOLDERS IN OVER THREE YEARS.
We believe that proper corporate governance procedures and practices
and the level of management accountability that the Del Global Board imposes are
highly relevant to Del Global's financial performance. In view of sweeping
legislation enacted by Congress including the Sarbanes-Oxley Act of 2002 and the
rules being adopted by the major stock exchanges which are promoting greater
accountability to stockholders, we believe that the state of Del Global's
corporate governance is inadequate. The Company has been slow to implement the
most basic corporate governance practices, as set forth below.
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o DEL GLOBAL HAS NOT HELD AN ANNUAL MEETING OF STOCKHOLDERS SINCE
FEBRUARY 10, 2000. Remarkably, for over three years, Del Global
has appointed new directors at its sole discretion rather than
giving the stockholders, the true owners of the Company, the
opportunity to exercise their right to democratically install
new directors or to vote on other business proposals. None of
the incumbent directors were elected by the stockholders of Del
Global.
o DEL GLOBAL ONLY RECENTLY FORMED A NOMINATING AND CORPORATE
GOVERNANCE COMMITTEE. On March 26, 2003, Steel nominated three
of its Nominees. Unlike many public companies, Del Global did
not until April 2003 have a Nominating and Corporate Governance
Committee, the customary functions of which are to identify and
recommend to the board of directors qualified director nominees
and to assist the board of directors in developing and
recommending a set of effective corporate governance policies
and procedures.
o DEL GLOBAL AMENDED ITS BYLAWS TO ELIMINATE THE RIGHT OF
STOCKHOLDERS TO CALL SPECIAL MEETINGS OF STOCKHOLDERS. In
September 2001, Del Global amended its Bylaws to eliminate the
right of stockholders to call special meetings of stockholders.
We believe this action has reduced the voice of stockholders in
the governance of the Company at a time when important decisions
needed to be made regarding the Company's future.
o DEL GLOBAL'S POISON PILL ENTRENCHES THE DEL GLOBAL BOARD AND
MANAGEMENT. Del Global has a poison pill. We believe the poison
pill has the effect of entrenching the Del Global Board and
management. In our opinion, this lack of management
accountability to stockholders adversely affects stockholder
value.
We believe that Del Global stockholders deserve a higher level of
accountability, given Del Global's recent financial performance. We are
therefore committed to seeking corporate governance reforms. In Steel's opinion,
the Company's failure to hold an annual meeting of stockholders in over three
years has had the effect of entrenching directors and disenfranchising
stockholders. Moreover, we believe Del Global has been slow to implement certain
progressive corporate governance reforms, as evidenced by its failure to create
a Nominating and Corporate Governance Committee until April 2003, which we
believe could have curbed excessive director compensation and numerous conflicts
among certain directors and executive officers as described in greater detail
below.
Independence of Directors:
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We believe that the Del Global Board should be comprised of a
majority of independent directors who have no affiliation with the current Del
Global management and the Del Global Board.
We believe that the Nominees would be truly independent directors
and are committed to representing the interests of all the stockholders of Del
Global. The Nominees and their affiliates have not entered into any agreements
to provide professional or other services to Del Global and have no interest in
Del Global except for their interests that may arise from being stockholders of
Del Global.
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We believe that for independent directors to serve as an effective
check on management, independent directors should meet at regularly scheduled
executive sessions, without the presence of management. This facilitates frank
and open discussion among independent directors. Regular scheduling of such
meetings would not only promote more effective communication among independent
directors, but would avoid any negative inference that might be drawn from the
sessions themselves. Finally, we believe that Del Global should make prominent
disclosure in its public filings of a means by which interested parties could
communicate with independent directors.
Bylaw Amendment Allowing Stockholders to Call Special Meetings:
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If the Nominees are elected, they also will use their best efforts
to cause the Del Global Board to amend Del Global's Bylaws to allow holders of
at least twenty-five percent (25%) of the Company's outstanding Common Stock to
call special meetings of stockholders, a stockholder right that the Del Global
Board eliminated in September 2001, reducing the rights of its stockholders. The
Nominees believe that authorizing stockholders who own at least twenty-five
percent (25%) of the Company's Common Stock to call special meetings of
stockholders will afford stockholders the opportunity to hold the Del Global
Board accountable for its actions at any time of the year, not just once a year
at the annual meeting of stockholders. The Del Global Board, which is elected by
the stockholders, should listen and be receptive to requests for special
meetings of stockholders having a significant interest in the Company in order
to give prompt and timely consideration to matters that stockholders deem
important to their interests and not be required to wait until the next annual
meeting, since the lapse of time could be very detrimental.
Redemption of Poison Pill:
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If the Nominees are elected, they also will use their best efforts
to cause the Del Global Board to terminate Del Global's poison pill by redeeming
all of the outstanding rights under Del Global's poison pill and filing evidence
of such redemption with the rights agent. Historically, proponents of poison
pills have asserted that they enable a board of directors to respond in an
orderly fashion to unsolicited takeover bids by providing sufficient time to
carefully evaluate the fairness of such a bid. We oppose Del Global's poison
pill because we believe that it places such an effective obstacle to a takeover
bid that it serves to entrench the Del Global Board and management. We believe
that Del Global's poison pill forces a would-be acquirer to negotiate its bid
for Del Global with management, instead of making its offer directly to the
stockholders of Del Global. In our opinion, the power of the Del Global Board
and management to block any bid that does not leave them in control adversely
affects stockholder value. We further believe that the effect of their poison
pill is to insulate management from the most fundamental accountability to
stockholders by providing management and the Del Global Board with a veto over
takeover bids, even when stockholders might favorably view such bids.
The Company adopted a Rights Agreement governing the Company's
poison pill in September 2001 pursuant to which it declared a dividend of one
common share purchase right for each outstanding share of its common stock.
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Under the Rights Agreement, each share of the Company's common stock issued
after adoption of the Rights Agreement will include an associated right. Each
right entitles the registered holder to purchase one share of the Company's
common stock at an exercise price of $25 per share. The rights are not
exercisable until the earlier of (i) 10 business days after a person or group of
affiliated or associated persons - referred to as an acquiring person - (other
than those exempted in the Rights Agreement) has acquired beneficial ownership
of 20% or more of the Company's common stock then outstanding, or (ii) 10
business days following the commencement of, or public announcement of an
intention to make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by an acquiring person of 20% or more
of the outstanding shares of the Company's common stock. The rights will expire
on the earlier of (i) the redemption or exchange of the rights or (ii) the close
of business on September 17, 2011. In the event the Company is acquired in a
merger or other business combination, or 50% or more of its consolidated assets
or earning power is sold after a person or group becomes an acquiring person,
each holder of a right - other than the acquiring person - will thereafter have
the right to receive, upon the exercise of the share purchase right at the then
current exercise price, that number of shares of common stock of the acquiring
person or its parent corporation which at the time of such transaction has a
market value equal to two times the exercise price of the right. At any time
after any person or group becomes an acquiring person and prior to the
acquisition by the acquiring person of 50% or more of the outstanding shares of
the Company's common stock, the Del Global Board may exchange the then
outstanding rights in whole or in part, at an exchange ratio of one share of the
Company's common stock per right. The rights owned by the acquiring person will
be deemed to be void. In the event the Company makes a public announcement that
a person or group has become an acquiring person, each holder of a right, other
than rights beneficially owned by the acquiring person, will thereafter have the
right to purchase from the Company upon exercise that number of shares of the
Company's common stock having a market value equal to two times the exercise
price for the right. At any time on or prior to the close of business on the
earlier of: (i) 10 days following an event that causes a person to become an
acquiring person (or a later date as may be determined by action of the Del
Global Board and publicly announced by the Company prior to the 10th day
following the acquiring person being named such) or (ii) the close of business
on September 17, 2011, the Del Global Board may redeem all, but not less than
all, of the then outstanding rights at a price of $.01 per right.
DEL GLOBAL'S DISAPPOINTING FINANCIAL RESULTS
DURING THE PAST THREE YEARS, DEL GLOBAL HAS SUSTAINED SIGNIFICANT LOSSES.
Del Global's financial results over the past three years have been a
disappointment to Steel, and it believes, to many other Del Global stockholders.
