sec document
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-12
SL INDUSTRIES, INC.
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(Name of Registrant as Specified in Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials:
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/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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2
SL INDUSTRIES, INC.
520 FELLOWSHIP ROAD
SUITE A-114
MT. LAUREL, NEW JERSEY 08054
-----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 29, 2003
-----------------
To The Holders of Our Common Stock:
We invite you to attend our annual shareholders' meeting on Thursday,
May 29, 2003 at the Warwick Hotel, 65 West 54th Street, New York, New York at
1:30 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 will
act on the following matters:
1) To elect eight (8) directors until the next annual meeting in
2004 or until their successors have been elected and qualified;
2) To ratify the appointment of Grant Thornton LLP as our
independent accountants for fiscal 2003; 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 22, 2003 will be entitled to vote on the foregoing matters
at the annual meeting. Even if you only own a few shares or 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
Dated: Mt. Laurel, New Jersey
April 29, 2003
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 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 29, 2003, and any adjournment or postponement
thereof (the "Meeting"). This Proxy Statement, the accompanying form
of proxy and the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2002 (the "2002 Annual Report") are being
mailed to shareholders on or about April 29, 2003. 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 Warwick Hotel, 65 West 54th Street,
New York, New York, on Thursday, May 29, 2003, at 1:30 P.M., Eastern
Time.
RECORD DATE AND VOTING
The Board of Directors fixed the close of business on Tuesday, April
22, 2003, 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 5,907,700 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
eight (8) directors for the ensuing year, (ii) the ratification of
Grant Thornton LLP as the Company's independent auditors for the
fiscal year ending December 31, 2003 and (iii) such other business
as may properly come before the Meeting and any adjournment or
postponement thereof.
QUORUM AND REQUIRED VOTE
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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 of
the Company is necessary to constitute a quorum for the purpose of
acting on the matters referred to in the Notice of Annual Meeting
accompanying this Proxy Statement and any other proposals which 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 our Board of
Directors. For the other proposals to be approved, we require the
favorable vote of a majority of the votes cast. Only votes for or
against a proposal count. Votes which are withheld from voting on a
proposal will be excluded entirely and will have no effect in
determining the quorum or the majority of votes cast. Abstentions
and broker non-votes count for quorum purposes only and not for
voting purposes.
PROXIES
The Board of Directors is asking for your proxy. Giving the Board of
Directors 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 proposals 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 proxyholders with respect to
amendments or variations to the matters identified in the
accompanying Notice of Meeting 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.
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 SL
Industries, Inc. shares as of April 22, 2003 as acceptable proof of
ownership.
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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.
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 2004
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).
All Offices
with the Director
Name Age Company Since
---- --- ------- -----
Warren G. 37 Chairman of the Board and Chief 2002
Lichtenstein(1) Executive Officer
Glen Kassan(1) 59 President and Director 2002
J. Dwane Baumgardner(2) 62 Director 1990
Mark E. Schwarz(1)(2)(3) 42 Director 2002
James Henderson 44 Director 2002
Steven Wolosky(3) 47 Director 2002
Avrum Gray(2) 67 Director 2002
James A. Risher 60 Nominee
(1) Member of Executive Committee.
(2) Member of Audit Committee.
(3) Member of Compensation Committee.
BUSINESS BACKGROUND
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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 and Chief Executive Officer on February 4, 2002. Mr. Lichtenstein had
previously served as a director of the Company from 1993 to 1997. Mr.
Lichtenstein has served as 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") since January 1, 1996. Prior to such time, Mr.
Lichtenstein was the Chairman and a director of Steel Partners, Ltd. ("Old
Ltd."), the general partner of Steel Partners Associates, L.P., which was
the general partner of Steel, from 1993 until prior to January 1, 1996. Mr.
Lichtenstein was the acquisition/risk arbitrage analyst at Ballantrae
Partners, L.P., a private investment partnership formed to invest in risk
arbitrage, special situations and undervalued companies, from 1988 to 1990.
Mr. Lichtenstein has served as a director and the Chief Executive Officer
of Gateway Industries, Inc. ("Gateway"), a provider of database development
and Web site design and development services, since 1994 and as Chairman of
the Board since 1995. He has served as a director of WebFinancial
Corporation ("WebFinancial"), a consumer and commercial lender, since 1996
and as its President and Chief Executive Officer since December 1997. Mr.
Lichtenstein has served as a Director and the President and Chief Executive
Officer of Steel Partners Ltd. ("New Ltd."), a management and advisory
company that provides management services to Steel and other affiliates of
Steel, since June 1999 and as its Secretary and Treasurer since May 2001.
Mr. Lichtenstein served as President of Steel Partners Services, Ltd.
