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))
[ ] Definitive Proxy Statement
[X] 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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[ ] 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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December 27, 2001
Dear Fellow SL Industries Shareholder:
By now you should have received the company's proxy material relating to the
annual meeting of shareholders scheduled for January 22, 2002. You may have also
received another set of proxy material from a group of dissident shareholders
calling itself the RORID Committee headed by Warren Lichtenstein that is
attempting to take control of your company by electing their own slate of
directors. WE STRONGLY URGE YOU TO PROVIDE US WITH YOUR PROXY BY VOTING THE
ENCLOSED WHITE PROXY CARD AND DISREGARDING THE GOLD PROXY CARD SOLICITED BY THE
RORID COMMITTEE.
WHO ARE THESE DISSIDENTS AND WHAT DO THEY WANT?
We believe that the RORID Committee is a group led by Warren Lichtenstein, one
of the five dissident nominees for director. Mr. Lichtenstein and his associates
regularly engage in proxy fights to take control of small cap companies. It's
important to note that:
- Two other nominees are employees of companies controlled by Mr.
Lichtenstein.
- The fourth nominee is a lawyer for Mr. Lichtenstein's investment
partnership.
- The fifth nominee also works with Mr. Lichtenstein on his takeover
contests.
IF THE LICHTENSTEIN GROUP'S NOMINEES ARE SUCCESSFUL IN THEIR CAMPAIGN TO WREST
CONTROL OF YOUR BOARD OF DIRECTORS AND YOUR COMPANY, WILL THEY OWE THEIR
ALLEGIANCE TO MR. LICHTENSTEIN? WILL THEY - BASED ON THEIR TRACK RECORD - MANAGE
THE COMPANY FOR THE BENEFIT OF ALL SHAREHOLDERS?
As stated in the Lichtenstein group's proxy materials, in Mr. Lichtenstein's
discussions with us and in his statements in the media, the Lichtenstein group
advocates an IMMEDIATE sale of your company. In a recently published article,
Mr. Lichtenstein declared, in referring to your company, "We've nominated five
people to the board, and we want to see the company sold." Further, as stated in
his group's proxy materials, "It is the Committee's position that SL should be
sold in its entirety AT THE CURRENT TIME."
Why are we opposed to the immediate "fire sale" of the Company?
WE BELIEVE THAT THE IMMEDIATE SALE OF OUR COMPANY IS NOT IN THE BEST INTERESTS
OF ALL SL SHAREHOLDERS AND IS INCONSISTENT WITH THE BOARD'S ONGOING PROGRAM TO
MAXIMIZE SHAREHOLDER VALUE.
Your board of directors fully understands its fiduciary responsibility to
maximize shareholder value, and the board has taken actions to do so. This year
we retained the investment banking firm of Credit Suisse First Boston
Corporation ("CSFB") to assist us in thoroughly evaluating the strategic
alternatives available to our company, including the sale of all or parts of SL
Industries. After exhaustive efforts and with the advice of CSFB, we concluded
that due to the difficult financial and economic environment, among other
factors, potential purchasers discounted their preliminary bids to levels that
were not reflective of the value of our business.
We believe that the company should be sold as soon as reasonably practicable but
not in a "fire sale." Unlike the Lichtenstein group, we are convinced that the
best course of action is to manage the Company to optimize its operating
performance and strengthen its balance sheet so that when a suitable purchaser
for SL or its business units is found - which we hope will be sooner rather than
later - we will be able to negotiate a purchase price that gives shareholders
the maximum value for their investment in the company.
THE CURRENT BOARD OF DIRECTORS WILL CONTINUE TO EVALUATE ANY AND ALL
ALTERNATIVES THAT CAN BRING SHAREHOLDERS THE GREATEST VALUE.
We believe that our strategies will result in higher returns for our
shareholders than could be achieved from the immediate sale of our company at
"fire sale" prices. THROUGH AGGRESSIVE CASH MANAGEMENT, COST REDUCTIONS AND
DISCONTINUING THE OPERATIONS OF TWO OF OUR FOUR MEXICAN FACILITIES, WE HAVE
SIGNIFICANTLY ENHANCED OUR FINANCIAL CONDITION OVER THE PAST SEVERAL MONTHS. We
feel that with an anticipated economic recovery in 2002, we will be well
positioned to generate improved financial results, increasing the potential
realizable value from SL or its business units.
WHY IS LICHTENSTEIN ATTACKING SL INDUSTRIES STOCK PERFORMANCE?
The dissident group's proxy materials state that the decrease in our company's
share price is directly linked to our management's and our directors' efforts.
This statement ignores adverse conditions affecting SL's core markets, the
economy in general and small cap companies, specifically. In a recently
published article, the principal of an investment partnership stated:
"In times like these, small cap companies are out of favor....There is
no catalyst to help the stocks of these companies go up. ...Everyone
likes big caps, no one likes small caps. Everyone likes value, no one
likes growth. Institutional investors can't take a big enough position
to make small caps worth their while. These companies, sometimes called
orphan stocks, are being neglected...."
IT'S INTERESTING THAT THE SOURCE OF THIS STATEMENT IS WARREN LICHTENSTEIN!
WHAT IS LICHTENSTEIN'S TRACK RECORD IN MANAGING OTHER COMPANIES?
It seems as though Mr. Lichtenstein has been most selective in disclosing, in
his group's proxy statement, his track record with companies that he has
controlled.
We thought that it would be informative to view the stock price performance of
some of the other companies on whose boards Mr. Lichtenstein and certain members
of the Lichtenstein group serve.
TANDYCRAFTS, INC. (PINK SHEETS: TACR)
- NOVEMBER 21, 2000 The day on which Mr. Lichtenstein was elected to the board of
directors.
