Edgar Filing: SL INDUSTRIES INC

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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. _____)

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[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to Section 240.14a-12

SL INDUSTRIES, INC.
(Name of Registrant as Specified in Its Charter)

________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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SL INDUSTRIES, INC.
520 FELLOWSHIP ROAD
SUITE A-114
MT. LAUREL, NEW JERSEY 08054

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 16, 2007

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To The Holders of Our Common Stock:

We invite you to attend our annual shareholders' meeting on May 16, 2007 at
the offices of Olshan Grundman Frome Rosenzweig & Wolosky LLP, 65 East 55th
Street, New York, New York at 2:00 P.M., Eastern Time. At the meeting, you will
hear an update on our operations, have a chance to meet some of our directors
and executives, and vote on the following matters:

1. To elect seven (7) directors until the next annual meeting in 2008 or
until their successors have been elected and qualified;

2. To ratify the appointment of Grant Thornton LLP as our independent
accountants for fiscal 2007; and

3. Any other matters that properly come before the meeting.

This booklet includes a formal notice of the meeting and the proxy
statement. The proxy statement tells you more about the agenda and procedures
for the meeting. It also describes how our Board of Directors operates and gives
personal information about our director nominees.

Only record holders of SL Industries, Inc. common stock at the close of
business on April 2, 2007 will be entitled to vote on the foregoing matters at
the annual meeting. Even if you only own a few shares of common stock, we want
your shares to be represented at the annual meeting. I urge you to complete,
sign, date and return your proxy card promptly in the enclosed envelope.

We have also provided you with the exact place and time of the meeting if
you wish to attend in person.

Sincerely yours,

----------------------------------------
DAVID R. NUZZO
Secretary

Mt. Laurel, New Jersey
April 16, 2007

SL INDUSTRIES, INC.
520 FELLOWSHIP ROAD
SUITE A-114
MT. LAUREL, NEW JERSEY 08054
(856) 727-1500

PROXY STATEMENT

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors (the "Board") of SL Industries, Inc., a New Jersey
corporation (the "Company") of proxies in the accompanying form to be used at
the Annual Meeting of Shareholders of the Company to be held on May 16, 2007,
and any adjournment or postponement thereof (the "Meeting"). This Proxy
Statement, the accompanying form of proxy and the Company's Annual Report for
the fiscal year ended December 31, 2006 (the "2006 Annual Report") are being
mailed to shareholders on or about April 16, 2007. The shares represented by the
proxies received pursuant to the solicitation made hereby and not revoked will
be voted at the Meeting.

MEETING OF SHAREHOLDERS

The Meeting will be held at the offices of Olshan Grundman Frome Rosenzweig
& Wolosky LLP, 65 East 55th Street, New York, New York, on May 16, 2007, at 2:00
P.M., Eastern Time.

RECORD DATE AND VOTING

The Board of Directors has fixed the close of business on April 2, 2007, as
the record date (the "Record Date") for the determination of holders of
outstanding shares of the Company entitled to notice of and to vote on all
matters presented at the Meeting. Such shareholders will be entitled to one vote
for each share held on each matter submitted to a vote at the Meeting. On the
Record Date, there were 5,636,971 shares of the Company's common stock, $.20 par
value per share (the "Common Stock"), issued and outstanding, each of which is
entitled to one vote on each matter to be voted upon.

PURPOSES OF THE MEETING

The purposes of the Meeting are to vote upon (i) the election of seven (7)
directors until the next annual meeting in 2008, or until their successors have
been elected and qualified; (ii) the ratification of Grant Thornton LLP as the
Company's independent auditors for the fiscal year ending December 31, 2007; and
(iii) such other business as may properly come before the Meeting.

QUORUM AND REQUIRED VOTE

Under the By-Laws of the Company, the presence of a quorum is required for
each matter to be acted upon at the Meeting. The presence, either in person or
by properly executed proxy, of the holders of a majority of the outstanding
shares of Common Stock is necessary to constitute a quorum for the purpose of
acting on the matters referred to in the Notice of Annual Meeting of
Shareholders accompanying this Proxy Statement and any other proposals that may
properly come before the Meeting. Broker non-votes and abstentions will be
counted only for the purpose of determining whether a quorum is present at the
Meeting. Broker non-votes occur when a broker returns a proxy but does not have
the authority to vote on a particular proposal.

The director nominees receiving a plurality of the votes cast during the
Meeting will be elected to fill the seats of the Board. For the other proposal
to be approved, the favorable vote of a majority of

shares present and entitled to vote thereon is required. Abstentions count for
quorum purposes and will have the same effect as a vote against the other
proposal.

PROXIES

The Board requests your proxy. Giving the Board your proxy means you
authorize it to vote your shares at the Meeting in the manner you direct. You
may vote for all, some or none of the director nominees. You may also vote for
or against the other proposal or abstain from voting.

On the matters coming before the Meeting as to which a choice has been
specified by a shareholder by means of the ballot on the proxy, the shares will
be voted accordingly. If no choice is so specified, the shares will be voted (i)
FOR the election of the nominees for director listed in this Proxy Statement and
(ii) FOR the ratification of Grant Thornton LLP as the Company's independent
auditors, all as referred to in Items 1 and 2, respectively, in the Notice of
Annual Meeting of Shareholders and as described in this Proxy Statement.

The form of proxy accompanying this Proxy Statement confers discretionary
authority upon the named proxy holders with respect to amendments or variations
to the matters identified in the accompanying Notice of Annual Meeting of
Shareholders and with respect to any other matters which may properly come
before the Meeting. As of the date of this Proxy Statement, management of the
Company knows of no such amendment or variation or of any matters expected to
come before the Meeting which are not referred to in the accompanying Notice of
Annual Meeting of Shareholders.

A shareholder who has given a proxy may revoke it by voting in person at
the Meeting, by giving written notice of revocation to the Secretary of the
Company or by giving a later dated proxy at any time before voting.

Only holders of Common Stock, their proxy holders, and the Company's
invited guests may attend the Meeting. If you wish to attend the Meeting in
person but you hold your shares through someone else, such as a stockbroker, you
must bring proof of your ownership and identification with a photo at the
Meeting. For example, you could bring an account statement showing that you
beneficially owned shares of the Common Stock as of April 2, 2007 as acceptable
proof of ownership.

COSTS OF SOLICITATION

The Company will bear the cost of printing and mailing proxy materials,
including the reasonable expenses of brokerage firms and others for forwarding
the proxy materials to beneficial owners of Common Stock. In addition to
solicitation by mail, solicitation may be made by certain directors, officers
and employees of the Company, or firms specializing in solicitation; and may be
made in person or by telephone or telegraph. No additional compensation will be
paid to any director, officer or employee of the Company for such solicitation.
The Company has retained Innisfree M&A, Inc. to assist the Company in the
solicitation of proxies for a fee of $6,500, plus expenses.

ITEM 1: ELECTION OF DIRECTORS

The Company has one class of directors, each serving a one-year term.
Directors elected at the Meeting will serve until the 2008 Annual Meeting of
Shareholders and until their respective successors are duly elected and
qualified.

INFORMATION WITH RESPECT TO NOMINEES AND DIRECTORS

Set forth below are the names and ages of the nominees for directors and
their principal occupations at present and for the past five years. There are,
to the knowledge of the Company, no agreements or understandings by which these
individuals were so selected. No family relationships exist between any
directors or executive officers, as such term is defined in Item 402 of
Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). The Board has adopted independence standards for directors
that conform to the standards required by the American Stock Exchange ("AMEX")
for listed companies. Based on the Company's director independence standards,
the Board has affirmatively determined that each of the nominees, other than
Messrs. Lichtenstein, Kassan and Henderson, is independent, including each of
the non-management directors, consisting of Messrs. Baumgardner, Schwarz, Gray
and Risher.

Director
Name Age All Offices with the Company Since
-------------------------- --- ---------------------------- --------

Warren G. Lichtenstein(1) 41 Chairman of the Board 2002

Glen M. Kassan(1) 63 Vice Chairman 2002

J. Dwane Baumgardner(2)(4) 66 Director 1990

James R. Henderson 49 Director 2002

Mark E. Schwarz(1) (3)(4) 46 Director 2002

Avrum Gray(2)(3)(4) 71 Director 2002

James A. Risher(2)(3) 64 Director 2003

(1) Member of Executive Committee.