("SPS"), a management and advisory company, from October 1999 through March
2002. SPS provided management services to Steel and other affiliates of
Steel until March 2002, when New Ltd. acquired the rights to provide
certain management services from SPS. He has also served as Chairman of the
Board of Directors of Caribbean Fertilizer Group Ltd. ("Caribbean
Fertilizer"), a private company engaged in the production of agricultural
products in Puerto Rico and Jamaica, since June 2000. Mr. Lichtenstein is
also a director of the following other publicly held companies: Puroflow
Incorporated ("Puroflow"), a designer and manufacturer of precision
filtration devices; ECC International Corp. ("ECC"), a manufacturer and
marketer of computer-controlled simulators for training personnel to
perform maintenance and operator procedures on military weapons; and United
Industrial Corporation ("UIC"), a designer and producer of defense,
training, transportation and energy systems.
GLEN KASSAN was elected as a Director on January 24, 2002 and as President
on February 4, 2002. Mr. Kassan has served as Executive Vice President of
New Ltd. since March 2002. Mr. Kassan served as Executive Vice President of
SPS from June 2001 through March 2002 and Vice President from October 1999
through May 2001. He has also served as Vice Chairman of the Board of
Directors of Caribbean Fertilizer since June 2000. Mr. Kassan has also
served as Vice President, Chief Financial Officer and Secretary of
WebFinancial since June 2000. From 1997 to 1998, Mr. Kassan served as
Chairman and Chief Executive Officer of Long Term Care Services, Inc., a
privately owned healthcare services company which Mr. Kassan co-founded in
1994 and initially served as Vice Chairman and Chief Financial Officer. Mr.
Kassan is currently a director of Puroflow and UIC.
J. DWANE BAUMGARDNER has been a Director since 1990. Mr. Baumgardner has
been Vice Chairman and President of Magna Donnelly Corporation, an
automotive supplier of exterior and interior mirror, lighting and
engineered glass systems, since January 2003. 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
4
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 and Scanlon Leadership Network (where he served as President
from 1983 to 1985).
MARK E. SCHWARZ was elected as a Director on January 24, 2002. Mr. Schwarz
has served as the general partner, directly or through entities which he
controls, of Newcastle Partners, L.P., a private investment firm, since
1993. Mr. Schwarz was Vice President and Manager of Sandera Capital,
L.L.C., a private investment firm affiliated with Hunt Financial Group,
L.L.C., a Dallas-based investment firm associated with the Lamar Hunt
family ("Hunt"), from 1995 to September 1999 and a securities analyst and
portfolio Manager for SCM Advisors, L.L.C., formerly a Hunt-affiliated
registered investment advisor, from May 1993 to 1996. Mr. Schwarz currently
serves as a director of the following companies: WebFinancial; Nashua
Corporation, a specialty paper, label, and printing supplies manufacturer;
Bell Industries, Inc., a provider of computer systems and services; Pizza
Inn, Inc., a franchisor and operator of pizza restaurants; and Tandycrafts,
Inc., a manufacturer of picture frames and mirrors. Mr. Schwarz has also
served as Chairman of the Board of Directors of Hallmark Financial
Services, Inc., a property and casualty insurance holding company, since
October 2001, and as its Chief Executive Officer since January 2003. From
October 1998 through April 1999, Mr. Schwarz served as a director of Aydin
Corporation ("Aydin"), a defense electronics manufacturer.
JAMES R. HENDERSON was elected as a Director on January 24, 2002. Mr.
Henderson has served as a Vice President of New Ltd. since March 2002. Mr.
Henderson served as a Vice President of SPS from August 1999 through March
2002. He has also served as President of Gateway since December 2001. Mr.
Henderson has served as a director of ECC since December 1999 and acting
Chief Executive Officer since July 2002. He has also served as Vice
President of Operations of WebFinancial since September 2000; a director of
WebBank, a subsidiary of WebFinancial, since March 2002; and a director and
Chief Operating Officer of WebFinancial Holdings Corporation, a subsidiary
of WebFinancial, since January 2000. From 1996 to July 1999, Mr. Henderson
was employed in various positions with Aydin, 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.
STEVEN WOLOSKY was elected as a Director on January 24, 2002. Mr. Wolosky
has been a partner of Olshan Grundman Frome Rosenzweig & Wolosky LLP,
counsel to the Company and Steel, for more than five years. Mr. Wolosky is
a director of New Ltd. He serves as Secretary of Gateway and as Assistant
Secretary of WHX Corporation, a New York Stock Exchange listed company.
AVRUM GRAY was elected as a Director on May 23, 2002. He 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 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. 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. Additionally, Mr. Gray has been
Chairman of the Board of Spertus College, as well as a board member of the
Illinois Institute of
5
Technology, the Stuart School, and a number of philanthropic organizations,
including the Jewish Federation of Chicago.
JAMES A. 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. He also 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, from February 2001 to May 2002.
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
Outside (i.e., non-employee) directors receive the following fees:
- $4,375 quarterly retainer fee;
- $1,000 for each Board of Directors meeting attended; and
- $750 for each committee meeting attended.
