<PAGE> 1
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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
SL INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(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):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / 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:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
LOGO
October 11, 1996
DEAR SHAREHOLDER:
You are cordially invited to attend the Annual Meeting of Shareholders of
SL INDUSTRIES, INC., on Friday, November 15, 1996, at 10:00 in the morning. The
meeting will be held in the Grand Salon at the Ramada Regency Palace, Route 73
and Fellowship Road, Mt. Laurel, New Jersey. Prior to the meeting, an 8:30 a.m.
breakfast will be held in the Regency Ballroom.
At this meeting, the shareholders will be asked to elect seven directors to
serve during the coming year, to ratify the appointment of a certified public
accounting firm to serve as the Company's auditors for the fiscal year 1997, and
to consider such other business as may properly come before the meeting.
We look forward to the attendance of our shareholders because it provides
us with an opportunity for hearing your views and for holding informal
discussions concerning the progress of SL INDUSTRIES, INC.
YOUR PROXY IS IMPORTANT TO ASSURE A QUORUM AT THE MEETING.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE BE SURE THAT THE
ENCLOSED 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.
Sincerely yours,
/s/ Owen Farren
------------------------------------
OWEN FARREN
President and Chief Executive Officer
<PAGE> 3
SL INDUSTRIES, INC.
Corporate Office: SUITE A-114, 520 FELLOWSHIP ROAD,
MT. LAUREL, NJ 08054
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE is hereby given that the Annual Meeting of Shareholders of SL
INDUSTRIES, INC., will be held at the Ramada Regency Palace, Route 73 and
Fellowship Road, Mt. Laurel, New Jersey, on Friday, November 15, 1996, at 10:00
in the morning for the following purposes:
1. To elect seven directors for the ensuing year;
2. To ratify the appointment of Arthur Andersen LLP, to serve as the
Company's independent auditors for the fiscal year 1997; and,
3. To transact such other business as may properly come before the
Annual Meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on September 17,
1996, 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 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.
By Order of the Board of Directors
/s/ James E. Morris
---------------------
James E. Morris
Secretary
October 11, 1996
Mount Laurel, New Jersey
<PAGE> 4
SL INDUSTRIES, INC.
SUITE A-114
520 FELLOWSHIP ROAD
MOUNT 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 Annual Meeting of Shareholders on November 15,
1996, at 10:00 a.m., and at any adjournment thereof, (the "Annual Meeting"). The
Annual Meeting has been called to consider and vote upon the election of seven
Directors, the ratification of the appointment of Arthur Andersen LLP as the
Company's auditors for the fiscal year 1997, and such other business as may
properly come before the meeting. The Company's By-Laws require written notice
21 calendar days in advance of the Annual Meeting to raise business at the
Annual Meeting, including the nomination of Directors. Shareholders were sent
the complete text of such By-Law provision by letter dated September 8, 1992.
Any shareholder wishing an additional copy of such provision should call the
Secretary of the Company. This Proxy Statement and the enclosed form of proxy
are first being mailed to shareholders on or about October 11, 1996.
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 September 17, 1996, 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
meeting or by voting the shares subject to the proxy by written ballot at the
meeting.
The proxy tabulation will be done by our transfer agent and proxies should
be returned in the enclosed business reply envelope. 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, telex, facsimile or other electronic means. The Company has also
retained MacKenzie Partners, Inc., for a fee of $3,500, to aid in the
solicitation of proxies.
On the record date, September 17, 1996, there were 5,769,780 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, except that there is
cumulative voting in the election of directors.
Cumulative voting means that each shareholder may cast a number of votes
equal to the number of his or her shares multiplied by the number of directors
to be elected (seven at this Annual Meeting) and that he or she may cast all of
such votes for a single director or may distribute them among the number to be
elected or any two or more of them as he or she may see fit. If a shareholder
wishes to distribute his or her cumulative votes in a specific manner, the proxy
card should be marked to indicate clearly how the votes are to be distributed
among the nominees. For example, the shareholder may write on the proxy card the
number of votes to be cast next to the name of the Director or Directors for
whom the shareholder desires to cast such
<PAGE> 5
votes. Unless indicated to the contrary, if a shareholder strikes out the name
of a nominee all the cumulative votes of such shareholder which were otherwise
distributable among all of the nominees will instead be distributed among the
remaining nominees in the discretion of the proxy holders named therein as
described below, unless otherwise indicated. For example, if a shareholder owns
10 shares and strikes out the name of one of the seven nominees listed on the
proxy card, all of such shareholder's 70 cumulative votes will be distributed
among the remaining six nominees at the discretion of the proxy holders. THE
SEVEN CANDIDATES RECEIVING THE HIGHEST NUMBER OF VOTES SHALL BE ELECTED.