(2) Member of Audit Committee.

(3) Member of Compensation Committee.

(4) Member of Nominating and Corporate Governance Committee.

BUSINESS BACKGROUND

The following is a summary of the business background and experience of
each of the persons named above:

WARREN G. LICHTENSTEIN was elected Chairman of the Board on January 24, 2002.
From February 4, 2002 until August 10, 2005, Mr. Lichtenstein served as Chief
Executive Officer of the Company. Mr. Lichtenstein had previously served as a
director of the Company from 1993 to 1997. Mr. Lichtenstein has been the
Chairman of the Board, Secretary and the Managing Member of Steel Partners,
L.L.C., the general partner of Steel Partners II, L.P. ("Steel"), a private
investment partnership, since January 1, 1996 and the President, Chief Executive
Officer and a director of Steel Partners, Ltd. ("SPL"), a management and
advisory company that provides management services to Steel and its affiliates,
since June 1999. He

is also a co-founder of Steel Partners Japan Strategic Fund (Offshore), L.P., a
private investment partnership investing in Japan, and Steel Partners China
Access Fund I LP, a private equity partnership investing in China. Mr.
Lichtenstein has been a director (currently Chairman of the Board) of United
Industrial Corporation ("UIC"), a company principally focused on the design,
production and support of defense systems and a manufacturer of combustion
equipment for biomass and refuse fuels, since May 2001. Mr. Lichtenstein was a
director of Layne Christensen Company, a provider of products and services for
the water, mineral, construction and energy markets, from January 2004 to
October 2006. He has served as Chairman of the Board of WHX Corporation ("WHX"),
a holding company, since July 2005. Mr. Lichtenstein served as a director of
WebFinancial Corporation ("WebFinancial"), a consumer and commercial lender,
from 1996 to June 2005, as Chairman and Chief Executive Officer from December
1997 to June 2005 and as President from December 1997 through December 2003. Mr.
Lichtenstein has been a director of KT&G Corporation, South Korea's largest
tobacco company, since March, 2006.

GLEN M. KASSAN was elected as a director on January 24, 2002 and as Vice
Chairman of the Board on August 10, 2005. From February 4, 2002 until August 10,
2005, Mr. Kassan served as President of the Company. He has been an Operating
Partner of SPL since August 1999 and an Operating Partner of its predecessor
from October 1999 to May 2001. Mr. Kassan has served as Vice President and
Secretary of WebFinancial since June 2000 and as Chief Financial Officer from
June 2000 through 2007. Mr. Kassan has served as a director of WHX since July
2005 and as its Vice Chairman of the Board, Chief Executive Officer and
Secretary since October 2005. Mr. Kassan is also currently a director of UIC.

J. DWANE BAUMGARDNER has been a director since 1991. From January 2003 to May
2004, Mr. Baumgardner served as Vice Chairman and President of Magna Donnelly
Corporation, an automotive supplier of exterior and interior mirror, lighting
and engineered glass systems. Prior to January 2003, he had been the Chief
Executive Officer and President of Magna Donnelly Corporation since October
2002. Magna Donnelly Corporation is a wholly owned subsidiary of Magna
International Inc. that was established in October 2002 by the merger of
Donnelly Corporation and Magna Mirror Systems. Prior to October 2002, Mr.
Baumgardner had been the Chairman and Chief Executive Officer of Donnelly
Corporation, an automotive supplier, since 1986. Mr. Baumgardner is currently a
director of Wescast Industries, Inc., a global automotive supplier, and of
Landscape Forms, Inc., a designer and manufacturer of outdoor commercial
furnishings. He is also a member of the Board of Advisors for the Strive Group,
an integrated merchandising supply chain company to large consumer product
companies. He also serves as the President of the Scanlon Foundation.

JAMES R. HENDERSON was elected as a director on January 24, 2002. Mr. Henderson
has served as a Vice President of SPL since March 2002 and as a Vice President
of its predecessor from August 1999 through March 2002. He has also served as
President of Gateway Industries, Inc., a provider of database development and
Web site design and development services, since December 2001. Mr. Henderson
served as a director of ECC International Corp., a manufacturer and marketer of
computer controlled simulators for training personnel to perform maintenance and
operator procedures on military weapons, from December 1999 to September 2003
and as acting Chief Executive Officer from July 2002 to March 2003. He has
served as a director of BNS Co., a holding company, since June 2004. Mr.
Henderson has served as a director and Chief Executive Officer of WebFinancial
since June 2005, as President and Chief Operating Officer since November 2003,
and was the Vice President of Operations of WebFinancial from September 2000
through December 2003. He has served as a director of WebBank, the operating
subsidiary of WebFinancial, since March 2002, as Chairman since 2004, and as
acting Chief Executive Officer of WebBank from November 2004 to May 2005. He has
also served as a director of Del Global Technologies Corp., a designer and
manufacturer of medical imaging and diagnostic systems, since November 2003 and
as chairman since May 2005. Mr. Henderson has served as a director of Angelica
Corporation since September 2006. From January 2001 to August 2001, Mr.
Henderson served as President of MDM Technologies, Inc., a direct mail and
marketing company that was principally controlled by the Company's Chairman.
From 1996 to July 1999, Mr. Henderson was employed in

various positions with Aydin Corporation ("Aydin"), a defense electronics
manufacturer, which included a tenure as President and Chief Operating Officer
from October 1998 to June 1999. Prior to his employment with Aydin, Mr.
Henderson was employed as an executive with UNISYS Corporation, an e-business
solutions provider.

MARK E. SCHWARZ was elected as a director on January 24, 2002. He is the
Chairman, Chief Executive Officer and Portfolio Manager of Newcastle Capital
Management, L.P., a private investment management firm he founded in 1992 that
is the general partner of Newcastle Partners, L.P., a private investment firm.
Mr. Schwarz has served as Chairman of the Board of Hallmark Financial Services,
Inc., a property and casualty insurance company, since October 2001 and as its
Chief Executive Officer since January 2003. He currently serves as Chairman of
the Board of Bell Industries, Inc., a computer systems integrator, Pizza Inn,
Inc., a franchisor and food and supply distributor, and New Century Equity
Holdings Corp., an asset management company. Mr. Schwarz is a director of Nashua
Corporation, a specialty paper, label and printing supplies manufacturer and
WebFinancial.

AVRUM GRAY was elected as a director on May 23, 2002. Mr. Gray is the Chairman
of G-Bar Limited Partnership, one of the nation's largest independent options
trading firms and a leading specialist in computer-based arbitrage activities in
the derivative markets, and has held this position since 1981. Mr. Gray is the
former Chairman of the Board of Lynch Systems, Inc., a glass press supplier to
the television and computer industry, and a former Chief Executive Officer of a
privately held manufacturer of components and devices for the automotive
aftermarket. Mr. Gray is also a director of Nashua Corporation, a specialty
paper, label and printing supplies manufacturer; Lynch Corporation, a holding
company with subsidiaries engaged in manufacturing and distributing frequency
control devices and glass forming and other equipment; and Material Sciences
Corporation, a materials solution provider. Additionally, Mr. Gray has been
Chairman of the Board of Spertus College, as well as a board member of the
Illinois Institute of Technology, the Stuart School, and a number of
philanthropic organizations, including the Jewish Federation of Chicago.

JAMES A. RISHER was elected as a director on May 29, 2003. Mr. Risher has been
the Managing Partner of Lumina Group, LLC, a private company engaged in the
business of consulting and investing in small and mid-size companies, since
1998. Since August 2006, Mr. Risher has served as the Chief Executive Officer of
Del Global Technologies Corp. From February 2001 to May 2002, Mr. Risher served
as Chairman and Chief Executive Officer of BlueStar Battery Systems
International, Inc. ("BlueStar"), a Canadian public company that is an
e-commerce distributor of electrical and electronic products to selected
automotive aftermarket segments and targeted industrial markets. BlueStar filed
CCAA (a petition for reorganization under Canadian bankruptcy laws) in August
2001, and a plan of reorganization was approved in November 2001. From 1986 to
1998, Mr. Risher served as a director, Chief Executive Officer and President of
Exide Electronics Group, Inc. ("Exide"), a global leader in the uninterruptible
power supply industry. He also served as Chairman of Exide from December 1997 to
July 1998.