In fiscal year 1993, the Board of Directors adopted a Non-Employee Director
Non-Qualified Stock Option Plan (the "Directors' Plan"), which was approved
by the shareholders at the Company's 1993 Annual Meeting. Under the
Directors' Plan, non-employee Directors have the right annually to elect to
receive non-qualified stock options in lieu of all or a stated percentage
of retainer and/or regular quarterly Board meeting attendance fees payable
for the upcoming fiscal year. The number of shares covered by such options
is determined at the time such fees would otherwise be payable based upon
the fair market value of the Company's Common Stock at such times, except,
with respect to an election to defer all such fees, such determination
shall be based upon 133% of fair market value at such times. Elections are
irrevocable. The Directors' Plan expires in 2003.
Under the Directors Plan, each director eligible under the plan elected for
fiscal year 2002 to date to receive non-qualified options in lieu of all
such fees. Neither Messrs. Lichtenstein nor Kassan are eligible to
participate in this plan. In accordance with such elections, the directors
received options to acquire shares of Common Stock as follows:
Options Received
----------------
J. Dwane Baumgardner 29,027
Mark E. Schwarz 26,123
James Henderson 20,824
Steven Wolosky 22,338
Richard Smith 17,796
Avrum Gray 13,378
6
BOARD COMMITTEES AND MEETINGS
The Board of Directors met on 15 occasions during the fiscal year
ended December 31, 2002. There are three Committees of the Board of
Directors: the Executive Committee, the Audit Committee and the
Compensation Committee. The members of the Executive Committee are
Warren G. Lichtenstein, Glen Kassan and Mark E. Schwarz. The
Executive Committee did not meet during the fiscal year ended
December 31, 2002. The Executive Committee has and may exercise all
the authority of the Board of Directors, 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 of Directors, which by its terms is amendable or
repealable only by the Board of Directors. The members of the Audit
Committee are Avrum Gray, Mark E. Schwarz and J. Dwane Baumgardner.
The Audit Committee met on six occasions during the fiscal year
ended December 31, 2002. The primary purpose of the Audit Committee
is to assist the Board of Directors 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 members of the Compensation Committee are Mark E. Schwarz and
Steven Wolosky. The Compensation Committee met on one occasion
during the fiscal year ended December 31, 2002. The Compensation
Committee reviews compensation arrangements and personnel matters.
The Company does not presently have a nominating committee, and the
customary functions of such committee are being performed by the
entire board.
SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 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 of such equity securities with
the Securities and Exchange Commission ("SEC") and the New York
Stock Exchange. Such entities are also required by SEC regulations
to furnish the Company with copies of all Section 16(a) forms filed.
Based solely on a review of the copies of such Forms furnished to
the Company and written representations that no Form 5s were
required, the Company believes that its directors and officers, and
greater than 10% beneficial owners, have complied with all Section
16(a) filing requirements.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding
ownership of our common stock, as of April 22, 2003 (except as
otherwise noted), by: (i) each person or entity (including such
person's or entity's address) who is known by us to own beneficially
more than five percent of our common stock, (ii) each of our
Directors and nominees for Director who beneficially owns shares,
(iii) each Named Executive Officer (as defined under Executive
Compensation) who beneficially owns shares, and (iv) all executive
officers and Directors as a group. The information presented in the
7
table is based upon the most recent filings with the Securities and
Exchange Commission by such persons or upon information otherwise
provided by such persons to us.
Number of Shares
Name of Beneficial Owner Beneficially Owned(1) Percentage Owned(2)
------------------------ --------------------- -------------------
The Gabelli Funds 1,550,700(3) 26.2%
One Corporate Center
Rye, NY 10580-1435
Oaktree Capital Management, LLC 525,000(4) 8.9%
333 South Grand Avenue
28th Floor
Los Angeles, CA 90071
Steel Partners II, L.P. 746,250(5) 12.6%
150 East 52nd Street
21st Floor
New York, NY 10022
J. Dwane Baumgardner 93,666(6) 1.6%
David R. Nuzzo 61,436(7) 1.0%
Warren Lichtenstein 756,550(8) 12.8%
Glen Kassan 0(5) *
Avrum Gray 39,578(9) *
James Henderson 20,824(5)(10) *
Mark E. Schwarz 243,473(5)(11) 4.1%
Richard Smith(12) 17,796(10) *
Steven Wolosky 22,338(5)(10) *
James A. Risher 0 *
All Directors and Executive
Officers as a Group 1,255,661(13) 20.4%
* Less than one percent (1%).
(1) Beneficial ownership is determined in accordance with the rules
of the Securities and Exchange Commission. Under such rules, shares
8
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 5,907,700 shares outstanding as of April 22, 2003.