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 Proposals
1 and 2. With respect to the election of directors, where no vote is specified
or where a vote FOR proposal 1 is marked, unless contrary instructions are set
forth on the proxy card, the cumulative votes represented by a proxy will be
cast for all or fewer than all of the nominees at the discretion of the proxy
holders named therein in order to elect as many nominees as believed possible
under the then prevailing circumstances. At the present time, the Board has not
determined any specific order in which it intends to distribute votes among its
nominees.
Under the ByLaws of the Company, the presence of a quorum is required for
each matter to be acted upon at the Annual Meeting. The holder of a majority of
the shares entitled to vote at the meeting must be present in person or
represented by proxy in order to constitute a quorum for all matters to come
before the meeting. Broker non-votes and abstentions will be counted only for
the purpose of determining whether a quorum is present at the meeting. Except
for the election of directors, with respect to which there is cumulative voting
as more fully described above, all matters to be voted upon at the Annual
Meeting must receive the approval of a majority of votes cast at the duly
convened Annual Meeting in order to be binding on the Company. For purposes of
determining the number of votes cast with respect to any voting matter, only
votes cast "for" or "against," in accordance with and subject to Section 402.08
of the rules of the New York Stock Exchange (or any successor provision), are
included.
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 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.
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 Annual
Meeting of Shareholders. Should any matters properly come before the Annual
Meeting or any adjournment thereof, 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.
The enclosed proxy confers discretionary authority to vote with respect to
any and all of the following matters that may come before the Annual Meeting:
(i) matters which the Company does not know, a reasonable time before the proxy
solicitation, are to be presented at the Annual Meeting; (ii) approval of the
minutes of a prior meeting of shareholders if such approval does not amount to
ratification of the action taken at that meeting; (iii) the election of any
person to any office for which a bona fide nominee is named in this Proxy
Statement and proxy pursuant to Rule 14a-8 or Rule 14a-9 promulgated under the
Securities Exchange Act of 1934; and (v) matters incident to the conduct of the
Annual Meeting. In connection with such matters, the persons named in the
enclosed proxy card will vote in accordance with their best judgment.
2
<PAGE> 6
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth certain information regarding ownership of
the Company's Common Stock, as of September 17, 1996 (except as otherwise noted)
by: (i) each person or entity (including such person's or entity'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 who beneficially owns shares, (iii) each Named Executive Officer (as
defined under Executive Compensation) who beneficially owns shares, and (iv) all
executive officers and Directors as a group. The information presented in the
table is based upon the most recent filings with the Securities and Exchange
Commission by such persons or upon information otherwise provided by such
persons to the Company.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) PERCENTAGE OWNED
------------------------------------------ --------------------- ----------------
<S> <C> <C>
Dimensional Fund Advisors Inc............. 425,800(2) 7.4%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
UM Investment Corporation................. 312,100(3) 5.4%
56 Haddon Avenue
Haddonfield, NJ 08033
J. Dwane Baumgardner...................... 30,422(4) *
Owen Farren............................... 184,980(5) 3.1%
Edward A. Gaugler......................... 180,540(6) 3.1%
George R. Hornig.......................... 14,357(7) *
Warren G. Lichtenstein.................... 247,000(8) 4.3%
Salvatore J. Nuzzo........................ 44,341(9) *
Robert J. Sanator......................... 5,000 *
James E. Morris........................... 28,474(10) *
All Directors and Executive Officers
as a Group (eight)...................... 735,114(11) 12.2%
</TABLE>
- ---------------
* Less than one percent (1%).