DIRECTOR COMPENSATION

Director compensation is more fully described below in the "Director
Compensation Table" located in the "Executive Compensation" portion of this
Proxy Statement.

BOARD COMMITTEES AND MEETINGS

The Board met on two occasions during the year ended December 31, 2006 and
acted by written consent on three occasions. Each of the directors attended at
least 75% of the aggregate of (i) the total number of meetings of the Board; and
(ii) the total number of meetings held by all committees of the Board on which
he served. There are four committees of the Board: the Executive Committee, the
Audit Committee, the Compensation Committee and the Nominating and Corporate
Governance Committee.

Each director is expected to make reasonable efforts to attend Board
meetings, meetings of committees of which such director is a member and the
Annual Meeting of Shareholders. Three directors attended the 2006 Annual Meeting
of Shareholders.

EXECUTIVE COMMITTEE

The Executive Committee has and may exercise all the authority of the
Board, except that the Executive Committee cannot make, alter or repeal any
By-Law of the Company, elect or appoint any director or remove any officer or
director, submit to shareholders any action that requires shareholder approval,
or amend or repeal any resolution previously adopted by the Board, which by its
terms is amendable or repealable only by the Board. The members of the Executive
Committee are Warren G. Lichtenstein, Glen M. Kassan and Mark E. Schwarz. The
Executive Committee did not meet during the fiscal year ended December 31, 2006.

AUDIT COMMITTEE

The Company has a separately-designated standing Audit Committee
established in accordance with Section 3(a)(58)(A) of the Exchange Act. The
Audit Committee has adopted a written charter, which is available on the
Company's website at www.slindustries.com. The adequacy of the charter has been
reviewed and assessed by the Audit Committee on an annual basis. The members of
the Audit Committee are Avrum Gray, James A. Risher and J. Dwane Baumgardner.
The Company certifies that it has and will continue to have an Audit Committee
of at least three members, each of whom meets the criteria for being
"independent" set forth under Section 121(A) of the listing standards of the
AMEX. In addition, the Board has determined that Avrum Gray, the Chairman of the
Audit Committee and a non-management director, is an audit committee financial
expert serving on the Audit Committee. The primary purpose of the Audit
Committee is to assist the Board in fulfilling its responsibility to oversee the
Company's financial reporting activities. The Audit Committee annually selects
independent public accountants to serve as auditors of the Company's books,
records and accounts, reviews the scope of the audits performed by such auditors
and the audit reports prepared by them and reviews and monitors the Company's
internal accounting procedures. A report from the Audit Committee is also
included in this Proxy Statement. See Audit Committee Report. The Audit
Committee met on five occasions during the fiscal year ended December 31, 2006
and acted by written consent on one occasion.

COMPENSATION COMMITTEE

The Compensation Committee reviews compensation arrangements and personnel
matters. The Compensation Committee has adopted a written charter. The members
of the Compensation Committee are James A. Risher, Mark E. Schwarz and Avrum
Gray. Each member of the Compensation Committee meets the criteria for being
"independent" set forth under Section 121(A) of the listing standards of the
AMEX. The Compensation Committee met on two occasions during the fiscal year
ended December 31, 2006 and acted by written consent on one occasion.

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

The Nominating and Corporate Governance Committee recommends criteria for
service as a director, reviews candidates and recommends appropriate governance
practices and compensation for directors. The Nominating and Corporate
Governance Committee has adopted a written charter, which is available on the
Company's website at www.slindustries.com. The members of the Nominating and
Corporate Governance Committee are Mark E. Schwarz, Avrum Gray and J. Dwane
Baumgardner. Each member of the Nominating and Corporate Governance Committee
meets the criteria for being "independent" set forth under Section 121(A) of the
listing standards of the AMEX. The Nominating and Corporate Governance Committee
did not meet during the fiscal year ended December 31, 2006 and acted by written
consent on one occasion.

The Nominating and Corporate Governance Committee considers and makes
recommendations to the Board with respect to the size and composition of the
Board and identifies potential candidates to serve as directors, to the extent
there are vacancies on the Board. The Nominating and Corporate Governance
Committee considers recommendations for director nominees from a wide variety of
sources, including members of the Board, business contacts, community leaders,
third-party advisory services and members of management. The Nominating and
Corporate Governance Committee also considers shareholder recommendations for
director nominees that are properly received in accordance with the Company's
By-laws, and applicable rules and regulations of the Securities and Exchange
Commission (the "SEC"). The Nominating and Corporate Governance Committee does
not evaluate director candidates recommended by shareholders differently than
director candidates recommended by other sources.

In considering Board candidates, members of the Nominating and Corporate
Governance Committee take into consideration all factors that it deems
appropriate, including, but not limited to, the individual's character,
education, experience, knowledge and skills. The Nominating and Corporate
Governance Committee will also consider the extent of the individual's
experience in business, education or public service, his or her ability to bring
a desired range of skills, diverse perspectives and experience to the Board and
whether the individual possesses high ethical standards, a strong sense of
professionalism and is capable of serving the interests of shareholders. In
addition to reviewing a candidate's background and accomplishments, candidates
for director nominees are reviewed in the context of the current composition of
the Board and the evolving needs of the Company's businesses. It is the policy
of the Board that at all times at least a majority of its members meet the
standards of independence promulgated by the AMEX and the SEC. Additionally, the
Nominating and Corporate Governance Committee will consider the number of boards
on which the candidate already serves when assessing whether the candidate has
the appropriate time to devote to service on the Board.

Shareholders wishing to bring a nomination for a director candidate prior
to a shareholders meeting must give written notice to David R. Nuzzo, Secretary,
SL Industries, Inc., 520 Fellowship Road, Suite A-114, Mt. Laurel, New Jersey
08054, either by personal delivery or by United States mail, postage prepaid.
The shareholder's notice must be received by the Secretary not later than the
close of business on the 120th calendar day prior to the anniversary date on
which notice of the prior year's annual meeting was first mailed to
shareholders. The shareholder's written notice to the Secretary shall set forth
(i) as to each person whom the shareholder proposes to nominate for election or
reelection as a director, all information relating to such person that is
required to be disclosed in solicitations of proxies for election of directors,
or is otherwise required, in each case pursuant to Regulation 14A under the
Exchange Act, including such person's written consent to being named in the
proxy statement as a nominee and to serving as a director if elected; and (ii)
as to the shareholder giving the notice and the beneficial owner, if any, on
whose behalf the nomination is made, the name and address of such shareholder,
as they appear on the Company's books; and of such beneficial owner, (a) the
class and number of shares of the Common Stock that are owned beneficially and
of record by such shareholder and such beneficial owner; and (b) a
representation that the shareholder is a holder of record of shares of the
Common Stock and intends to appear in person or by proxy at the meeting to
propose such business.

The Nominating and Corporate Governance Committee initially evaluates a
prospective nominee on the basis of his or her resume and other background
information that has been made available to the Committee. A member of the
Nominating and Corporate Governance Committee will contact for further review
those candidates who the Committee believes are qualified, who may fulfill a
specific Board need, and who would otherwise best make a contribution to the
Board. If, after further discussions with the candidate, and other further
review and consideration as necessary, the Nominating and Corporate Governance
Committee believes that it has identified a qualified candidate, it will make a
recommendation to the Board.

Except as set forth above, the Nominating and Corporate Governance
Committee does not have a formal policy regarding the handling or consideration
of director candidate recommendations received from a shareholder, or a formal
process for identifying and evaluating nominees for directors (including
nominees recommended by shareholders).