(3) Based upon a Schedule 13D/A Amendment No. 20 filed on April 4,
2002 with the Securities and Exchange Commission by Gabelli Funds,
LLC in addition to other information. Gabelli Group Capital
Partners, Inc. makes investments for its own account and is the
parent company of Gabelli Asset Management Inc. Mario J. Gabelli is
the Chairman of the Board of Directors, Chief Executive Officer and
majority shareholder of Gabelli Partners. Gabelli Asset Management,
a public company listed on the New York Stock Exchange, is the
parent company of a variety of companies engaged in the securities
business, including (i) GAMCO Investors, Inc., a wholly-owned
subsidiary of Gabelli Asset Management, an investment adviser
registered under the Investment Advisers Act of 1940, as amended,
which provides discretionary managed account services for employee
benefit plans, private investors, endowments, foundations and
others; (ii) Gabelli Advisers, Inc., a subsidiary of Gabelli Asset
Management, which provides discretionary advisory services to The
Gabelli Westwood Mighty Mites Fund; (iii) Gabelli Performance
Partnership L.P., a limited partnership whose primary business
purpose is investing in securities (Mario J. Gabelli is the general
partner and a portfolio manager for Gabelli Performance
Partnership); (iv) Gabelli International Limited, a corporation
whose primary business purpose is investing in a portfolio of equity
securities and securities convertible into, or exchangeable for,
equity securities offered primarily to persons who are neither
citizens nor residents of the United States; and (v) Gabelli Funds,
LLC, an investment adviser registered under the Investment Advisers
Act, which presently provides discretionary managed account services
for various registered investment companies.
Includes the following shares deemed to be owned beneficially by the
following affiliates: 1,263,200 shares held by GAMCO; 107,000 shares
held by Gabelli International; 98,500 shares held by Gabelli Funds;
1,000 shares held by Gabelli Foundation, Inc., a private foundation;
16,000 shares held by Gabelli Advisers; and 65,000 shares held by
Gabelli Performance Partnership. Each of the Gabelli affiliates
claims sole voting and dispositive power over the shares held by it.
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 the Chief Investment Officer of each of the Gabelli affiliates;
the majority stockholder and Chairman of the Board of Directors and
Chief Executive Officer of Gabelli Partners; the president, a
trustee and the investment manager of the Gabelli Foundation; and
the general partner and portfolio manager for Gabelli Performance
Partnership.
GAMCO, Gabelli Advisors, and Gabelli Funds, each has its principal
business office at One Corporate Center, Rye, New York 10580.
Gabelli Performance Partnership has its principal business office at
401
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Theodore Freund Ave., Rye, New York 10580. Gabelli International has
its principal business office at c/o Fortis Fund Services (Cayman)
Limited, Grand Pavillion, Commercial Centre, 802 West Bay Road,
Grand Cayman, British West Indies. The Gabelli Foundation has its
principal offices at 165 West Liberty Street, Reno, Nevada 89501.
(4) Oaktree Capital Management, LLC, a California limited liability
company, is deemed to have beneficial ownership of 525,000 shares as
of June 30, 2001. The principal business of Oaktree is providing
investment advice and management services to institutional and
individual investors. Oaktree's general partner is OCM Principal
Opportunities Fund, L.P., a Delaware limited partnership.
(5) Based upon a Schedule 13D/A Amendment No. 10 filed jointly on
September 5, 2002 with the Securities and Exchange Commission by
Steel, Mr. Lichtenstein, Newcastle Partners, L.P., Newcastle Capital
Management, L.P., Newcastle Capital Group, L.L.C., Mr. Schwarz, Mr.
Kassan, Mr. Henderson and Mr. Wolosky, in addition to other
information. In such filing each of Messrs. Kassan, Henderson and
Wolosky report that they beneficially own no shares of common stock.
(6) Includes 2,000 shares owned by Mr. Baumgardner and 91,666 shares
which Mr. Baumgardner has the right to acquire at any time upon
exercise of stock options.
(7) Includes 4,500 shares owned by Mr. Nuzzo, 5,936 shares
beneficially owned by Mr. Nuzzo as a participant in our Savings and
Pension Plan, and 51,000 shares which Mr. Nuzzo has the right to
acquire at any time upon exercise of stock options.
(8) Includes the 746,250 shares of which, by virtue of his position
as Chairman of the Board, Chief Executive Officer and Secretary of
Steel (as described in Note 5 above), Mr. Lichtenstein has the power
to vote and dispose.
(9) 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 which 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.
(10) Represents options to acquire shares of Common Stock at any
time.
(11) Includes 217,350 shares of which, 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, Mr. Schwarz has the
power to vote and dispose. Also includes 26,123 shares which Mr.
Schwarz has the right to acquire at any time upon exercise of stock
options.
(12) Richard Smith is not standing for re-election to the Company's
Board of Directors.
(13) Includes 234,875 shares which directors and executive officers
have the right to acquire, at any time, upon the exercise of
nonqualified and incentive stock options granted by us.
