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 Com-
mission Only (as permitted by
Rule 14a-6(e) (2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
SL Industries, Inc.
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(Name of Registrant as Specified in Its 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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(3) Filing Party:
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(4) Date Filed:
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[SL INDUSTRIES, INC. LOGO]
December 14, 2001
DEAR SHAREHOLDER:
You are cordially invited to attend the 2001 Annual Meeting of Shareholders
of SL INDUSTRIES, INC., on Tuesday, January 22, 2002, at 9:00 a.m.
The meeting will be held in the Grand Ballroom at the Doubletree Guest
Suites, Fellowship Road, Mt. Laurel, New Jersey. Prior to the meeting, an 8:30
a.m. continental breakfast will be served.
Your Board of Directors and Management look forward to meeting those
shareholders able to attend.
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THE MEETING.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE BE SURE THAT THE
ENCLOSED WHITE PROXY CARD IS PROPERLY COMPLETED, DATED, SIGNED AND RETURNED
WITHOUT DELAY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES.
YOUR BOARD OF DIRECTORS ALSO URGES YOU NOT TO SIGN ANY PROXY CARD THAT MAY
BE SENT TO YOU BY THE RORID COMMITTEE. EVEN IF YOU HAVE PREVIOUSLY SIGNED A
PROXY CARD SENT TO YOU BY THE RORID COMMITTEE, YOU CAN REVOKE THAT EARLIER PROXY
BY SIGNING, DATING AND MAILING THE ENCLOSED WHITE PROXY CARD IN THE ENVELOPE
PROVIDED.
Thank you for your continued support.
Sincerely yours,
SIGNATURE
OWEN FARREN
President and Chief Executive Officer
SL INDUSTRIES, INC.
CORPORATE OFFICE: 520 FELLOWSHIP ROAD, SUITE A-114
MT. LAUREL, NJ 08054
NOTICE OF 2001 ANNUAL MEETING OF SHAREHOLDERS
NOTICE is hereby given that the 2001 Annual Meeting of Shareholders of SL
INDUSTRIES, INC., will be held at the Doubletree Guest Suites, Fellowship Road,
Mt. Laurel, New Jersey, on Tuesday, January 22, 2002, at 9:00 a.m. for the
following purposes:
1. to elect eight directors for the ensuing year;
2. to ratify the appointment of Arthur Andersen LLP, to serve as the
Company's independent auditors for fiscal year 2002; and
3. to transact such other business as may properly come before the
Annual Meeting and any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on December 5, 2001,
as the record date for the determination of the shareholders entitled to notice
of and to vote at the Annual Meeting.
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THE MEETING.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE BE SURE THAT THE
ENCLOSED WHITE PROXY CARD IS PROPERLY COMPLETED, DATED, SIGNED AND RETURNED
WITHOUT DELAY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE TIME IT IS
VOTED.
YOUR BOARD OF DIRECTORS ALSO URGES YOU NOT TO SIGN ANY PROXY CARD THAT MAY
BE SENT TO YOU BY THE RORID COMMITTEE. EVEN IF YOU HAVE PREVIOUSLY SIGNED A
PROXY CARD SENT TO YOU BY THE RORID COMMITTEE, YOU CAN REVOKE THAT EARLIER PROXY
BY SIGNING, DATING AND MAILING THE ENCLOSED WHITE PROXY CARD IN THE ENVELOPE
PROVIDED.
By Order of the Board of Directors
SIGNATURE
DAVID R. NUZZO
Secretary
December 14, 2001
Mt. Laurel, New Jersey
SL INDUSTRIES, INC.
SUITE A-114
520 FELLOWSHIP ROAD
MT. LAUREL, NJ 08054
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies, by and on behalf of the Board of Directors of SL Industries, Inc. (the
"Company"), to be voted at the 2001 Annual Meeting of Shareholders on January
22, 2002, at 9:00 a.m., and at any adjournment or postponement thereof (the
"Annual Meeting"). The Annual Meeting has been called to consider and vote upon
the election of eight Directors, the ratification of the appointment of Arthur
Andersen LLP as the Company's auditors through the fiscal year 2002, and such
other business as may properly come before the meeting. This Proxy Statement and
the enclosed form of proxy are first being mailed to shareholders on or about
December 17, 2001.
The Board of Directors is soliciting votes FOR the Company's slate of
nominees for election to the Board of Directors. A WHITE proxy card is enclosed
for your use. THE BOARD OF DIRECTORS URGES YOU TO COMPLETE, SIGN, DATE AND
RETURN THE WHITE PROXY CARD IN THE ACCOMPANYING ENVELOPE, which is postage-paid
if mailed in the United States.
The RORID Committee has recently filed definitive proxy materials with the
Securities and Exchange Commission stating that it intends to nominate a slate
of five individuals for election to the Company's Board of Directors in
opposition to the Company's nominees for the Board of Directors. Your Board of
Directors believes that the election of the five nominees of the RORID Committee
would be seriously detrimental to SL Industries.
ACCORDINGLY, THE BOARD URGES YOU NOT TO SIGN ANY PROXY CARD THAT MAY BE
SENT TO YOU BY THE RORID COMMITTEE. IF YOU HAVE ALREADY DONE SO, YOU MAY REVOKE
YOUR PREVIOUSLY SIGNED PROXY BY DELIVERING WRITTEN NOTICE OF REVOCATION OR A
LATER DATED PROXY CARD IN THE ENCLOSED ENVELOPE.
IF YOUR SHARES ARE HELD IN THE NAME OF A BANK, BROKER, OR OTHER NOMINEE,
ONLY YOUR BANK OR BROKER OR OTHER NOMINEE CAN VOTE YOUR SHARES AND ONLY UPON
YOUR SPECIFIC INSTRUCTIONS. PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR
ACCOUNT AND INSTRUCT HIM OR HER TO VOTE THE WHITE PROXY CARD AS SOON AS
POSSIBLE.
VOTING BY SHAREHOLDERS
Only holders of record of the Company's Common Stock, par value $.20 per
share (the "Common Stock"), at the close of business on December 5, 2001, are
entitled to receive notice of and to vote at the Annual Meeting.
