SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 8)1
Bell Industries, Inc.
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(Name of issuer)
COMMON STOCK
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(Title of class of securities)
078 107 109
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(CUSIP number)
STEVEN WOLOSKY, ESQ.
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
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(Name, address and telephone number of person
authorized to receive notices and communications)
October 29, 1999
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(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
/ /.
Note. six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
(Continued on following pages)
(Page 1 of 28 Pages)
Exhibit Index on Page 10
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1 The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the subject class
of securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
<PAGE>
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CUSIP No. 078 107 109 13D Page 2 of 10 Pages
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================================================================================
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
STEEL PARTNERS II, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OR ORGANIZATION
DELAWARE
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,671,710
OWNED BY --------------------------------------------------------------
EACH
REPORTING
PERSON WITH
8 SHARED VOTING POWER
-0-
--------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,671,710
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,671,710
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.4%
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14 TYPE OF REPORTING PERSON*
PN
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<PAGE>
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CUSIP No. 078 107 109 13D Page 3 of 10 Pages
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================================================================================
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
WARREN LICHTENSTEIN
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OR ORGANIZATION
USA
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,671,710
OWNED BY ---------------------------------------------------------------
EACH
REPORTING
PERSON WITH
8 SHARED VOTING POWER
- 0 -
---------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,671,710
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,671,710
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.4%
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14 TYPE OF REPORTING PERSON*
IN
================================================================================
<PAGE>
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CUSIP No. 078 107 109 13D Page 4 of 10 Pages
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================================================================================
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
NEWCASTLE PARTNERS, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OR ORGANIZATION
TEXAS
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 13,900
OWNED BY --------------------------------------------------------------
EACH
REPORTING
PERSON WITH
8 SHARED VOTING POWER
-0-
--------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
13,900
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
13,900
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.15%
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14 TYPE OF REPORTING PERSON*
PN
================================================================================
<PAGE>
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CUSIP No. 078 107 109 13D Page 5 of 10 Pages
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================================================================================
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
MARK E. SCHWARZ
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OR ORGANIZATION
USA
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 13,900
OWNED BY --------------------------------------------------------------
EACH
REPORTING
PERSON WITH
8 SHARED VOTING POWER
- 0 -
--------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
13,900
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
13,900
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.15%
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14 TYPE OF REPORTING PERSON*
IN
================================================================================
<PAGE>
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CUSIP No. 078 107 109 13D Page 6 of 10 Pages
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The following constitutes the Amendment No. 8 to the Schedule 13D filed
by the undersigned (the "Amendment No. 8"). Capitalized terms used but not
otherwise defined herein shall have the meanings ascribed to such terms in the
Schedule 13D, as previously amended. This Amendment No. 8 amends and supplements
the Schedule 13D as follows:
Item 3. Source and Amount of Funds.
---------------------------
Item 3 is hereby amended and restated in its entirety as follows:
The aggregate purchase price of the 1,671,710 Shares owned by Steel
Partners II is $8,601,508 (as adjusted, to take into effect the receipt by Steel
Partners II of dividends upon the sale of certain assets of the Issuer). The
Shares owned by Steel Partners II were acquired with partnership funds.
The aggregate purchase price of the 13,900 Shares of Common Stock owned
by Newcastle is $67,102 (as adjusted, take into effect the receipt by Newcastle
of dividends upon the sale of certain assets of the Issuer). The Shares of
Common Stock owned by Newcastle were acquired with partnership funds.
Item 4. Purpose of Transaction.
-----------------------
Item 4 is hereby amended and supplemented by adding the following
thereto:
On October 29, 1999, the Reporting Persons filed a Preliminary Proxy
Statement with the Securities and Exchange Commission in order to solicit
proxies from the shareholders of the Issuer (i) to elect four persons to be
nominated by Steel Partners for election to the Board of Directors of the Issuer
and (ii) to approve a non-binding shareholder resolution urging the Board of
Directors of the Issuer to terminate the Issuer's Rights Agreement (the "Rights
Agreement") dated as of February 1, 1999 and redeem the Rights (as defined
therein) issued thereunder, unless the Rights Agreement is approved by the
holders of a majority of the Issuer's outstanding shares. A copy of the
Preliminary Proxy Statement is filed as an exhibit to this Schedule 13D and
incorporated herein by reference.
Upon final approval from the Commission for its proxy solicitation
materials, the Reporting Persons intend to commence their solicitation of the
shareholders of the Issuer with respect to the items set forth above.
Item 5. Interest in Securities of the Issuer.
-------------------------------------
Item 5 (a) and (c) are hereby amended and restated in its entirety as
follows:
(a) The aggregate percentage of Shares reported owned by each person
named herein is based upon 9,608,315 Shares outstanding, which is the total
number of Shares outstanding as reported in the Issuer's Quarterly Report on
Form 10-Q for the fiscal quarter ended June 30, 1999.
As of the close of business on October 7, 1999, Steel Partners II
beneficially owns 1,671,710 Shares, constituting approximately 17.4% of the
Shares outstanding. Mr. Lichtenstein beneficially owns 1,671,710 shares of
Common Stock, representing approximately 17.4% of the Shares outstanding. Mr.
Lichtenstein has sole voting and dispositive power with respect to the 1,671,710
<PAGE>
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CUSIP No. 078 107 109 13D Page 7 of 10 Pages
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Shares owned by Steel Partners II by virtue of his authority to vote and dispose
of such Shares. Of such Shares, 1,471,710 were acquired in open-market
transactions and 200,000 were acquired in privately negotiated transactions.
As of the close of business on October 7, 1999, Newcastle beneficially
owns 13,900 Shares of Common Stock, constituting approximately .15% of the
shares outstanding. Mr. Schwarz has sole voting and dispositive power with
respect to the 13,900 Shares owned by Newcastle by virtue of his authority to
vote and dispose of such Shares. All of such Shares were acquired in open-market
transactions.
(c) Schedule A annexed hereto lists all transactions in the Issuer's
Common Stock in the last sixty days by the Reporting Persons unless otherwise
reported on a prior Schedule 13D.
Item 7. Material to be Filed as Exhibits.