CODE OF CONDUCT AND ETHICS

The Company has adopted a code of conduct and ethics (the "Code") that
applies to all of its directors, officers and employees. The Code is reasonably
designed to deter wrongdoing and to promote (i) honest and ethical conduct,
including the ethical handling of actual or apparent conflicts of interest
between personal and professional relationships, (ii) full, fair, accurate,
timely and understandable disclosure in reports and documents filed with, or
submitted to, the SEC and in other public communications made by the Company,
(iii) compliance with applicable governmental laws, rules and regulations, (iv)
the prompt internal reporting of violations of the Code to appropriate persons
identified in the Code, and (v) accountability for adherence to the Code. The
Code has been filed as an exhibit to the Company's annual report on Form 10-K
for the fiscal year ended December 31, 2003 and is available on the Company's
website at www.slindustries.com. The Code may also be requested in print,
without charge, by writing to: David R. Nuzzo, Secretary, SL Industries, Inc.,
520 Fellowship Road, Suite A-114, Mt. Laurel, New Jersey 08054. Amendments to
the Code and any grant of a waiver from a provision of the Code requiring
disclosure under applicable SEC rules will be disclosed on the Company's website
at www.slindustries.com.

PROCEDURES FOR CONTACTING DIRECTORS

The Company has adopted a procedure by which shareholders may send
communications, as defined within Item 7(h) of Schedule 14A under the Exchange
Act, to one or more directors by writing to such director(s) or to the whole
Board, care of the Corporate Secretary, SL Industries, Inc., 520 Fellowship
Road, Suite A-114, Mt. Laurel, New Jersey 08054. Any such communications will be
promptly distributed by the Secretary to such individual director(s) or to all
directors if addressed to the whole Board.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company's directors and
officers, and persons who own more than 10% of a registered class of its equity
securities, to file reports of ownership and changes in ownership (typically,
Forms 3, 4 and/or 5) of such equity securities with the SEC and the AMEX. Such
entities are also required by SEC regulations to furnish the Company with copies
of all such Section 16(a) reports.

Based solely on a review of Forms 3 and 4 and amendments thereto furnished
to the Company and written representations that no Form 5 or amendments thereto
were required, the Company believes that during the fiscal year ended December
31, 2006, its directors and officers, and greater than 10% beneficial owners,
have complied with all Section 16(a) filing requirements.

EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS

JAMES C. TAYLOR has served as Chief Executive Officer and President of the
Company since August 10, 2005. Mr. Taylor previously served as Executive Vice
President and Chief Operating Officer of the Company since January 2004, as
President of the Company's Power Electronics Group since August 2002, and as
President of the Company's subsidiary, Teal Electronics Corp., since January
2000. From September 1997 to December 1999, Mr. Taylor was President of
Transicoil, a division of Horizon Aerospace, LLC, a privately held company
specializing in military, aerospace, and medical motors.

DAVID R. NUZZO has served as Vice President and Chief Financial Officer and
Secretary since December 1997. Mr. Nuzzo has served as Treasurer since January
2001.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding ownership of
the Common Stock, as of April 2, 2007 (except as otherwise noted), by: (i) each
person or entity (including such person's or entity's address) who is known by
the Company to own beneficially more than five percent of the Common Stock; (ii)
each of the Company's directors and nominees for director who beneficially owns
shares of Common Stock; (iii) each Named Executive Officer (as defined under the
Executive Compensation section of this Proxy Statement) who beneficially owns
shares of Common Stock; and (iv) all executive officers and directors as a
group. The information presented in the table is based upon the most recent
filings with the SEC by such persons or upon information otherwise provided by
such persons to the Company. Unless otherwise indicated, the address for all of
the executive officers, directors and shareholders named below is c/o SL
Industries, Inc., 520 Fellowship Road, Suite A-114, Mt. Laurel, New Jersey
08054.

Number of Shares
Name of Beneficial Owner Beneficially Owned(1) Percentage Owned(2)
------------------------ --------------------- -------------------

The Gabelli Funds 1,281,033(3) 22.7%
One Corporate Center
Rye, NY 10580-1435

Steel Partners II, L.P. 1,608,550(4) 28.5%
590 Madison Avenue
32nd Floor
New York, NY 10022

Warren G. Lichtenstein 1,618,849(4)(5) 28.72%

Glen M. Kassan 0(4) *

Mark E. Schwarz 243,473(6) 4.3%

J. Dwane Baumgardner 95,995(7) 1.7%

David R. Nuzzo 72,402(8) 1.3%

James C. Taylor 61,312(9) 1.1%

Avrum Gray 39,578(10) *

James R. Henderson 20,824(4) *

James A. Risher 0 *

All Directors and Executive
Officers as a Group 2,152,433(11) 38.2%

* Less than one percent (1%)

(1) Beneficial ownership is determined in accordance with the rules of the SEC.
Under such rules, shares are deemed to be beneficially owned by a person or
entity if such person or entity has or shares the power to vote or dispose
of the shares, whether or not such person or entity has any economic
interest in such shares. Except as otherwise indicated, and subject to
community property laws where applicable, the persons and entities named in
the table above have sole voting and investment power with respect to all
shares of Common Stock shown as beneficially owned by them. Shares of
Common Stock subject to options or warrants currently exercisable or
exercisable within 60 days are deemed outstanding for purposes of computing
the percentage ownership of the person or entity holding such option or
warrant, but are not deemed outstanding for purposes of computing the
percentage ownership of any other person or entity.

(2) Based upon 5,636,971 shares outstanding as of April 2, 2007.

(3) Based upon a Schedule 13D/A Amendment No. 27 filed on March 2, 2007 with
the SEC by GGCP, Inc., formerly known as Gabelli Group Capital Partners,
Inc. ("GGCP"), GAMCO Investors, Inc. formerly known as Gabelli Asset
Management Inc. ("GBL"), Gabelli Funds, LLC ("Gabelli Funds"), GAMCO Asset
Management, Inc. formerly known as GAMCO Investors, Inc. ("GAMCO"), Gabelli
Advisers, Inc. ("Gabelli Advisers"), Gabelli Securities, Inc. ("GSI"),
Gabelli & Company, Inc. ("Gabelli & Company"), MJG Associates, Inc. ("MJG
Associates"), Gabelli Foundation, Inc. ("Foundation"), Mario J. Gabelli,
and Lynch Interactive Corporation ("Interactive") (collectively, the
"Reporting Persons"), in addition to other information. GGCP makes
investments for its own account and is the parent company of GBL. GBL, a
public company listed on the New York Stock Exchange, is the parent company
for a variety of companies engaged in the securities business, including
(i) GAMCO, a wholly-owned subsidiary of GBL, an investment adviser
registered under the Investment Advisers Act of 1940, as amended
("Advisor's Act"), which provides discretionary managed account services
for employee benefit plans, private investors, endowments, foundations and
others; (ii) GSI, a majority-owned subsidiary of GBL, which is an
investment adviser registered under the Advisers Act and serves as a
general partner or investment manager to limited partnerships and offshore
investment companies and as a part of its business may purchase or sell
securities for its own account; (iii) Gabelli Funds, a wholly-owned
subsidiary of GBL, which is an investment adviser registered under the
Investment Advisers Act of 1940, as amended, which presently provides
discretionary managed account services for various registered investment
companies; and (iv) Gabelli Advisors, a subsidiary of GBL, which is an
investment advisor providing discretionary advisory services to The Gabelli
Westwood Mighty Mites Fund.

Gabelli & Company, a wholly-owned subsidiary of GSI, is a broker-dealer
registered under the Exchange Act, which as a part of its business
regularly purchases and sells securities for its own account. MJG
Associates provides advisory services to private investment partnerships
and offshore funds, and Mario J. Gabelli is its sole stockholder, director
and employee. The Foundation is a private foundation in which Mario J.
Gabelli is President, a Trustee and the Investment Manager of the
Foundation. Interactive is a holding company with operating subsidiaries
engaged primarily in the rural telephone industry. Interactive actively
pursues new business ventures and acquisitions. Interactive makes
investments in marketable securities to preserve capital and maintain
liquidity for financing its business activities and acquisitions and is not
engaged in the business of investing, reinvesting, or trading in
securities. Mario J. Gabelli is a director and a substantial shareholder of
Interactive. Mario J. Gabelli is also the majority stockholder and Chief
Executive Officer of GGCP and Chairman and Chief Executive Officer of GBL,
and the Chief Investment Officer for each of the Reporting Persons. GGCP is
the majority shareholder of GBL. GBL, in turn, is the sole stockholder of
GAMCO. GBL is also the majority stockholder of GSI and the largest
shareholder of Gabelli Advisers. Gabelli & Company is a wholly-owned
subsidiary of GSI.

