SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
----------------------
Date of Report (Date of earliest event reported): January 18, 2002
SL INDUSTRIES, INC.
(Exact name of issuer as specified in its charter)
New Jersey 1-4987 21-0682685
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification Number)
520 Fellowship Road, Suite A114
Mount Laurel, New Jersey 08054
(Address of principal executive offices and zip code)
(856) 727-1500
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS.
1. An election of the Board of Directors (the "Board") of SL
Industries, Inc. (the "Company") is scheduled to be held on January 22, 2002 at
the Company's 2001 Annual Meeting of Shareholders. It is possible that, as a
result of the election, the incumbent members of the Board would no longer
constitute a majority of the Board. Such a change in the composition of the
Board would, if it should occur, constitute a "change-in-control" of the Company
as defined in the respective Change in Control Agreements dated as of May 1,
2001, as amended, between the Company and each of its three executive officers
(the "Executives") (the "Agreements"). Each of the Executives has submitted a
notice of termination of his employment with the Company which will become
effective only if and when such a change of control occurs at or prior to the
election of directors.
The Board of Directors has determined that, in the event that such a
change in control occurs, it would be in the best interest of the Company and
its shareholders for each of the three Executives to remain employed with the
Company after the election in order to facilitate the transition to a new Board.
Therefore, pursuant to Section 4 of the Agreement, the Company has formally
requested, and each executive has agreed that the Executive remain employed with
the Company for up to ninety days after a change-in-control, should one occur as
a result of the upcoming election or otherwise as a result of the related proxy
contest with the RORID Committee. (The RORID Committee is a group of
shareholders, including Steel Partners II, L.P. (Steel Partners) and Newcastle
Partners, L.P. (Newcastle Partners), which is attempting to obtain control of
the Company's Board of Directors.)
2. Two of the Executives, Owen Farren and David Nuzzo, attended a
meeting in early November 2001, with representatives of Steel Partners,
including Warren Lichtenstein, and representatives of Newcastle Partners. The
two Executives have informed the Company that, at the meeting, a representative
of Newcastle Partners stated that it was very typical for change in control
contracts to be abrogated by a new board of directors and that the Company's
President, Owen Farren, should agree to arrange for a transfer of control of the
Company's Board to Steel Partners and Newcastle Partners. Mr. Farren was told
that, if he did so, new directors nominated by Steel Partners and Newcastle
Partners would negotiate an arrangement with Mr. Farren so that he would not be
left with nothing under his Change-in-Control Agreement. Mr. Farren declined
this offer. The two Executives have reported that, based on the threat made at
Mr. Farren, they believe that the RORID Committee might not honor any of the
Change-in-Control Agreements between the Company and the three Executives if its
nominees obtained control of the Company's Board of Directors.
The Board of Directors believes that such an action by a successor
Board of Directors controlled by nominees of the RORID Committee would frustrate
the intent of the Company's prior decision to enter into such agreements and
would deprive the Company of the benefits and protections afforded to the
Company under provisions of the Agreements which require the Executives to waive
claims against the Company, continue employment for certain transition periods
and give non-compete and non-solicitation
protections to the Company.
For the purpose of insuring that the Change-in-Control payments will
be paid to the Executives in such manner and at such times as specified in the
Change-In-Control Agreements, the Company has established a trust holding funds
in an amount sufficient to enable it to meet its obligations under the
Change-in-Control Agreement, thereby giving reassurance to the Executives and
enabling the Company to retain the protections and benefits of such agreements.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Township of Mount Laurel, State
of New Jersey, on the 18th day of January, 2002.
SL INDUSTRIES, INC.
By: /s/ Owen Farren
---------------------
Owen Farren
President and Chief Executive Officer