Shares cannot be voted at the Annual Meeting unless the owner thereof is
present in person or represented by proxy. When a proxy in the accompanying form
is returned, properly dated and executed, the shares represented thereby will be
voted at the Annual Meeting and, if a shareholder specifies a choice with
respect to any matter to be acted upon, such shares will be voted in accordance
with the specifications so made. A proxy may be revoked at any time prior to
being voted by filing a written notice of revocation with the Secretary of the
Company, by submitting a proxy bearing a later date, or by voting the shares
subject to the proxy by written ballot at the meeting.
On the record date, December 5, 2001, there were 5,710,963 shares of Common
Stock of the Company outstanding. All outstanding shares are of one class.
Shareholders have the right to cast one vote for each share held on the record
date as to each matter presented at the meeting.
All shares represented by each properly executed unrevoked proxy received
prior to the Annual Meeting will be voted in accordance with the instructions
specified therein, or in the absence of appropriate instructions, for the
election of all of the nominees for director listed in Proposal 1 and for
Proposal 2.
Presence of a Quorum. Under the By-Laws of the Company, the presence of a
quorum is required for each matter to be acted upon at the Annual Meeting. We
believe that, because the date, time and place of the meeting were agreed to by
the Company and Steel Partners II, L.P. (a member of the RORID Committee's
soliciting group) and approved by an order of the Superior Court of New Jersey,
the shareholders present in person or represented by proxy at the Annual Meeting
shall constitute a quorum for all matters to come before the meeting.
Broker Non-votes. If your shares are held by a broker, the broker will ask
you how you want your shares to be voted. If you give the broker instructions,
your shares must be voted as you direct. If you do not give instructions, one of
two things can happen, depending on the type of proposal. For some proposals,
such as election of directors and ratification of auditors, the broker may vote
your shares at its discretion, although brokers do not have discretion to vote
your shares if there is a contest concerning the proposal. But for other
proposals, including shareholder proposals, the broker may not vote your shares
at all. When that happens, it is called a "broker non-vote."
Election of Directors. Directors shall be elected by a plurality of the
votes cast. The eight nominees for director receiving the most votes will be
elected. Abstentions and broker non-votes will result in nominees receiving
fewer votes but will not count as either votes "for" or "against" a nominee.
Ratification of Appointment of Auditors. To be approved, the proposal to
ratify the appointment of Arthur Andersen LLP to serve as the Company's
independent auditors for the fiscal year 2002 must receive a majority of votes
cast at the Annual Meeting. Abstentions and broker non-votes will not be counted
either "for" or "against" the proposal.
The cost of soliciting proxies will be borne by the Company. In addition to
solicitations by mail, a number of directors, officers and other employees of
the Company and of its subsidiaries may (without additional compensation)
solicit proxies in person or by telephone, telegraph, telex, facsimile, e-mail
and postings on the Company's Web site. The Company has also retained MacKenzie
Partners, Inc., for a fee not-to-exceed $75,000, and reimbursement of
out-of-pocket expenses, to aid in the solicitation of proxies. MacKenzie
Partners, Inc. will be indemnified against certain liabilities and expenses,
including certain liabilities under the federal securities laws. MacKenzie
Partners, Inc. will solicit proxies from individuals, brokers, banks, bank
nominees and other institutional holders. The Company has requested banks,
brokerage houses and other custodians, nominees and fiduciaries to forward all
solicitation materials to the beneficial owners of the shares they hold of
record. The Company will reimburse these record holders for their reasonable
out-of-pocket expenses in so doing. It is anticipated that MacKenzie Partners,
Inc. will employ approximately 30 persons to solicit the Company's stockholders
for the Annual Meeting.
The entire expense of soliciting proxies is being borne by the Company. The
Company currently estimates that the total amount which it will spend in
connection with this solicitation of proxies to be approximately $250,000. The
Company also estimates that, through the date hereof, its total expenditures to
date in connection with this proxy solicitation are approximately $45,000.
YOUR VOTE AT THIS YEAR'S ANNUAL MEETING IS ESPECIALLY IMPORTANT.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE BE SURE THAT THE
ENCLOSED WHITE PROXY CARD IS PROPERLY COMPLETED, DATED, SIGNED AND RETURNED
WITHOUT DELAY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES.
YOUR BOARD OF DIRECTORS ALSO URGES YOU NOT TO SIGN ANY PROXY CARD THAT MAY
BE SENT TO YOU BY THE RORID COMMITTEE. EVEN IF YOU HAVE PREVIOUSLY SIGNED A
PROXY CARD SENT TO YOU BY THE RORID COMMITTEE, YOU CAN REVOKE THAT EARLIER PROXY
BY SIGNING, DATING AND MAILING THE ENCLOSED WHITE PROXY CARD IN THE ENVELOPE
PROVIDED.
2
The Board of Directors does not know of any business to properly come
before the Annual Meeting, other than that set forth in the Notice of 2001
Annual Meeting of Shareholders. Should any matters properly come before the
Annual Meeting, notice of which was not received by the Company a reasonable
time before this Proxy Statement is mailed, for which specific authority has not
been solicited from the shareholders, then, to the extent permissible by law,
the persons voting the proxies will use their discretionary authority to vote
thereon in accordance with their best judgment.
PARTICIPANT INFORMATION
As nominees for directors, J. Dwane Baumgardner, Richard E. Caruso, Owen
Farren, Charles T. Hopkins, Judith A. Maynes, J. Edward Odegaard, Walter I.
Rickard and Robert J. Sanator are deemed to be participants in the Company's
proxy solicitation. Certain information concerning these individuals is set
forth below.
J. Dwane Baumgardner is Chairman of Donnelly Corporation, Inc., with a
principal business address of 49 W. Third Street, Holland, Michigan 49423.
Owen Farren, Chairman, President and Chief Executive Officer of the
Company, Suite A-114, 520 Fellowship Road, Mt. Laurel, NJ 08054, engaged in the
following transactions in the Company's common stock: December 7, 1999, acquired
3,000 shares at $3.25 per share and sold 3,000 shares at $12.00 per share,
December 10, 1999, acquired 2,000 shares at $3.25 per share and 2,000 shares at
$4.125 per share and sold 4,000 shares at $11.75 per share.
Charles T. Hopkins (retired), on November 10, 2000 acquired 1000 shares of
the Company's common stock at $11.125 per share.