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. Under such rules, shares are deemed to
be beneficially owned by a person or entity if such person or entity has or
shares the power to vote or dispose of the shares, whether or not such
person or entity has any economic interest in such shares. Except as
otherwise indicated, and subject to community property laws where
applicable, the persons and entities named in the table above have sole
voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them. Shares of Common Stock subject to
options or warrants currently exercisable or exercisable within 60 days are
deemed outstanding for purposes of computing the percentage ownership of
the person or entity holding such option or warrant but are not deemed
outstanding for purposes of computing the percentage ownership of any other
person or entity.
(2) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 425,800 shares, as of
December 31, 1995, 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, for all of which Dimensional
Fund Advisors, Inc., serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares.
(3) UM Investment Corporation ("UM Investment"), a Delaware corporation, deemed
to have beneficial ownership of 312,100 shares, as of July 18, 1996, is a
wholly owned subsidiary of UM Holdings, Ltd. ("UM"), a New Jersey
corporation having an address at 56 Haddon Avenue, Haddonfield, New Jersey
08033. The principal business of UM Investment is maintaining and managing
investments. John Aglialoro and Joan Carter, who are married, are officers
and directors of UM and UM Investment and own substantially all of the
outstanding capital stock of UM.
3
<PAGE> 7
(4) Includes 28,422 shares which Mr. Baumgardner has the right to acquire at
any time upon exercise of stock options.
(5) 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,
17,711 shares beneficially owned as a participant in the Company's Savings
and Pension Plan, and 161,000 shares which Mr. Farren has the right to
acquire, at any time, upon the exercise of stock options.
(6) Such shares do not include 942 shares which are owned by Mr. Gaugler's
wife, as to which such director disclaims any beneficial ownership.
(7) Includes 14,357 shares which Mr. Hornig has the right to acquire at any
time upon exercise of stock options.
(8) Includes 230,700 shares which Steel Partners, L.P., beneficially owns and
in which Mr. Lichtenstein has a beneficial interest.
(9) Includes 41,341 shares which Mr. Nuzzo has the right to acquire at any time
upon exercise of stock options.
(10) Includes 4,316 shares owned jointly by Mr. Morris and his wife, who share
voting and investment power, 2, 158 shares beneficially owned as a
participant in the Company's Savings and Pension Plan, and 22,000 shares
which Mr. Morris has the right to acquire at any time upon exercise of
stock options.
(11) Includes 267,120 shares which five (5) directors and executive officers
have the right to acquire, at any time, upon the exercise of nonqualified
and incentive stock options granted by the Company. Except for 235,085
shares, as to which certain directors and executive officers share voting
and investment power, the directors and executive officers have sole
voting and investment power as to the shares beneficially owned by them.
ELECTION OF DIRECTORS
At the Annual Meeting, seven 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, except that
the cumulative votes represented by proxies will be cast for all or fewer than
all of the nominees for director at the discretion of the proxy holders named
therein in order to elect as many nominees as possible under the circumstances
prevailing at the meeting. Discretionary authority to so cumulate votes is
hereby solicited. 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 Directors of the Company.
4
<PAGE> 8
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.
<TABLE>
<CAPTION>
SERVED
CONTINUOUSLY
NAME PRINCIPAL OCCUPATION FOR AS DIRECTOR
OF NOMINEE AGE FIVE YEARS AND DIRECTORSHIPS SINCE
- ---------------------- ---- -----------------------------------------------
<S> <C> <C> <C>
J. Dwane (56) Chairman of Donnelly Corporation, Inc., a 1990
Baumgardner(1)(3)(4) manufacturing company in Holland, Michigan,
since 1986 and Chief Executive Officer since
1982.
Owen Farren(1)(4) (45) President and Chief Executive Officer of the 1991
Company since April 1991; from May 1990 to
April 1991, Executive Vice President of the
Company.
Edward A. Gaugler(2) (77) An original founder of the Company, served as 1993
President from 1956 to 1960 and as director
from 1956 to 1967; retired for more than five
years.
George R. Hornig(3)(4) (42) Managing Director of Deutsche Morgan Grenfell, 1992
Inc. (investment bankers) since 1993; from 1991
to 1993, President and COO of Dubin & Swieca
Holdings, Inc. (money managers)
Warren G. (31) Chairman and Director of WGL Capital Corp., a 1993
Lichtenstein(2) general partner of Steel Partners, L.P.