---------------------------------
Item 7 is amended to add the following:
5. Preliminary Proxy Statement of Steel Partners II, L.P.
<PAGE>
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CUSIP No. 078 107 109 13D Page 8 of 10 Pages
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SIGNATURES
----------
After reasonable inquiry and to the best of his knowledge and belief,
each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: November 2, 1999 STEEL PARTNERS II, L.P.
By: Steel Partners, L.L.C. General
Partner
By:/s/ Warren G. Lichtenstein
------------------------------------
Warren G. Lichtenstein
Chief Executive Officer
/s/ Warren G. Lichtenstein
---------------------------------------
WARREN G. LICHTENSTEIN
NEWCASTLE PARTNERS, L.P.
By:/s/ Mark E. Schwarz
------------------------------------
Mark E. Schwarz
General Partner
/s/ Mark E. Schwarz
---------------------------------------
Mark E. Schwarz
<PAGE>
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CUSIP No. 078 107 109 13D Page 9 of 10 Pages
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EXHIBIT INDEX
Exhibit Page
- ------- ----
1. Joint Filing Agreement between Steel Partners II and Warren
G. Lichtenstein (previously filed).
2. Joint Filing Agreement between Steel Partners II, L.P.,
Warren Lichtenstein, Sandera Partners, L.P., Newcastle
Partners, L.P. and Mark E. Schwarz. (previously filed)
3. Director Nomination Letter from Steel Partners II, L.P. to
Bell Industries, Inc. dated January 8, 1999 (previously
filed).
4. Letter to Tracy Edwards, President and Chief Executive
Officer of Bell
Industries, Inc. dated October 7, 1999 (previously filed).
5. Preliminary Proxy Statement of Steel Partners II, L.P. 11
<PAGE>
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CUSIP No. 078 107 109 13D Page 10 of 10 Pages
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SCHEDULE A
Transactions in the Shares During the Last 60 Days
(Unless Otherwise Reported on a Prior Schedule 13D)
---------------------------------------------------
Shares of Common Price Per Date of
Stock Purchased Share Purchase
--------------- ----- --------
NEWCASTLE PARTNERS, L.P.
------------------------
8,000 $4.56 10/15/99
<PAGE>
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:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
BELL INDUSTRIES, INC.
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(Name of Registrant as Specified In Its Charter)
STEEL PARTNERS II, L.P.
WARREN G. LICHTENSTEIN
ROBERT FRANKFURT
MARK E. SCHWARZ
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 Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
<PAGE>
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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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<PAGE>
PROXY STATEMENT
OF
STEEL PARTNERS II, L.P.
------------------------------------
1999 ANNUAL MEETING OF SHAREHOLDERS
OF
BELL INDUSTRIES, INC.
------------------------------------
PLEASE SIGN, DATE AND RETURN THE ENCLOSED BLUE PROXY CARD
This proxy statement (the "Proxy Statement") and the enclosed BLUE
proxy card are being furnished to shareholders of Bell Industries, Inc., a
California corporation (the "Company") by Steel Partners II, L.P., a Delaware
limited partnership ("Steel Partners") in connection with the solicitation of
proxies from the Company's shareholders to be used at the 1999 Annual Meeting of
Shareholders of the Company, including any adjournments or postponements thereof
and any special meeting which may be called in lieu thereof (the "Annual
Meeting"), to take the following actions: (i) to elect four persons (the
"Nominees") to be nominated by Steel Partners for election to the Board of
Directors of the Company (the "Board") and (ii) to approve a non-binding
shareholder resolution (the "Poison Pill Resolution") urging the Board to
terminate the Company's Rights Agreement (the "Rights Agreement") dated as of
February 1, 1999 and redeem the Rights (as defined herein) issued thereunder,
unless the Rights Agreement is approved by the holders of a majority of the
Company's outstanding shares. As nominees for director, Messrs. Lichtenstein,
Frankfurt, Schwarz and Wolosky are also deemed to be participants in the proxy
solicitation. The principal executive offices of the Company are located at 1960
East Grand Avenue, Suite 560, El Segundo, California 90245. This Proxy Statement
and the BLUE proxy card are first being furnished to the Company's shareholders
on or about November [ ], 1999.
The Company has set the record date for determining shareholders
entitled to notice of and to vote at the Annual Meeting as November 5, 1999 (the
"Record Date") and has set December 30, 1999 as the date of the Annual Meeting.
Shareholders of record at the close of business on the Record Date will be
entitled to one vote at the Annual Meeting for each Share (as defined herein)
held on the Record Date. On the Record Date, the Company has stated that [ ]
shares of common stock of the Company (the "Shares") were outstanding and
entitled to vote at the Annual Meeting. As of such date, Steel Partners, along
with all of the participants in this solicitation, were the beneficial owners of
an aggregate of 1,685,610 Shares which represents greater than [ ]% of the
Shares outstanding on the Record Date (based on information publicly disclosed
by the Company). Steel Partners intends to vote such Shares for the election of
the Nominees and for the approval of the Poison Pill Resolution.
As provided in Article II, Section 2.03(b) of the Company's Restated
Bylaws, in the event a shareholder gives notice at the Annual Meeting prior to
the election of directors of such shareholder's intention to cumulate such
shareholder's votes, then all shareholders may cumulate their votes for
candidates in nomination. Steel Partners presently intends to give notice at the
Annual Meeting to cumulate its votes. In the event of cumulative voting, in
connection with the election of directors, each shareholder is entitled to
cumulate votes and give one candidate a number of votes equal to the number of
directors to be elected, multiplied by the number of votes to which such Shares
are entitled, or to distribute the votes on the same principle among as many
candidates as the shareholder chooses. The candidates receiving the highest
number of votes, up to the number of directors to be elected (which is presently
seven), shall be elected. Votes against a director and votes withheld shall have
no legal effect. In the event the Company purports to increase the number of
directorships pursuant to Article I, Section 1.02 of the Bylaws, Steel Partners
reserves the right to nominate additional persons as director such that the
Nominees would constitute a majority of the Board. Additional nominations made
pursuant to the preceding sentence are without prejudice to the position of
Steel Partners
-3-
<PAGE>
that any attempt to increase the size of the Board constitutes an unlawful
manipulation of the Company's corporate machinery to disenfranchise the
Company's shareholders.
THIS SOLICITATION IS BEING MADE BY STEEL PARTNERS AND NOT ON BEHALF OF
THE BOARD OF DIRECTORS OR MANAGEMENT OF THE COMPANY.