J. Edward Odegaard, Managing Director of Whitehead Mann, 200 Park Avenue,
Suite 1600, New York, NY 10160, on September 14, 2000 acquired 2,000 shares of
the Company's common stock at $12.00 per share.
Walter I. Rickard is President and Chief Executive Officer of LSSi Corp.,
with a principal business address of 101 Fieldcrest Avenue, Raritan Plaza III,
Edison, NJ 08837.
Robert J. Sanator, Dean of the College of Management of Long Island
University, C.W. Post Campus, Roth Hall, Brookville, NY, 11548, on March 31,
2000 acquired 1,000 shares of the Company's common stock at $9.50 per share and
on May 24, 2000, acquired 1,000 shares of the Company's common stock at $8.75
per share.
Each of Richard E. Caruso and Judith A. Maynes is retired.
No participant is, or has been within the past year, a party to any
contract, arrangement or understanding with any person with respect to any
securities of the Company, with the exception of stock options granted in the
ordinary course of business by the Compensation Committee of the Board of
Directors under the Company's various preexisting stock option plans. No
participant or associate of a participant has any arrangement or understanding
with any person with respect to any future employment by the Company or with
respect to any future transaction to which the Company may be a party, except
for Mr. Farren, who has entered into a change-in-control agreement with the
Company. Under the terms of Mr. Farren's change-in-control agreement, Mr. Farren
will be obligated to work for the Company for a limited period of time
subsequent to a change-in-control, if so requested by the Company, and, in
addition, will be entitled to certain payments in the event of a
change-in-control of the Company.
3
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth certain information regarding ownership of
the Company's Common Stock, as of November 30, 2001 (except as otherwise noted),
by: (i) each shareholder (including such shareholder's address) who is known by
the Company to own beneficially more than five percent of the Company's Common
Stock, (ii) each of the Company's Directors and nominees for Director, (iii)
each Named Executive Officer (as defined under Executive Compensation) and
current executive officer, and (iv) all executive officers and Directors as a
group. The information presented in the table is based upon the certain filings
with the Securities and Exchange Commission by such persons, as indicated in the
notes to the table below or upon information otherwise provided by such persons
to the Company.
The address of each person who is an officer or director of the Company is
520 Fellowship Road, Suite A-114, Mt. Laurel, NJ 08054.
NUMBER OF SHARES PERCENTAGE
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) OWNED
------------------------ --------------------- ----------
Dimensional Fund Advisors, Inc. ............................ 296,400(2) 5.2%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
The Gabelli Funds........................................... 1,400,720(3) 24.5%
One Corporate Center
Rye, NY 10580-1435
Oaktree Capital Management, LLC............................. 525,000(4) 9.2%
333 South Grand Avenue
28th Floor
Los Angeles, CA 90071
Steel Partners II, L.P. .................................... 850,800(5) 14.9%
750 Lexington Avenue
27th Floor
New York, NY 10022
J. Dwane Baumgardner........................................ 62,677(6) 1.1%
Richard E. Caruso........................................... 11,881(7) *
Jacob Cherian............................................... 7,644(8) *
Owen Farren................................................. 254,534(9) 4.3%
Charles T. Hopkins.......................................... 1,000 *
Judith A. Maynes............................................ -0- *
James E. Morris(10)......................................... -0- *
David R. Nuzzo.............................................. 49,512(11) *
J. Edward Odegaard.......................................... 2,000(12) *
Walter I. Rickard........................................... 12,669(13) *
Robert J. Sanator........................................... 8,000 *
All Directors and Executive Officers as a Group............. 409,917(14) 6.7%
---------------
* Less than one percent (1%).
(1) Beneficial ownership is based on 5,710,963 outstanding shares of Common
Stock as of November 30, 2001. Under applicable rules promulgated under the
Securities and Exchange Act of 1934, as amended, a person is deemed to be
the beneficial owner of shares of Common Stock if, among other things, he
or she directly or indirectly has or shares voting power or investment
power with respect to such shares. A person is also considered to
beneficially own shares of Common Stock which he or she does not actually
own but has the right to acquire presently or within the next 60 days, by
exercise of stock options or otherwise.
4
(2) Based upon a Schedule 13F-HR dated September 30, 2001, filed with the
Securities and Exchange Commission by Dimensional Fund Advisors Inc.
("Dimensional"). Dimensional, a registered investment advisor, is deemed to
have beneficial ownership of 296,400 shares, all of which shares are held
in portfolios of DFA Investment Dimensions Group Inc., a registered
open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
(3) Based upon a Schedule 13D/A Amendment No. 17 dated November 15, 2001, filed
with the Securities and Exchange Commission by Gabelli Funds LLC ("Gabelli
Funds"). Gabelli Group Capital Partners, Inc. ("Gabelli Partners") makes
investments for its own account and is the parent company of Gabelli Asset
Management Inc. ("GAMI"). Mario J. Gabelli is the Chairman of the Board of
Directors, Chief Executive Officer and majority shareholder of Gabelli
Partners. GAMI, 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. ("GAMCO"), a wholly-owned
subsidiary of GAMI, an investment adviser registered under the Investment
Advisers Act of 1940, as amended ("Advisers Act"), which provides
discretionary managed account services for employee benefit plans, private
investors, endowments, foundations and others; (ii) Gabelli Advisers, Inc.
("Gabelli Advisers"), a subsidiary of GAMI, which provides discretionary
advisory services to The Gabelli Westwood Mighty Mites(sm) Fund; (iii)
Gabelli Performance Partnership L.P. ("GPP"), a limited partnership whose
primary business purpose is investing in securities (Mario J. Gabelli is
the general partner and a portfolio manager for GPP); (iv) Gabelli
International Limited ("GIL"), 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 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 (the "Gabelli Affiliates"): 75,000 shares held by
GAMCO, 1,143,120 shares held by GIL; 14,600 shares held by Gabelli
Foundation, Inc. ("Foundation"), a private foundation; 1,000 shares held by
Mario J. Gabelli; 60,000 shares held by Gabelli Advisers; and 107,000
shares held by GPP. 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 Foundation; and the
general partner and portfolio manager for GPP.
GAMCO, Gabelli Advisors, and Gabelli Funds, each has its principal business
office at One Corporate Center, Rye, New York 10580. GPP has its principal
business office at 401 Theodore Fremd Ave., Rye, New York 10580. GIL 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 Foundation has its principal offices at 165 West
Liberty Street, Reno, Nevada 89501.