(private investment partnership), a Delaware
limited partnership since 1990. Chairman and a
director of Steel Partners, L.L.C., the general
partner of Steel Partners II, L.P. (private
investment partnership), a Delaware limited
partnership, since 1993; Director of Gateway
Industries, Inc. (new business ventures) since
1994; Director of Alpha Technologies Group,
Inc. (thermal management products and
connectors) since 1993; Director of Saratoga
Beverage Group, since 1993.
Salvatore J. (65) Chairman of the Company since September 1993; 1988
Nuzzo(1)(2) Chairman and COO of Datron, Inc., a
manufacturing company in Hartford, CT from May,
1996 to Present; Chairman and part owner of
Marine Mechanical Corporation from March 1994
to present; Chairman of the Board of
Technautics Corporation, a manufacturing
company in Cleveland, Ohio, from April 1991 to
March 1994; and CEO from April 1991 to December
1992; retired between March 1988 and April
1991; Director of Avnet Corporation, a
distribution company in New York, New York.
Robert J. (66) Dean, College of Management Long Island 1993
Sanator(2)(3) University, from April 1991 to present.
</TABLE>
- ---------------
(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
<PAGE> 9
THE BOARD OF DIRECTORS
The Company's Board of Directors has established the following standing
committees: the Executive Committee, the Audit Committee, the Nominating
Committee and the Compensation Committee. The Executive Committee, which did not
meet during the fiscal year 1996, has and may exercise all the authority of the
Board, except that the committee cannot make, alter or repeal any Bylaw of the
Corporation, 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 which by its terms is
amendable or repealable only by the Board. The Audit Committee, which met four
times during fiscal year 1996, recommends the selection of independent auditors,
reviews the scope and results of the annual audit, is advised of and reviews
nonaudit services to be provided by the independent auditors, and reviews
reports of the independent auditors and of quarterly financial results. The
Nominating Committee, which met one time in fiscal year 1996, was constituted on
July 14, 1992, to recommend the number and name of persons to be elected by the
shareholders as directors of the Company. At the present time there is no
procedure by which shareholders can recommend nominees to be considered by the
Nominating Committee. The Compensation Committee, which met one time during the
fiscal year 1996, recommends the compensation to be paid to executive officers
and the stock options to be granted to key employees under the Company's 1991
Long Term Incentive Plan (see Compensation Committee Report). The Board of
Directors of the Company met six times during the fiscal year 1996. Each member
of the Board attended at least seventy-five percent of the meetings of the Board
of Directors and Committees thereof, if a member.
Non-employee directors are paid quarterly retainer fees of $3,500 (with the
exception of Mr. Nuzzo, whose quarterly fee is $5,250), $1,000 for each Board
meeting attended, and $500 for each Committee meeting attended. Mr. Farren does
not receive director's retainer, Board meeting or committee meeting fees.
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
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,
Hornig and Nuzzo elected for fiscal year 1996 to receive non-qualified stock
options in lieu of all such fees. In accordance with such elections, Mr. Nuzzo
was granted options to acquire 16,362 shares, Mr. Baumgardner was granted
options to acquire 11,053 shares, and Mr. Hornig was granted options to acquire
11,706 shares during fiscal year 1996. Messrs. Nuzzo, Baumgardner and Hornig
have made the same elections for fiscal year 1997.
A $50,000 life insurance policy is maintained on each director's life for
which the director designates the beneficiary. In addition, upon the retirement
of a director who has attained the age of sixty and has completed ten years of
service with the Board, the Company will pay $10,000 per year to the retired
director for life with a term certain of 10 years. Mr. Farren is ineligible for
these benefits. Most of these retirement payments are funded by the purchase of
a life insurance policy and provide both a death and retirement benefit, and the
Company is both owner and beneficiary of the policy. If the retired director
dies after becoming eligible for retirement benefits and before the guaranteed
retirement payments have been made, the unpaid balance of the benefits
guaranteed will continue to be paid by the Company to the beneficiary designated
by him.