Del Global has sustained operating and net losses during each of the past three
completed fiscal years and the three and six month periods ended February 1,
2003.
o According to the Company's registration statement on Form S-1
filed with the Securities and Exchange Commission ("SEC") on
February 12, 2003 (the "Form S-1"), the Company realized
operating losses of $14,042,000, $11,846,000 and $4,999,000 and
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net losses of $12,012,000, $8,521,000 and $3,638,000 for fiscal
2002, 2001 and 2000, respectively.
o According to the Company's most recent Form 10-Q for the quarter
ended February 1, 2003, the Company realized operating losses of
$976,000 and $1,715,000 and net losses of $6,255,000 and
$6,861,000 for the three and six month periods ended February 1,
2003, respectively.
In December 2000, the Company's Common Stock was suspended from
trading on the Nasdaq National Market and subsequently de-listed because the
Company failed to timely file its 2000 annual report with the SEC. The Company's
Common Stock languishes in the "Pink Sheets" with little or no daily trading
volume.
CONFLICTS OF INTEREST
THE COMPANY HAS PAID FEES TO PARTIES RELATED TO ITS CURRENT CHIEF EXECUTIVE
OFFICER AND DIRECTOR, SAMUEL PARK, AND CERTAIN FORMER DIRECTORS. WE BELIEVE THAT
FEES PAID TO RELATED PARTIES MAY IMPAIR A DIRECTOR'S ABILITY TO EXERCISE
INDEPENDENT JUDGMENT.
The Company has paid fees to parties related to its current Chief
Executive Officer and Director, Samuel Park, and certain former directors.
According to public filings, Samuel Park and certain former directors have made
it a practice of engaging themselves, friends and family to perform services for
the Company and, in some cases, offering them full-time employment with the
Company. We question whether these services could have been obtained by the
Company on more favorable terms from independent third parties.
o CONFLICTS OF INTEREST INVOLVING CEO AND DIRECTOR SAMUEL PARK.
According to the Form S-1, during fiscal 2002, the Company paid
approximately $319,000 to a consulting firm for work primarily
performed by Edward Ferris and Damien Park, the son of Samuel
Park. Between July 2002 and January 2003, the Company also
incurred fees of approximately $18,600 per month to a consulting
firm of which Damien Park is President. Despite these
pre-existing business and family relationships with the
Company's CEO and Director, Edward Ferris was subsequently
appointed Senior Vice President, Corporate and Organizational
Development of the Company at an annual base salary of $200,000
and Damien Park recently was also given a full-time position
with the Company.
o CONFLICTS OF INTEREST INVOLVING FORMER CHAIRMAN OF THE BOARD
ROGER WINSTON. According to the Form S-1, during fiscal 2002,
the Company paid approximately $279,000 to an executive
recruiting firm for recruiting services. Dale Winston, the Chief
Executive and partial owner of this recruiting firm, is the
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spouse of Roger Winston, the former Chairman of the Board of the
Company and was the Chairman during the period when these
payments were made.
o CONFLICT OF INTEREST INVOLVING DIRECTOR DAVID MICHAEL WHO
RECENTLY RESIGNED FROM THE DEL GLOBAL BOARD. According to the
Form S-1, during fiscal 2002, the Company paid approximately
$22,000 in accounting fees to an accounting firm partially owned
by David Michael, a Director of the Company until April 2003,
while Mr. Michael was Chairman of the Company's Audit Committee.
VARIOUS GOVERNMENT INVESTIGATIONS AND OTHER LEGAL PROCEEDINGS INVOLVING DEL
GLOBAL
THE COMPANY AND CERTAIN OF ITS FORMER DIRECTORS HAVE BEEN TARGETED IN VARIOUS
GOVERNMENT INVESTIGATIONS AND OTHER LEGAL PROCEEDINGS THAT WE BELIEVE HAVE
COLLAPSED INVESTOR CONFIDENCE IN THE COMPANY.
We believe the following government investigations and other legal
proceedings have had a destructive impact on investor confidence in the Company.
o SEC ENFORCEMENT ACTION AGAINST DEL GLOBAL. According to the Form
S-1, in December 2000, the Division of Enforcement of the SEC
issued a Formal Order Directing Private Investigation in
connection with violations relating to previously reported
accounting irregularities, giving rise to the need to restate
financial statements for fiscal 1997 to fiscal 1999 and the
first three quarters of fiscal 2000. The Company has indicated
in the Form S-1 that although the Company has reached an
agreement in principle with the SEC to settle its claims against
the Company, the proposed settlement may be subject to necessary
future restatements of historical financial statements or other
material adjustments which, in our opinion, calls into question
the effectiveness of the Company's past and current financial
disclosure controls and procedures.
o DEPARTMENT OF DEFENSE INVESTIGATION OF POWER CONVERSION GROUP
BUSINESS. According to the Form S-1, in March 2002, the RFI
Corporation subsidiary, part of the Company's Power Conversion
Group, was served with a subpoena by the U.S. Attorney for the
Eastern District of New York in connection with investigations
by the U.S. Department of Defense. Although the Company has
disclosed that it has revised the subsidiary's quality control
practices, the investigation is ongoing and its outcome is
uncertain. This investigation commenced approximately one year
after Samuel Park, the Company's Chief Executive Officer, joined
the Company.
o SEC CONSENT DECREE AND "WELLS NOTICE" INVOLVING DAVID MICHAEL.
According to the Form S-1, David Michael, a director of the
Company from 1985 until his recent resignation in April 2003,
was the subject of a consent decree with the SEC in April 1999
pursuant to which Mr. Michael was enjoined from appearing or
practicing before the SEC as an accountant. In October 2002, Mr.
Michael (as well as a former director who has also since
resigned) informed Del Global that he had received a "Wells
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Notice" from the SEC indicating that the SEC is considering
whether or not to recommend the filing of a civil proceeding
against Mr. Michael in connection with the Company's accounting
issues. In connection with Mr. Michael's retirement in April
2003 from the Del Global Board, Del Global entered into a
Separation Agreement and General Release of Claims with Mr.
Michael providing for, among other things, the immediate vesting
of 25,625 stock options, an extension of the term of certain
stock options and a release.
o CLASS ACTION LITIGATION SETTLEMENT. According to the Form S-1, a
consolidated class action complaint was filed against the
Company, certain of its former officers and current and former
directors in February 2001 alleging violations of federal
securities laws. The defendants settled the case resulting in
the issuance to the plaintiffs of a $2 million subordinated
note, 2.5 million shares of the Company's Common Stock, and
warrants to purchase 1 million shares of the Company's Common
Stock.
DEL GLOBAL'S COMPENSATION ARRANGEMENTS SHOULD BE TIED CLOSELY TO PERFORMANCE
WE BELIEVE THAT SAMUEL PARK BENEFITS FROM EXCESSIVE CASH AND NON-CASH
COMPENSATION ARRANGEMENTS.
We believe that executive compensation should be linked to value
delivered to stockholders and that a public company's compensation programs
should be designed to provide a correlation between the financial success of
management and the stockholders. We see no correlation between the financial
performance of Del Global as described above and Samuel Park's lucrative
compensation arrangement.
o Under his employment agreement with the Company, Samuel Park
receives a base salary of at least $350,000 per year and is
entitled to an annual bonus equal to sixty percent (60%) of his
then current salary, subject to achieving unspecified
performance goals.
o According to the Form S-1, it appears that during fiscal 2002,
Mr. Park received the maximum bonus allowable under his
employment agreement ($220,500) even after the Company (i)
incurred a net loss of over $12 million for the fiscal year,
(ii) was in violation of certain covenants of its new credit
facility shortly after it was obtained and (iii) the Department
of Defense commenced its investigation of the RFI Corporation
subsidiary.
o Despite these setbacks suffered by the Company during fiscal
2002, the Company has indicated in the Form S-1 that the Del
Global Board agreed in December 2002 to amend Mr. Park's
employment agreement to provide for a gross-up payment equal to
the total amount of all taxes imposed on change of control
payments. We believe these additional benefits are costly and
unnecessary. The Company has indicated in the Form S-1 that the
large payments required pursuant to the Company's change of
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control agreements could unduly burden the Company or serve as a
barrier to a potential acquiror.
o In addition, according to the Form S-1, the Company also
maintains executive apartments for the use of Mr. Park and other
members of management which we believe is excessive given the
Company's size and financial performance.
WE BELIEVE THAT THE ELECTION OF STEEL'S NOMINEES REPRESENTS AN OPPORTUNITY FOR
STOCKHOLDERS TO MAXIMIZE THE VALUE OF THEIR SHARES.