(4) Based upon a Schedule 13F-HR dated June 30, 2001, filed with the Securities
and Exchange Commission by Oaktree Capital Management, LLC, a California
limited liability company ("Oaktree"). Oaktree is deemed to have beneficial
ownership of 525,000 shares. 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 on the definitive proxy statement dated December 14, 2001 filed by
Steel Partners II, L.P. ("Steel Partners II") and other persons. Their
shares consist of 623,150 shares owned directly by Steel Partners II, L.P.,
10,300 shares owned by Warren G. Lichtenstein, Chief Executive Officer of
Steel
5
Partners, L.L.C., which is the general partner of Steel Partners II, and
217,350 shares owned by New Castle Partners, L.P., which has entered into a
voting agreement with Steel Partners II.
(6) Includes 60,677 shares which Mr. Baumgardner has the right to acquire at
any time upon exercise of stock options.
(7) Includes 11,881 shares which Mr. Caruso has the right to acquire at any
time upon exercise of stock options.
(8) Includes 394 shares beneficially owned by Mr. Cherian as a participant in
the Company's Savings & Pension Plan and 7,250 shares which Mr. Cherian has
the right to acquire at any time upon exercise of stock options.
(9) Includes 69 shares owned jointly by Mr. Farren and his wife, who share
voting and investment power, 6,200 shares held in an IRA for Mr. Farren,
21,065 shares beneficially owned as a participant in the Company's Savings
and Pension Plan, and 227,200 shares which Mr. Farren has the right to
acquire, at any time, upon the exercise of stock options.
(10) In connection with his retirement, Mr. Morris resigned as an executive
officer on December 31, 2000.
(11) Includes 2,263 shares beneficially owned by Mr. Nuzzo as a participant in
the Company's Savings and Pension Plan, and 42,750 shares which Mr. Nuzzo
has the right to acquire at any time upon exercise of stock options.
(12) Shares owned jointly by Mr. Odegaard and his wife, who share voting and
investment power.
(13) Includes 12,331 shares which Mr. Rickard has the right to acquire at any
time upon exercise of stock options.
(14) Includes 362,089 shares issuable upon exercise of options.
PROPOSAL 1
ELECTION OF DIRECTORS
At the Annual Meeting, eight persons will be elected to serve as the
Company's Board of Directors until the next Annual Meeting of Shareholders and
until their successors shall have been elected and qualified. Unless otherwise
directed, it is intended that shares represented by proxy will be voted by the
proxy holders in favor of the election of all the following persons. Each of the
nominees has consented to be named as a nominee in this Proxy Statement and to
serve as a director, if elected. Each of the nominees is at present a member of
the Board of Directors of the Company. In the event that any of the nominees for
director should become unavailable to serve as such, the proxies may be voted
for such substitute or substitutes as may be nominated by the Board of the
Company.
The following table sets forth the name of each nominee for election to the
Board of Directors, his age, principal occupation and the name and principal
business of any corporation or organization in which such occupation is carried
on, and the period during which he has served as director.
SERVED
CONTINUOUSLY
PRINCIPAL OCCUPATION FOR FIVE AS DIRECTOR
NAME OF NOMINEE AGE YEARS AND DIRECTORSHIPS SINCE
--------------- --- ----------------------------- ------------
J. Dwane
Baumgardner(1)(3)........ 61 Chairman of Donnelly Corporation, Inc., a 1990
manufacturing company in Holland, Michigan,
since 1986 and Chief Executive Officer since
1982; Director of Westcast Industries, Inc.
since 1997. Westcast Industries, Inc., whose
common stock is listed on the Toronto Stock
Exchange, is the world's largest supplier of
exhaust manifolds for passenger cars and
light trucks.
6
SERVED
CONTINUOUSLY
PRINCIPAL OCCUPATION FOR FIVE AS DIRECTOR
NAME OF NOMINEE AGE YEARS AND DIRECTORSHIPS SINCE
--------------- --- ----------------------------- ------------
Richard E. Caruso(3)(4).... 55 President of Hosting Solutions, Nortel 1999
Networks from November 1999 to August 2001
(Retired); Vice President and General Manager
of Service Provider Applications, Nortel
Networks from July 1999 to October 1999; Vice
President of Digital Media Projects, IBM
Global Media & Entertainment Industries from
December 1998 to July 1999; General Manager
of Solutions, IBM Global Telecom & Media
Industries from July 1994 to December 1998;
Director of Globecomm Systems, Inc. since
2000.
Owen Farren(1)............. 50 Chairman of the Company since June 1998 and 1991
President and Chief Executive Officer of the
Company since April 1991; from May 1990 to
April 1991, Executive Vice President of the
Company.
Walter I.
Rickard(1)(3)(4)......... 60 President and CEO, LSSi Corp., a specialty 1997
provider of telecommunications database
services, from October 1996 to present;
President and CEO, NYNEX Entertainment and
Information Services Group, 1994 to 1996, and
NYNEX Corporate Vice President, 1992 to 1994.
Robert J. Sanator(1)(2).... 71 Dean, College of Management, Long Island 1993
University, from April 1991 to present.
J. Edward Odegaard(2)(5)... 49 Managing Director, Whitehead Mann, a 2000
leadership consulting firm providing
executive recruiting, performance
benchmarking and executive coaching services,
from January 2001 to present; Managing
Director, Palm Ventures, a venture capital
firm, 2000 to 2001; Managing Director, JP
Morgan, 1978 to 2000.
Judith A. Maynes(4)(5)..... 54 Vice President, International Law, AT&T from 2000
July 1972 to March 2000. (Retired)
Charles T. Hopkins(2)(5)... 58 Partner at KPMG LLP, an international 2000
accounting and consulting firm, from 1975 to
1999 (Retired); Managing Partner at KPMG LLP
from 1992 to 1998; Director of Charming
Shoppes, Inc., a chain of specialty women's
apparel stores, since 1999.
---------------
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
(4) Member of the Nominating Committee.
(5) Member of the Finance Committee.