- GLEN KASSAN, MARK The other members of the RORID Committee on the board of
SCHWARZ Tandycrafts.
- MAY 14, 2001 The day Tandycrafts shares were delisted from the New York
Stock Exchange.
- MAY 15, 2001 The day Tandycrafts filed for bankruptcy protection.
- ZERO The number of annual and quarterly reports that have been
filed by Tandycrafts since Messrs.Lichtenstein, Kassan and
Schwarz have served as directors. Each failure to file is a
violation of SEC regulations.
- 123,000 SHARES The number of Tandycrafts shares given by Tandycrafts to
companies controlled by Messrs. Lichtenstein and Schwarz to
settle litigation relating to a proxy fight.
- ZERO The number of Tandycrafts shares received by Tandycrafts' other
shareholders in connection with the proxy fight.
PUROFLOW INCORPORATED (OTC BULLETIN BOARD: PFLW)
- SEPTEMBER 16, 1999 The day on which Mr. Lichtenstein was elected to the board of
directors.
- $11.25 Share price on September 17, 1999 (adjusted to account for the
1 for 15 reverse stock split effected on October 9, 2001).
- $5.50 Share price on December 24, 2001.
- 51% Percentage share value loss from September 17, 1999 to
December 24, 2001.
WEBFINANCIAL CORPORATION (NASDAQ: WEFN)
- NOVEMBER 20, 1996 The day on which Mr. Lichtenstein was elected to the board of
directors.
- CEO & PRESIDENT The executive positions with WebFinancial currently held by
Mr. Lichtenstein.
- MARK SCHWARZ The other member of the RORID Committee on the board of
WebFinancial.
- GLEN KASSAN The member of the RORID Committee who serves as the Vice
President, CFO and Secretary of WebFinancial.
- $3.50 Share price on November 20, 1996 (adjusted to account for the
1 for 2 reverse stock split effected on November 23, 1998).
- $2.68 Share price on December 24, 2001.
- 23% Percentage share value loss from November 20, 1996 to December
24, 2001.
- 187% TRAIL PEER According to WebFinancial's 2001 proxy materials, the
GROUP percentage by which WebFinancial's share price performance has
trailed its peer group index for the
period of January 31, 1996 through
December 31, 2000.
GATEWAY INDUSTRIES, INC. (OTC BULLETIN BOARD: GWAY)
- MAY, 1994 Month and year in which Mr. Lichtenstein was elected to the
board of directors.
- $3.594 Share price on May 11, 1994 (the lowest closing price in the
month of May in 1994 adjusted to account for the 1 for 5
reverse stock split on September 22, 1994).
- $.98 Share price on December 21, 2001.
- 73% Percentage share value loss from May 11, 1994 to December 21,
2001.
MR. LICHTENSTEIN WAS PART OF A GROUP OF DEFENDANTS THAT WERE ENJOINED BY A
UNITED STATES FEDERAL DISTRICT COURT JUDGE FROM VOTING CERTAIN OF THEIR SHARES
IN A PROXY FIGHT FOR CONTROL OF A SMALL CAP MEDICAL EQUIPMENT COMPANY. THE COURT
ISSUED AN ORDER DATED FEBRUARY 29, 1996, GRANTING, IN PART, THE COMPANY'S MOTION
FOR A PRELIMINARY INJUNCTION AGAINST MR. LICHTENSTEIN AND THE OTHER DEFENDANTS,
ON THE GROUNDS THAT THE COMPANY HAD DEMONSTRATED A PROBABILITY OF SUCCESS ON THE
MERITS OF ITS ASSERTION THAT THE DEFENDANTS, INCLUDING MR. LICHTENSTEIN, HAD
VIOLATED THE FEDERAL SECURITIES LAWS.
A SCHEDULE 13D AMENDMENT FILED BY MR. LICHTENSTEIN, STEEL PARTNERS II, L.P., AN
INVESTMENT PARTNERSHIP CONTROLLED BY MR. LICHTENSTEIN, AND OTHERS DISCLOSED THAT
ON SEPTEMBER 27, 2001, STEEL SOLD 1,536,100 SHARES OF TANDYCRAFTS COMMON STOCK
IN THE OPEN MARKET. WE DO NOT UNDERSTAND HOW THE SALE OF APPROXIMATELY 12.5% OF
TANDYCRAFTS' OUTSTANDING SHARES IN THE OPEN MARKET BY STEEL, AN AFFILIATE OF
TANDYCRAFTS, WAS LEGALLY ACCOMPLISHED WITHOUT THE FILING OF A REGISTRATION
STATEMENT. MOREOVER, FROM OCTOBER 30, 2001 THROUGH NOVEMBER 1, 2001, STEEL
PURCHASED 1,585,399 SHARES OF TANDYCRAFTS COMMON STOCK, DESPITE THE FACT THAT
TANDYCRAFTS WAS NOT CURRENT IN ITS SEC FILINGS.
PROTECT YOUR INVESTMENT - REJECT LICHTENSTEIN'S "FIRE SALE"
PLATFORM - VOTE THE ENCLOSED WHITE PROXY CARD FOR YOUR SL
DIRECTORS TODAY!
Your vote at this year's annual meeting is particularly important. Regardless of
the number of shares you own - every share counts - we urge you to vote FOR the
directors on the enclosed WHITE proxy card and to disregard the GOLD proxy card
when you receive it.
Even if you have already voted a GOLD proxy card, it is not too late to change
your mind, and you have every legal right to do so. Simply sign and date the
enclosed WHITE proxy card and return it in the envelope provided. Only the
latest dated proxy will be counted at the meeting.
If you have any questions or require assistance in voting your proxy, please
call MacKenzie Partners at (800) 322-2885. Thank you for your continued support.
Sincerely,
Owen Farren
Chairman of the Board