6
<PAGE> 10
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 officer whose total annual salary and bonus exceeded $100,000
during fiscal 1996 (the "Named Executive Officers") for services in all
capacities during fiscal 1996, 1995, and 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
---------------
ANNUAL COMPENSATION SECURITIES ALL OTHER
NAME AND ---------------------- UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS/SARs(#) ($)(1)(2)
------------------ ----- --------- -------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Owen Farren
President & CEO................. 1996 187,100 81,250 16,000 26,721
1995 171,822(3) 60,000 10,000 26,671
1994 165,000 50,000 10,000 27,273
James E. Morris
Vice President/Corp.
Controller/Treasurer &
Secretary....................... 1996 85,307 31,200 4,000 4,504
1995 81,461 22,000 4,000 4,218
1994 71,173 18,900 4,000 2,784
</TABLE>
- ---------------
(1) Includes Company matching contributions and profit sharing contributions
made to the SL Industries, Inc., Savings and Pension Plan for Messrs. Farren
and Morris in fiscal year 1994 in the amounts of $6,049 and $3,164,
respectively, in fiscal year 1995, in the amounts of $5,446 and $3,554,
respectively, and in fiscal year 1996 in the amounts of $5,461 and $3,801,
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 calendar year earnings. Under
the plan, benefits are payable at retirement as a lump sum or as an annuity.
(2) Includes premiums paid for group term life insurance for Messrs. Farren and
Morris 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.
(3) Mr. Farren elected to defer $3,960 of his fiscal year 1995 salary. The
amount earns interest at the rate of 8%, compounded annually, and is payable
at retirement. The deferred amount is funded by a life insurance policy
where the Company is both owner and beneficiary of the policy.
Mr. Morris is scheduled to receive a $30,000 per year annuity, $21,000 of
which is fully vested, 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.
7
<PAGE> 11
SENIOR EXECUTIVE SEVERANCE PLAN
On May 1, 1991, the Company entered into a Severance Pay Agreement with Mr.
Farren, providing for payment equal to base annual salary or $135,000, whichever
is greater, and to continue for a limited time certain fringe benefits in the
event of involuntary termination of his employment, or voluntary termination for
"good reason." Good reason is defined to include (i) a demotion in position,
authority or similar action which would substantially alter the officer's
standing in the Company, (ii) a reduction in salary or failure to increase
compensation commensurate with other executive officers, (iii) a relocation of
the officer's place of employment, (iv) a change of control of the Company, (v)
incurring any serious illness or disability, or (vi) any other circumstance as
determined by the Board of Directors in good faith.
STOCK OPTIONS
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning options to purchase
Common Stock granted under the Company's 1991 Long Term Incentive Plan in fiscal
year 1996 to the Named Executive Officers. These options were fully exercisable
on the date of grant. The material terms of such options appear in the following
table.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
- ---------------------------------------------------------------------------------------- ANNUAL RATES
NUMBER OF % OF TOTAL OF STOCK PRICE
SECURITIES STOCK OPTIONS APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM(1)
STOCK OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ------------------
NAME GRANTED(#) FISCAL YEAR PRICE($/SH) DATE 5%($) 10%($)
- ------------------------------ ------------- ------------- ----------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Owen Farren................... 16,000 12.1% 6.875 9/20/05 69,178 175,312
James E. Morris............... 4,000 3.0% 6.875 9/20/05 17,295 43,828
</TABLE>
- ---------------
(1) The Potential Realizable Value, determined in accordance with SEC rules,
assumes annualized market appreciation rates of 5% and 10%, respectively,
from a market value of $6.875/share on September 21, 1995 (the date of the
grant) to September 20, 2005 (the date of expiration of such options). These
assumptions are not intended to forecast future price appreciation of the
Company's stock price. The real value of the options in this table depends
on the actual performance of the Company's Common Stock during the
applicable period, which may increase or decrease in value over the time
period set forth above. The Potential Realizable Value does not assume
future dividends, stock or cash. The option grant does not accrue cash
dividends unless the options are exercised, should dividends be declared.
AGGREGATED STOCK OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END STOCK OPTION VALUES
The following table sets forth the aggregate options to purchase shares of
Common Stock of the Company held by the Named Executive Officers at July 31,
1996. No options were exercised during the fiscal year ended July 31, 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY OPTIONS
UNEXERCISED OPTIONS AT FISCAL YEAR
AT FISCAL YEAR END(#) END($)
--------------------- --------------------
EXERCISABLE/ EXERCISABLE/
NAME NONEXERCISABLE NONEXERCISABLE
-------------------------------------- -------------- --------------
<S> <C> <C>
Owen Farren........................... 161,000/0 678,500/0(1)
James E. Morris....................... 22,000/0 96,000/0(1)
</TABLE>
- ---------------
(1) Based on the closing price of $8.50 at fiscal year end, less the respective
exercise prices.
