SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
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 Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
PUROFLOW INCORPORATED
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(Name of Registrant as Specified In Its Charter)
THE FULL VALUE COMMITTEE
STEEL PARTNERS II, L.P.
WARREN G. LICHTENSTEIN
ROBERT FRANKFURT
JAMES BENENSON, JR.
STEVEN WOLOSKY
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(Name of Persons(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
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
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Exchange Act Rule 0-11:
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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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STEEL PARTNERS II, L.P.
150 East 52nd Street, 21st Floor
New York, New York, 10022
August 9, 1999
BY FACSIMILE
The Board of Directors
Puroflow Incorporated
16559 Saticoy Street
Van Nuys, California 91004
Gentlemen:
Steel Partners is writing this letter in response to your recent letter
and press release, each dated August 4, 1999, publicly announcing your offer to
settle our proxy contest. Steel Partners has made it clear throughout its
negotiations that a board whose majority is composed of Steel's nominees is the
best way to enhance stockholder value. While Steel Partners is highly confident
that we would be able to accomplish our objectives if we were to proceed with
our proxy solicitation, we concur that it would be in the best interests of all
parties involved if we could avoid the expense and unrest such actions would
involve. To that end, we continue to be willing to have discussions with the
Board of Directors and its representatives, with a view towards reaching a
settlement prior to the Company's annual meeting.
While we believe the Company's most recent proposal represents a start
toward reaching a settlement, we believe the offer omits certain important items
requested by Steel Partners in its negotiations with the Board. Those items
include:
1. That any standstill agreement Steel Partners would enter
into would terminate immediately prior to the next annual
meeting. This would allow Steel Partners to seek a majority of
the board seats at the next annual meeting should Steel be
unable to accomplish its goal of enhancing value for all
stockholders as a result of its minority position on the
board;
2. That the Board of Directors would agree to amend the
Company's Poison Pill Rights Plan so that the acquisition
threshold is raised to 25%, allowing additional equity
participation in the Company without eliminating the alleged
protection that the Poison Pill Rights Plan affords
stockholders; and
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<PAGE>
3. That the Board of Directors would agree to eliminate any
and all related party transactions, including those
transactions between the Company and its non-employee
directors.
Until receiving your letter, we believed the Board understood
the importance of these provisions to any settlement. As such, Steel Partners is
unwilling to accept the terms of your proposal unless these items are included.
However, if the Company were to agree to the modifications listed above, Steel
Partners would accept the Company's proposal of a minority position on the Board
of Directors.
We hope that the recent tenor of our discussions and
correspondence will lead to an agreement between the Company and Steel, and
believe such an agreement will only serve to enhance shareholder value, a goal
that should be the main objective for both parties. Our offer will remain open
until Wednesday, August 11, and we look forward to your response.
Sincerely,
Warren G. Lichtenstein
Managing Partner
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