7
THE BOARD OF DIRECTORS
BOARD OF DIRECTORS' MEETINGS AND COMMITTEES
The Board of Directors held six meetings during the fiscal year 2000. Each
member of the Board of Directors attended at least 75% of the total number of
meetings of the Board and of all Committees in which he or she was a member. The
Board of Directors has established standing Audit, Compensation, Executive,
Finance and Nominating committees. Each committee is composed solely of
non-employee members of the Board of Directors, except the Executive Committee,
of which Owen Farren, the Company's Chairman, President and Chief Executive
Officer, is a member.
The Audit Committee, which presently consists of Robert J. Sanator, J.
Edward Odegaard and Charles T. Hopkins, each of whom meets the criteria for
"independence" under New York Stock Exchange Rule 303.01, held seven meetings
during fiscal year 2000. The committee operates under a written charter adopted
by the Board of Directors, attached as Appendix A, and selects, subject to
approval of the Board of Directors, a firm of independent certified public
accountants to audit the books and accounts of the Company and its subsidiaries
for the fiscal year for which they are appointed. In addition, the committee
reviews and approves the scope and cost of all services (including nonaudit
services) provided by the firm selected to conduct the audit. The committee also
monitors the effectiveness of the audit effort and the Company's financial
reporting, and reviews the Company's financial and operating controls.
The information contained in this proxy statement with respect to the Audit
Committee charter and the independence of the members of the Audit Committee
shall not be deemed to be "soliciting material" or to be "filed" with the
Securities and Exchange Commission, nor shall such information be incorporated
by reference into any future filing under the Securities Act of 1933, as amended
(the "Securities Act"), or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), except to the extent that the Company specifically incorporates
it by reference in such filing.
The Compensation Committee, which presently consists of J. Dwane
Baumgardner, Richard E. Caruso and Walter I. Rickard, held four meetings during
fiscal year 2000. The committee recommends the compensation to be paid to
executive officers. The committee also recommends the stock options to be
granted to key employees under the Company's 1991 Long Term Incentive Plan (see
Compensation Committee Report), as well as the amendments to be adopted for the
Company's defined contribution pension plan.
The Executive Committee, which presently consists of J. Dwane Baumgardner,
Owen Farren, Walter I. Rickard and Robert J. Sanator, did not meet during fiscal
year 2000. The committee has and may exercise all the authority of the Board of
Directors, except that the 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 Finance Committee, which presently consists of J. Edward Odegaard,
Judith A. Maynes and Charles T. Hopkins, held one meeting during fiscal year
2000. The committee reviews the Company's financing alternatives, investing
activities, and analyses and makes recommendations with respect to the Company's
capital structure.
The Nominating Committee, which presently consists of Richard E. Caruso,
Walter I. Rickard and Judith A. Maynes, held three meetings during fiscal year
2000. The committee recommends the number and names of persons to be elected by
the shareholders as directors of the Company. The Company will consider nominees
recommended by shareholders. Currently there are no formal procedures for
shareholders to follow in submitting such recommendations.
8
COMPENSATION OF DIRECTORS
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.
Mr. Farren does not receive a quarterly retainer fee or a fee for attending
meetings of the Board of Directors and the Executive Committee.
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.
Under the Directors' Plan, Messrs. Baumgardner and Caruso and George R.
Hornig (who served as a director until February 2001), elected for fiscal year
2000 to receive non-qualified stock options in lieu of all such fees. In
accordance with such elections, they received options to acquire 6,284 shares,
5,992 shares and 5,408 shares, respectively, during fiscal year 2000.
EXECUTIVE OFFICER COMPENSATION
The following table sets forth certain information regarding compensation
awarded to, earned by or paid to the Chief Executive Officer and the Company's
other executive officers whose total annual salary and bonus exceeded $100,000
during fiscal year 2000 (the "Named Executive Officers") for services in all
capacities during fiscal year ending December 31, 2000, fiscal year ending July
31, 1999, the period August 1, 1999 through December 31, 1999 and fiscal year
ending July 31, 1998.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS
----------------
ANNUAL COMPENSATION SECURITIES ALL OTHER
---------------------- UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS/SARS (#) ($)(3)(4)
--------------------------- ---- ---------- --------- ---------------- ------------
Owen Farren....................... 2000 270,000 0 0 28,769
President & CEO 1999(1) 111,404 0 20,000 1,708
1999 252,231 238,275(2) 24,000 29,149
1998 237,289 163,000 20,000 28,276
James E. Morris(5)................ 2000 109,000 0 0 6,001
Vice President/Corporate 1999(1) 45,173 0 5,000 3,801
Controller & Treasurer 1999 105,262 38,500 5,000 8,502
1998 100,567 54,000 5,500 7,017
David R. Nuzzo.................... 2000 165,000 0 0 7,365
Vice President -- Finance and 1999(1) 68,300 0 12,500 2,071
Administration & Secretary 1999 155,708 58,000 7,500 8,298
1998 98,077 65,000 25,000 2,450
9
---------------
(1) For the period August 1, 1999 through December 31, 1999.
(2) Includes $121,275 received under the terms of a special incentive program
for senior executives that was based on the Company's performance during the
three fiscal years ended July 31, 1998; and $117,000 which was based on the
performance of the Company and the achievement of individual goals during
fiscal year 1999.
(3) Includes Company matching contributions and profit sharing contributions
made to the SL Industries Inc., Savings and Pension Plan for Messrs. Farren,
Morris and Nuzzo in fiscal year 1998 in the amounts of $7,353, $6,448, and
$2,000, respectively; in fiscal year 1999, for Messrs. Farren, Morris and
Nuzzo in the amounts of $8,249, $7,882 and $7,398, respectively; in the 5
month period for 1999 for Messrs. Farren, Morris and Nuzzo in the amounts of
$1,333, $3,538 and $1,696, respectively; and in calendar year 2000, for
Messrs. Farren, Morris and Nuzzo in the amounts of $7,923, $5,386 and
$6,519, respectively. The Company's 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 year 1998 and calendar
year 1999 earnings and fiscal year 1999 earnings. Under the plan, benefits
are payable at retirement as a lump sum or as an annuity.
(4) Includes premiums paid for group term life insurance for Messrs. Farren,
Morris, and Nuzzo 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.
(5) Mr. Morris retired from the Company on December 31, 2000.