Steel Partners is soliciting proxies for the election of the Nominees
to the Company Board and for adoption of the Poison Pill Resolution. Steel
Partners is not aware of any other proposals to be brought before the Annual
Meeting. However, should other proposals be brought before the Annual Meeting,
the persons named as proxies in the enclosed BLUE proxy card will vote on such
matters in their discretion.
IMPORTANT
Your vote is important, no matter how many or how few Shares you own.
Steel Partners urges you to sign, date, and return the enclosed BLUE proxy card
today to vote FOR the election of the Nominees.
The Nominees are committed, subject to their fiduciary duty to the
Company's shareholders, to giving all the Company's shareholders the opportunity
to receive the maximum value for their Shares. A vote FOR the Nominees and
approval of the Poison Pill Resolution will enable you - as the owners of the
Company - to send a message to the Company's Board that you are committed to
maximizing the value of your Shares.
o If your Shares are registered in your own name, please sign and date
the enclosed BLUE proxy card and return it to Steel Partners, c/o
Innisfree M&A Incorporated, in the enclosed envelope today.
o If any of your Shares are held in the name of a brokerage firm, bank,
bank nominee or other institution on the record date, only it can vote
such Shares and only upon receipt of your specific instructions.
Accordingly, please contact the person responsible for your account and
instruct that person to execute on your behalf the BLUE proxy card.
Steel Partners urges you to confirm your instructions in writing to the
person responsible for your account and to provide a copy of such
instructions to the committee, c/o Innisfree M&A Incorporated, who is
assisting in this solicitation, at the address and telephone numbers
set forth below, and on the back cover of this proxy statement, so that
we may be aware of all instructions and can attempt to ensure that such
instructions are followed.
If you have any questions regarding your
proxy, or need assistance in voting your Shares,
please call:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, New York 10022
Call toll-free: (888) 750-5834
Bankers and Brokers Call Collect: (212) 750-5833
-4-
<PAGE>
PROPOSAL I - ELECTION OF DIRECTORS
Why You Should Vote For The Steel Partners Nominees
Steel Partners believes that the election of the Nominees represents
the best means for the Company's shareholders to maximize the value of their
Shares. Steel Partners, as the largest shareholder of the Company, has a vested
interest in the maximization of the value of the Shares. In considering who is
best capable of maximizing value, Steel Partners shares the frustration of the
Company's shareholders in the Board's consistent inability to maximize
shareholder value.
The Company's stock price over the past several years, during one of
the greatest bull markets in history, demonstrates the Board's historical and
long-standing inability to create value. The Company's lackluster stock price
performance is reflective of the Company's history of failed acquisitions. The
most recent example of such a failed acquisition is the sale of the Company's
Electronic Distribution Group (the "Electronics Sale"), which resulted in an
accounting loss of approximately $60 to $65 million. Surprisingly, while the
Electronics Sale resulted in a significant accounting loss for the Company,
certain officers of the Company reaped significant benefits from the Electronics
Sale. As provided in the Company's preliminary Proxy Statement filed with the
SEC on October 29, 1999, the Company had agreements with its then executive
officers which provided for severance payments following termination upon a
"change of control." Following the Electronics Sale, Messrs. Graham, Hough and
Weeks received a payment of approximately $950,000, $642,000 and $141,000. Mr.
Edwards remained employed by the Company and accordingly has not yet received a
severance payment that would have amounted to approximately $1,033,000. In
addition, pursuant to the terms of the Non-Employee Directors Retirement Plan,
John J. Cost and Milton Rosenberg, the two existing non-employee directors, have
the right to receive lump-sum payments of their retirement benefit in the amount
of $380,000 and $316,000, respectively. Although the Electronics Sale resulted
in a large accounting loss for financial reporting purposes, the payouts to
senior officers and directors were not affected. Further, in February 1999, the
Company paid Mr. Williams (its former Chairman of the Board, President and Chief
Executive Officer) approximately $1,723,000 under a deferred compensation
agreement and consulting agreement and an additional $277,000 in lieu of
continued salary as Co-Chairman of the Board.
In addition, the Company declared and paid a dividend to shareholders
following the Electronics Sale in the approximate aggregate amount of $55
million. As was expected, following the payment of such dividend, the Company's
Shares have traded below $5.00 per share, making it difficult for many
institutions to purchase and/or continue to hold the Shares.
Steel Partners believes that the value of the Company has not been
maximized by the Board and is committed to giving all of the Company's
shareholders an opportunity to receive maximum value for their Shares. In that
regard, on October 7, 1999, Steel Partners sent a letter to the Company which
expressed its continued willingness to acquire 100% of the issued and
outstanding shares of the Company (other than those Shares held by Steel
Partners) at a price of $5.30 per Share in cash (the "Offer"), a price which
represented a $0.74 (or approximately 16.5%) premium to the closing price of
$4.56 on such date. After reaching a substantial agreement on all terms of a
proposed merger agreement other than price, the Offer was rejected by the
Company due to its purported belief that the price of $5.30 per share was
inadequate. Although Steel Partners believes the Offer provides the best chance
for the Company's shareholders to receive the maximum value for their Shares, we
support the prompt sale of the Company to the highest bidder, whether in cash or
some other form of consideration, or any other transaction or series of
transactions that will serve to accomplish this goal. If elected, the Nominees
are expected to take all actions, subject to their fiduciary duties to the
Company's shareholders, to maximize shareholder value, either through the sale
of the Company to the highest bidder (whether or not it is Steel Partners) and
on the most favorable terms available to the Company, or through a restructuring
or recapitalization designed to accomplish these objectives, or otherwise.
If all are elected, the Nominees will constitute a majority of the
current seven members of the Board and will, subject to their fiduciary duties,
seek to arrange a prompt sale of the Company to the highest bidder, or another
-5-
<PAGE>
transaction or series of transactions that will serve to maximize shareholder
value. The Nominees would expect that bids would be evaluated based on, among
other things, the value of the consideration offered, the ability of the bidder
to finance the bid, the quality of any non-cash consideration offered (including
the financial condition of any bidder offering non-cash consideration), and the
timing and likelihood of consummation of the proposed transaction in light of
any required financing or regulatory approvals. However, there can be no
assurance that the Board will be able to arrange the sale of the Company even if
all of the Nominees are elected.