10
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding
compensation awarded to, earned by or paid to the Chief Executive
Officer and each of the Company's other executive officers whose
total annual salary and bonus exceeded $100,000 during the year 2002
(the "Named Executive Officers") for services in all capacities
during the years ended December 31, 2002, 2001 and 2000. Owen
Farren's employment with the Company was terminated effective
February 4, 2002 and Jacob Cherian resigned from the Company
effective April 26, 2002.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Awards
Securities All Other
Name and Annual Compensation Underlying Compensation
Principal Position Year Salary ($) Bonus($) Options/SARs (#) ($)(4)(5)
------------------ ---- ---------- --------- ---------------- ---------
Warren G. Lichtenstein(1) 2002 0 0 0 0
Chairman of the Board and Chief
Executive Officer
Glen Kassan(1) 2002 0 0 0 0
President
David R. Nuzzo 2002 171,000 0 0 353,384(6)
Vice President-Finance and 2001 171,000 0 17,000 19,567
Administration, Treasurer and 2000 165,000 0 0 7,365
Secretary
Owen Farren(2) 2002 73,544 0 0 898,392(6)
President and CEO 2001 281,423 0 20,000 30,315
2000 270,000 0 0 28,769
Jacob Cherian(3) 2002 46,025 0 0 250,690(6)
Vice President 2001 119,808 0 17,000 20,056
and Corporate
Controller
(1) Mr. Lichtenstein was elected Chairman of the Board on January 24, 2002 and
Chief Executive Officer on February 4, 2002. Mr. Kassan was elected
President on February 4, 2002. Neither Messrs. Lichtenstein nor Kassan
receive direct compensation from the Company. Mr. Lichtenstein's services
as Chairman of the Board and Chief Executive Officer and Mr. Kassan's
services as President are provided to the Company in accordance with the
provisions of a management agreement with New Ltd. See "Compensation
Committee Report on Executive Compensation" and "Certain Relationships and
Related Transactions" presented below.
(2) Owen Farren's employment with the Company was terminated effective February
4, 2002.
(3) Jacob Cherian was named Vice President and Corporate Controller effective
January 1, 2001. He resigned from the Company effective April 26, 2002.
11
(4) Includes our matching contributions and profit sharing contributions made
to the SL Industries Inc. Savings and Pension Plan in calendar year 2000
for Messrs. Farren and Nuzzo in the amounts of $7,923 and $6,519,
respectively; and in calendar year 2001 for Messrs. Farren, Nuzzo and
Cherian in the amounts of $8,500, $8,500 and $5,990, respectively. Our
contribution to the plan is based on a percentage of the participant's
elective contributions up to the maximum defined under the plan and a fixed
percentage, determined annually by the Board of Directors, of the
participant's total fiscal years 1999 and 2000 earnings. Under the plan,
benefits are payable at retirement as a lump sum or as an annuity.
(5) Includes premiums paid for group term life insurance for Messrs. Farren,
Nuzzo and Cherian, and premiums paid for an ordinary whole life insurance
policy on Mr. Farren's life in the face amount of $1,000,000, of which he
is the owner with the right to designate beneficiaries.
(6) Consists of payments made to Messrs. Nuzzo, Farren and Cherian relating to
insurance premiums and payments made under change-in-control agreements in
the respective amounts as follows: $828 and $352,556; $20,827 and $877,565;
and $690 and $250,000. See "Employment Contracts, Termination and Change
-In-Control Arrangements" presented below.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The Company did not grant options to the Named Executive Officers during the
year ended December 31, 2002.
AGGREGATED STOCK OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END STOCK
OPTION VALUES
The following table sets forth the number of shares received upon exercise of
stock options by each of the Named Executive Officers during the last completed
fiscal year and the aggregate options to purchase shares of our common stock
held by the Named Executive Officers at December 31, 2002.
Number of Securities
Underlying Value of Unexercised
Unexercised Options In-The-Money Options
At Fiscal Year End (#) at Fiscal Year End ($)(1)
----------------------- -------------------------
Acquired Upon Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
---- ------------ ------------ ------------- -------------
Warren G.
Lichtenstein 0 0 0/0 0/0
Glen Kassan 0 0 0/0 0/0
David R. Nuzzo 0 0 51,000/11,000 0/0
Owen Farren 159,000 409,900 0/0 0/0
Jacob Cherian 0 0 0/0 0/0
(1) Computed by multiplying the number of options by the difference between (i)
the per share closing price at fiscal year-end and (ii) the exercise price
per share.
12
EQUITY COMPENSATION PLAN SUMMARY
The following table sets forth information as of December 31, 2002 regarding the
number of shares of Common Stock issued and available for issuance under the
Company's existing equity compensation plans:
NUMBER OF SECURITIES
REMAINING
AVAILABLE FOR FUTURE
ISSUANCE
UNDER EQUITY
NUMBER OF SECURITIES TO WEIGHTED-AVERAGE COMPENSATION PLANS
BE ISSUED UPON EXERCISE EXERCISE PRICE OF (EXCLUDING SECURITIES
OF OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, REFLECTED
PLAN CATEGORY WARRANTS AND RIGHTS WARRANTS AND RIGHTS IN COLUMN (a))
Equity compensation plans approved by (a) (b) (c)
security holders 808,253 $10.22 0
Equity compensation plans not approved by
security holders 0 $0 0
Total 808,253 $10.22 0
LONG-TERM INCENTIVE PLANS-AWARDS IN LAST FISCAL YEAR
The Company did not grant awards to any of its executive officers under any
long-term incentive plans during the year ended December 31, 2002.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Schwarz and Wolosky each served as a member of the Compensation
Committee of the Board of Directors during the fiscal year ended December 31,
2002. Mr. Wolosky is a partner of Olshan Grundman Frome Rosenzweig & Wolosky
LLP, which the Company has retained as outside counsel since January 2002. The
fees paid such firm by the Company do not exceed 5% of such firm's gross
revenues for the fiscal year ended December 31, 2002.