Mr. Morris is scheduled to receive a $30,000 per year annuity, payable at
age 65 for life with a term certain of 10 years. This agreement is funded by the
purchase of a life insurance policy and provides both a death and retirement
benefit, and the Company is both owner and beneficiary of the policy. If the
participant dies after becoming eligible for retirement benefits and before the
guaranteed retirement benefits have been paid, the unpaid balance of the
benefits guaranteed will continue to be paid by the Company to the designated
beneficiary.
Pursuant to a standing resolution of the Board of Directors, upon the death
of any executive officer, having more than five (5) years of service, the
Company will pay his spouse, over a 36-month period, an amount equal to the
officer's salary at his death.
The Company did not grant any stock options to Named Executive Officers
during fiscal year 2000.
AGGREGATED STOCK OPTION EXERCISES IN LAST
FISCAL YEAR (2000) AND FISCAL YEAR-END STOCK OPTION VALUES
The following table sets forth the number of shares of Common Stock of the
Company received upon exercise of stock options by each of the Named Executive
Officers during the last completed fiscal year and the aggregate number of
shares of Common Stock of the Company issuable upon exercise of options held by
each of the Named Executive Officers at December 31, 2000.
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED UPON VALUE FISCAL YEAR END (#) FISCAL YEAR END ($)(1)
NAME EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------- ------------ ------------------------- -------------------------
Owen Farren(2)........... 7,000 58,500 213,400/21,600 1,144,188/3,000
James E. Morris.......... 26,500 190,000 15,500/0 3,969/0
David R. Nuzzo........... N/A N/A 34,500/10,500 1,406/938
---------------
(1) Computed by multiplying the number of options by the difference between (i)
the per share closing price of $11.4375 at fiscal year end and (ii) the
exercise price per share.
(2) Shares exercised between August 1, 1999 and December 31, 1999
10
SEVERANCE AGREEMENTS WITH EXECUTIVE OFFICERS
In March 2001, the Company reported that it had completed its previously
announced evaluation of strategic alternatives and had determined to explore a
sale of the Company, with the assistance of Credit Suisse First Boston, in order
to maximize value for shareholders. In order to preserve the value of the
Company during the sale process, the Board of Directors determined that it was
in the best interest of the Company to take actions to retain its senior
management and key employees during the sale process.
As a result, in May 2001, the Company entered into Change-in-Control
Agreements (the "Agreements") with Owen Farren, David R. Nuzzo and Jacob
Cherian, respectively, under which the Company would provide certain payments
and benefits if the executive officer terminates his employment, or is
terminated by the Company, within one year following a change-in-control of the
Company. A change-in-control would occur if, for example, a person becomes the
beneficial owner of 30 percent or more of the voting power of the Company's
outstanding stock or if, under certain circumstances, the present members of the
Company's Board of Directors shall no longer constitute a majority of the Board.
There are additional events or circumstances which could result in the
occurrence of a change-in-control.
The Agreements provide that the executive officer shall receive two times
(2.99 times in the case of Mr. Farren) the average of his combined annual salary
and cash bonus paid for each of the three full calendar years ending prior to
the change-in-control. The executive officer shall also receive medical and
other insurance for 24 months (36 months in the case of Mr. Farren) after
becoming entitled to receive a change-in-control payment. Each executive officer
agrees to remain employed with the Company for certain periods subsequent to a
change-in-control upon written request of the Company on or before the date of
the change-in-control, and agrees not to compete with the Company for a period
of one year after his termination date.
Under certain circumstances, if Messrs. Farren and Nuzzo do not receive the
payments contemplated by the Agreements, they will become entitled to receive
benefits according to their respective Severance Pay Agreements, as described
below.
In 1991, the Company entered into a Severance Pay Agreement with Mr.
Farren, providing for payment equal to his annual base salary or $135,000,
whichever is greater, and to continue for a limited time certain fringe benefits
in the event of involuntary termination of his employment, or voluntary
termination for "good reason." Good reason is defined to include (i) a demotion
in position, authority or similar action which would substantially alter the
officer's standing in the Company, (ii) a reduction in salary or failure to
increase compensation commensurate with other executive officers, (iii) a
relocation of the officer's place of employment, (iv) a change of control of the
Company, (v) incurring any serious illness or disability, or (vi) any other
circumstance as determined by the Board of Directors in good faith.
In 1997, the Company entered into a Severance Pay Agreement with Mr. Nuzzo
providing for payment of his annual base salary for a period not greater than 24
months, or until he secures new employment, whichever comes first, but, in any
event, not less than 12 months in the event of termination of his employment
within six months of a change-in-control of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal year 2000, the Compensation Committee members were J. Dwane
Baumgardner (Chairman), Richard E. Caruso and Walter I. Rickard, all of whom are
non-employee directors of the Company.
The information set forth in the following Report of the Compensation
Committee of the Board of Directors, the Report of the Audit Committee of the
Board of Directors and the Performance Graph shall not be deemed incorporated by
reference into any existing or future filings under the Securities Act or the
Exchange Act, which incorporate by reference this Proxy Statement, except to the
extent that the Company specifically incorporates such information by reference.
11
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 2000, the members of the Compensation
Committee were J. Dwane Baumgardner (Chairman), Richard E. Caruso and Walter I.
Rickard, all of whom were (and 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 Mr.
Owen Farren, the Company's President and Chief Executive Officer. 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. 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
12
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. The Company's 1991 Long Term Incentive Plan encourages stock
ownership by authorizing the grant of stock options to officers and key
employees of the Company. From time to time, the Compensation Committee provides
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 salary for the Company's chief executive officer, Owen Farren, for
fiscal year 2000 was established by the Compensation Committee based, in large
part, on the performance of the Company during fiscal year 1999. Based on the
above considerations, effective January 1, 2000, the Compensation Committee
increased Mr. Farren's annual base salary by approximately 6%, from $252,231 to
$270,000. The increase was reviewed and ratified by the Board of Directors.
Because the Company did not meet its performance targets during fiscal year
2000, the Company did not pay cash bonuses or grant stock options to its
executive officers for fiscal year 2000 (other than the grant of stock options
to an executive officer in connection with the commencement of his employment).
Sincerely yours,
Compensation Committee:
J. Dwane Baumgardner, Chairman
Richard E. Caruso
Walter I. Rickard
13
PERFORMANCE GRAPH
The following Performance Graph summarizes the cumulative total shareholder
return on an investment of $100 on July 31, 1995 in the Company's Common Stock
for the period from that date to December 31, 2000, as compared to the
cumulative total return on a similar investment of $100 on that date in stocks
comprising the S&P Electrical 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.