The Nominees
Steel Partners is proposing that the shareholders of the Company elect
the Nominees to the Board at the Annual Meeting. If required, Steel Partners
intends to distribute to the shareholders of the Company supplemental materials,
in the event that the Board takes action after the date of this Proxy Statement,
to increase the number of Directors of the Company. In the event the Company
purports to increase the number of directorships pursuant to Article I, Section
1.02 of the Bylaws, Steel Partners reserves the right to nominate additional
persons as director such that the Nominees would constitute a majority of the
Board. Additional nominations made pursuant to the preceding sentence are
without prejudice to the position of Steel Partners that any attempt to increase
the size of the Board constitutes an unlawful manipulation of the Company's
corporate machinery to disenfranchise the Company's shareholders.
The following information set forth the name, business address, present
principal occupation, and employment and material occupations, positions,
offices, or employments for the past five years of the Nominees. This
information has been furnished to Steel Partners by the Nominees. Where no date
is given for the commencement of the indicated office or position, such office
or position was assumed prior to November 1, 1994. Each person listed below is a
citizen of the United States.
WARREN G. LICHTENSTEIN (34) is one of the Committee's nominees for
director. Mr. Lichtenstein has been the Chairman of the Board, Secretary and the
Managing Member of Steel Partners, L.L.C. ("Steel LLC"), the general partner of
Steel Partners II, L.P. ("Steel") since January 1, 1996. Prior to such time, Mr.
Lichtenstein was the Chairman and a director of Steel Partners, Ltd. ("Former
General Partner"), the general partner of Steel Partners Associates, L.P.
("Associates"), which was the general partner of Steel since 1993 and prior to
January 1, 1996. For information regarding Steel and Steel LLC, see below under
"Participant Information". Mr. Lichtenstein was the acquisition/risk arbitrage
analyst at Ballantrae Partners, L.P., a private investment partnership formed to
invest in risk arbitrage, special situations and undervalued companies, from
1988 to 1990. Mr. Lichtenstein is a director of the following publicly held
companies: Gateway Industries, Inc., WebFinancial Corporation, Puroflow,
Incorporated, PLM International, Inc., CPX Corp., Tech-Sym Corporation and
Saratoga Beverage Group, Inc. Mr. Lichtenstein also served as Chairman of the
Board of Aydin Corporation from October 5, 1998 until its sale to L-3
Communications Corporation ("L-3") in April 1999 at a price of $13.50 per share,
which represents a premium of approximately 39% over the reported closing price
of $9.69 per share the day preceding the announced transaction with L-3. As of
the Record Date, Mr. Lichtenstein beneficially owned 1,671,710 Shares of the
Common Stock of the Company, all of which were owned by Steel. The business
address of Mr. Lichtenstein is 150 E. 52nd Street, 21st Floor, New York, New
York 10022. For information regarding Mr. Lichtenstein's purchases and sales of
Shares of the Common Stock of the Company during the past two years, see
Schedule I.
In late 1995, Steel commenced a proxy solicitation to replace the
incumbent directors of Medical Imaging Centers of America, Inc. ("MICA").
Thereafter, MICA initiated an action against Steel, Warren Lichtenstein, and
others in the United States District Court for the Southern District of
California, Medical Imaging Centers of America, Inc. v. Lichtenstein, et al,
Case No. 96-0039B. On February 29, 1996, the Court issued an Order granting, in
part, MICA's motion for a preliminary injunction on the grounds that plaintiff
had demonstrated a probability of success on the merits of its assertion that
defendants had violated Section 13 of the Securities Exchange Act of 1934. Under
the Court's preliminary injunction, defendants in the action were enjoined from
voting certain of their shares at MICA's annual meeting of shareholders, except
pursuant to a formula under which they would be voted in the same proportion as
other votes cast at the meeting. The Court declined to adjourn the annual
meeting of shareholders. At the meeting, Steel
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received sufficient votes to elect its nominees to the Board of MICA, after
giving effect to the Court's preliminary injunction. The parties thereafter
settled their differences pursuant to an agreement under which MICA agreed to
initiate an auction process which, if not concluded within a certain time
period, would end and thereafter the designees of Steel would assume control of
the Board of MICA. MICA was ultimately sold for $11.75 per share, as contrasted
with the price of $8.25 per share, representing the closing price on the day
prior to the initiation of Steel's proxy solicitation.
ROBERT FRANKFURT (33) is one of the nominees for director. Mr.
Frankfurt joined the Former General Partner in 1995 and became a non-managing
member of Steel L.L.C. in 1996. Mr. Frankfurt concurrently served as President
of MDM Technologies during 1997 and 1998. As of the date hereof Mr. Frankfurt
does not beneficially own any Shares of the Common Stock of the Company. Mr.
Frankfurt has not purchased or sold any Shares of Common Stock of the Company in
the past two years. The business address of Mr. Frankfurt is 150 East 52nd
Street, 21st Floor, New York, NY 10022.
STEVEN WOLOSKY (44) is one of the nominees for director. For more than
the past five years, Mr. Wolosky has been a partner of Olshan Grundman Frome
Rosenzweig & Wolosky LLP, counsel to Steel Partners. Mr. Wolosky is also
Assistant Secretary of WHX Corporation, a NYSE listed company and a director of
CPX Corp. As of the date hereof, Mr. Wolosky did not beneficially own any Shares
of the Common Stock of the Company. Mr. Wolosky has not purchased or sold any
Shares of the Common Stock of the Company in the past two years. The business
address of Mr. Wolosky is 505 Park Avenue, New York, New York 10022.
MARK E. SCHWARZ (39) is one of the nominees for director. Mr. Schwarz
is the sole general partner of Newcastle Partners, L.P. ("Newcastle"), a private
investment firm, since 1993. Prior to such time. Mr. Schwarz was the Vice
President of Sandera L.L.C., a private investment firm, from 1995, and Manager
from 1995 to 1999. Prior to such time Mr. Schwarz was a securities analyst and
portfolio manager for SCM Advisors, L.L.C. a registered investment advisor, from
1993 to 1996. As of the Record Date, Mr. Schwarz beneficially owned 13,900
Shares of the Common Stock of the Company. The business address of Mr. Schwarz
is c/o Newcastle Partners, 4514 Cole Avenue, Suite 600, Dallas, Texas 75205. For
information regarding Mr. Schwarz's purchases and sales of Shares of the Common
Stock of the Company during the past two years, see Schedule I.