Includes the following shares deemed to be owned beneficially by the
following affiliates: 1,058,633 shares held by GAMCO; 104,300 shares held
by MJG Associates; 95,000 shares held by Gabelli Funds; 13,600 shares held
by Gabelli Advisors; 2,000 shares held by Foundation and 7,500 shares held
by GSI. The foregoing persons do not admit to constituting a group within
the meaning of Section 13(d) of the Exchange Act. Mario J. Gabelli is
deemed to have beneficial ownership of the securities owned beneficially by
each of the foregoing persons. GSI is deemed to have beneficial ownership
of the securities owned beneficially by Gabelli & Company. GBL and GGCP are
deemed to have beneficial ownership of the securities owned beneficially by
each of the foregoing persons other than Mario J. Gabelli and the
Foundation.

GGCP, GBL, GAMCO, and Gabelli & Company are New York corporations and GSI
and Gabelli Advisers are Delaware corporations, each having its principal
business office at One Corporate Center, Rye, New York 10580. Gabelli Funds
is a New York limited liability company having its principal business
office at One Corporate Center, Rye, New York 10580. MJG Associates is a
Connecticut corporation having its principal business office at 140
Greenwich Avenue, Greenwich, CT 06830. The Foundation is a Nevada
corporation having its principal offices at 165 West Liberty Street, Reno,
Nevada 89501. Interactive is a Delaware corporation having its principal
place of business at 401 Theodore Fremd Avenue, Rye, New York 10580.

(4) Based upon a Schedule 13D/A Amendment No. 16 filed jointly on November 16,
2006 with the SEC by Steel, Mr. Lichtenstein, Mr. Kassan and Mr. Henderson,
in addition to other information. As the general partner of Steel, Partners
LLC may be deemed to beneficially own the 1,608,550 shares owned by Steel.
In such filing Mr. Kassan reports that he beneficially owns no shares of
Common Stock and Mr. Henderson reports that he beneficially owns the right
to acquire 20,824 shares at any time upon exercise of stock options.

(5) Includes the 1,608,550 shares, which by virtue of his position as Chairman
of the Board, Chief Executive Officer and Secretary of Steel, Mr.
Lichtenstein has the power to vote and dispose.

(6) Includes 217,350 shares that Mr. Schwarz has the power to vote and dispose,
by virtue of his position as Managing Member of Newcastle Capital Group,
L.L.C., which is the general partner of Newcastle Capital Management, L.P.,
which is the general partner of Newcastle Partners, L.P. Also includes
26,123 shares that Mr. Schwarz has the right to acquire at any time upon
exercise of stock options.

(7) Includes 34,920 shares owned by Mr. Baumgardner and 61,075 shares that Mr.
Baumgardner has the right to acquire at any time upon exercise of stock
options.

(8) Includes 4,500 shares owned by Mr. Nuzzo, 5,902 shares beneficially owned
by Mr. Nuzzo as a participant in the Company sponsored 401(k) plan, and
62,000 shares that Mr. Nuzzo has the right to acquire at any time upon
exercise of stock options.

(9) Includes 12,300 shares owned directly by Mr. Taylor, 100 shares owned
indirectly by Mr. Taylor through a family member, 1,912 shares beneficially
owned by Mr. Taylor as a participant in the Company sponsored 401(k) plan,
and 47,000 shares that Mr. Taylor has the right to acquire at any time upon
exercise of stock options.

(10) Includes 3,500 shares held by Mr. Gray's Individual Retirement Account,
13,400 shares held by 1993 GF Limited Partnership, in which the general
partner is a corporation owned solely by Mr. Gray, and 6,800 shares held by
AVG Limited Partnership, in which Mr. Gray is a general partner. Also
includes 2,500 shares held by JYG Limited Partnership, in which Mr. Gray's
spouse is a general partner, and 13,378 shares that Mr. Gray has the right
to acquire at any time upon

exercise of stock options. Except for the shares held in his Individual
Retirement Account and by JYG Limited Partnership, Mr. Gray disclaims
beneficial ownership of these shares.

(11) Includes 240,489 shares that directors and executive officers have the
right to acquire, at any time, upon the exercise of nonqualified and
incentive stock options granted by the Company.

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

OVERVIEW

This compensation discussion and analysis describes the material elements
of compensation awarded to, earned by or paid to each of our named executive
officers who served during the fiscal year ended December 31, 2006. This
compensation discussion primarily focuses on the information contained in the
following tables and related footnotes and narrative for the last completed
fiscal year, but we also describe compensation actions taken before or after the
last completed fiscal year to the extent that it enhances the understanding of
our executive compensation disclosure. The Compensation Committee currently
oversees the design and administration of our executive compensation program.

Our current executive compensation program includes the following principal
components: (i) base salary, (ii) cash bonus incentive provided through a
short-term incentive plan, ("STIP"), and a long-term incentive plan ("LTIP"),
and (iii) perquisites and other compensation. In addition, certain of our named
executive officers still have unexercised options to purchase shares of common
stock that were granted under our 1991 Long Term Incentive Plan, which plan
terminated pursuant to its terms in 2001, although options granted under the
plan remain outstanding pursuant to their terms. These outstanding options are
detailed below in the "Outstanding Equity Awards at Fiscal Year- End Table."

EXECUTIVE COMPENSATION OBJECTIVES

The Company's compensation philosophy aims to balance short-term
performance of executives with the achievement of long-range strategic goals
resulting in continuously improving shareholder value and to engender and
preserve a sense of fairness and equity among employees, shareholders, and
customers. In keeping with that philosophy, the objective of our executive
compensation program is to:

- link a significant portion of annual compensation directly to
operating performance;

- promote achievement of the Company's long-term strategic goals and
objectives;

- align the interest of Company employees with long-term shareholder
interest; and

- attract, retain, and motivate executives critical to the Company's
long-term success.

To achieve these objectives, our compensation programs have been designed
to create a correlation between the financial success of the executive and the
shareholders by providing compensation that will support the achievement of the
Company's financial goals while attracting and retaining talented executives and
rewarding superior performance. Our compensation program provides both long and
short-term incentives that we believe align the interests of executives and
shareholders and reward executives for value delivered to shareholders and for
building value within the Company.

DETERMINATION OF COMPENSATION AWARDS

The Compensation Committee has the primary authority to oversee general
compensation policies for the Company's employees and is charged with reviewing
and approving compensation packages annually for our named executive officers.
In performing this function, the Compensation Committee reviews (a) executive
compensation surveys and compensation levels of executive officers of companies
in competing businesses and in the Company's geographic markets and (b) the
recommendations of Mr. Taylor, our Chief Executive Officer and President. From
time to time we engage independent compensation consultants and others regarding
compensation matters.

No specific weight or relative importance was assigned to the various
qualitative factors and compensation information considered by the Compensation
Committee. Accordingly, the Company's compensation policies and practices may be
deemed subjective, within an overall published framework based on both the
financial and non-financial factors.

TIMING OF COMPENSATION

Compensation, including salary base adjustments, incentive plan
eligibility, incentive plan goal specifications and incentive plan payments, for
our named executive officers are reviewed annually, usually in the first
quarter.

ELEMENTS OF COMPENSATION

The principal elements of our executive compensation are:

- base salary;

- performance-based incentives;

i. short-term incentives

ii. long-term incentives

- perquisites and other compensation.

BASE SALARIES

Base salary is used to recognize the experience, skills, knowledge and
responsibilities required of all our employees, including our named executive
officers. When establishing base salaries for 2006, the Compensation Committee
considered a number of factors, including the seniority of the individual, the
functional role of the position, the level of the individual's responsibility,
the ability to replace the individual, the base salary of the individual at
his/her prior employment and the number of well qualified candidates to assume
the individual's role. Generally, we believe that executive base salaries should
be targeted near the median of the range of salaries for executives in similar
positions at comparable companies. Base salary levels of executive officers are
reviewed annually by the Compensation Committee.