[Performance Graph]
---------------------------------------------------------------------------------------------------------------------------
31-JULY-1995 31-JULY-1996 31-JULY-1997 31-JULY-1998 31-JULY-1999 31-DEC-1999 31-DEC-2000
---------------------------------------------------------------------------------------------------------------------------
SL Industries, Inc. $100 $149 $181 $260 $220 $209 $207
Russell 2000 Stock
Index $100 $105 $138 $140 $148 $168 $161
S&P Electrical
Equipment Group $100 $132 $219 $265 $327 $447 $408
14
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Directors of the Company is composed of
three independent directors, each of whom meets the criteria for "independence"
under New York Stock Exchange Rule 303.01, and operates under a written charter
adopted by the Board of Directors, attached as Appendix A. The Audit Committee
oversees the Company's financial reporting processes on behalf of the Board of
Directors. Management has the primary responsibility for the financial
statements and the financial reporting process including the systems of internal
accounting controls. In fulfilling its oversight responsibilities, the Audit
Committee reviewed the Company's audited financial statements for the fiscal
year ended December 31, 2000 with management, including a discussion of the
quality, not just the acceptability, of accounting principles, the
reasonableness of significant judgments, and the clarity of disclosures in the
financial statements.
The Audit Committee has also reviewed and discussed the Company's audited
financial statements for the fiscal year ended December 31, 2000 with the
Company's independent accountants, who are responsible for expressing an opinion
on the conformity of the Company's audited financial statements with accounting
principles generally accepted in the United States. In addition, the Audit
Committee has discussed with the Company's independent accountants the matters
required to be discussed by Statement on Auditing Standards No. 61, as amended,
"Communications with Audit Committees," relating to conduct of the audit. The
Audit Committee has received the written disclosures and the letter from the
independent accountants required by Independence Standards Board Standard No. 1,
"Independence Discussions with Audit Committees," and discussed with the
independent accountants their independence.
Based on the Audit Committee's review of the Company's audited financial
statements for the fiscal year ended December 31, 2000 and the review and
discussions described in the foregoing paragraphs of this report, the Audit
Committee recommended to the Board of Directors that the audited financial
statements for the fiscal year ended December 31, 2000 be included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000
for filing with the Securities and Exchange Commission.
Sincerely yours,
Audit Committee:
Robert J. Sanator, Chairman
Charles T. Hopkins
J. Edward Odegaard
15
PROPOSAL 2
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed Arthur Andersen LLP,
certified public accountants, as the Company's independent auditors for the
fiscal year ending December 31, 2002. The submission of the appointment of
Arthur Andersen LLP for ratification by the shareholders is not required by law
or by the Company's By-Laws and is being done for the sole purpose of
ascertaining the views of the shareholders of the Company with respect to such
appointment.
If such appointment is not ratified, the Board of Directors may appoint
another firm as the Company's independent auditors for the fiscal year ending
December 31, 2002. Representatives of Arthur Andersen LLP are expected to be
present at the Meeting, will be given an opportunity to make a statement if they
desire to do so, and will be available to answer appropriate questions from
shareholders.
The Audit Committee of the Board of Directors has determined that the
provision of the services set forth in the "All Other Fees" section below is
compatible with maintaining the independence of Arthur Andersen LLP with respect
to the Company for the fiscal year ended December 31, 2000.
AUDIT FEES
The Company was billed a total of $202,455 by Arthur Andersen LLP for
professional fees rendered in connection with the audit of the Company's annual
financial statements for the fiscal year ended December 31, 2000, and for 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, 2000,
and for statutory audits of the Company's foreign subsidiaries.
FINANCIAL INFORMATION SYSTEM DESIGN AND IMPLEMENTATION FEES
Arthur Andersen 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; and (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,
2000.
ALL OTHER FEES
The Company was billed a total of $171,579 by Arthur Andersen 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, 2000, related primarily to tax matters.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than ten percent (10%) of the Company's
Common Stock (collectively, the "Reporting Persons") to file initial reports of
ownership and reports of changes in ownership of the Common Stock with the
Securities and Exchange Commission and the New York Stock Exchange. Reporting
Persons are required to furnish the Company with copies of all forms that they
file under Section 16(a). Based solely upon a review of the copies of such forms
received by the Company or written representations from Reporting Persons, the
Company believes that, with respect to fiscal year 2000, all Reporting Persons
complied with all applicable filing requirements under Section 16(a).
16
SUBMISSION OF SHAREHOLDER PROPOSALS FOR 2002 ANNUAL MEETING
Any shareholder who, in accordance with and subject to the provision of the
proxy rules of the Securities and Exchange Commission, wishes to submit a
proposal for inclusion in the Company's Proxy Statement for its 2002 Annual
Meeting of Shareholders must deliver such proposal in writing to the Secretary
of the Corporation at the Company's principal executive offices at Suite A-114,
520 Fellowship Road, Mt. Laurel, New Jersey 08054. With respect to shareholder
proposals, the Company's By-Laws require written notice 60 calendar days in
advance of the Annual Meeting to raise business at the Annual Meeting, including
the nomination of Directors. The complete text of such By-Law provision was
included as an exhibit to the Company's October 31, 1995 Form 10-Q. Any
shareholder wishing an additional copy of such provision should call the
Secretary of the Company.
The Company intends to announce in appropriate filings with the Securities
and Exchange Commission the date on which the 2002 Annual Meeting will be held.
The Company will also announce the date by which shareholders must submit
proposals for inclusion in the Proxy Statement for the 2002 Annual Meeting.
OTHER MATTERS
The Board of Directors does not know of any matters other than those
described in this proxy statement that will be presented for action at the
meeting. If other matters properly come before the meeting, the persons named as
proxies intend to vote the shares they represent in accordance with their
judgment.
THE ANNUAL REPORT OF THE COMPANY FOR ITS FISCAL YEAR ENDED DECEMBER 31,
2000, WAS MAILED ON APRIL 20, 2001, TO ALL SHAREHOLDERS OF RECORD. COPIES OF THE
COMPANY'S FORM 10-K REPORT FOR THAT YEAR, AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, WILL BE AVAILABLE WITHOUT CHARGE TO SHAREHOLDERS BY
WRITING: DAVID R. NUZZO, SECRETARY, SL INDUSTRIES, INC., SUITE A-114, 520
FELLOWSHIP ROAD, MT. LAUREL, NEW JERSEY 08054.