The closing market price per common share on the New York Stock Exchange on
September 17, 1996, was $10.125.
8
<PAGE> 12
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee members are J. Dwane Baumgardner (Chairman),
George R. Hornig and Robert J. Sanator, all of whom are non-employee directors
of the Company.
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The following report shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
The Compensation Committee of the Board of Directors (the "Compensation
Committee") is responsible for the establishment of the level and manner of
compensation of the Company's two (2) executive officers and certain others. In
addition, the Compensation Committee seeks to ensure that sound compensation
policies and practices exist and are being followed. The current members of the
Compensation Committee are J. Dwane Baumgardner (Chairman), George R. Hornig and
Robert J. Sanator, all of whom are non-employee directors of the Company.
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 recommendations by management. 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 see that management aligns 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. Bonus payments are based on the achievement of the
Company performance targets and the achievement of individual performance goals.
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. The Company seeks to
provide an overall level of compensation that is competitive with other
companies in competing businesses and in the Company's geographic markets.
Compensation in any particular case will vary on the basis of the Company's
annual and long-term performance as well as individual performance.
9
<PAGE> 13
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, 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 1997, and bonus for fiscal year 1996 was established by the
Compensation Committee based, in large part, on the performance of the Company
during fiscal 1996. Options were granted to Mr. Farren in September 1995 and
September 1996 in large part to recognize his efforts in making significant
progress during the past two fiscal years toward the Board's directives to him
of trimming corporate overhead expenses, developing an overall plan for
reassessing the Company's strategic direction, and achieving financial and other
targets.
Respectfully submitted,
Compensation Committee:
J. Dwane Baumgardner, Chairman
George R. Hornig
Robert J. Sanator
PERFORMANCE GRAPH
The following Performance Graph summarizes the cumulative total shareholder
return on an investment of $100 on July 31, 1991 in the Company's Common Stock
for the period from that date to July 31, 1996, as compared to the cumulative
total return on a similar investment of $100 on that date in stocks comprising
the Russell 3000 Stock Index ("RUA") and the S&P Electrical Equipment Group
("S215"). The graph assumes the investment of all dividends.
<TABLE>
<CAPTION>
Measurement Period S&P Electrical
(Fiscal Year Covered) SL Industries Russell 3000 Equipment Group
<S> <C> <C> <C>
Oct 91 87.097 100.095 93.729
Jan 92 103.977 105.569 103.306
Apr 92 103.977 105.987 104.640
Jul 92 87.730 108.303 103.553
Oct 92 98.285 107.690 104.647
Jan 93 95.721 114.485 114.549
Apr 93 92.420 114.226 121.629
Jul 93 96.542 117.319 129.851
Oct 93 106.529 122.843 128.234
Jan 94 103.999 126.322 140.249
Apr 94 103.999 118.464 127.688
Jul 94 118.327 119.263 136.159
Oct 94 111.565 122.952 134.809
Jan 95 139.536 122.061 141.209
Apr 95 129.326 132.794 154.618
Jul 95 157.468 146.371 162.560
Oct 95 219.087 151.181 171.333
Jan 96 192.443 164.226 207.775
Apr 96 213.062 170.631 212.065
Jul 96 234.449 164.421 218.949
</TABLE>
10
<PAGE> 14
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 July 31, 1997, subject to ratification of such appointment by
shareholders. The submission of the appointment of Arthur Andersen LLP for
ratification by the shareholders is not required by law or by the Company's
Bylaws and is being done for the sole purpose of ascertaining the views of the
shareholders of the Company with respect to such appointment. The Company shall
not be bound by such shareholder action if the shareholders do not ratify the
appointment, in which event the selection of other independent certified public
accountants may be considered by the Board of Directors. 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.