PERFORMANCE-BASED INCENTIVES

2006 Bonus Plan

The 2006 Bonus Plan (the "2006 Plan") provides incentives to officers and
members of management of the Company and its subsidiaries, including certain of
the Company's executive officers, in the form of cash bonus payments for
achieving certain performance goals established for them. Participants in the
2006 Plan who are named executive officers of the Company include James C.
Taylor,

President and Chief Executive Officer of the Company, and David R. Nuzzo, the
Vice President and Chief Financial Officer of the Company.

Our Compensation Committee has established two components for the 2006
Plan. The first component is a short-term incentive plan and the second
component is a long-term incentive plan. The structure of the 2006 Plan is
designed to provide short-term incentives to participants for achieving annual
targets, while also motivating and rewarding eligible participants for achieving
longer-term growth goals.

a. 2006 Short-Term Incentive Plan Awards

The short-term incentive plan component of the 2006 Plan (the "2006 STIP")
consists of two components. The first component is based on the achievement of
return on invested capital ("ROIC") objectives and the second component is based
on the achievement of pre-determined individual objectives. Based on the
determination of the objectives under the two components, the maximum percentage
of base salary that may be earned by a participant ranges from 20% to 45% of his
or her base salary, but may exceed such range in the event that ROIC exceeds the
Company's targets. Bonuses earned under the 2006 STIP are paid in the first
fiscal quarter of 2007. No bonuses are paid under the 2006 STIP if either
component is below a predetermined threshold.

For the fiscal year ended December 31, 2006, under the 2006 STIP, Mr.
Taylor earned a bonus payment of $115,439 and Mr. Nuzzo earned a bonus payment
of $43,619, which payments were made in March 2007.

b. 2006 Long-Term Incentive Plan Awards

The long-term incentive plan component of the 2006 Plan (the "2006 LTIP")
is based on a combination of the achievement of certain sales targets and ROIC
targets over the three-year period ending on December 31, 2008. Based on the
determination of these objectives, the maximum percentage of base salary that
may be earned by the participants range from 10% to 55% of his or her base
salary, but may exceed such range in the event that ROIC exceeds the Company's
targets. Bonuses earned under the 2006 LTIP will be paid following the
conclusion of the 2008 fiscal year. A bonus payout under the 2006 LTIP will not
occur if either the ROIC or sales component is below 80% of the respective
target. The 2006 LTIP is similar to, and runs concurrently, with the 2005 long
term incentive plan (the "2005 LTIP"), which covers the three-year period ending
on December 31, 2007, but with different targets.

For the fiscal year ended December 31, 2006, the Company did not make any
bonus payments to any of its executive officers under the 2006 LTIP or the 2005
LTIP.

In addition, under prior year's incentive plans, the named executive
officers are entitled to certain payments in the fiscal year ended December 31,
2006.

SEVERANCE AND CHANGE IN CONTROL BENEFITS

We provide the opportunity for Mr. Taylor to be protected under the
severance and change in control provisions contained in a Change in Control
Agreement dated as of May 1, 2001. We provide this protection in order to
attract and retain an appropriate caliber of talent for his position. The
severance and change in control provisions that apply for Mr. Taylor are
summarized below in "Potential Payments upon Termination or Change-in-Control."
We believe that our use of such severance and change in control protections are
an essential element of our executive compensation and assist us in recruiting
and retaining talented executives. No other named executive officers are
protected by such provisions.

PERQUISITES AND OTHER COMPENSATION

We provide the opportunity for our named executive officers and other
executives to receive certain perquisites and general health and welfare
benefits. For the last completed fiscal year, we provided the following personal
benefits and perquisites to certain of our named executives officers: health
insurance, life and disability insurance, 401(k) plan, and car expense
reimbursement.

OTHER PAYMENTS

Options

In the past, the Compensation Committee has provided long term incentive
compensation in the form of stock options, where appropriate, as compensation
for its executive officers, including the named executive officers. These
options were granted pursuant to our 1991 Long Term Incentive Plan, which plan
expired in 2001 in accordance with its terms, although options granted under the
plan remain outstanding pursuant to their terms. Each option granted under the
1991 Long Term Incentive Plan expires no later than ten (10) years from the date
the option was granted. At the present time, the Company does not have any
option plans in effect. The Company did not grant options to the named executive
officers during the fiscal year ended December 31, 2006.

SUMMARY COMPENSATION TABLE

The following table sets forth all compensation awarded to, paid to or
earned by the following type of executive officers for the fiscal year ended
December 31, 2006: (i) individuals who served as, or acted in the capacity of,
the Company's principal executive officer for the fiscal year ended December 31,
2006; (ii) individuals who served as, or acted in the capacity of, the Company's
principal financial officer for the fiscal year ended December 31, 2006; (iii)
the Company's three most highly compensated executive officers, other than the
chief executive and chief financial officer, who were serving as executive
officers at the end of the fiscal year ended December 31, 2006 (of which there
were none); and (iv) up to two additional individuals for whom disclosure would
have been provided but for the fact that the individual was not serving as an
executive officer of the Company at the end of the fiscal year ended December
31, 2006 (of which there were none). We refer to these individuals collectively
as our named executive officers.

(G)
NON-EQUITY (I)
(A) (C) (E) INCENTIVE PLAN ALL OTHER (J)
NAME AND (B) SALARY STOCK AWARDS COMPENSATION COMPENSATION TOTAL
PRINCIPAL POSITION YEAR ($) ($) ($) ($) ($)
--------------------------- ---- -------- ------------ -------------- ------------ --------

James C. Taylor 2006 $302,769 $10,765(1) $115,439(2) $62,251(3)(4) $491,224
Chief Executive Officer
and President

David R. Nuzzo 2006 $201,846 $ 6,080(1) $ 43,619(5) $26,690(3)(6) $278,235
Vice President and Chief
Financial Officer,
Treasurer and Secretary

(1) This amount reflects the value of common stock contributed by the Company
through the Company sponsored 401(k) plan. The value of the common stock
contribution is the product of the number of shares contributed by the
Company and the weighted average price of those shares.

(2) This amount excludes a bonus payment of $24,547, paid in March 2007
pursuant to the 2004 Bonus Plan, which amount was previously reported as
part of Mr. Taylor's 2004 bonus.

(3) Includes the Company's profit sharing cash contributions and matching
401(k) cash contributions for each of Messrs. Taylor and Nuzzo to the
Company sponsored 401(k) plan.

(4) Includes car expense reimbursement payments in the amount of $16,339 and
premiums paid for group term life insurance for Mr. Taylor for 2006. Also
included are the amounts by which two potential bonus payments under
separate agreements, each detailed below in "Employment and Other
Agreements," have increased during the fiscal year ended December 31, 2006,
in the amount of $34,300.

(5) This amount excludes a bonus payment of $8,403, paid in March 2007 pursuant
to the 2004 Bonus Plan, which amount was previously reported as part of Mr.
Nuzzo's 2004 bonus.

(6) Includes car expense reimbursement payments in the amount of $15,078 and
premiums paid for group term life insurance for Mr. Nuzzo for 2006.

NARRATIVE DISCLOSURE TO SUMMARY COMPENSATION TABLE

The compensation paid to the named executive officers includes salary,
non-equity incentive compensation and certain other compensation detailed above.
The non-equity incentive compensation does not included any payments under the
2005 LTIP or 2006 LTIP because these amounts are not deemed earned until the
conclusion of the last fiscal year covered by such plans.

In 2006, salaries and bonuses accounted for approximately 85% of total
compensation for our principal executive officer and approximately 88% for our
other named executive officer.

GRANTS OF PLAN-BASED AWARDS

We made no grants of plan-based awards to any of our named executive
officers in 2006 other than the grant of shares of common stock contributed by
the Company to the Company sponsored 401(k) plan in the respective amounts of
647.57 shares and 378.5 shares for Messrs Taylor and Nuzzo.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

OPTION AWARDS
------------------------------------------------
(B) (E) (F)
NUMBER OF SECURITIES OPTION OPTION
(A) UNDERLYING UNEXERCISED EXERCISE EXPIRATION
NAME OPTIONS (#) EXERCISABLE PRICE ($) DATE
--------------- ----------------------- --------- ----------

James C. Taylor
25,000 $11.1250 1/10/2010
5,000 $12.0000 8/1/2010
7,000 $12.1750 5/18/2011
10,000 $ 5.7500 9/25/2011

David R. Nuzzo
25,000 $13.0625 12/1/2007
7,500 $11.1250 9/11/2008
12,500 $13.5000 9/24/2009
7,000 $12.1750 5/18/2011
10,000 $ 5.7500 9/25/2011

EMPLOYMENT AND OTHER AGREEMENTS

None of our named executive officers are party to employment agreements.