Steel has nominated four truly independent nominees who, if elected,
will constitute a majority of the Company's Board of Directors. We believe that
a majority of independent directors who have no affiliation with the current Del
Global Board and management will increase the quality of oversight by the Del
Global Board, lessen the possibility of conflicts of interest and allow the Del
Global Board to most effectively exercise its fiduciary duties to the
stockholders.
Steel's Nominees are David W. Wright, Gerald M. Czarnecki, Suzanne
M. Hopgood and Wallace Barnes. Mr. Wright is an experienced value investor with
a significant investment stake in Del Global. Entities managed by Mr. Wright
have been stockholders of Del Global since December 2001. Mr. Wright is familiar
with the Company's history, management and operations through his analysis of
the Company's public filings and communications with management. Mr. Czarnecki,
Ms. Hopgood and Mr. Barnes, who were all referred to Steel by the President of
the National Association of Corporate Directors, are seasoned business managers
with substantial board leadership experience and a strong knowledge of corporate
governance trends and policy. If elected, the Nominees presently intend to
oversee the Company under its current management, including Samuel Park as Chief
Executive Officer, and do not expect to seek acquisitions until the
reconstituted Del Global Board is comfortable with management and Del Global's
business plan. If elected, the Nominees intend to review Del Global's current
business plan to determine whether it is likely to result in the maximization of
stockholder value and make recommendations to management accordingly. In
addition, if elected, the Nominees intend to take the following action with an
emphasis on corporate governance reform, subject to their fiduciary duties,
including, but not limited to:
o AMENDING THE COMPANY'S BYLAWS TO ALLOW HOLDERS OF AT LEAST
TWENTY-FIVE PERCENT (25%) OF THE COMPANY'S OUTSTANDING COMMON
STOCK TO CALL SPECIAL MEETINGS OF STOCKHOLDERS, A STOCKHOLDER
RIGHT THAT THE DEL GLOBAL BOARD ELIMINATED IN SEPTEMBER 2001,
REDUCING THE RIGHTS OF ITS STOCKHOLDERS;
o REPEALING THE COMPANY'S POISON PILL;
o AMENDING THE COMPANY'S BYLAWS TO PROVIDE FOR THE PERMANENT
SEPARATION OF THE OFFICES OF CHIEF EXECUTIVE OFFICER AND
CHAIRMAN OF THE BOARD;
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o ADDING OUR NOMINEES, RECOGNIZED CORPORATE GOVERNANCE EXPERTS, TO
DEL GLOBAL'S NOMINATING AND CORPORATE GOVERNANCE COMMITTEE TO
ENSURE THE ADOPTION AND IMPLEMENTATION OF "BEST PRACTICES"
CORPORATE GOVERNANCE;
o ACTIVELY SEEKING TO SETTLE ALL PENDING GOVERNMENTAL ACTIONS AND
CIVIL PROCEEDINGS;
o APPLYING TO RE-LIST THE COMPANY'S COMMON STOCK ON THE NASDAQ
NATIONAL MARKET OR NASDAQ SMALLCAP MARKET TO THE EXTENT THE
COMPANY QUALIFIES UNDER NASDAQ'S LISTING REQUIREMENTS; AND
o CONSIDERING THE RETENTION OF A NATIONALLY RECOGNIZED INVESTMENT
BANKING FIRM TO ASSIST IN THE REVIEW OF STRATEGIC ALTERNATIVES.
There can be no assurance that the foregoing actions will be implemented if our
Nominees are elected or that the election of our Nominees will maximize or
otherwise enhance stockholder value.
We wish to provide the stockholders, the true owners of Del Global,
with the opportunity to elect directors that are unaffiliated with the existing
Del Global Board and management. Your vote to elect the Nominees does not
constitute a vote in favor of our value enhancing plans for Del Global. Your
vote to elect the Nominees will have the legal effect of replacing four
incumbent directors of Del Global with our Nominees. If the Nominees are elected
to the Del Global Board, stockholders will have an opportunity to vote on any
value enhancing plan or proposal to the extent required by applicable law.
Neither we (nor to our knowledge, any other person on our behalf)
has made or undertaken any analysis or reports as to whether stockholder value
will be maximized as a result of this solicitation or obtained reports from
consultants or other outside parties as to whether the proposals presented
herein would have an effect on stockholder value. There can be no assurance that
stockholder value will be maximized as a result of this solicitation or the
election of the Nominees.
THE NOMINEES
The following information sets forth the name, business address,
present principal occupation, and employment and material occupations,
positions, offices, or employments for the past five years of each of the
Nominees. This information has been furnished to Steel by the Nominees. The
Nominees are citizens of the United States of America.
DAVID W. WRIGHT (Age 44) has served since 1997 as the President of
the general partner of Henry Partners and Matthew Partners, two private
investment partnerships that invest in securities of publicly traded, micro cap
companies. Mr. Wright served on the Board of Directors of TAB Products Co., a
document management company formerly listed on the AMEX, from September 2001
until the sale of the company in October 2002. Mr. Wright also served as a
member of TAB Products' Audit Committee, Employee Benefits Committee and its
Special Committee, which was formed to oversee the company's sale process. The
business address of Mr. Wright is c/o Henry Investment Trust, L.P., 255 South
17th Street, Suite 2501, Philadelphia, PA 19103. As of the date hereof, Mr.
Wright beneficially owned 355,298 Shares, consisting of 8,000 Shares owned
directly by Mr. Wright, 233,000 Shares owned directly by Henry Partners and
114,298 Shares (including 52,298 Shares issuable upon the exercise of warrants,
at a price of $2.00 per Share, exercisable in full upon the effectiveness of a
registration statement on Form S-1 (SEC File No. 333-103148) filed by the
Company covering the Shares underlying the warrants) owned directly by Matthew
Partners. Mr. Wright is the President and Managing Member of Canine Partners,
the general partner of Henry Investment Trust, which in turn is the general
partner of each of Henry Partners and Matthew Partners. By virtue of his
positions with Henry Partners and Matthew Partners, Mr. Wright has sole voting
and dispositive power with respect to the Shares owned by such entities. For
information regarding purchases and sales of securities of Del Global
beneficially owned by Mr. Wright during the past two years, see Schedule I.
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GERALD M. CZARNECKI (Age 63) has served as the Chairman of The
Deltennium Corporation, a privately held holding company ("Deltennium"), since
November 1995. Deltennium operates as a holding company for various operating
businesses of which Mr. Czarnecki is the principal stockholder, including
Deltennium Capital, Inc., a venture capital firm. Prior to forming Deltennium,
Mr. Czarnecki had a broad career as a corporate executive including serving as
Chairman & CEO of Honfed Bank, a multi-billion dollar bank; President of UNC
Inc., a manufacturing and services company in the aviation industry; and Senior
Vice President of Human Resources and Administration of IBM, the world's largest
computer company. Mr. Czarnecki is a frequent speaker and seminar leader on a
broad range of corporate governance issues and serves on a number of corporate
boards. He has served as a member of the Board of Directors and Chairman of the
Audit Committee of State Farm Insurance Companies since 1998; serves as
non-executive Chairman of Renaissance, Inc. and serves as a member of the Board
of Directors and member of the Audit Committee of ATM National, Inc. He is a
member of the Board of Directors of the National Association of Corporate
Directors, National Capital Area Chapter and is a consultant to Board Governance
Services, Inc., a third party provider of advisory services to boards of
directors. The business address of Mr. Czarnecki is c/o The Deltennium
Corporation, 6900 Wisconsin Avenue, Suite #206, Bethesda, MD 20815. As of the
date hereof, Mr. Czarnecki did not beneficially own any securities of Del Global
and has not purchased or sold any securities of Del Global during the past two
years.
SUZANNE M. HOPGOOD (Age 53) has served as the President of The
Hopgood Group, LLC, a provider of consulting and interim management services to
the hospitality, financial services, and real estate industries, since founding
the company in 1985. From August 2000 to October 2001, Ms. Hopgood served as
President, Chief Executive Officer and as a director of Houlihan's Restaurant
Group, Inc., an operator of full service casual dining restaurants. From May
1998 to May 2000, Ms. Hopgood served as Chairman of the Board of Furr's
Restaurant Group, Inc. ("Furr's"), an operator of family-style cafeteria and
buffet restaurants formerly listed on the NYSE. She also served as Chief
Executive Officer of Furr's from May 1998 to October 1998 and as a director from
May 1996 to May 2000. Ms. Hopgood has extensive experience in corporate
workouts, turnarounds and restructuring. She is the President of the National
Association of Corporate Directors, Connecticut Chapter. The business address of
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Ms. Hopgood is c/o The Hopgood Group, LLC, 44 Capitol Avenue, Suite 103A,
Hartford, CT 06106. As of the date hereof, Ms. Hopgood did not beneficially own
any securities of Del Global and has not purchased or sold any securities of Del
Global during the past two years.