EMPLOYMENT CONTRACTS, TERMINATION AND CHANGE-IN-CONTROL ARRANGEMENTS
In 2001, the Registrant entered into change-in-control agreements with senior
executives and other key personnel.
In January 2002, the five nominees of the RORID Committee were elected to the
Company's eight-member Board of Directors. Upon the occurrence of this event,
Messrs. Farren, Nuzzo and Cherian each received payment under his respective
change-in-control agreement. As a result, in January the Company paid to Messrs.
13
Farren, Nuzzo and Cherian, respectively, $877,565, $352,556 and $250,000 under
such agreements. Under their respective change-in-control agreements, these
executives are not entitled to receive any further cash payments, but are
entitled to receive insurance benefits for specified time periods or until they
obtain new employment, whichever occurs first.
Upon receiving their resignations, the Company exercised its rights under the
change-in-control agreements to require Messrs. Farren, Nuzzo and Cherian to
remain in their positions for up to ninety days. Mr. Farren was subsequently
terminated as Chief Executive Officer and President on February 4, 2002. Mr.
Nuzzo has continued in his position with the Company. Mr. Cherian gave notice of
his termination effective April 24, 2002.
14
PERFORMANCE GRAPH
The following Performance Graph summarizes the cumulative total shareholder
return on an investment of $100 on July 31, 1997 in the Company's Common Stock
for the period from that date to December 31, 2002, as compared to the
cumulative total return on a similar investment of $100 on that date in stocks
comprising the S&P Electrical Components & Equipment Group and the Russell 2000
Stock Index. The graph assumes the reinvestment of all dividends. The
Performance Graph is not necessarily indicative of future performance.
7/31/97 7/31/98 7/30/99 12/31/99 12/29/00
------- ------- ------- -------- --------
SL Industries, Inc. $100.00 $143.59 $121.80 $115.46 $114.78
S&P Electrical Components & Equipment Group $100.00 $86.53 $120.21 $135.48 $163.54
Russell 2000 Stock Index $100.00 $102.31 $108.76 $123.33 $118.00
12/31/01 12/31/02
-------- --------
SL Industries, Inc. $ 58.71 $ 53.19
S&P Electrical Components & Equipment Group $127.04 $ 121.01
Russell 2000 Stock Index $119.21 $ 93.48
--------------------
15
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for the
establishment of the level and manner of compensation of the Company's executive
officers (including its Named Executive Officers). In addition, the Compensation
Committee seeks to ensure that sound compensation policies and practices exist
and are being followed. During fiscal year 2002, the members of the Compensation
Committee were Mark E. Schwarz (Chairman) and Steven Wolosky, each of whom are
non-employee directors of the Company.
The following describes the Compensation Committee's compensation policies
applicable to its executive officers (including its Named Executive Officers),
including the relationship of corporate performance to executive compensation,
with respect to compensation reported for the last fiscal year.
The Compensation Committee believes that executive compensation should be linked
to value delivered to shareholders. The Company's compensation programs have
been designed to provide a correlation between the financial success of the
executive and the shareholders. Both long and short-term incentives are intended
to align the interests of executives and shareholders and to reward the
executive for building value within the Company.
The functions of the Compensation Committee are to oversee general compensation
policies for the Company's employees, to review and approve compensation
packages annually for the Company's executive officers and subsidiary
presidents, to approve cash incentive programs for all subsidiaries, and to
grant stock options to officers of the Company and other key employees as
appropriate. The Company seeks to provide executive compensation that will
support the achievement of the Company's financial goals, while attracting and
retaining talented executives and rewarding superior performance. In performing
this function, the Compensation Committee reviews executive compensation
surveys, the compensation levels of executive officers of companies in competing
businesses and in the Company's geographic markets, and recommendations by
Messrs. Lichtenstein and Kassan, the Company's Chairman of the Board and Chief
Executive Officer and President, respectively. The Compensation Committee may
also from time to time consult with independent compensation consultants and
others.
The Committee's current philosophy is to balance short-term performance of
executives with 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, it has set the following objectives: (1) to link a
significant portion of annual compensation directly to operating performance;
(2) to promote achievement of the Company's long-term strategic goals and
objectives; (3) to align the interest of Company executives with long-term
shareholder interest; (4) to align the interest of Company employees with
long-term shareholder interest; and (5) to attract, retain, and motivate
executives critical to the Company's long-term success.