Pursuant to an agreement dated as of August 5, 2002 (the "Bonus
Agreement"), Mr. Taylor will be paid a bonus (the "First Bonus") upon the first
to occur of (i) the occurrence of a change in control; or (ii) the delivery of a
notice by Mr. Taylor requesting the payment of the First Bonus, which may be in
one or two parts. The First Bonus will be an amount equal to the product of (i)
100,000 and (ii) the amount by which the Common Stock price exceeds $5.45. Upon
his termination of employment with the Company for any reason, Mr. Taylor will
have no further right to receive the First Bonus.

Assuming that payment of the First Bonus was to be calculated using the
closing market price on the last day of trading in the fiscal year ended
December 31, 2006, which was $16.25 per share of Common Stock, the First Bonus
would equal $1,080,000. Between the fiscal year ended December 31, 2005 and the
fiscal year ended December 31, 2006, the value of the First Bonus increased by
$20,000. This change in the value of the First Bonus is reflected in the "Other
Compensation" column in the Summary Compensation Column.

In addition, pursuant to a Long Term Bonus Agreement dated September 1,
2005 (the "Long Term Bonus Agreement"), Mr. Taylor will be paid a bonus (the
"Second Bonus") upon the first to occur of (i) the occurrence of a change in
control; or (ii) the delivery of a notice by Mr. Taylor requesting the payment
of the Second Bonus. The Second Bonus will be an amount equal to the product of
(i) 50,000 and (ii) the amount by which the Common Stock price exceeds $15.02.
The Second Bonus will vest as follows: 20% on each of September 1, 2005, 2006,
2007, 2008 and 2009.

Upon his termination of employment with the Company for any reason, Mr.
Taylor will be entitled to receive the Second Bonus upon delivery of a notice
for a period of thirty (30) days following the date of termination, after which
time he will have no further right to receive the Second Bonus.

Assuming that payment of the Second Bonus was to be calculated using the
closing market price on the last day of trading in the fiscal year ended
December 31, 2006, which was $16.25 per share of Common Stock, the vested
portion of the Second Bonus would equal $24,600. Between the effective date of
the agreement in September 2005 and December 31, 2006, the value of the vested
portion of the Second Bonus increased by $14,300. This change in the value of
the Second Bonus is reflected in the "Other Compensation" column in the Summary
Compensation Column.

POTENTIAL PAYMENTS UPON TERMINATION OR A CHANGE IN CONTROL

James C. Taylor, the Company's Chief Executive Officer and President, is
party to a change in control agreement dated as of May 1, 2001 (the "Change in
Control Agreement") by and between him and the Company. Pursuant to the Change
in Control Agreement, Mr. Taylor will receive a payment equal to two times his
annual salary in the event he is terminated as Chief Executive Officer and
President without cause or he terminates such employment for good reason within
one year of a change in control of the Company or the execution of a definitive
agreement contemplating a change in control of the Company.

Please see the discussion of the Bonus Agreement and Long Term Bonus
Agreement with Mr. Taylor detailed above.

DIRECTOR COMPENSATION

The following table summarizes compensation that our directors earned
during 2006 for services as members of our Board of Directors.

(B)
FEES EARNED OR (H)
(A) PAID IN CASH(1) TOTAL
NAME ($) ($)
---- --------------- ------

Warren G. Lichtenstein
Chairman of the Board (2) (2)
Glen M. Kassan
Vice Chairman (2) (2)
J. Dwane Baumgardner 25,750 25,750
James R. Henderson 22,000 22,000
Mark E. Schwarz 27,250 27,250
Avrum Gray 33,500 33,500
James A. Risher 32,250 32,250

(1) Directors other than the Chairman and Vice Chairman receive the following
fees:

- $5,000 quarterly retainer fee for each director;

- $1,250 quarterly retainer fee for the chairman of each committee;

- $1,000 for each Board meeting attended; and

- $750 for each committee meeting attended.

(2) Neither Mr. Lichtenstein nor Mr. Kassan receive direct compensation from
the Company. Mr. Lichtenstein's services as Chairman of the Board and Mr.
Kassan's Services as Vice Chairman were provided to the Company in
accordance with the provisions of a management agreement with SPL. The fee
paid to SPL by the Company was $475,000 in 2006. See "Certain Relationships
and Related Transactions" presented below.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. Risher, Schwarz and Gray served on the Compensation Committee
during the fiscal year ended December 31, 2006. None of the committee members
have ever been officers or employees of the Company, or ever had any
relationship requiring disclosure below under the caption "Certain Relationships
and Related Transactions."

LIMITATION ON LIABILITY AND INDEMNIFICATION MATTERS

Our restated bylaws and our restated articles of incorporation provide for
indemnification of our directors and officers to the fullest extent permitted by
Delaware law.

DIRECTORS' AND OFFICERS' INSURANCE

We currently maintain a directors' and officers' liability insurance policy
that provides our directors and officers with liability coverage relating to
certain potential liabilities.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

As a result of certain services being provided to the Company by SPL, a
company controlled by the Chairman of the Board of the Company, Warren G.
Lichtenstein, the Compensation Committee engaged an independent firm to provide
a report and advice regarding the amount of management fees that should be
payable to SPL. These fees are the only consideration for the services of the
Chairman of the Board, Warren G. Lichtenstein, the Company's Vice Chairman, Glen
M. Kassan, and other assistance from SPL. The services provided include
management and advisory services with respect to operations, strategic planning,
finance and accounting, merger, sale and acquisition activities and other
aspects of the businesses of the Company. In consideration for such services,
the fee paid to SPL by the Company was $475,000 in 2006.

COMPENSATION COMMITTEE REPORT*

We have reviewed and discussed with management certain Executive
Compensation and Compensation Discussion and Analysis provisions to be included
in the Company's 2007 Shareholder Meeting Schedule 14A Proxy Statement, filed
pursuant to Section 14(a) of the Securities Exchange Act of 1934, as amended
("Proxy"). Based on the reviews and discussions referred to above, we recommend
to the Board of Directors that the Executive Compensation and Compensation
Discussion and Analysis provisions referred to above be included in the
Company's Proxy.

Submitted by the Compensation Committee of the Board of Directors

James A. Risher
Mark E. Schwarz
Avrum Gray

* This Compensation Committee Report is not deemed incorporated by reference
by any general statement incorporating by reference this Proxy into any
filing under the Securities Act of 1933, as Amended, or the Exchange Act,
except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under
either such Acts.

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
NOMINEES.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee assists the Board of Directors in fulfilling its
responsibility for oversight of the quality and integrity of the accounting,
auditing and financial reporting practices of the Company. Each member of the
Audit Committee meets the criteria for being "independent" set forth under AMEX
Rule P. 10,021, Sec. 121. During the fiscal year ended December 31, 2006, the
Committee met five times and acted by written consent on one other occasion.

In discharging its responsibility for oversight of the audit process, the
Audit Committee obtained from the independent auditors, Grant Thornton LLP, a
formal written statement describing any relationships between the auditors and
the Company that might bear on the auditors' independence consistent with the
Independent Standards Board Standard No. 1, "Independence Discussions with Audit
Committees," and discussed with the auditors any relationships that might impact
the auditors' objectivity and independence and satisfied itself as to the
auditors' independence.

The Committee discussed and reviewed with the independent auditors the
communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees" and discussed and reviewed the results of
the independent auditors' examination of the financial statements for the fiscal
year ended December 31, 2006.

The Committee reviewed the audited financial statements of the Company as
of and for the fiscal year ended December 31, 2006, with management and the
independent auditors. Management has the responsibility for preparation of the
Company's financial statements and the independent auditors have the
responsibility for examination of those statements.