WALLACE BARNES (Age 77) served in various capacities including
President, Chief Executive Officer, Chairman of the Board and Non-Executive
Chairman of Barnes Group Inc., a diversified international manufacturer of
precision components and assemblies and distributor of industrial supplies
listed on the NYSE, from 1954 to April 1995. From 1971 to May 1996, Mr. Barnes
served as a director of Aetna Life & Casualty Company, a predecessor of
Aetna Inc., a leading health care provider listed on the NYSE. From December
1988 to December 1998, he served as a director of Rohr, Inc., an aerospace
supplier listed on the NYSE prior to its merger with B. F. Goodrich Company,
during which time he also served as Chairman of the Board beginning in December
1994. From May 1983 to May 1998, he served as a director of Rogers Corporation,
a developer and manufacturer of high-performance specialty materials for the
wireless communications, computers and networking, imaging, transportation and
consumer industries listed on the NYSE. He has also served as Chairman of the
Board of Tradewind Turbines, Inc., an aircraft maintenance and overhaul company,
since December 1993. Mr. Barnes currently dedicates a majority of his time
serving as Chairman of the Connecticut Employment and Training Commission which
is charged with overseeing and improving the coordination of all education,
employment and training programs in Connecticut. Governor John Rowland appointed
Mr. Barnes to this position in February 1997. The business address of Mr. Barnes
is c/o Sky Bight Partners, 1875 Perkins Street, Bristol, CT 06010. As of the
date hereof, Mr. Barnes did not beneficially own any securities of Del Global
and has not purchased or sold any securities of Del Global during the past two
years.
The Nominees will not receive any compensation from Steel for their
services as directors of Del Global. Other than as stated herein, there are no
arrangements or understandings between Steel and any of the Nominees or any
other person or persons pursuant to which the nomination described herein is to
be made, other than the consent by each of the Nominees to be named in this
Proxy Statement and to serve as a director of Del Global if elected as such at
the Annual Meeting. None of the Nominees has been convicted in any criminal
proceedings (excluding traffic violations or similar misdemeanors) over the past
ten years. None of the Nominees is a party adverse to Del Global or any of its
subsidiaries or has a material interest adverse to Del Global or any of its
subsidiaries in any material pending legal proceedings.
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Steel does not expect that the Nominees will be unable to stand for
election, but, in the event that such persons are unable to serve or for good
cause will not serve, the Shares represented by the enclosed GOLD proxy card
will be voted for substitute nominees. In addition, Steel reserves the right to
nominate substitute persons if Del Global makes or announces any changes to its
Bylaws or takes or announces any other action that has, or if consummated would
have, the effect of disqualifying the Nominees. In any such case, Shares
represented by the enclosed GOLD proxy card will be voted for such substitute
nominees. Notwithstanding Steel's ability to vote proxies for substitute
nominees, the enclosed GOLD proxy card can only be voted for up to four of the
five directors being elected at the Annual Meeting. Steel reserves the right to
nominate additional persons if Del Global increases the size of the Del Global
Board above its existing size. Additional nominations made pursuant to the
preceding sentence are without prejudice to the position of Steel that any
attempt to increase the size of the current Del Global Board constitutes an
unlawful manipulation of Del Global's corporate machinery.
YOU ARE URGED TO VOTE FOR THE ELECTION OF THE NOMINEES ON THE ENCLOSED GOLD
PROXY CARD.
PROPOSAL NO. 2 - APPROVAL OF THE 2003 EQUITY INCENTIVE PLAN
Steel recommends a vote "AGAINST" the proposal requesting approval
of the Company's 2003 Equity Incentive Plan. Please see the Company's Proxy
Statement for the Annual Meeting (the "Management Proxy Statement") for a
description of this proposal.
The Company had as of the end of its last fiscal year outstanding
options to purchase a number of shares of its common stock equal to 19.26% of
the shares of the Company's common stock outstanding as of the Record Date. The
participants in this solicitation believe that until the Company's financial
performance improves, additional options above the amount currently available
should not be made available for grant. In addition, the Company has not
indicated publicly whether or not it will expense the granting of stock options.
The participants in this solicitation intend to vote all of their Shares AGAINST
the proposal to approve the Company's 2003 Equity Incentive Plan.
YOU ARE URGED TO VOTE AGAINST THE PROPOSAL TO APPROVE THE COMPANY'S 2003 EQUITY
INCENTIVE PLAN ON THE ENCLOSED GOLD PROXY CARD.
PROPOSAL NO. 3 - RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
Steel has no objection to the ratification of the appointment of
Deloitte & Touche LLP as independent public accountants for Del Global for
fiscal 2003. Please see the Management Proxy Statement for a description of this
proposal.
-15-
VOTING AND PROXY PROCEDURES
Only stockholders of record on the Record Date will be entitled to
notice of and to vote at the Annual Meeting. Each Share is entitled to one vote.
Stockholders who sell Shares before the Record Date (or acquire them without
voting rights after the Record Date) may not vote such Shares. Stockholders of
record on the Record Date will retain their voting rights in connection with the
Annual Meeting even if they sell such Shares after the Record Date. Based on
publicly available information, Steel believes that the only outstanding class
of securities of Del Global entitled to vote at the Annual Meeting is the
Shares.
Shares represented by properly executed GOLD proxy cards will be
voted at the Annual Meeting as marked and, in the absence of specific
instructions, will be voted FOR the election of the Nominees to the Del Global
Board, AGAINST the proposal to approve the Company's 2003 Equity Incentive Plan
and FOR the proposal to ratify the appointment of Deloitte & Touche LLP as
independent public accountants of Del Global for fiscal 2003, and in the
discretion of the persons named as proxies on all other matters as may properly
come before the Annual Meeting.
We are asking you to elect our Nominees in opposition to five
incumbent nominees whose terms expire at the Annual Meeting. The enclosed GOLD
proxy card may only be voted for our Nominees and does not confer voting power
with respect to the remaining directorship. Accordingly, you will not have the
opportunity to vote for any of Del Global's nominees. You can only vote for Del
Global's nominees by signing and returning a proxy card provided by Del Global.
Stockholders should refer to the Management Proxy Statement for the names,
backgrounds, qualifications and other information concerning Del Global's
nominees. The participants in this solicitation intend to vote all of their
Shares in favor of the Nominees and will not vote their Shares in favor of any
of Del Global's nominees in order to fill the remaining directorship. If the Del
Global Board undertakes to expand the number of directors and Steel does not
nominate additional persons sufficient to constitute a majority of the Del
Global Board if elected, we may not hold the majority of the Del Global Board
and thus we may not be able to implement any of the actions described in this
Proxy Statement. The Del Global Board has the discretionary authority to create
and fill vacant directorships. Del Global stockholders will be disenfranchised
with regard to at least one directorship if the stockholders elect to vote for
our Nominees and fail to return the Company's proxy card.
QUORUM
In order to conduct any business at the Annual Meeting, a quorum
must be present in person or represented by valid proxies. A quorum consists of
a majority of the Shares issued and outstanding on the Record Date. All Shares
that are voted "FOR", "AGAINST" or "ABSTAIN" (or "WITHHOLD" in the case of
election of directors) on any matter will count for purposes of establishing a
quorum and will be treated as Shares entitled to vote at the Annual Meeting (the
"Votes Present").
-16-
VOTES REQUIRED FOR APPROVAL
Under New York law, the Company's state of incorporation, for
purposes of determining the "Votes Cast" with respect to any matter presented
for consideration at the Annual Meeting, only those Votes Cast "FOR" or
"AGAINST" are counted.
Election of Directors. A plurality of the total Votes Cast by
holders of the Shares is required for the election of directors and the nominees
who receive the most votes will be elected (assuming a quorum is present). A
vote to "WITHHOLD" for any nominee for director will be counted for purposes of
determining the Votes Present, but will have no other effect on the outcome of
the vote on the election of directors. A stockholder may cast such votes for the
Nominees either by so marking the ballot at the meeting or by specific voting
instructions sent with a signed proxy to either Steel in care of Innisfree
M&A Incorporated at the address set forth on the back cover of this Proxy
Statement or to Del Global at One Commerce Park, Valhalla, New York 10595 or any
other address provided by Del Global.