The Company's executive compensation program consists of base salary, annual
cash bonus incentive, and stock options. (Along with all other employees,
executives also participate in one of the Company's defined contribution pension
plans.) Salary levels of executive officers are reviewed annually by the
Compensation Committee. In order to align the interests of executive officers
with long-term shareholder interest, bonus payments are awarded only if Company
performance targets are met. If the Company performance targets are met, bonus
payments are based on the achievement of such targets and the achievement of
individual performance goals, including certain non-financial performance
measurements such as improvements in productivity, improvement of product
quality, development and introduction of new products, and relationships with
customers.
16
Bonus amounts are calculated after fiscal year-end financial results become
available to the Compensation Committee and are determined in accordance with
guidelines established by the Compensation Committee. Compensation in any
particular case will vary on the basis of the Company's annual and long-term
performance as well as individual performance.
No specific weight or relative importance was assigned to the various
non-quantitative factors and compensation information which the Compensation
Committee considered. Accordingly, the Company's compensation policies and
practices may be deemed informal and subjective, although they were based on
both the financial and non-financial factors and detailed considerations
described above.
The Compensation Committee believes stock options and stock ownership contribute
to the aligning of the executive's interests with those of the shareholders.
From time to time, the Compensation Committee has provided long term incentive
compensation in the form of stock options where appropriate as compensation for
its executive officers. In determining whether individual stock option grants
will be made, the Compensation Committee evaluates each participant's job
responsibilities and performance during the last completed fiscal year, as well
as the perceived potential that the individual has in contributing to the
success of the Company. The Company did not grant any options to employees in
2002 because the Company's stock option plans were expired.
Mr. Lichtenstein's services as Chairman of the Board and Chief Executive Officer
and Mr. Kassan's services as President are provided to the Company in accordance
with the provisions of a management agreement with Steel Partners Ltd. Under
this agreement, Steel Partners Ltd. provides management services to the Company
for an annual fee plus all reasonable and necessary business expenses incurred
in the performance of such services. The aggregate annual fee paid under this
agreement for fiscal year 2002 was $362,000. Neither Messrs. Lichtenstein nor
Kassan receives direct compensation from the Company. The Compensation Committee
considers the management services provided by Steel Partners Ltd. important to
achieving the Company's objectives and believes the fees paid are less than what
the Company would have to pay a Chief Executive Officer and President. See
"Certain Relationships and Related Transactions."
The Company did not pay cash bonuses or grant stock options to its Named
Executive Officers for fiscal year 2002.
Sincerely yours,
COMPENSATION COMMITTEE
Mark E. Schwarz
Steven Wolosky
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Warren Lichtenstein, Chairman of the Board and Chief Executive Officer of the
Company, and Glen Kassan, a director and President of the Company, are executive
officers of New Ltd., which provides management services to the Company for an
annual fee plus all reasonable and necessary business expenses incurred in the
performance of such services. The fee paid under this agreement in fiscal year
2002 was $362,000.
Steven Wolosky, a director of the Company, is a partner of Olshan Grundman Frome
Rosenzweig & Wolosky LLP, which the Company has retained as outside counsel
since January 2002. The fees paid such firm by the Company do not exceed 5% of
such firm's gross revenues for the fiscal year ended December 31, 2002.
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 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 American Stock Exchange Rule P.
10,021, Sec. 121. During the fiscal year ended December 31, 2002, the Committee
met six times.
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, 2002.
The Committee reviewed the audited financial statements of the Company as of and
for the fiscal year ended December 31, 2002, 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.
18
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, 2002, for filing with the Securities and
Exchange Commission.
AUDIT COMMITTEE
Avrum Gray
Mark Schwarz
J. Dwane Baumgardner
ITEM 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors 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 of
Directors is submitting the selection of Grant Thornton LLP as the Company's
independent auditors for the fiscal year ending December 31, 2003 to
shareholders for ratification in order to ascertain the shareholders' views.
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 of
the Company entitled to vote thereon and represented at the Meeting. The Board
of Directors will reconsider its selection should the shareholder votes evidence
disapproval.
On July 18, 2002, the Company announced that it dismissed Arthur Andersen LLP as
its independent accountants and engaged Grant Thornton LLP as its new
independent accountants. The decision to dismiss Arthur Andersen and to engage
Grant Thornton LLP was recommended by the Audit Committee of the Board of
Directors and approved by the Board of Directors.
Arthur Andersen's reports on the Company's financial statements for the two
years ended December 31, 2000 and December 31, 2001 did not contain an adverse
opinion or a disclaimer of opinion, nor were they qualified or modified as to
audit scope, or accounting principles.
However, as a result of an impairment charge related to the write off of
intangible assets of a subsidiary of the Company recognized at December 31,
2001, the Company was in violation of its net income covenant for the fourth
quarter of 2001 under its revolving credit facility. Additionally, on March 1,
2002 the Company received a notice from its lenders under the revolving credit
facility stating that the Company is currently in default under the revolving
credit facility due to its failure to meet a scheduled debt reduction.