The Nominees will not receive any compensation from Steel Partners for
their services as a Director of the Company. On January 8, 1999, Steel Partners,
Sandera Partners, L.P., Newcastle Partners, L.P., and Messrs. Lichtenstein and
Schwarz entered into a Joint Filing Agreement, in which, among other things, (i)
they agreed to the joint filing on behalf of each of them of statements on
Schedule 13D with respect to the Common Stock of the Company, (ii) Messrs.
Lichtenstein and Schwarz formed a group to nominate a slate of directors to the
Board and solicit written consents or votes at the Annual Meeting for their
slate of directors for the Board and (iii) Steel Partners agreed to bear all
expenses incurred in connection with such committee's nomination of persons to
the Board, including approved expenses incurred by any of the nominees in the
solicitation of written proxies or votes by such committee. On October 7, 1999,
Sandera Partners, L.P. sold its share of Common Stock to Steel Partners and
terminated the Joint Filing Agreement with respect to itself. Other than as
stated above, there are no arrangements or understandings between Steel Partners
and each Nominee or any other person or person pursuant to which the nominations
described herein are to be made, other than the consent by each of the Nominees
to serve as a director of the Company if elected as such at the Annual Meeting.
The Nominees have executed written consents agreeing to be a nominee for
election of Director of the Company and to serve as a Director if so elected.
The Nominees have not been convicted in any criminal proceedings (excluding
traffic violations or similar misdemeanors) over the past ten years.
According to the Company's public filings, if elected as a Director,
each Nominee, as a non-employee director, will receive $1,000 for each
attendance at a meeting of the Board or a committee thereof which does not
immediately precede or follow a meeting of the Board. Non-employee directors are
also entitled to receive stock options under the Company's Non-employee
Directors' Stock Option Plan. Under the Plan, each non-employee director
receives options for 10,000 shares upon his election as a director and an option
for 1,000 shares for each year thereafter in which he is reelected.
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<PAGE>
The Nominees are not adverse to the Company or any of its subsidiaries
in any material pending legal proceedings.
Steel Partners does not expect that the Nominees will be unable to
stand for election, but, in the event that such persons are unable to do so, the
Shares represented by the enclosed BLUE proxy card will be voted for alternate
nominees. In addition, Steel Partners reserves the right to nominate substitute
or additional persons if the Company makes or announces any changes to its
Bylaws, including increasing the size of the Board, or takes or announces any
other action that has, or if consummated would have, the effect of disqualifying
the Nominees. In any such case, Shares represented by the enclosed BLUE proxy
card will be voted for such substitute or additional nominees. Also, in the
event the election of directors is by cumulative voting, the persons named in
the enclosed proxy will cumulate the votes represented by the proxies so as to
elect the maximum number of Nominees possible, which number may be less than
four.
YOU ARE URGED TO VOTE FOR THE ELECTION OF THE NOMINEES ON THE ENCLOSED
BLUE PROXY CARD.
PROPOSAL II - THE POISON PILL RESOLUTION
Why You Should Vote for the Poison Pill Resolution
The Poison Pill Resolution seeks to eliminate the Rights Agreement
currently in place at the Company. On February 1, 1999, the Board, without
seeking stockholder approval, executed the Rights Agreement. One Right was
distributed with respect to each outstanding Share to stockholders of record on
February 1, 1999.
At any time prior to any person or persons becoming an Acquiring Person
(as defined in the Rights Agreement), the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price").
Immediately upon the action of the Board ordering redemption of the Rights, the
Rights will terminate and the only right to which the holders of Rights will be
entitled will be the right to receive the Redemption Price. The Rights will
expire at the close of business on May 31, 2001 unless earlier redeemed by the
Company, at which time the Company may choose to extend the current Rights
Agreement or otherwise execute a new Rights Agreement, in either case, without
the consent of shareholders. References to the Rights Agreement contained herein
are qualified in their entirety by reference to the Form 8-A of the Company
filed with the Securities and Exchange Commission on February 25, 1999, and the
text of the Rights Agreement filed as an exhibit thereto.
The Rights Agreement (commonly referred to as a "poison pill") is an
anti-takeover device which effectively prevents a change in control of the
Company, including a sale, without the approval of the Board. Triggering the
poison pill affects the bidder by causing substantial dilution to a person or
group that attempts to acquire the Company on terms not approved by the Board.
The elimination of the Rights Agreement would give the Company's
shareholders an improved ability to determine for themselves how to respond to
any offer, solicited or unsolicited, that might be made, including pursuant to
the Offer. While the Rights Agreement may discourage coercive offers or may
enable the Board to seek an alternative offer for shareholders, Steel Partners
believes that it is equally true that such a plan could be used to block an
offer which shareholders would find attractive or that it might be used for an
undesirable purpose, such as the entrenchment of the Board or management of the
Company. It is Steel Partners' opinion that the disclosure and substantive
requirements of the Williams Act (e.g., Sections 13(d), 14(d) and 14(e) of the
Exchange Act) and the supermajority voting requirements relating to certain
business combinations that are contained in Article Seven on the Company's
Restated Articles and provide the shareholders of the Company adequate
protection against unfair or coercive offers. In addition, Steel Partners' Offer
is a one-step, all cash offer for 100% of the issued and outstanding Shares of
common stock of the Company (other than those Shares owned by Steel Partners),
and thus, is not coercive or inequitable to the
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Company's shareholders, and such Offer, if approved by the Board of Directors of
the Company would require the approval of the Company's shareholders in order to
be consummated.
In this regard, Steel Partners proposes that the shareholders of the
Company adopt the following resolution:
"RESOLVED, that the shareholders of Bell Industries,
Inc. (the "Company") hereby request that the Board
of Directors of the Company terminate the Rights
Agreement dated as of February 1, 1999 and redeem
the rights distributed thereunder, unless the Rights
Agreement is approved by an affirmative vote of a
majority of the shareholders at a meeting of
shareholders to be called by the Board for such
purpose, and that this policy of shareholder
approval apply to all "Rights Agreements" considered
at any time by the Board."