Other Proposals. Other than the election of directors, the vote
required for all other business matters set forth in this Proxy Statement is the
affirmative vote of a majority of the Votes Cast.
ABSTENTIONS
Abstentions will count as Votes Present for the purpose of
determining whether a quorum is present. Abstentions will not be counted as
Votes Cast. Accordingly, Steel believes that abstentions will have no effect
upon the outcome of voting on any of the business matters set forth in this
Proxy Statement.
BROKER NON-VOTES
Shares held in street name that are present by proxy will be
considered as Votes Present for purposes of determining whether a quorum is
present. With regard to certain proposals, the holder of record of Shares held
in street name is permitted to vote as it determines, in its discretion, in the
absence of direction from the beneficial holder of the Shares.
The term "broker non-vote" refers to shares held in street name that
are not voted with respect to a particular matter, generally because the
beneficial owner did not give any instructions to the broker as to how to vote
such shares and the broker is not permitted under applicable rules to vote such
shares in its discretion because of the subject matter of the proposal, but
whose shares are present on at least one matter. Such shares shall be counted as
Votes Present for the purpose of determining whether a quorum is present. Broker
non-votes will not be counted as Votes Cast with respect to matters as to which
the record holder has expressly not voted. Accordingly, Steel believes that
broker non-votes will have no effect upon the outcome of voting on any of the
business matters set forth in this Proxy Statement.
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REVOCATION OF PROXIES
Stockholders of Del Global may revoke their proxies at any time
prior to exercise by attending the Annual Meeting and voting in person (although
attendance at the Annual Meeting will not in and of itself constitute revocation
of a proxy) or by delivering a written notice of revocation. The delivery of a
subsequently dated proxy which is properly completed will constitute a
revocation of any earlier proxy. The revocation may be delivered either to Steel
in care of Innisfree M&A Incorporated at the address set forth on the back
cover of this Proxy Statement or to Del Global at One Commerce Park, Valhalla,
New York 10595 or any other address provided by Del Global. Although a
revocation is effective if delivered to Del Global, Steel requests that either
the original or photostatic copies of all revocations be mailed to Steel in care
of Innisfree M&A Incorporated at the address set forth on the back cover of
this Proxy Statement so that Steel will be aware of all revocations and can more
accurately determine if and when proxies have been received from the holders of
record on the Record Date of a majority of the outstanding Shares. Additionally,
Innisfree M&A Incorporated may use this information to contact stockholders
who have revoked their proxies in order to solicit later dated proxies for the
election of the Nominees.
IF YOU WISH TO VOTE FOR THE ELECTION OF THE NOMINEES TO THE DEL GLOBAL BOARD,
PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED GOLD PROXY CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED.
SOLICITATION OF PROXIES
The solicitation of proxies pursuant to this Proxy Statement is
being made by Steel. Proxies may be solicited by mail, facsimile, telephone,
telegraph, in person and by advertisements. Steel will not solicit proxies via
the Internet.
Steel has entered into an agreement with Innisfree M&A
Incorporated for solicitation and advisory services in connection with this
solicitation, for which Innisfree M&A Incorporated will receive a fee not to
exceed $50,000, together with reimbursement for its reasonable out-of-pocket
expenses, and will be indemnified against certain liabilities and expenses,
including certain liabilities under the federal securities laws. Innisfree
M&A Incorporated will solicit proxies from individuals, brokers, banks, bank
nominees and other institutional holders. Steel has requested banks, brokerage
houses and other custodians, nominees and fiduciaries to forward all
solicitation materials to the beneficial owners of the Shares they hold of
record. Steel will reimburse these record holders for their reasonable
out-of-pocket expenses in so doing. It is anticipated that Innisfree M&A
Incorporated will employ approximately 25 persons to solicit Del Global's
stockholders for the Annual Meeting.
The entire expense of soliciting proxies is being borne by Steel and
each of Henry Partners and Matthew Partners (and their affiliates) pursuant to
the terms of the Joint Filing and Solicitation Agreement (as defined below). If
the Nominees are elected to the Del Global Board, Steel and each of Henry
Partners and Matthew Partners (and their affiliates) intend to seek
reimbursement of the costs of this solicitation from Del Global. Unless
otherwise required by law, Steel does not currently intend to submit the
question of reimbursement of the costs of this solicitation to a stockholder
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vote. Costs of this solicitation of proxies are currently estimated to be
approximately $200,000. Steel and each of Henry Partners and Matthew Partners
(and their affiliates) estimate that through the date hereof, their expenses in
connection with this solicitation are approximately $125,000.
PARTICIPANT INFORMATION
Each member of the Group is a participant in this solicitation.
Warren Lichtenstein is Chairman of the Board, Secretary and the Managing Member
of Steel Partners, L.L.C. ("Steel LLC"), a Delaware limited liability company.
Steel LLC is the general partner of Steel. The principal business of Mr.
Lichtenstein, Steel LLC and Steel is investing in the securities of small-cap
companies. The principal business address of Mr. Lichtenstein, Steel LLC and
Steel is 590 Madison Avenue, 32nd Floor, New York, New York 10022. As of the
date hereof, Steel is the beneficial owner of 1,558,516 Shares. Steel LLC does
not beneficially own any Shares on the date hereof, except by virtue of its role
in Steel. Mr. Lichtenstein may be deemed to beneficially own the 1,558,516
Shares of Del Global owned by Steel by virtue of his positions with Steel. For
information regarding purchases and sales of securities of Del Global during the
past two years by Steel, see Schedule I.
David Wright is the President and Managing Member of Canine
Partners, a Pennsylvania limited liability company, which is the general partner
of Henry Investment Trust, a Pennsylvania limited partnership, which in turn is
the general partner of each of Henry Partners, a Delaware limited partnership,
and Matthew Partners, a Delaware limited partnership. Henry Partners and Matthew
Partners are private investment partnerships engaged in the purchase and sale of
securities. Henry Investment Trust is the general partner of each of Henry
Partners and Matthew Partners, and Canine Partners is the general partner of
Henry Investment Trust. The principal occupation of Mr. Wright is managing,
through Henry Investment Trust, the investments of Henry Partners and Matthew
Partners. The principal business address of Mr. Wright, Canine Partners, Henry
Investment Trust, Henry Partners and Matthew Partners is 255 South 17th Street,
Suite 2501, Philadelphia, PA 19103. As of the date hereof, Henry Partners is the
beneficial owner of 233,000 Shares and Matthew Partners is the beneficial owner
of 114,298 Shares (including 52,298 Shares issuable upon the exercise of
warrants, at a price of $2.00 per Share, exercisable in full upon the
effectiveness of a registration statement on Form S-1 (SEC File No. 333-103148)
filed by the Company covering the Shares underlying the warrants). Henry
Investment Trust, as the general partner of each of Henry Partners and Matthew
Partners, may be deemed to beneficially own the 233,000 Shares owned by Henry
Partners and the 114,298 Shares owned by Matthew Partners. Canine Partners, as
the general partner of Henry Investment Trust, which in turn is the general
partner of each of Henry Partners and Matthew Partners, may be deemed to
beneficially own the 233,000 Shares owned by Henry Partners and the 114,298
shares owned by Matthew Partners. Mr. Wright, as the President of Canine
Partners, the general partner of Henry Investment Trust, which in turn is the
general partner of each of Henry Partners and Matthew Partners, may be deemed to
beneficially own the 233,000 Shares owned by Henry Partners and the 114,298
Shares owned by Matthew Partners. In addition, Mr. Wright owns directly 8,000
Shares. For information regarding purchases and sales of securities of Del
Global during the past two years by Mr. Wright, Henry Partners and Matthew
Partners, see Schedule I.
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Gerald Czarnecki serves as the Chairman and Chief Executive Officer
of The Deltennium Corporation, a privately held holding company that operates
various businesses of which Mr. Czarnecki is the principal stockholder. The
principal business address of Mr. Czarnecki is c/o The Deltennium Corporation,
6900 Wisconsin Avenue, Suite #206, Bethesda, MD 20815. As of the date hereof,
Mr. Czarnecki did not beneficially own any securities of Del Global and has not
purchased or sold any securities of Del Global during the past two years.