Consequently, Arthur Andersen's report for the period ended December 31, 2001
dated March 15, 2002 did contain the following paragraph: "The accompanying
financial statements have been prepared assuming that the Company will continue
as a going concern. As discussed in Note 1 to the consolidated financial
statements, the Company was in technical default under its revolving credit
facility at December 31, 2001 and an additional event of default occurred on
March 1, 2002. Due to these events of default, the lenders that provide the
revolving credit facility do not have to provide any further financing and have
the right to terminate the facility and demand repayment of all amounts
outstanding. The existence of these events of default raises substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to this matter are also described in Note 1. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty."
19
On May 23, 2002, the Company and its lenders reached an agreement, pursuant to
which the lenders granted a waiver of default and amended certain financial
covenants of the revolving credit facility, so that the Company was in full
compliance with the revolving credit facility after giving effect to this
agreement.
During the Company's two most recent fiscal years and through July 18, 2002,
there were no disagreements with Arthur Andersen on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure which, if not resolved to Arthur Andersen's satisfaction, would have
caused them to make reference to the subject matter in connection with their
report on the Company's consolidated financial statements for such years, and
there were no reportable events as defined in Item 304(a)(1)(v) of Regulation
S-K.
During the Company's two most recent fiscal years and the subsequent interim
periods through July 18, 2002, it did not consult with Grant Thornton LLP
regarding the application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that might be
rendered on the Company's consolidated financial statements, or any other
matters or events as set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K.
AUDIT FEES
----------
The Company was billed an aggregate of $372,961 by Grant Thornton LLP for
professional fees rendered in connection with the audit of the Company's annual
financial statements for the fiscal year ended December 31, 2002, the reviews of
the Company's financial statements included in the Company's quarterly reports
on Form 10-Q during the fiscal year ended December 31, 2002 and for statutory
audits of the Company's foreign subsidiaries.
FINANCIAL INFORMATION SYSTEM DESIGN AND IMPLEMENTATION FEES
-----------------------------------------------------------
Grant Thornton LLP did not perform any services for the Company in connection
with: (i) the direct or indirect operation, or supervision of the operation of,
the Company's information system or management of the Company's local area
network; or (ii) the design or implementation of hardware or software systems
that aggregate source data underlying the Company's financial statements or
generate information that is significant to the Company's financial statements
taken as a whole, for the fiscal year ended December 31, 2002.
ALL OTHER FEES
--------------
The Company was billed an aggregate of $54,320 by Grant Thornton LLP for
professional fees rendered in connection with the provision of services other
than those described in the "Audit Fees" and "Financial Information System
Design and Implementation Fees" sections above for the fiscal year ended
December 31, 2002. Such fees were related primarily to tax matters.
The Audit Committee of the Board of Directors 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.
20
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 31, 2003.
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 22, 2003 a copy of its Annual Report on Form 10-K for the fiscal year
ended December 31, 2002. Such report contains the Company's certified
consolidated financial statements for the fiscal year ended December 31, 2002,
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 Lichtenstein
Chairman
Mt. Laurel, New Jersey
April 29, 2003
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.
21
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
SL INDUSTRIES, INC.
PROXY -- ANNUAL MEETING OF SHAREHOLDERS
May 29, 2003
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 which the undersigned would be entitled to vote if personally
present at the 2003 Annual Meeting of Stockholders of the Company to be held at
the Warwick Hotel, 65 West 54th Street, New York, New York on May 29, 2003, at
1:30 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 29, 2003, and a copy of the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2002.
CONTINUED TO BE COMPLETED, SIGNED
AND DATED ON THE REVERSE SIDE
22
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X].
1. ELECTION OF DIRECTOR NOMINEES. For the election as directors for the
ensuing year of all nominees listed below (except as indicated below).
NOMINEES:
[ ] FOR ALL NOMINEES [ ] WARREN G. LICHTENSTEIN
[ ] GLEN KASSAN
[ ] J. DWANE BAUMGARDNER
[ ] WITHOLD AUTHORITY FOR ALL NOMINEES [ ] MARK E. SCHWARZ
[ ] JAMES HENDERSON
[ ] STEVEN WOLOSKY
[ ] FOR ALL EXCEPT (See instructions below) [ ] AVRUM GRAY
[ ] JAMES A. RISHER
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you wish to
withhold, as shown here: [X]
2. RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS THE
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR
ENDING DECEMBER 31, 2003.
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.
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.
To change the address on your account please check the box at right and indicate
your new address in the address space above. Please note that changes to
registered name(s) on the account may not be submitted via this method. [ ]
Signature of Stockholder__________________ Date:______________
Signature of Stockholder__________________ Date:______________
NOTE: Please sign as your name or names appear on this Proxy. When shares are
held jointly, each holder should sign. When signing as executor, administrator,
attorney, trustee or guardian, please give full title as such. If the signer is
a corporation, please sign full corporate name by duly authorized officer,
giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
23