This resolution is precatory and non-binding on the Board, even if
approved by shareholders. While not binding on the Board, Steel Partners
believes that the adoption of the Poison Pill Resolution would send a clear
message to the Board that shareholders oppose the Board's unilateral adoption of
the Rights Agreement. In order to implement this proposal, first, the Board must
pass a resolution to amend the Rights Agreement so as to provide that it must be
terminated unless approved by the Company's shareholders. Then this matter would
need to be submitted to shareholders for adoption at a duly called annual or
special meeting of shareholders.
YOU ARE URGED TO VOTE FOR APPROVAL OF THE POISON PILL RESOLUTION ON THE
ENCLOSED BLUE PROXY CARD.
VOTING AND PROXY PROCEDURES
Only shareholders of record on the Record Date will be entitled to
notice of and to vote at the Annual Meeting. Each Share is entitled to one vote.
Shareholders who sell Shares before the Record Date (or acquire them without
voting rights after the Record Date) may not vote such Shares. Shareholders of
record on the Record Date will retain their voting rights in connection with the
Annual Meeting even if they sell such Shares after the Record Date. Based on
publicly available information, Steel Partners believes that the only
outstanding class of securities of the Company entitled to vote at the Annual
Meeting are the Shares.
Shares represented by properly executed BLUE proxy cards will be voted
at the Annual Meeting as marked and, in the absence of specific instructions,
will be voted FOR the election of as many of the Nominees to the Board as the
voted represented by such proxies are entitled to elect, FOR the Poison Pill
Resolution and in the discretion of the persons named as proxies on all other
matters as may properly come before the Annual Meeting. Holders of Shares have
one vote for each share. Approval of the Poison Pill Resolution requires the
affirmative vote of a majority of shares represented and entitled to vote at the
Annual Meeting. As provided in Article II, Section 2.03(b) of the Company's
Restated Bylaws, in the event a shareholder gives notice at the Annual Meeting
prior to the election of directors of such shareholder's intention to cumulate
such shareholder's votes, then all shareholders may cumulate their votes for
candidates in nomination. Steel Partners presently intends to give notice at the
Annual Meeting to cumulate its votes. In the event of cumulative voting, in
connection with the election of directors, each shareholder is entitled to
cumulate votes and give one candidate a number of votes equal to the number of
directors to be elected, multiplied by the number of votes to which such Shares
are entitled, or to distribute the votes on the same principle among as many
candidates as the shareholder chooses. The candidates receiving the highest
number of votes, up to the number of directors to be elected (which is presently
seven), shall be elected. Votes against a director and votes withheld shall have
no legal effect. In the event the Company purports to increase the number of
directorships pursuant to Article I, Section 1.02 of the Bylaws, Steel Partners
reserves the right to nominate additional persons as director such that the
Nominees would constitute a majority of the Board. Additional nominations made
pursuant to the preceding sentence are without
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<PAGE>
prejudice to the position of Steel Partners that any attempt to increase the
size of the Board constitutes an unlawful manipulation of the Company's
corporate machinery to disenfranchise the Company's shareholders.
A quorum must be present to take any action on a voting matter at the
Annual Meeting. The presence in person or by proxy of the persons entitled to
vote a majority of the Shares will constitute a quorum at the Annual Meeting.
For purposes of determining the number of Shares present in person or
represented by proxy on voting matters, all votes cast "FOR", "AGAINST" or
"ABSTAIN" are included. A "Broker Non-Vote" is a vote withheld by a broker on a
particular matter because the broker has not received instructions from the
customer for whose account the shares are held. Broker non-votes and abstentions
are not treated as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. Broker non-votes and abstentions will have
no effect on the election of directors.
The Poison Pill Resolution constitutes a non-binding recommendation by
the Company's shareholders to the Board and is merely advisory. Thus, even if
shareholders adopt such resolutions, the Board would not be required to take the
recommended actions, and there can be no assurance that the Board will consider
the Poison Pill Resolution if such resolution is adopted.
Shareholders of the Company may revoke their proxies at any time prior
to its exercise by attending the Annual Meeting and voting in person (although
attendance at the Annual Meeting will not in and of itself constitute revocation
of a proxy) or by delivering a written notice of revocation. The delivery of a
subsequently dated proxy which is properly completed will constitute a
revocation of any earlier proxy. The revocation may be delivered either to Steel
Partners, in care of Innisfree M&A Incorporated, at the address set forth on the
back cover of this Proxy Statement or to the Company, at 1960 East Grand Avenue,
Suite 560, El Segundo, California 90245 or any other address provided by the
Company. Although a revocation is effective if delivered to the Company, Steel
Partners requests that either the original or photostatic copies of all
revocations be mailed to Steel Partners, in care of Innisfree M&A Incorporated,
at the address set forth on the back cover of this Proxy Statement so that Steel
Partners will be aware of all revocations and can more accurately determine if
and when proxies have been received from the holders of record on the Record
Date of a majority of the outstanding Shares.
IF YOU WISH TO VOTE FOR THE ELECTION OF THE NOMINEES TO THE BOARD AND
FOR THE POISON PILL RESOLUTION, PLEASE SIGN, DATE AND RETURN PROMPTLY THE
ENCLOSED BLUE PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
SOLICITATION OF PROXIES
The solicitation of proxies pursuant to this Proxy Statement is being
made by Steel Partners. Proxies may be solicited by mail, facsimile, telephone,
telegraph, in person and by advertisements. Solicitations may be made by certain
directors, officers and employees of Steel Partners, none of whom will receive
additional compensation for such solicitation.
Steel Partners has retained Innisfree M&A Incorporated for solicitation
and advisory services in connection with this solicitation, for which Innisfree
M&A Incorporated will receive $[ ] together with reimbursement for its
reasonable out-of-pocket expenses and will be indemnified against certain
liabilities and expenses, including certain liabilities under the federal
securities laws. Innisfree M&A Incorporated will solicit proxies from
individuals, brokers, banks, bank nominees and other institutional holders.