Suzanne Hopgood serves as President of The Hopgood Group, LLC, a
provider of consulting and interim management services to the hospitality,
financial services, and real estate industries. The business address of Ms.
Hopgood is c/o The Hopgood Group, LLC, 44 Capitol Avenue, Suite 103A, Hartford,
CT 06106. As of the date hereof, Ms. Hopgood did not beneficially own any
securities of Del Global and has not purchased or sold any securities of Del
Global during the past two years.
Wallace Barnes is retired and currently dedicates a majority of his
time serving as Chairman of the Connecticut Employment and Training Commission
which is charged with overseeing and improving the coordination of all
education, employment and training programs in Connecticut. The business address
of Mr. Barnes is c/o Sky Bight Partners, 1875 Perkins Street, Bristol, CT 06010.
As of the date hereof, Mr. Barnes did not beneficially own any securities of Del
Global and has not purchased or sold any securities of Del Global during the
past two years.
On March 20, 2003, Steel, WebFinancial, Warren G. Lichtenstein,
Henry Partners, Matthew Partners, Henry Investment Trust, Canine Partners and
David W. Wright entered into a Joint Filing Agreement whereby they agreed to
file a joint Schedule 13D (and amendments thereto) with respect to the Shares
(the "Joint Filing Agreement"). On March 21, 2003, the parties to the Joint
Filing Agreement filed with the SEC a joint Schedule 13D disclosing that they
have formed a group for the purpose of seeking representation on the Del Global
Board. On March 26, 2003, all the members of the Group entered into a Joint
Filing and Solicitation Agreement (the "Joint Filing and Solicitation
Agreement") in which, among other things, (i) the parties agreed to the joint
filing on behalf of each of them of statements on Schedule 13D with respect to
the Shares, (ii) the parties agreed to solicit proxies or written consents for
the election of David Wright, Gerald Czarnecki and Suzanne Hopgood, or any other
person(s) nominated by Steel, to the Del Global Board at the Annual Meeting (the
"Solicitation"), and (iii) Steel and each of Henry Partners and Matthew Partners
(and their affiliates) agreed to bear all expenses incurred in connection with
the Group's activities, including approved expenses incurred by any of the
parties in connection with the Solicitation, in amounts to be mutually agreed
upon by Steel and each of Henry Partners and Matthew Partners (and their
affiliates); provided, however, that in no event shall the expenses borne by
Henry Partners and Matthew Partners (and their affiliates) exceed $25,000 in the
aggregate.
On April 18, 2003, the Joint Filing and Solicitation Agreement was
amended and restated to include Wallace Barnes as a party and member of the
Group and to provide that Steel shall indemnify and hold harmless each of the
Nominees against any and all claims arising from the proxy solicitation by Steel
and any related transactions.
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On January 14, 2003, Steel Partners, Ltd., an affiliate of Steel,
entered into a consulting agreement with Henry Investment Trust whereby it
agreed to provide certain investment consulting services to Steel Partners, Ltd.
and to make available David W. Wright to perform such services. In consideration
of the services to be furnished by Henry Investment Trust, Steel Partners, Ltd.
is required to pay to Henry Investment Trust a fixed monthly fee of $7,500. The
agreement is in effect for a term of six months and is automatically renewable
for successive six-month periods unless and until terminated by either party in
accordance with its terms.
CERTAIN LEGAL PROCEEDINGS
On April 9, 2003, Steel filed suit against Del Global in the Supreme
Court of the State of New York, County of New York, in order to compel Del
Global to produce certain records, documents and information that will allow
Steel to solicit proxies for election of the Nominees at the Annual Meeting. On
April 14, 2003, Del Global provided Steel the stockholder information sought in
such lawsuit. On April 15, 2003, Steel withdrew such lawsuit.
CERTAIN TRANSACTIONS BETWEEN STEEL AND DEL GLOBAL
Except as set forth in this Proxy Statement (including the Schedules
hereto), neither Steel nor any of the other participants in this solicitation,
or any of their respective associates: (i) directly or indirectly beneficially
owns any Shares or any securities of Del Global; (ii) has had any relationship
with Del Global in any capacity other than as a stockholder, or is or has been a
party to any transactions, or series of similar transactions, or was indebted to
Del Global during the past year with respect to any Shares or securities of Del
Global; or (iii) knows of any transactions during the past year, currently
proposed transactions, or series of similar transactions, to which Del Global or
any of its subsidiaries was or is to be a party, in which the amount involved
exceeds $60,000 and in which any of them or their respective affiliates had, or
will have, a direct or indirect material interest. In addition, other than as
set forth herein, there are no contracts, arrangements or understandings entered
into by Steel or any other participant in this solicitation or any of their
respective associates within the past year with any person with respect to any
of Del Global's securities, including, but not limited to, joint ventures, loan
or option arrangements, puts or calls, guarantees against loss or guarantees of
profit, division of losses or profits, or the giving or withholding of proxies.
Except as set forth in this Proxy Statement (including the Schedules
hereto), neither Steel nor any of the other participants in this solicitation,
or any of their respective associates, has entered into any agreement or
understanding with any person with respect to (i) any future employment by Del
Global or its affiliates or (ii) any future transactions to which Del Global or
any of its affiliates will or may be a party. However, Steel has reviewed, and
will continue to review, on the basis of publicly available information, various
possible business strategies that it might consider in the event that the
Nominees are elected to the Del Global Board.
OTHER MATTERS AND ADDITIONAL INFORMATION
Steel is unaware of any other matters to be considered at the Annual
Meeting other than the approval of the Company's 2003 Equity Incentive Plan and
the ratification of the appointment of the Company's independent public
accountants. However, should other matters, which Steel is not aware of a
-21-
reasonable time before this solicitation, be brought before the Annual Meeting,
the persons named as proxies on the enclosed GOLD proxy card will vote on such
matters in their discretion.
Steel has omitted from this Proxy Statement certain disclosure
required by applicable law that is already included in the Management Proxy
Statement. This disclosure includes, among other things, biographical
information on Del Global's directors and executive officers, information
concerning executive compensation, an analysis of cumulative total returns on an
investment in Del Global Shares during the past five years, information on audit
services and fees of Deloitte & Touche LLP and procedures for submitting
proposals for inclusion in Del Global's proxy statement at the next annual
meeting. Stockholders should refer to the Management Proxy Statement in order to
review this disclosure.
See Schedule II for information regarding persons who beneficially
own more than 5% of the Shares and the ownership of the Shares by the management
of Del Global.
-22-
The information concerning Del Global contained in this Proxy
Statement and the Schedules attached hereto has been taken from, or is based
upon, publicly available information.
STEEL PARTNERS II, L.P.
APRIL 29, 2003
-23-
SCHEDULE I
TRANSACTIONS IN THE SECURITIES OF DEL GLOBAL TECHNOLOGIES CORP.
DURING THE PAST TWO YEARS
Class Quantity Price Per Date of
of Security Purchased/(Sold) Unit($) Purchase/(Sale)
- ----------- ---------------- ------- ---------------
Steel Partners II, L.P.
