SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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/ / Definitive Proxy Statement
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/ / Soliciting Material Pursuant to Section 240.14a-12
Del Global Technologies Corp.
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N/A
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[LOGO] DEL GLOBAL TECHNOLOGIES
FOR IMMEDIATE RELEASE
DEL GLOBAL QUESTIONS STEEL PARTNERS TRUE COMMITMENT TO
CORPORATE GOVERNANCE
URGES SHAREHOLDERS NOT TO BE MISLED
DETAILS DEL'S TRANSFORMATION TO BEST PRACTICES OF CORPORATE
GOVERNANCE
VALHALLA, NY, May 22, 2003 - Del Global Technologies Corp. (DGTC) ("Del") issued
the following letter to the Company's shareholders today:
IMPORTANT
May 22, 2003
Dear Valued Shareholder:
Steel Partners II, L.P., the group attempting to take control of your Company at
the May 29th Annual Meeting of Shareholders, is campaigning primarily on a
platform of corporate governance.
We believe effective corporate governance is vital, and establishing best
practices has been a priority of Del's new management team from Day One when the
positions of Chairman and CEO were separated. Ironically, evidence suggests
corporate governance is not a priority for Steel Partners elsewhere. We
encourage you to look at the breakdown in corporate governance at SL Industries,
a company that fell prey to Steel Partners' control in January 2002 following a
hostile proxy contest:
o Warren Lichtenstein, the Managing Partner of Steel Partners II, LLP,
holds BOTH the position of Chairman AND CEO.
o The Compensation Committee is comprised of Steel affiliates Mark
Schwartz and Steven Wolosky, two Directors who have been involved in a
number of Steel's proxy contests and asset sales.
Wolosky is a Partner with Olshan Grundman Frome Rosenzweig & Wolosky.
The firm is both Steel Partners' counsel and, since January 2002 when
Mr. Wolosky became a Director of SL, it is also SL's counsel. SINCE
THIS TIME WOLOSKY'S FIRM HAS BILLED SL INDUSTRIES $1,260,000 IN LEGAL
FEES.
On April 1, 2003 the COMPENSATION COMMITTEE AGREED TO PAY STEEL
PARTNERS $480,000 FOR SERVICES PERFORMED SINCE CONTROLLING SL'S BOARD.
One Commerce Park, Valhalla, NY 10595
914-686-3600 www.delglobal.com
Del Global Technologies 2
May 22, 2003
o In January 2003, SL'S BOARD AGREED TO SELL ONE OF ITS MOST PROFITABLE
BUSINESSES TO AN INVESTOR IN STEEL PARTNERS' HEDGE FUND for $4M in
cash and $4M in debt. At the time of the sale, reported net income for
this business was $2.2M, suggesting a potential market value in excess
of the sale price.
Steel Partners' communications on Del Global are peppered with false and
misleading accusations that associate Del's past problems with the ENTIRELY NEW
MANAGEMENT TEAM AND BOARD OF DIRECTORS. From the outset, while correcting Del's
many financial, operational and organizational problems, we have led a
transformation to best practices of corporate governance at the Company.
Our commitment to corporate governance is clearly demonstrated by the standards
and practices your new management and Board have put in place:
o The Chairman and CEO are separate positions; four out of five
Directors are independent.
o Committee Charters for (a) Nominating and Governance, (b) Audit and
(c) Compensation and Stock Option Committees were established.
- Each Committee consists of solely independent members; each
Committee reports directly to the entire Board.
- The Nominating and Governance Committee reports annually to the
Board on governance matters.
- The Audit Committee charter contains many procedures suggested by
the Business Roundtable, such as supervision of relationship with
auditors, review of internal controls and quarterly executive
sessions with the CFO, internal auditors and independent
auditors.
o A comprehensive Code of Business Conduct and Ethics has been deployed
throughout the Company, reinforced by employee training and requiring
all employees to acknowledge understanding and compliance.
o A 24-hour confidential hotline is available for employees to report
suspected violations of law or policy, together with a defined
complaint investigation process.
o Independent Directors have full access to management and employees.
The Board meets without management at least twice annually.
o Del Global's Corporate Governance Standards and Practices are
available to employees on the Company Intranet and available to the
public on the Company's website (www.delglobal.com).
SO PLEASE DON'T BE MISLED. Corporate Governance is NOT the issue. We believe
this is a poorly disguised attempt to take control of your Company at a cheap
price.
Del Global Technologies 3
May 22, 2003
DEL GLOBAL HAS AN ENTIRELY NEW LEADERSHIP TEAM
WE HAVE ACCOMPLISHED A MASSIVE TURNAROUND
WE EXPECT TO BE PROFITABLE IN Q4 FY03(1) AND RE-LIST ON NASDAQ BY YEAR END
WE HAVE DEVELOPED AGGRESSIVE GROWTH STRATEGIES
WE HAVE A WELL BALANCED AND EXPERIENCED BOARD OF DIRECTORS
WE NEED YOUR VOTE! SIGN THE WHITE CARD TODAY!