By Order of the Board of Directors
/s/ David R. Nuzzo
DAVID R. NUZZO
Secretary
17
APPENDIX A
AUDIT COMMITTEE CHARTER OF THE BOARD OF DIRECTORS
OF SL INDUSTRIES, INC.
PURPOSE. The primary function of the Audit Committee is to assist the
Board of Directors in fulfilling its oversight responsibilities by reviewing:
(i) the quarterly financial information included in the Company's quarterly news
releases; (ii) the annual financial reports provided by the Company to its
shareholders and to the United States Securities and Exchange Commission (the
"SEC"); (iii) the Company's systems of internal controls regarding finance,
accounting and legal compliance that management and the Board of Directors shall
have established; and (iv) the Company's auditing, accounting and financial
reporting processes generally. The Audit Committee's primary duties and
responsibilities are to:
- Serve as an independent and objective party to monitor the Company's
financial reporting process and internal control system.
- Review and evaluate the audit efforts of the Company's independent
auditors.
- Provide an open avenue of communication between and among the independent
auditors, financial and senior management and the Board of Directors.
COMPOSITION. The Audit Committee shall be comprised of at least three (3)
financially literate independent directors, one of which has an accounting or
financial management background. The members of the Committee shall be appointed
by the Board of Directors.
MEETINGS. The Committee formally meets four times each year, and has the
authority to receive all relevant information in order to fulfill its oversight
responsibilities. At the first Board of Directors regular meeting that follows
one or more Audit Committee meetings, the Chairman of the Audit Committee, who
is appointed by the Board of Directors, advises the Board of matters reviewed
and discussed by the Committee at its meetings.
RESPONSIBILITIES AND DUTIES. To fulfill its responsibilities and duties
the Audit Committee should:
- Recommend its selection of independent auditors to the Board of Directors
for ratification by the shareholders.
- Evaluate the performance of the independent auditors.
- Recommend the replacement of the independent auditors to the Board of
Directors.
- Review and approve the scope, fees, approach, and results of the annual
audit with the independent auditors.
- Be advised of and review non-audit services to be provided by the
independent auditors.
- Meet at least annually with management and the independent auditors to
discuss any matters that they wish to bring to the Committee's attention.
As part of these meetings, confer privately with each of the two groups.
- Advise the independent auditors that they are accountable to the Audit
Committee and the Board of Directors.
- Review the independent auditors' comments regarding the strengthening of
internal controls.
- Review the effectiveness of the Company's process for assessing and
continuously improving internal controls and the Company's risk
management process.
- Review and assess material estimates and judgments underlying both
quarterly and annual financial results with management and the
independent auditors.
- Review and approve the public disclosure of quarterly and annual
financial results.
A-1
- Review and approve Meeting Minutes that set forth specifics such as:
- the time spent at each meeting;
- the topics considered; and
- any reports on the topics that were distributed to Committee members.
- Require that the independent auditors submit a formal written statement
annually regarding relationships and services which may affect their
objectivity and independence and recommend that the Board of Directors
take appropriate action to address the auditor's independence, when
necessary.
- Provide a report containing the disclosures required by the SEC and the
New York Stock Exchange to the Board of Directors for inclusion in the
Company's annual proxy statements.
- Provide a disclosure regarding the Board of Directors' adoption of a
written charter for the Audit Committee for inclusion in the Company's
annual proxy statements and a copy of the Audit Committee Charter as an
appendix to the Company's proxy statements at least once every three
years.
- Review and reassess the adequacy of this Charter on an annual basis.
A-2
PROXY
SL INDUSTRIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
SL INDUSTRIES, INC., FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON JANUARY 22, 2002
The undersigned shareholder of SL Industries, Inc., a New Jersey corporation,
does hereby constitute and appoint Owen Farren and Walter I. Rickard, and each
of them (with full power to act alone), attorneys-in-fact and proxies of the
undersigned, with full powers of substitution, for and in the name, place and
stead of the undersigned, to vote as specified below all of the common shares
of the Company which the undersigned is entitled to vote at the Annual Meeting
of Shareholders of the Company to be held at the Doubletree Guest Suites,
Fellowship Road, Mount Laurel, New Jersey, January 22, 2002, at 9:00 A.M., and
at any adjournment or postponement thereof (the "Annual Meeting"). This proxy
revokes all prior proxies given by the undersigned. The undersigned
acknowledges receipt of the Notice of Annual Meeting of Shareholders and Proxy
Statement relating to the Annual Meeting.
This proxy, when properly executed, will be voted in the manner specified below.
WITH RESPECT TO THE ELECTION OF DIRECTORS, WHERE NO VOTE IS SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF THE EIGHT (8) NOMINEES FOR DIRECTOR
LISTED BELOW. WHERE NO VOTE IS SPECIFIED FOR PROPOSAL (2), THIS PROXY WILL BE
VOTED FOR PROPOSAL (2). The individuals named above are authorized to vote in
their discretion on any other matters that properly come before the meeting.
CONTINUED AND TO BE COMPLETED, SIGNED
AND DATED ON REVERSE SIDE
PLEASE VOTE YOUR SHARES TODAY!
MARK, SIGN AND DATE THE PROXY BELOW.
RETURN IN THE ENCLOSED ENVELOPE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2
1. ELECTION OF DIRECTORS NOMINEES:
J. DWANE BAUMGARDNER JUDITH MAYNES
RICHARD E. CARUSO J. EDWARD ODEGAARD
OWEN FARREN WALTER I. RICKARD
CHARLES T. HOPKINS ROBERT J. SANATOR
[ ] FOR the election as directors for the ensuing year of all nominees listed
above (except as stricken out above) (TO WITHHOLD AUTHORITY TO VOTE FOR ANY
SPECIFIC NOMINEES, CHECK THE FOREGOING 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 APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2002.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Upon all other matters properly coming before the meeting and any
adjournment or postponement thereof.
Dated , 20__ Signature:
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Please sign exactly as your name appears hereon. Executors, administrators or
trustees should indicate their capacities. If stock is held in joint names, both
registered holders should sign.