-----------------------
Common Stock 46,000 3.7967 6/12/02
Common Stock 7,500 3.7500 6/13/02
Common Stock 15,000 3.7800 6/14/02
Common Stock 110,000 3.8000 6/17/02
Common Stock 36,000 3.7500 6/20/02
Common Stock 36,156 3.7500 6/21/02
Common Stock 3,500 3.7500 6/25/02
Common Stock 12,000 3.7450 6/26/02
Common Stock 5,000 3.7500 6/27/02
Common Stock 5,000 3.7200 7/01/02
Common Stock 5,000 3.7500 7/03/02
Common Stock 8,900 3.7500 7/05/02
Common Stock 2,000 3.7500 7/08/02
Common Stock 8,000 3.7500 7/11/02
Common Stock 42,348 3.6506 7/15/02
Common Stock 2,000 3.7200 7/22/02
Common Stock 18,500 3.6749 7/23/02
Common Stock 10,001 3.5660 7/24/02
Common Stock 2,000 2.9500 7/26/02
Common Stock 16,300 3.4301 7/29/02
Common Stock 5,000 3.5650 7/31/02
Common Stock 10,000 3.2250 8/01/02
Common Stock 2,000 3.5400 8/08/02
Common Stock 2,000 3.5500 8/09/02
-24-
Class Quantity Price Per Date of
of Security Purchased/(Sold) Unit($) Purchase/(Sale)
- ----------- ---------------- ------- ---------------
Common Stock 5,000 3.5000 8/14/02
Common Stock 7,000 3.5086 8/21/02
Common Stock 12,000 3.4933 8/29/02
Common Stock 36,000 3.5300 8/30/02
Common Stock 3,000 3.5300 9/06/02
Common Stock 5,700 3.5500 9/11/02
Common Stock 5,000 3.5500 9/16/02
Common Stock 30,000 3.5438 9/17/02
Common Stock 33,800 2.4500 9/19/02
Common Stock 55,000 2.6136 9/20/02
Common Stock 50,000 2.6500 9/23/02
Common Stock 5,000 2.5400 9/24/02
Common Stock 7,200 2.6558 9/26/02
Common Stock 50,000 2.7800 10/04/02
Common Stock 1,200 2.4800 10/08/02
Common Stock 31,000 2.4845 10/09/02
Common Stock 38,000 2.5000 10/11/02
Common Stock 811 2.4300 10/14/02
Common Stock 500 2.6000 10/15/02
Common Stock 7,500 2.5000 10/21/02
Common Stock 5,000 2.5000 10/30/02
Common Stock 56,500 2.5133 10/31/02
Common Stock 5,000 2.4920 11/04/02
Common Stock 9,000 2.4500 11/05/02
Common Stock 5,000 1.9200 11/11/02
Common Stock 5,000 2.0000 11/13/02
Common Stock 18,500 1.9843 11/20/02
Common Stock 5,000 1.9800 11/22/02
Common Stock 300 2.9000 2/18/03
Common Stock 43,700 2.4650 4/04/03
-25-
Class Quantity Price Per Date of
of Security Purchased/(Sold) Unit($) Purchase/(Sale)
- ----------- ---------------- ------- ---------------
Common Stock 611,600 2.500 4/11/03
HENRY PARTNERS, L.P.
--------------------
Common Stock 137,500 1.960 12/20/01
Common Stock 33,000 3.070 3/25/02
Common Stock 16,500 3.102 3/27/02
Common Stock 3,000 3.058 3/28/02
Common Stock 9,000 3.317 4/03/02
Warrants to purchase Common Stock 33,000 1.550 6/12/02
Common Stock 4,000 2.436 7/25/02
Warrants to purchase Common Stock 1,000 1.280 7/25/02
Warrants to purchase Common Stock 6,000 1.020 9/18/02
Common Stock 22,000 2.061 11/06/02
Common Stock 8,000 1.943 11/18/02
Warrants to purchase Common Stock (40,000) 0.370 (12/02/02)
MATTHEW PARTNERS, L.P.
----------------------
Common Stock 25,000 1.961 12/20/01
Common Stock 2,000 2.662 1/17/02
Common Stock 5,000 3.105 3/05/02
Common Stock 2,500 3.010 3/08/02
Common Stock 2,500 3.410 3/20/02
Common Stock 2,000 3.362 3/22/02
Common Stock 8,000 3.073 3/25/02
Common Stock 4,000 3.106 3/27/02
Warrants to purchase Common Stock 8,298 1.550 6/12/02
-26-
Class Quantity Price Per Date of
of Security Purchased/(Sold) Unit($) Purchase/(Sale)
- ----------- ---------------- ------- ---------------
Common Stock 1,000 2.455 7/25/02
Warrants to purchase Common Stock 4,000 1.020 9/18/02
Common Stock 8,000 2.063 11/06/02
Common Stock 2,000 1.952 11/18/02
Warrants to purchase Common Stock 40,000 0.380 12/02/02
DAVID W. WRIGHT
---------------
Common Stock 1,000 3.850 5/29/02
Common Stock 1,000 3.850 5/30/02
Common Stock 3,000 3.850 6/03/02
Common Stock 5,000 4.050 6/04/02
Common Stock 2,000 3.950 6/05/02
Common Stock 5,000 3.950 6/06/02
Common Stock 5,000 3.950 6/07/02
Common Stock (14,000) 3.920 (2/06/03)
-27-
SCHEDULE II
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
THE FOLLOWING IS BASED SOLELY ON INFORMATION PROVIDED IN THE
MANAGEMENT PROXY STATEMENT.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the Company's knowledge, as of April 18, 2003, the only persons
(including "groups" as that term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) who beneficially own more
than 5% of the Company's common stock are the following:
Name and Address Amount and Nature of
Of Beneficial Owner Beneficial Ownership(1) Percent of Class
------------------- ----------------------- ----------------
Benson Associates LLC 1,159,163(2) 11.22%
111 SW 5th, Suite 2130
Portland, OR 97204
FMR Corp. 696,100(3) 6.74%
82 Devonshire Street
Boston, MA 02109
Royce & Associates LLC 1,100,110(4) 10.65%
1414 Avenue of the Americas
New York, NY 10019
Warren G. Lichtenstein(5) 1,942,460(5) 18.7%
c/o Steel Partners II, L.P.
150 E. 52nd Street, 21st Floor
New York, NY
Wellington Management Co. LLP 903,024(6) 8.74%
75 State Street
Boston, MA 02109
Samuel P. Sporn 1,166,666(7) 10.94%(2)
c/o Schoengold & Sporn, P.C
19 Fulton Street, Suite 406
New York, NY 10038
-28-
- ---------------------
(1) Unless otherwise noted, each beneficial owner has sole voting and
investment power with respect to the shares shown beneficially owned by
him or it.
(2) According to information contained in a Schedule 13G/A dated March 5,
2003, Benson Associates, LLC ("Benson"), an investment advisor
registered under the Investment Advisors Act of 1940 ("Investment Act"),
is the beneficial owner of 1,159,163 shares of common stock of the
Company. In its role as investment advisor, Benson has sole power to
vote and dispose of the shares of common stock of the Company but
disclaims beneficial ownership of such shares owned by it in a fiduciary
capacity.
(3) According to information contained in a Schedule 13G dated February 14,
2003, Fidelity Management and Research Company ("Fidelity"), a
wholly-owned subsidiary of FRM Corp., an investment advisor registered
under the Investment Act, is the beneficial owner of 696,100 shares of
common stock of the Company through its Fidelity Low Priced Stock Fund
and other funds. Edward C. Johnson 3d, in his capacity as Chairman of
FMR Corp., through its control of Fidelity, and the Fidelity Funds each
has sole power to dispose of the shares of common stock of the Company
owned by FMR Corp. Neither FMR Corp. nor Edward C. Johnson 3d, has sole
power to vote or direct the voting of the shares owned directly by the
Fidelity Funds. Voting power resides with each of the Fidelity Funds'
Boards' of Trustees.
(4) According to information contained in a Schedule 13G dated February 4,
2003, Royce & Associates, LLC ("Royce"), an investment advisor
registered under the Investment Act, is the beneficial owner of
1,100,110 shares of common stock of the Company. In its role as
investment advisor, Royce has sole power to vote the shares of common
stock of the Company owned by Royce.
(5) According to information contained in a Schedule 13D dated April 18,
2003 filed jointly by Steel Partners II, L.P., a Delaware limited
partnership ("Steel Partners"), Warren G. Lichtenstein, WebFinancial
Corporation, a Delaware corporation ("WebFinancial"), Henry Partners,
L.P., a Delaware limited partnership ("Henry Partners"), Matthew
Partners, L.P., a Delaware limited partnership ("Matthew Partners"),
Henry Investment Trust, L.P., a Pennsylvania limited partnership ("Henry
Trust"), Canine Partners, L.L.C., a Pennsylvania limited liability
company ("Canine Partners") and David W. Wright (collectively, the
"Group"), the Group collectively is the beneficial owner of 903,216
shares of common stock of the Company. Steel Partners, LLC, a Delaware
limited liability company ("Partners LLC") is the general partner of
Steel Partners. Mr. Lichtenstein is the sole executive officer and
managing member of Partners LLC. By virtue of his position, Mr.
Lichtenstein has the sole power to vote and dispose of the 1,558,516
shares of common stock of the Company owned by Steel Partners.
WebFinancial has sole power to vote and dispose of 28,646 shares of
common stock of the Company. Mr. Lichtenstein is also the President,
Chief Executive Officer and director of WebFinancial Corporation. Mr.