SHAREHOLDER PROPOSALS
Any shareholder who, in accordance with and subject to the provisions of
the proxy rules of the Securities and Exchange Commission, wishes to submit a
proposal for inclusion in the Corporation's Proxy Statement for its 1997 Annual
Meeting of Shareholders must deliver such proposal in writing to the Secretary
of the Corporation at the Corporation's principal executive offices at Suite
A-114, 520 Fellowship Road, Mount Laurel, New Jersey 08054, no later than June
12, 1996.
OTHER MATTERS
THE ANNUAL REPORT OF THE COMPANY FOR ITS FISCAL YEAR ENDED JULY 31, 1996,
WAS MAILED ON OCTOBER 11, 1996, 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: JAMES E. MORRIS, SECRETARY, SL INDUSTRIES, INC., SUITE A-114, 520
FELLOWSHIP ROAD, MOUNT LAUREL, NEW JERSEY 08054.
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.
By Order of the Board of Directors
/s/ James E. Morris
-------------------------
James E. Morris
Secretary
11
<PAGE> 15
SL INDUSTRIES, INC. SAVINGS AND PENSION PLAN
CONFIDENTIAL VOTING INSTRUCTION SHEET
Relating to the Annual Meeting of Shareholders
to be held on November 15, 1996
TO: CORESTATES BANK, N.A.
The undersigned participant ("Participant") in the SL Industries, Inc.,
Savings and Pension Plan (the "Plan") hereby instructs you that the shares of
common stock of SL Industries, Inc. ("SL"), allocated to the Participant's
account or accounts under the Plan as of July 31, 1996 (the "Shares"), be voted
as specified below at the Annual Meeting of Shareholders to be held on November
15, 1996 (and at any adjournment or postponement thereof).
IF ITEM 1 BELOW IS CHECKED, THERE IS NO NEED TO COMPLETE ITEMS 2 AND 3.
With respect to Item 2, Election of Directors, if no instructions are
given, the Shares are to be voted in the same proportion as all Shares for which
Participants shall have submitted instructions. If instructions are provided
for the election of directors, the undersigned Participant's cumulative votes
are to be distributed evenly among the nominees selected, unless instructions to
the contrary are given in the space provided.
With respect to Item 3, if no instruction is given, the Shares are to be
voted in the same proportion as all Shares for which Participants shall have
submitted instructions.
1. _____ VOTE SHARES ON ALL ISSUES AS RECOMMENDED BY MANAGEMENT OF SL.
2. ELECTION OF DIRECTORS - NOMINEES
J. DWANE BAUMGARDNER, OWEN FARREN, EDWARD A. GAUGLER, GEORGE R.
HORNIG, WARREN G. LICHTENSTEIN, SALVATORE J. NUZZO, ROBERT J.
SANATOR
The Shares are to be voted for directors as follows:
_____ For all or any of the nominees listed above (except as
stricken out above)
_____ Specific instructions (for example, to cumulate votes for one
or more named nominees)
________________________________________________________________
________________________________________________________________
3. APPOINTMENT OF ARTHUR ANDERSEN LLP AS AUDITORS FOR THE FISCAL
YEAR 1997
_____ For the appointment of Arthur Andersen LLP as auditors for the
fiscal year 1997
_____ Against the appointment of Arthur Andersen LLP as auditors for
the fiscal year 1997
_____ No instruction
Signature: ________________________________
Dated: ____________________________________
<PAGE> 16
SAVINGS AND PENSION PLAN
C/O CORESTATES BANK, N. A.
FCI-3-86-7
P.O. BOX 13839
PHILADELPHIA, PA 19101-3839
October 11, 1996
To the Participants in the
SL Industries, Inc., Savings and Pension Plan
Ladies and Gentlemen:
Enclosed is the Notice of Annual Meeting of Shareholders and Proxy
Statement dated October 11, 1996, which has been sent to SL Industries, Inc.'s
("SL"), shareholders of record September 17, 1996, in connection with the Annual
Meeting of Shareholders ("Annual Meeting") to be held Friday, November 15, 1996.
SL is also providing to each of you a copy of its Annual Report for the
fiscal year ended July 31, 1996. If you would like to receive an extra copy of
the Annual Report, please call or write to Ms. June Jenkins Hodges, Assistant
Treasurer, at SL, as follows: SL Industries, Inc., 520 Fellowship Road, Suite
A-114, Mt. Laurel, New Jersey 08054 (tel. (609) 727-1500 extension 5681).