Steel Partners has requested banks, brokerage houses and other custodians,
nominees and fiduciaries to forward all solicitation materials to the beneficial
owners of the Shares they hold of record. Steel Partners will reimburse these
record holders for their reasonable out-of-pocket expenses in so doing. It is
anticipated that Innisfree M&A Incorporated will employ approximately [ ]
persons to solicit the Company's shareholders for the Annual Meeting.
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<PAGE>
The entire expense of soliciting proxies is being borne by Steel
Partners. Steel Partners does not currently intend to seek reimbursement of the
costs of this solicitation from the Company, although if some or all of the
Nominees are elected, Steel Partners may seek reimbursement from the Company for
the costs of this solicitation. Costs of this solicitation of proxies are
currently estimated to be approximately $[ ]. Steel Partners estimates that
through the date hereof, its expenses in connection with this solicitation are
approximately $[ ].
INFORMATION ABOUT PARTICIPANTS
The general partner of Steel Partners is Steel LLC, a Delaware limited
liability company. The principal business of Steel Partners is investing in the
securities of micro-cap companies. The principal business address of Steel
Partners and Steel LLC is 150 East 52nd Street, 21st Floor, New York, New York
10022. Warren G. Lichtenstein is Chairman of the Board, Secretary and the
Managing Member of Steel LLC. Robert Frankfurt is an employee and nonmanaging
member of Steel LLC and an employee of Steel Partners. As of the date hereof,
Steel Partners is the beneficial owner of 1,671,710 shares of the Common Stock
of the Company. Steel LLC does not beneficially own any shares of the Common
Stock of the Company on the date hereof, except by virtue of its role in Steel
Partners. For information regarding Steel Partners purchases and sales of Shares
of the Common Stock of the Company during the past two years, see Schedule I.
Mr. Wolosky is Senior Partner of Olshan Grundman Frome Rosenzweig and
Wolosky LLP, counsel to Steel Partners. Mr. Wolosky does not beneficially own
Shares of Common Stock of the Company.
Newcastle Partners, L.P. ("Newcastle") is a Texas limited partnership.
The principal business of Newcastle is the purchase, sale, exchange, acquisition
and holding of investment securities. The principal business address of
Newcastle is 4514 Cole Avenue, Suite 600, Dallas, Texas 75205. Mark E. Schwarz
is the sole general partner of Newcastle. As of the date hereof, Newcastle was
the beneficial owner of 13,900 shares of Common Stock of the Company. For
information regarding the purchases and sales of Shares of the Common Stock of
the Company during the past two years by Newcastle, see Schedule I.
The Board of Directors of the Company has a single class of directors.
At each annual meeting of shareholders, the directors are elected to a one-year
term. The Nominees, if elected, would serve as directors for the term expiring
in 2000 or until the due election and qualification of their successors. Steel
Partners has no reason to believe any of the Nominees will be disqualified or
unable or unwilling to serve if elected.
CERTAIN TRANSACTIONS BETWEEN STEEL PARTNERS AND THE COMPANY
Except as set forth in this Proxy Statement (including the Schedules
hereto), neither Steel Partners, nor any of the Nominees or any of the other
participants in this solicitation, or any of their respective associates: (i)
directly or indirectly beneficially owns any Shares or any securities of the
Company; (ii) has had any relationship with the Company in any capacity other
than as a shareholder, or is or has been a party to any transactions, or series
of similar transactions, since November 1, 1996 with respect to any Shares of
the Company; or (iii) knows of any transactions since November 1, 1996,
currently proposed transaction, or series of similar transactions, to which the
Company or any of its subsidiaries was or is to be a party, in which the amount
involved exceeds $60,000 and in which any of them or their respective affiliates
had, or will have, a direct or indirect material interest. In addition, other
than as set forth herein, there are no contracts, arrangements or understandings
entered into by Steel Partners or any of the Nominees or any other participant
in this solicitation or any of their respective associates within the past year
with any person with respect to any of the Company's securities, including, but
not limited to, joint ventures, loan or option arrangements, puts or calls,
guarantees against loss or guarantees of profit, division of losses or profits,
or the giving or withholding of proxies.
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<PAGE>
Except as set forth in this Proxy Statement (including the Schedules
hereto), neither Steel Partners nor any of the Nominees, nor any of the other
participants in this solicitation, or any of their respective associates, has
entered into any agreement or understanding with any person with respect to (i)
any future employment by the Company or its affiliates or (ii) any future
transactions to which the Company or any of its affiliates will or may be a
party. However, Steel Partners has reviewed, and will continue to review, on the
basis of publicly available information, as well as certain non-public
information supplied to the Company pursuant to a Confidentiality Agreement,
various possible business strategies that they might consider in the event that
the Nominees are elected to the Board. In addition, if and to the extent that
Steel Partners acquires control of the Company, Steel Partners intends to
conduct a detailed review of the Company and its assets, financial projections,
corporate structure, dividend policy, capitalization, operations, properties,
policies, management and personnel and consider and determine what, if any,
changes would be desirable in light of the circumstances which then exist.
OTHER MATTERS AND ADDITIONAL INFORMATION
Steel Partners is unaware of any other matters to be considered at the
Annual Meeting. However, Steel Partners has notified the Company of their
intention to bring before the Annual Meeting such proposals as it believes to be
appropriate. Should other proposals be brought before the Annual Meeting, the
persons named as proxies on the enclosed BLUE proxy card will vote on such
matters in their discretion. Shareholders will have no appraisal or similar
dissenter's rights with respect to the proposal to adopt the Poison Pill
Resolution.
STEEL PARTNERS II, L.P
November [ ], 1999
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<PAGE>
SCHEDULE I
TRANSACTIONS IN THE SECURITIES OF THE COMPANY
Shares of Common Price Per Date of
Stock Purchased/(Sold) Share(1) Purchase/Sale
- ---------------------- -------- -------------
STEEL PARTNERS II, L.P.