Lichtenstein disclaims beneficial ownership of the 28,646 shares owned
by WebFinancial. Mr. Wright is the President and Managing Member of
Canine Partners, which is the general partner of Henry Trust, which in
turn is the general partner of each of Henry Partners and Matthew
Partners. Henry Partners has sole power to vote and dispose of 233,000
shares of common stock of the Company and Matthew Partners beneficially
owns 114,298 shares of common stock of the Company. The beneficial
ownership of Matthew Partners also includes warrants to purchase 52,298
shares of common stock of the Company, which warrants are exercisable
upon the effectiveness of the Registration Statement on Form S-1 filed
on February 12, 2003. Canine Partners has sole voting and dispositive
power with respect to 347,298 shares of common stock of the Company. By
virtue of his positions at Canine Partners, Henry Partners and Henry
Trust, Mr. Wright may be deemed to beneficially own the 233,000 shares
of common stock of the Company owned by Henry Partners and the 114,298
shares of common stock of the Company owned by Matthew Partners. In
addition, Mr. Wright individually owns 8,000 shares of common stock of
the Company outstanding. Accordingly, Mr. Wright has sole voting and
dispositive power with respect to 355,298 shares of common stock of the
Company.
(6) According to information contained in a Schedule 13G dated February 14,
2003, Wellington Management Company, LLP ("Wellington"), an investment
advisor registered under the Investment Act, may be deemed the
beneficial owner of 903,024 shares of common stock of the Company.
Clients of Wellington are the owners of record of the shares held by
Wellington. Accordingly, in its role as investment advisor, Wellington
has shared power to vote as to 666,151 shares of common stock of the
Company and shared power to dispose of all 903,024 shares of common
stock owned by Wellington.
-29-
(7) According to information contained in a Schedule 13D dated January 21,
2003, Schoengold & Sporn, P.C. ("Schoengold") a New York
professional corporation, engaged in the practice of law, may be deemed
the beneficial owner of 833,333 shares of common stock of the Company.
Messrs. Samuel P. Sporn, Joel P. Laitman and Christopher Lometti are
attorneys with Schoengold. None of Messrs. Sporn, Laitman or Lometti
beneficially own any shares or have individual power to vote or dispose
or direct the disposition of the shares of common stock of the Company
owned by Schoengold. Accordingly, Schoengold has sole power to direct
the vote and sole power to dispose or direct the disposition of the
shares of common stock of the Company owned by Schoengold. The
beneficial ownership of Schoengold also includes a warrant to purchase
333,333 shares of common stock of the Company, which warrant is
exercisable upon the effectiveness of the Registration Statement on Form
S-1 filed on February 12, 2003.
-30-
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth certain information, to the Company's
knowledge regarding the beneficial ownership of the Company's common stock as of
April 10, 2003, by (i) each executive officer identified in the Summary
Compensation Table of the Management Proxy Statement, (ii) each of the Company's
directors, and (iii) all executive officers and directors as a group. Beneficial
ownership is determined in accordance with the rules and regulations of the
Securities and Exchange Commission. For purposes of calculating the percentage
beneficially owned, the number of shares of common stock of the Company includes
10,332,548 shares of common stock outstanding as of April 10, 2003 and the
shares of common stock subject to options held by the person or group that are
currently exercisable or exercisable within 60 days from April 10, 2003. The
address for all of the Company's executive officers and directors is c/o Del
Global Technologies Corp., One Commerce Park, Valhalla, NY 10595.
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Ownership(1) Percent of Class(2)
------------------- ----------------------- -------------------
Samuel E. Park 250,000(3) 2.36%
Thomas V. Gilboy 52,500(3) *
Edward Ferris 12,500(3) *
Daniel J. Pisano, Jr 29,000(3) *
Walter F. Schneider 78,500(3) *
Frank J. Brady 0 0
Glenda K. Burkhart 0 0
Edgar J. Smith, Jr 6,250(3) *
Stephen N. Wertheimer 0 0
All Directors and Named 428,750(3) 3.98%
Executive Officers
as a group (9 Persons)
- -------------
* Represents less than 1% of the outstanding shares of the Company's
common stock.
(1) Unless otherwise noted, each director and executive officer has sole
voting and investment power with respect to the shares shown as
beneficially owned by him.
(2) Excludes the Company's common stock issuable upon exercise of warrants
issued to certain shareholders in connection with settlement of a class
action lawsuit, registered pursuant to a registration statement on Form
S-1 filed on February 12, 2003, which was not effective as of the date
of this Proxy Statement.
(3) Represents shares of the Company's common stock which may be acquired
upon the exercise of stock options which are presently exercisable or
will become exercisable within 60 days of April 10, 2003:
-31-
Samuel E. Park 250,000
Thomas V. Gilboy 52,500
Edward Ferris 12,500
Daniel J. Pisano, Jr. 29,000
Walter F. Schneider 78,500
Edgar J. Smith 6,250
All Directors and 428,750
Named Officers as a Group
-32-
IMPORTANT
Tell your Board what you think! Your vote is important. No matter
how many Shares you own, please give Steel your proxy FOR the election of the
Nominees by taking three steps:
o SIGNING the enclosed GOLD proxy card,
o DATING the enclosed GOLD proxy card, and
o MAILING the enclosed GOLD proxy card TODAY in the envelope
provided (no postage is required if mailed in the United
States).
If any of your Shares are held in the name of a brokerage firm,
bank, bank nominee or other institution, only it can vote such Shares and only
upon receipt of your specific instructions. Accordingly, please contact the
person responsible for your account and instruct that person to execute the GOLD
proxy card representing your Shares. Steel urges you to confirm in writing your
instructions to Steel in care of Innisfree M&A Incorporated at the address
provided below so that Steel will be aware of all instructions given and can
attempt to ensure that such instructions are followed.
If you have any questions or require any additional information
concerning this Proxy Statement, please contact Innisfree M&A Incorporated
at the address set forth below.
[INNISFREE LOGO]
501 Madison Avenue, 20th Floor
New York, New York 10022
CALL TOLL FREE: (888) 750-5834
BANKERS AND BROKERS CALL COLLECT: (212) 750-5833
DEL GLOBAL TECHNOLOGIES CORP.
2003 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF STEEL PARTNERS II, L.P.
THE BOARD OF DIRECTORS OF DEL GLOBAL TECHNOLOGIES CORP.
IS NOT SOLICITING THIS PROXY
P R O X Y
The undersigned appoints Warren G. Lichtenstein and David W. Wright, and each of
them, attorneys and agents with full power of substitution to vote all shares of
common stock of Del Global Technologies Corp. (the "Company") which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders of the Company, and including at any adjournments or
postponements thereof and at any meeting called in lieu thereof.
The undersigned hereby revokes any other proxy or proxies heretofore given to
vote or act with respect to the shares of common stock of the Company held by
the undersigned, and hereby ratifies and confirms all action the herein named
attorneys and proxies, their substitutes, or any of them may lawfully take by
virtue hereof. If properly executed, this Proxy will be voted as directed on the
reverse and in their discretion with respect to any other matters as may
properly come before the Annual Meeting.
IF NO DIRECTION IS INDICATED WITH RESPECT TO THE PROPOSALS ON THE REVERSE, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES, OR ANY SUBSTITUTIONS
THERETO, AGAINST APPROVAL OF THE 2003 EQUITY INCENTIVE PLAN AND FOR THE
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS.
This Proxy will be valid until the sooner of one year from the date indicated on
the reverse side and the completion of the Annual Meeting.
PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS PROXY.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
[X] Please mark vote as in this example
1. ELECTION OF DIRECTORS:
A total of five Directors will be elected at the Annual Meeting of
Stockholders of the Company. This Proxy can only be voted for four
of the five Directors being elected at the Annual Meeting.
Accordingly, this Proxy does not confer voting power with respect to
the remaining directorship.
FOR ALL
WITHHOLD EXCEPT
AUTHORITY TO NOMINEE(S)
FOR ALL VOTE FOR ALL WRITTEN
NOMINEES NOMINEES BELOW
Nominees: David W. Wright, [ ] [ ] [ ]
Gerald M. Czarnecki,
Suzanne M. Hopgood and _________
Wallace Barnes
2. APPROVAL OF THE 2003 EQUITY INCENTIVE PLAN:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
DATED: ____________________________
____________________________________
(Signature)
____________________________________
(Signature, if held jointly)
____________________________________
(Title)
WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS SHOULD EACH SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH SIGNING.
IMPORTANT: PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY!