As a participant in the SL Industries, Inc., Savings and Pension Plan
(the "Plan"), you are entitled to vote all of the shares of common stock of SL
held in the Plan for your benefit as of the record date ("Shares") for any
annual or special meeting of SL's shareholders. This means that you may give
instructions - in a manner which affords you complete confidentiality - as to
how such shares are to be voted on any and all matters to be considered at the
Annual Meeting by following the instructions below. Instructions from the
Participants will be sent directly to a neutral organization, which will
tabulate the voting instructions and provide us with the totals only.
INSTRUCTIONS
You are entitled to give voting instructions for the number of shares of
SL common stock indicated on the enclosed Voting Instruction Sheet. Please
complete, sign and date the Voting Instruction Sheet and send it promptly to
CoreStates Bank, N.A. ("CoreStates"), in the enclosed envelope, which requires
no postage if mailed in the United States.
CoreStates will count and total the votes of each Participant whose
Voting Instruction Sheet is received by the close of business on Tuesday,
November 12, 1996. CoreStates will then report only the totals to us.
CoreStates will keep your individual instructions confidential and will not
disclose them to us, SL or any other person. We will then vote the shares at
the Annual Meeting (either in person or by proxy) in accordance with the totals
provided to us by CoreStates.
As required by the Plan, Shares as to which no voting instructions are
received by CoreStates will be totaled by CoreStates and voted by us in the same
proportion as the Shares for which instructions have been received.
Since the Annual Meeting will be held on November 15, 1996, it is
important that you send your Voting Instruction Sheet to CoreStates promptly.
Sincerely yours,
/s/ JAMES E. MORRIS /s/ ROBERT J. SANATOR
------------------- ---------------------
James E. Morris Robert J. Sanator
Trustee Trustee
<PAGE> 17
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 NOVEMBER 15, 1996
The undersigned shareholder of SL Industries, Inc., a New Jersey
corporation, does hereby constitute and appoint J. Dwane Baumgardner and Edward
A. Gaugler, and each of them, attorneys-in-fact and agents 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 Ramada Regency Palace, Route 73 and Fellowship Road, Mount Laurel,
New Jersey, on November 15, 1996, at 10:00 in the morning, and at any
adjournment thereof. This proxy revokes all prior proxies given by the
undersigned.
This proxy, when properly executed, will be voted in the manner directed
below. With respect to the election of directors, where no vote is specified or
where a vote FOR proposal (1) is marked, the cumulative votes represented by a
proxy will be cast, unless contrary instructions are given, at the discretion of
the proxies named herein in order to elect as many nominees as believed possible
under the then prevailing circumstances. Unless indicated to the contrary, if
you strike out the name of a nominee, all your cumulative votes will be
distributed among the remaining nominees at the discretion of the proxies. Where
no vote is specified, this proxy will be voted FOR management Proposal (2) as
recommended by the Board of Directors. 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 signed on the other side)
<PAGE> 18
(Continued from other side)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
(1) ELECTION OF DIRECTORS NOMINEES: J. DWANE BAUMGARDNER; OWEN FARREN;
EDWARD A. GAUGLER; GEORGE R. HORNIG; WARREN G. LICHTENSTEIN; SALVATORE J.
NUZZO; ROBERT J. SANATOR.
/ / FOR the election as directors for the ensuing year of all or any
nominees listed above (except as stricken out above) (TO WITHHOLD
AUTHORITY TO VOTE FOR ANY SPECIFIC NOMINEES, CHECK THE FOREGOING BOX AND
STRIKE OUT OR LINE THROUGH SUCH NOMINEE'S NAME ON THE LIST ABOVE.)
/ / WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED ABOVE.
(2) RATIFICATION OF APPOINTMENT OF ARTHUR ANDERSEN LLP AS AUDITORS FOR THE
FISCAL YEAR 1996
/ / FOR / / AGAINST / / ABSTAIN
(3) Upon all other matters properly coming before the meeting.
Dated:___________________ , 1996
Signature:______________________
Signature:______________________
Title:__________________________
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.
This proxy shall vote all shares
held in all capacities to which
the signatory is entitled.