-----------------------
18,400 4.30424 10/1/98
16,000 4.28250 10/2/98
7,400 3.99703 10/5/98
50,900 4.11340 10/7/98
7,300 3.68340 10/8/98
14,500 3.69610 10/9/98
2,600 3.72000 10/12/98
1,600 3.68875 10/13/98
11,800 3.94246 10/16/98
12,200 4.44131 10/27/98
4,000 4.47000 10/29/98
7,600 4.37954 10/30/98
3,200 4.34500 11/2/98
1,400 4.86001 11/4/98
1,100 4.86001 11/5/98
1,700 4.84501 11/9/98
9,200 4.84160 11/10/98
1,200 4.84501 11/11/98
900 4.84501 11/12/98
2,700 4.84500 11/18/98
22,800 4.83568 11/19/98
24,000 4.72625 11/20/98
1,400 4.72001 11/27/98
5,000 4.72000 11/30/98
4,000 4.72000 12/01/98
10,000 4.65750 12/03/98
11,500 4.69570 12/04/98
10,000 4.72000 12/07/98
13,600 4.70851 12/08/98
66,800 4.74701 12/09/98
53,600 4.72787 12/10/98
28,200 4.77142 12/11/98
15,000 4.71000 12/14/98
40,500 4.75796 12/15/98
5,400 4.69407 12/16/98
76,610 4.87506 12/17/98
1,200 4.81251 12/18/98
46,100 5.01802 12/22/98
30,900 5.37597 12/23/98
30,600 5.37500 12/24/98
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239,900 5.37001 12/28/98
48,200 5.38300 12/31/98
149,200 5.55780 1/5/99
16,000 5.69780 1/7/99
32,400 5.70630 1/8/99
9,500 5.68774 1/11/99
10,000 5.65750 1/12/99
40,000 5.58250 1/13/99
12,400 5.38100 1/14/99
20,000 5.36750 1/15/99
52,400 5.62000 1/20/99
25,000 5.62500 1/21/99
28,600 5.62500 1/22/99
6,500 5.51808 1/25/99
8,500 5.49200 1/26/99
4,600 5.62500 1/28/99
5,100 5.62441 2/8/99
3,000 5.59000 2/12/99
32,700 5.38838 2/24/99
21,600 5.45030 2/25/99
25,000 5.45700 2/26/99
8,200 5.37500 3/1/99
200,000 5.30000 10/7/99
Shares of Common Price Per Date of
Stock Purchased/(Sold) Share(1) Purchase/Sale
- ---------------------- -------- -------------
NEWCASTLE PARTNERS, L.P.
------------------------
3,000 5.80 1/7/99
1,000 5.74 1/11/99
(3,100) 5.24 5/14/99
5,000 4.75 9/30/99
8,000 4.56 10/15/99
(1) Prices have been adjusted to take into effect the receipt by such
shareholder of a cash distribution of $5.70 in June 1999.
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IMPORTANT
Tell your Board what you think! Your vote is important. No matter how
many Shares you own, please give Steel Partners your proxy FOR the election of
the Nominees and FOR the Poison Pill Resolution by taking three steps:
1. Signing the enclosed BLUE Proxy Card;
2. Dating the enclosed BLUE Proxy Card; and
3. Mailing the enclosed BLUE Proxy Card today in the envelope
provided (no postage is required if mailed in the United
States).
If any of your Shares are held in the name of a brokerage firm, bank,
bank nominee of other institution, only it can vote such Shares and only upon
receipt of your specific instructions. Accordingly, please contact the person
responsible for your account and instruct that person to execute the BLUE proxy
card representing your Shares. Steel Partners urges you to confirm in writing
your instructions to Steel Partners in care of Innisfree M&A Incorporated at the
address provided below so that Steel Partners will be aware of all instructions
given and can attempt to ensure that such instructions are followed.
If you have any questions or require any additional information
concerning this Proxy Statement, please contact Innisfree M&A Incorporated at
the address set forth below:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, NY 10022
Call Toll Free (888) 750-5834
or
Banks and Brokers Call (212) 750-5833
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<PAGE>
BELL INDUSTRIES, INC. 1999 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF STEEL PARTNERS II, L.P.
The undersigned appoints Warren G. Lichtenstein or Robert A. Frankfurt
and each of them, as attorneys and agents with full power of substitution to
vote all shares of Common Stock of Bell Industries, Inc. (the "Company") which
the undersigned would be entitled to vote if personally present at the 1999
Annual Meeting of Shareholders of the Company, and including at any adjournments
or postponements thereof and at any special meeting called in lieu thereof, as
follows:
STEEL PARTNERS II, L.P. RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES NAMED
BELOW AND FOR THE POISON PILL RESOLUTION.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. ELECTION OF DIRECTORS: FOR WITHHOLD FOR ALL
ALL ALL Except nominee(s)
Nominees: Warren Lichtenstein, Mark written below
Schwartz, Robert Frankfurt, Steven [ ] [ ] [ ]
Wolosky
</TABLE>
--------------------------------------------
2. POISON PILL RESOLUTION PROPOSED BY STEEL PARTNERS. To adopt
the following resolution:
"RESOLVED, that the shareholders of Bell Industries, Inc. (the
"Company") hereby request that the Board of Directors of the
Company terminate the Rights Agreement dated as of February 1,
1999 and redeem the rights distributed thereunder, unless the
Rights Agreement is approved by an affirmative vote of a
majority of the shareholders at a meeting of shareholders to
be called by the Board for such purpose, and that this policy
of shareholder approval apply to all "Rights Agreements"
considered at any time by the Board."
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. In their discretion with respect to any other matters as may
properly come before the Annual Meeting.
The undersigned hereby revokes any other proxy or proxies heretofore
given to vote or act with respect to the Shares of Common Stock of the Company
held by the undersigned, and hereby ratifies and confirms all action the herein
named attorneys and proxies, their substitutes, or any of them may lawfully take
by virtue hereof. If properly executed, this proxy will be voted as directed
above. If no direction is indicated with respect to the above proposals, this
proxy will be voted FOR the election of the Nominees, or any substitutions or
additions thereto, including cumulatively for all or fewer than all of the
Nominees and FOR the Poison Pill Resolution, in the sole discretion of the
proxies and in the manner set forth in Item 3 above.
This proxy will be valid until the sooner of one year from the date
indicated below and the completion of the Annual Meeting.
DATED: _________________________________, 1999.
PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS PROXY.
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(Signature)
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(Signature, if held jointly)
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(Title)
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<PAGE>
WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS SHOULD EACH SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH SIGNING.
IMPORTANT: PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE!
IF YOU NEED ASSISTANCE WITH THIS PROXY CARD, PLEASE CALL
INNISFREE M&A INCORPORATED
CALL TOLL FREE (888) 750-5834
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