EVEN IF YOU PREVIOUSLY VOTED FOR STEEL PARTNERS' NOMINEES ON THEIR GOLD PROXY
CARD, YOU CAN EASILY CHANGE YOUR VOTE, BY SENDING IN YOUR WHITE PROXY CARD.
On Behalf of the Board of Directors,
Sincerely,
/s/ Samuel E. Park
Samuel E. Park
President and Chief Executive Officer
Statements about future results made in this release may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are based on current
expectations and the current economic environment. The Company cautions that
these statements are not guarantees of future performance. They involve a number
of risks and uncertainties that are difficult to predict including, but not
limited to, the ability of the Company to implement its business plan,
management changes, changing industry and competitive conditions, obtaining
anticipated operating efficiencies, securing necessary capital facilities,
favorable determinations in various legal and regulatory matters and favorable
general economic conditions. Actual results could differ materially from those
expressed or implied in the forward-looking statements. Important assumptions
and other important factors that could cause actual results to differ materially
from those in the forward-looking statements are specified in the Company's
filings with the Securities and Exchange Commission.
Del Global filed with the Securities and Exchange Commission a definitive proxy
statement relating to the solicitation of proxies with respect to the Del Global
2003 Annual Meeting of Shareholders. Del Global will file with the Commission,
and may file other proxy solicitation materials. Investors and security holders
are urged to read the proxy statement and any other proxy solicitation materials
(when they become available) because they will contain important information.
Del Global and the Directors and certain of the executive officers of Del Global
may be deemed to be participants in the solicitation of proxies in respect of
electing the Board of Directors of Del Global at the 2003 Annual Meeting of
Shareholders. Additional information with respect to the beneficial ownership of
those executive officers and Directors of Del Global common stock is set forth
in the definitive proxy statement filed by Del Global with the Commission.
Investors and security holders may obtain a free copy of the definitive proxy
statement and other documents filed by Del Global with the Commission at the
Commission's website at http://www.sec.gov. You may also access a copy of the
definitive proxy statement by accessing www.delglobal.com, or by contacting
Georgeson Shareholder Communications, Inc. toll free at (800) 545-1782 (banks
and brokers call collect at (212) 440-9800).
Del Global Technologies 4
May 22, 2003
1. Del Global expects to return to operating profitability in the fourth quarter
of Fiscal 2003, absent unbudgeted expenses, such as costs associated with a
potential settlement with the Department of Defense. In our Power Conversion
Group segment, our forecasted sales for the fourth quarter are fully in
backlog, and expectations regarding sales and operating income are based upon
our current production rate, demonstrated capacity, shipping schedule and our
current cost structure. The completion of the consolidation of our High
Voltage division is now beginning to be reflected in higher operating income
for this segment, and we expect continuing improvement. In our Medical
Systems segment, we are experiencing some short term market softness
particularly in the Middle East and the domestic market, and have taken steps
to reduce operating costs in order to achieve our expected operating income.
As a result, we believe that operating income in the fourth quarter of fiscal
2003 on a consolidated basis will be positive.
Del Global Technologies 5
May 22, 2003
HOW TO VOTE:
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN
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1. If your shares are registered in your own name, please sign, date and mail
the enclosed WHITE Proxy Card to Georgeson Shareholder Communications Inc.
in the postage paid envelope provided today.
2. If your shares are held in the name of a brokerage firm, bank nominee or
other institution, only it can sign a WHITE Proxy Card with respect to your
shares and only after receiving your specific instructions. Accordingly,
please sign, date and mail the enclosed WHITE Proxy Card in the
postage-paid envelope provided, and to ensure that your shares are voted,
you should also contact the person responsible for your account and give
instructions for a WHITE Proxy Card to be issued representing your shares.
3. After signing the enclosed WHITE Proxy Card do not sign or return the Gold
proxy card. Remember - only your latest dated proxy will determine how your
shares are to be voted at the meeting. IF YOU VOTED A GOLD PROXY CARD AND
WANT TO CHANGE YOUR VOTE, YOU CAN DO SO NOW BY SENDING IN THIS WHITE PROXY
CARD.
4. If you have any questions or need further assistance in voting your shares,
please contact our proxy solicitor.
[LOGO] GEORGESON SHAREHOLDER
17 State Street, 10th Floor
New York, NY 10004
Banks and Brokers (212) 440-9800
SHAREHOLDERS CALL TOLL FREE (800) 545-1782
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Del Global Technologies 6
May 22, 2003
CONTACTS:
DEL GLOBAL TECHNOLOGIES CORP.
Samuel E. Park, President and Chief Executive Officer
Thomas V. Gilboy, Chief Financial Officer
(914) 686-3600
MEDIA
The Abernathy MacGregor Group, Inc.
Steve Frankel
(212) 371-5999
INVESTORS
Georgeson Shareholder Communications Inc.
(800) 545-1782