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
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
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 Person(s) Filing Proxy Statement, if Other Than the Registrant)
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Steel Partners II, L.P. ("Steel") is filing materials contained in
this Schedule 14A with the Securities and Exchange Commission in connection with
the solicitation of proxies in support of the election of the nominees of Steel
to the Board of Directors of Del Global Technologies Corp. (the "Company") at
the 2003 annual meeting of the stockholders of the Company scheduled to be held
on May 29, 2003, or any other meeting of stockholders held in lieu thereof, and
any adjournments, postponements, reschedulings or continuations thereof (the
"Annual Meeting").
Item 1: Steel delivered the following letter to the stockholders of
the Company.
AN IMPORTANT MESSAGE TO
DEL GLOBAL TECHNOLOGIES CORP. STOCKHOLDERS
FROM STEEL PARTNERS II, L.P.
May 2, 2003
Dear Fellow Stockholder:
Steel Partners II, L.P. is the largest single stockholder of Del Global
Technologies Corp. and a member of a stockholder group owning an aggregate of
1,942,460 shares, or approximately 18.7% of the stock of Del Global. Our
significant investment in Del Global should not be interpreted as an endorsement
of its performance or its incumbent Board and management. On the contrary, we
are disappointed by Del Global's poor financial performance and slow
implementation of fundamental corporate governance practices. OUR OWNERSHIP
POSITION (IN SHARP CONTRAST TO THE TOTAL LACK OF SHARES OWNED BY THE INCUMBENT
BOARD AND CURRENT MANAGEMENT) IS YOUR ASSURANCE THAT WE REPRESENT THE INTERESTS
OF ALL STOCKHOLDERS - AND SHARE WITH YOU THE GOAL OF ACHIEVING THE MAXIMUM VALUE
FOR OUR MUTUAL INVESTMENT.
Like you, we are disappointed with Del Global's financial results over the last
three years. We believe that the complete lack of stockholder representation at
Del Global has resulted in a series of Board and management actions that have
been disastrous for Del Global and its stockholders. WE URGE YOU TO SUPPORT OUR
EFFORTS TO ESTABLISH AN INDEPENDENT VOICE FOR STOCKHOLDERS AT DEL GLOBAL BY
ELECTING OUR NOMINEES--PLEASE SIGN, DATE AND RETURN THE ENCLOSED GOLD PROXY CARD
TODAY. Consider the following:
o NO STOCKHOLDER MEETING FOR OVER THREE YEARS
We believe Del Global's failure to hold an annual meeting since February 2000
demonstrates its utter indifference to the right of stockholders--the true
owners of the company--to elect representatives to the Board and to have a say
in how their investment dollars are spent.
o NOT A SINGLE ELECTED DIRECTOR ON THE ENTIRE BOARD
The Board, under the leadership of Mr. Samuel Park, Del Global's CEO and a
director, has regularly appointed directors rather than have them elected by
stockholder vote. Del Global is likely one of the only public companies in the
United States where not a single incumbent director has been elected by
stockholders. We believe that this fundamental lack of accountability has led to
many of Del Global's current problems.
o BOARD ACTIONS CONTRARY TO STOCKHOLDERS' BEST INTERESTS
The Board, acting without the checks and balances of stockholder accountability,
has taken actions that we believe are contrary to your best interests,
including, in September 2001, amending the Bylaws to deprive stockholders of
rights they had previously enjoyed. Stockholders no longer have the right to
call a special meeting, and are effectively silenced in considering any
acquisition proposal, by Del Global's adoption of a poison pill. If elected, our
nominees will seek to eliminate devices that serve to entrench management and
reestablish governance structures that support the rights of stockholders.
PROTECT YOUR INVESTMENT--ELECT AN INDEPENDENT, QUALIFIED BOARD
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We believe that it is time to hold Del Global's Board and management accountable
to all stockholders. Our nominees represent your opportunity to elect a truly
independent Board composed of highly qualified, seasoned professionals, with
established records in corporate governance, private and public investment and
business management. Remember - three of our four nominees were recommended to
us by the respected National Association of Corporate Directors - while four of
the five incumbents were selected by former Del Global directors and/or current
management. That difference is what this contest is about.
BAD GOVERNANCE IS BAD BUSINESS
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We believe that only a strong and independent Board can effectively oversee the
management of your company, and that the significant losses sustained over the
last three years are directly attributable to the absence of such leadership.
For example, for the fiscal year ended in August 2002, Del Global had an
operating loss of over $14,000,000 and a net loss of over $12,000,000, or $1.38
per share. Despite the hit to your pocketbook, Del Global rewarded its
management and related parties handsomely:
o For that same year, Mr. Park's services cost Del Global stockholders
$353,901 in salary, a $220,500 bonus, $64,425 in other compensation
including amounts paid related to his use of a corporate apartment, and
options on 50,000 shares of stock exercisable at $1.80 per share.
o Mr. Park is not the only Park family member well rewarded by Del Global
and its stockholders. During fiscal 2002, Del Global paid approximately
$319,000 to a consulting firm for work performed primarily by Damien Park
(Mr. Park's son), and Edward Ferris. Mr. Ferris was subsequently hired by
Del Global at a cost to you of $200,000 per year plus options and bonuses,
and the younger Mr. Park, after being retained as a $16,800 per month
consultant for the first seven months of this fiscal year, was also
appointed to a full-time, $125,000 per year position with your company.
o During fiscal 2002, Del Global also paid approximately $279,000 to an
executive recruiting firm whose CEO is the spouse of Del Global's Chairman
at the time, Roger Winston. Similarly, Del Global paid approximately
$22,000 in accounting fees to an accounting firm partially owned by the
then-Chairman of your company's Audit Committee, recently retired director
David Michael.
