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 / /
Filed by a Party other than the Registrant: /x/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, For Use of the Commission 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)
THE RORID COMMITTEE
STEEL PARTNERS II, L.P.
WARREN G. LICHTENSTEIN
NEWCASTLE PARTNERS, L.P.
MARK E. SCHWARZ
GLEN KASSAN
JAMES R. HENDERSON
STEVEN WOLOSKY
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/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:
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/ / Fee paid previously with preliminary materials:
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THE RORID COMMITTEE
"RESPONSIBLE OWNERS REPLACING INCUMBENT DIRECTORS"
THE RORID COMMITTEE
o The second largest stockholder of SL Industries.
o Believes that SL's historical financial and stock price performance has
significantly trailed its peer group.
o Has nominated its slate of directors in opposition to the SL Board.
o Elections for the Board will be held at the annual meeting of stockholders
on January 22, 2002.
THE RORID COMMITTEE
o The Committee, along with all of the participants in the solicitation, are
the beneficial owners of 850,800 shares (14.9%).
o The Committee is committed to maximizing shareholder value through a sale
of the company or other strategic alternatives.
NOMINEES FOR DIRECTOR
o Warren G. Lichtenstein
o Mark E. Schwarz
o James R. Henderson
o Glen Kassan
o Steve Wolosky
OUR NOMINEES
o Are committed to maximizing shareholder value through a sale of the company
or other strategic alternatives.
o Will constitute a majority of the current eight-member board if elected.
SL'S LAGGING SHARE PRICE
o We believe that SL's share price has lagged its peer group over the past
several years.
o During the period from July 31, 1995 through December 31, 2000, SL's stock
price performance has lagged its peer group index by 201% with cumulative
total returns for the S&P Electrical Equipment group index of approximately
308% compared to cumulative total returns for SL's shares of approximately
107%.
SL'S LAGGING SHARE PRICE
o On December 29, 2000, the date on which SL last compared its share price
to its peer group indexes, SL shares closed at $11.44. On December 31,
2001, the share price closed at $5.85 per share, representing a substantial
49% decrease since the beginning of 2001.
CONTINUED LOSSES
According to SL's Form 10-Q for the fiscal quarter ended September 30, 2001:
o SL realized net losses of approximately $7.5 million for the nine month
period ended September 30, 2001.
o SL recorded losses from the restructuring plan of approximately $8.2
million and $4.1 million in the second and third fiscal quarters of 2001,
respectively.
o SL expects to record approximately $1.2 million in losses from the
restructuring plan in the fourth fiscal quarter of 2001.
GOING CONCERN
We are extremely concerned with SL's ability to continue as a going
concern. According to SL's Form 10-Q for the fiscal quarter ended September 30,
2001 and Form 8-K filed December 26, 2001:
o SL has exhausted the availability of funds under its credit facility with
$38.8 million of principal outstanding, as of September 30, 2001, of the
maximum $40 million availability.
o SL had advised its banks that it was in default of the financial covenants
in its credit facility at September 30, 2001. SL recently announced that it
had obtained a waiver from its banks with respect to its default for
noncompliance with the financial covenants in the credit facility.
o The auditors have advised SL that failure to resolve these matters prior to
the completion of their fiscal year 2001 audit may result in a modification
of their audit report with respect to the company's ability to continue as
a going concern.
REASONS FOR THE SOLICITATION
o We question whether the interests of the SL Board and management are
aligned with the interests of SL stockholders in view of their limited
ownership of securities of SL. According to public filings, the directors
and executive officers own outright in the aggregate less than 1% of the
outstanding shares of SL.
o We believe that the SL Board must promptly explore other alternatives to
maximize stockholder value including a sale of the entire company.
o On November 15, 2001, SL announced that the regular semi-annual cash
dividend payment has been suspended.
CHANGE IN CONTROL AGREEMENTS
o Since we announced that we would challenge SL's incumbent directors with
our slate of nominees, certain SL executives (Owen Farren, David Nuzzo and
Jacob Cherian) entered into "change in control" agreements with SL under
which they would be entitled to significant payments (over $1.1 million in
the case of CEO Owen Farren and over $360,000 in the case of Vice President
David Nuzzo) and other benefits if the executives are terminated following
a change in control of SL.
o Under the agreements, each such officer will be entitled to receive two times
(2.99 times for Mr. Farren) the average of his combined annual salary and
cash bonus for each of the previous three full calendar years and benefits
for up to 24 months (36 months for Mr. Farren) in the event the executive
is terminated within one year following a "change in control."
o We believe the change in control agreements are unwarranted and a waste of
corporate assets in view of SL's stock price and operating performance, as
described in our proxy statement.
SL BOARD'S RESTRUCTURING PLAN
o We believe that the SL Board's restructuring plan is not in the best
interests of the stockholders.
o On March 19, 2001, SL announced that it had engaged Credit Suisse First
Boston (CSFB) to explore a sale of the company.
o In November 2001, SL's Board announced that it did not believe that it was
in the best interests of the stockholders to sell the entire company.
o In November 2001, the Board also announced that it was in the process of
negotiating the sale of two subsidiaries of SL.
THE COMMITTEE'S VIEW ON THE SL BOARD'S RESTRUCTURING PLAN
o We believe that SL should be sold at the current time.
o We are concerned that the potential sale of these two subsidiaries will be
for substantial losses and will not maximize stockholder value for the SL
stockholders.
PROXY VOTE
o Stockholders of record at the close of business on December 5, 2001 are
entitled to vote at the annual meeting.
o Vote for Nominees committed to a sale of the company.
o If elected, our nominees will be subject to fiduciary duties which could
compel them to change their plans with respect to the sale of the company
or other transactions.
o Vote the GOLD Proxy. If you have already sent a WHITE proxy card to the SL
Board, you may revoke that proxy and vote against the election of SL's
nominees by signing, dating and returning the GOLD proxy card. The latest
dated proxy is the only one that counts.
The RORID Committee -- "Responsible Owners Replacing Incumbent Directors"