SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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[ ] 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)
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and 0-11.
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
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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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The following information was filed recently by SL Industries (the "Registrant")
on a Current Report on a Form 8-K with the Securities and Exchange Commission
and announced in a press release on January 21, 2002:
An election of the Board of Directors (the "Board") of SL Industries,
Inc. (the "Company") is scheduled to be held on January 22, 2002 at the
Company's 2001 Annual Meeting of Shareholders. It is possible that, as a result
of the election, the incumbent members of the Board would no longer constitute a
majority of the Board. Such a change in the composition of the Board would, if
it should occur, constitute a "change-in-control" of the Company as defined in
the respective Change in Control Agreements dated as of May 1, 2001, as amended,
between the Company and each of its three executive officers (the "Executives")
(the "Agreements"). Each of the Executives has submitted a notice of termination
of his employment with the Company which will become effective only if and when
such a change of control occurs at or prior to the election of directors.
The Board of Directors has determined that, in the event that such a
change in control occurs, it would be in the best interest of the Company and
its shareholders for each of the three Executives to remain employed with the
Company after the election in order to facilitate the transition to a new Board.
Therefore, pursuant to Section 4 of the Agreement, the Company has formally
requested, and each Executive has agreed that the Executive remain employed with
the Company for up to ninety days after a change-in-control, should one occur as
a result of the upcoming election or otherwise as a result of the related proxy
contest with the RORID Committee. (The RORID Committee is a group of
shareholders, including Steel Partners II, L.P. (Steel Partners) and Newcastle
Partners, L.P. (Newcastle Partners), which is attempting to obtain control of
the Company's Board of Directors.)
Two of the Executives, Owen Farren and David Nuzzo, attended a meeting
in early November 2001, with representatives of Steel Partners, including Warren
Lichtenstein, and representatives of Newcastle Partners. The two Executives have
informed the Company that, at the meeting, a representative of Newcastle
Partners stated that it was very typical for change in control contracts to be
abrogated by a new board of directors and that the Company's President, Owen
Farren, should agree to arrange for a transfer of control of the Company's Board
to Steel Partners and Newcastle Partners. Mr. Farren was told that, if he did
so, new directors nominated by Steel Partners and Newcastle Partners would
negotiate an arrangement with Mr. Farren so that he would not be left with
nothing under his Change-in-Control Agreement. Mr. Farren declined this offer.
The two Executives have reported that, based on the threat made at Mr. Farren,
they believe that the RORID Committee might not honor any of the
Change-in-Control Agreements between the Company and the three Executives if its
nominees obtained control of the Company's Board of Directors.
The Board of Directors believes that such an action by a successor Board
of Directors controlled by nominees of the RORID Committee would frustrate the
intent of the Company's prior decision to enter into such agreements and would
deprive the Company of the benefits and protections afforded to the Company
under provisions of the Agreements which require the Executives to waive claims
against the Company, continue employment for certain transition periods and give
non-compete and non-solicitation protections to the Company.
For the purpose of insuring that the Change-in-Control payments will be
paid to the Executives in such manner and at such times as specified in the
Change-In-Control Agreements, the Company has established a trust holding funds
in an amount sufficient to enable it to meet its obligations under the
Change-in-Control Agreement, thereby giving reassurance to the Executives and
enabling the Company to retain the protections and benefits of such agreements.