We believe Del Global stockholders should not be supporting the friends and
family of company executives; furthermore, senior management should not be
receiving substantial bonuses and stock options for dismal results.
A CLEAN BREAK...OR A COSMETIC CHANGE?
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While Del Global recently announced that it had changed certain of its
governance provisions and appointed directors who, they claim, represent "a
clean break from Del Global's past," we think you should question just how deep
these changes run. We believe these actions are mere "window dressing" and a
response to our initiatives, coming as they do in the face of our proxy
challenge and less than eight weeks before the Annual Meeting. We can't help but
wonder where this newfound concern for "good governance" has been hiding for the
166 weeks that have elapsed since the last stockholder meeting. We urge you to
elect independent nominees untainted by any prior connection to Del Global's
past history, and committed to real change.
OUR NOMINEES--A REAL ALTERNATIVE
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As detailed in our Proxy Statement, our nominees have the management skills,
relevant experience and sincere dedication Del Global requires in order to be
properly governed for the benefit of all of its stockholders:
WALLACE BARNES formerly served as 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. Mr. Barnes has also served as a director
of Aetna Life & Casualty Company, a predecessor of Aetna Inc. (NYSE), a
leading health care provider; as Chairman of the Board and a director of Rohr,
Inc. (NYSE), an aerospace supplier prior to its merger with B. F. Goodrich
Company; and as a director of Rogers Corporation (NYSE), a developer and
manufacturer of high-performance specialty materials for the wireless
communications, computers and networking, imaging, transportation and consumer
industries.
GERALD M. CZARNECKI is a venture capitalist and broadly experienced executive.
He has served as Executive Vice President and CFO of NYSE listed Republic of
Texas, Inc.; President, CEO and a Director of NASD-listed Altus Bank; Chairman,
CEO and a Director of Honfed Bank, Inc.; and President, Chief Operating Officer
and a Director of NYSE listed UNC, Inc. He currently serves as a member of the
Board of Directors and Chairman of the Audit Committee of State Farm Insurance
Companies, the largest insurance company in the world. He is a respected expert,
frequent speaker and seminar leader on a broad range of corporate governance
issues, serving as a director of the National Association of Corporate
Directors, National Capital Area Chapter and as a consultant to Board Governance
Services, Inc., a third party provider of advisory services to boards of
directors.
SUZANNE M. HOPGOOD, founder of The Hopgood Group, LLC, is a seasoned hands-on
business manager, consultant and recognized expert on corporate governance
issues. The Hopgood Group, LLC is a workout and interim management company. She
has served as President, CEO and a director of Houlihan's Restaurant Group, and
as CEO, Chairman of the Board and director of Furr's Restaurant Group, Inc. as a
result of a TIAA-CREF led stockholder proxy initiative. Furr's was traded on the
NYSE at the time. Ms. Hopgood also served as a member of the audit, nominating,
compensation and strategic planning committees of Houlihan's and Furr's. She is
President of the National Association of Corporate Directors, Connecticut
Chapter.
DAVID W. WRIGHT is an experienced value investor and corporate director. Through
entities he controls, Mr. Wright currently holds over 350,000 shares of Del
Global. 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. An
investor in Del Global since December 2001, he has carefully researched Del
Global and is familiar with its history, its management and its operations
through both his analysis of Del Global's filings and his communications with
management.
IT IS IMPORTANT TO NOTE THAT, IN SHARP CONTRAST TO THE CURRENT DEL GLOBAL BOARD,
EACH AND EVERY ONE OF OUR NOMINEES HAS SOLID PUBLIC COMPANY BOARD EXPERIENCE.
PROTECT YOUR INTERESTS BY ELECTING A STRONG AND INDEPENDENT BOARD OF DIRECTORS
COMMITTED TO THE CREATION OF VALUE FOR ALL DEL GLOBAL STOCKHOLDERS. IT IS TIME
FOR DEL GLOBAL STOCKHOLDERS TO DEMAND A BOARD OF DIRECTORS FULLY ACCOUNTABLE TO
STOCKHOLDERS. WE URGE YOU TO SIGN, DATE AND RETURN THE GOLD PROXY CARD TODAY IN
THE ENVELOPE PROVIDED.
Thank you for your support.
/s/ Warren Lichtenstein
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Warren G. Lichtenstein
Steel Partners II, L.P.
IMPORTANT
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PLEASE SIGN, DATE AND RETURN THE ENCLOSED GOLD PROXY CARD TODAY
IN THE POSTAGE-PAID ENVELOPE PROVIDED.
DO NOT SIGN ANY WHITE PROXY CARD THAT YOU MAY RECEIVE FROM THE COMPANY.
If your shares are held on your behalf by a broker or bank, please sign, date
and return the GOLD proxy in the envelope provided and contact the person
responsible for your account and ask them to ensure that your shares are voted
on the GOLD card.
IF YOU HAVE ANY QUESTIONS, OR NEED ASSISTANCE IN VOTING YOUR SHARES,
PLEASE CONTACT THE FIRM ASSISTING US IN THE SOLICITATION OF PROXIES:
INNISFREE M&A INCORPORATED
501 Madison Avenue
New York, NY 10022
CALL TOLL-FREE: (888) 750-5834
Banks and Brokers call collect: (212) 750-5833