Based upon the above-mentioned review and discussions with management and
the independent auditors, the Committee recommended to the Board that the
Company's audited financial statements be included in its Annual Report on Form
10-K for the fiscal year ended December 31, 2006, for filing with the SEC.

AUDIT COMMITTEE
Avrum Gray
J. Dwane Baumgardner
James Risher

ITEM 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

The Board has selected Grant Thornton LLP to serve as the Company's
independent auditors. Grant Thornton LLP has served as the Company's independent
auditors since July 2002. While it is not required to do so, the Board is
submitting to shareholders for ratification the selection of Grant Thornton LLP
as the Company's independent auditors for the year ending December 31, 2007.
Such ratification of the selection of Grant Thornton LLP will require the
affirmative vote of the holders of a majority of the shares of Common Stock
entitled to vote thereon and represented at the Meeting. The Board will
reconsider its selection should the shareholder votes evidence disapproval.

Audit Fees

The aggregate fees billed by Grant Thornton LLP for professional fees
rendered in connection with the audit of the Company's annual financial
statements and the reviews of the Company's financial statements included in the
Company's quarterly reports on Form 10-Q, including services related thereto,
were $591,390 for the year ended December 31, 2006 and $371,815 for the year
ended December 31, 2005.

Audit-Related Fees

The aggregate fees billed by Grant Thornton LLP for assurance and related
services that are reasonably related to the performance of the audit or review
of the Company's financial statements and are not reported as "Audit Fees,"
including review of the Company's annual report on Form 10-K in connection with
the acquisition of certain businesses, planning efforts related to the review of
the Company's internal controls over financial reporting pursuant to Section 404
of the Sarbanes-Oxley Act of 2002 and consultations concerning financial
accounting and reporting matters not classified as audit, were $62,683 for the
year ended December 31, 2006, and $16,980 for the year ended December 31, 2005.

Tax Fees

The aggregate fees billed by Grant Thornton LLP for professional services
rendered for tax compliance, tax advice and tax planning were $7,870 for the
year ended December 31, 2006, and $25,364 for the year ended December 31, 2005.
The services comprising the fees reported as "Tax Fees" included tax return
preparation in various foreign jurisdictions, consultation regarding various tax
issues, and support provided to management in connection with income and other
tax audits.

All Other Fees

There were no other fees billed by Grant Thornton LLP for products and
services, other than those described for the years ended December 31, 2006 and
December 31, 2005.

Pre-approval Policies and Procedures

All audit and non-audit services to be performed by the Company's
independent accountant must be approved in advance by the Audit Committee.
Consistent with applicable law, limited amounts of services, other than audit,
review or attest services, may be approved by the Chairman of the Audit
Committee pursuant to authority delegated by the Audit Committee, provided each
such approved service is reported to the full Audit Committee at its next
meeting.

All of the engagements and fees for the year ended December 31, 2006 were
approved by the Audit Committee. Of the total number of hours expended on Grant
Thornton LLP's engagement to audit the Company's financial statements for the
year ended December 31, 2006, none of the hours were

attributed to work performed by persons other than Grant Thornton LLP's
full-time, permanent employees.

The Audit Committee considered whether the provision of non-audit services
by Grant Thornton LLP was compatible with its ability to maintain independence
from an audit standpoint and concluded that Grant Thornton LLP's independence
was not compromised.

Representatives of Grant Thornton LLP are expected to be present at the
Meeting and available to respond to appropriate questions. Such representatives
will have the opportunity to make a statement if they desire to do so.

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE SELECTION
OF GRANT THORNTON LLP.

SHAREHOLDER PROPOSALS

In order to be considered for inclusion in the proxy materials to be
distributed in connection with the next annual meeting of shareholders of the
Company, shareholder proposals for such meeting must be submitted to the Company
no later than December 18, 2007. Shareholders wishing to nominate directors or
bring a proposal before the 2008 annual meeting of shareholders (but not include
it in the Company's proxy material) must provide written notice of such
nomination or proposal to the attention of the corporate secretary, no later
than the close of business on the 60th calendar day prior to the date of the
2008 annual meeting.

OTHER MATTERS

So far as now known, there is no business other than that described above
to be presented for action by the shareholders at the Meeting, but it is
intended that the proxies will be voted upon any other matters and proposals
that may legally come before the Meeting or any adjournment thereof, in
accordance with the discretion of the persons named therein.

ANNUAL REPORT

The Company is concurrently sending all of its shareholders of record as of
April 2, 2007 a copy of its Annual Report for the year ended December 31, 2006.
Such report contains the Company's certified consolidated financial statements
for the year ended December 31, 2006, including that of the Company's
subsidiaries.

Whether or not you intend to be present at this Meeting you are urged to
sign and return your proxy promptly.

By order of the Board of Directors,
Warren G. Lichtenstein
Chairman

Mt. Laurel, New Jersey
April 16, 2007

A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K AND ANY AMENDMENTS THERETO
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS PROVIDED WITH CERTAIN OTHER
SHAREHOLDER INFORMATION IN THE MATERIALS ACCOMPANYING THIS PROXY STATEMENT. TO
OBTAIN ADDITIONAL COPIES WITHOUT CHARGE, PLEASE WRITE TO: DAVID R. NUZZO,
SECRETARY, SL INDUSTRIES, INC., 520 FELLOWSHIP ROAD, SUITE A-114, MT. LAUREL,
NEW JERSEY 08054.

THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR PROPOSALS 1 AND 2

1. ELECTION OF DIRECTOR NOMINEES

WARREN G. LICHTENSTEIN MARK E. SCHWARZ
GLEN M. KASSAN AVRUM GRAY
J. DWANE BAUMGARDNER JAMES A. RISHER
JAMES R. HENDERSON

[ ] For the election as directors for the ensuing year of all
nominees listed above (except as stricken above) (TO WITHHOLD
AUTHORITY TO VOTE FOR ANY SPECIFIC NOMINEES, CHECK THE FORGOING
BOX AND CLEARLY STRIKE OUT OR LINE THROUGH WITH DARK INK SUCH
NOMINEE'S NAME IN THE LIST ABOVE.)

[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED ABOVE.

2. RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS THE
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR
ENDING DECEMBER 31, 2007.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

3. DISCRETIONARY AUTHORITY: To vote with discretionary authority with
respect to all other matters that may come before the Meeting and any
adjournment of postponement thereof.

NOTE: Your signature should appear the same as your name appears hereon. In
signing as attorney, executor, administrator, trustee or guardian, please
indicate the capacity in which signing. When signing as joint tenants, all
parties in the joint tenancy must sign. When a proxy is given by a corporation,
it should be signed by an authorized officer and the corporate seal affixed. No
postage is required if mailed in the United States.

Signature: Date
-------------------------- -----------------------------------

MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW: ____________

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF

SL INDUSTRIES, INC.

Proxy -- Annual Meeting of Shareholders

May 16, 2007

The undersigned, a shareholder of SL Industries, Inc., a New Jersey
corporation (the "Company"), does hereby appoint Warren Lichtenstein and Glen
Kassan, and each of them (with full power to act alone), the true and lawful
attorneys and proxies with full power of substitution, for and in the name,
place and stead of the undersigned, to vote all of the shares of Common Stock of
the Company that the undersigned would be entitled to vote if personally present
at the 2007 Annual Meeting of Stockholders of the Company to be held at Olshan
Grundman Frome Rosenzweig & Wolosky LLP, Park Avenue Tower, 65 East 55th Street,
New York, New York 10022 May 16, 2007, at 2:00 P.M., Eastern Time, or at any
adjournment or postponements thereof.

The undersigned hereby revokes any proxy or proxies heretofore given
and acknowledges receipt of a copy of the Notice of Annual Meeting and Proxy
Statement, both dated April 16, 2007, and a copy of the Company's Annual Report
for the year ended December 31, 2006.

THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREIN GIVEN. UNLESS
OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO ELECT THE DIRECTORS, AND TO
RATIFY THE APPOINTMENT OF GRANT THORNTON LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS.

CONTINUED TO BE COMPLETED, SIGNED
AND DATED ON THE REVERSE SIDE