sec document

PREC14A 1 formprec14a01874_11192001.htm sec document

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )

Filed by the Registrant / /

Filed by a Party other than the Registrant /X/

Check the appropriate box:

/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 Under Rule 14a-12

SL INDUSTRIES, INC.
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(Name of Registrant as Specified In Its Charter)

THE RORID COMMITTEE
STEEL PARTNERS II, L.P.
WARREN G. LICHTENSTEIN
NEWCASTLE PARTNERS, L.P.
MARK E. SCHWARZ
GLEN KASSAN
JAMES R. HENDERSON
STEVEN WOLOSKY
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.

/ / Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction
applies:

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(2) Aggregate number of securities to which transaction
applies:

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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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/ / Fee paid previously with preliminary materials:

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/ / Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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PRELIMINARY COPY SUBJECT TO COMPLETION
DATED NOVEMBER 20, 2001

ANNUAL MEETING OF STOCKHOLDERS
OF
SL INDUSTRIES, INC.
-------------------------

PROXY STATEMENT
OF
THE RORID COMMITTEE
-------------------------

PLEASE MAIL THE ENCLOSED GOLD PROXY CARD

The RORID Committee (the "Committee") is the second largest
stockholder of SL Industries, Inc., a Delaware corporation ("SL" or the
"Company"). The Committee is writing to you in connection with the election of
directors to SL's Board of Directors at the annual meeting of stockholders
scheduled to be held on January 22, 2002, including any adjournments or
postponements thereof and any meeting which may be called in lieu thereof (the
"Annual Meeting"). The Committee has nominated its slate of directors in
opposition to the incumbent Board of Directors (the "SL Board"). The Committee
believes that SL's historical financial and stock price performance has
significantly trailed its peer group and recent actions of the SL Board have not
been in the best interests of SL's stockholders. The Committee is convinced that
a more thorough investigation of strategic alternatives, and a greater
dedication to maximizing stockholder value, will only be achieved through the
election of the Committee's slate.

This proxy statement (the "Proxy Statement") and the enclosed GOLD
proxy card are being furnished to stockholders of SL by the Committee in
connection with the solicitation of proxies from SL's stockholders to be used at
the Annual Meeting to elect the Committee's nominees, Warren G. Lichtenstein,
Mark E. Schwarz, James R. Henderson, Glen Kassan and Steven Wolosky (the
"Nominees") to the SL Board. As Nominees for director, Messrs. Lichtenstein,
Schwarz, Henderson, Kassan and Wolosky are deemed to be participants in this
proxy solicitation. As members of the soliciting group, Steel Partners II, L.P.
("Steel") and Newcastle Partners, L.P. ("Newcastle") are also deemed to be
participants in the proxy solicitation. The principal executive offices of SL
are located at 520 Fellowship Road, Suite A114, Mt. Laurel, New Jersey 08054.
This Proxy Statement and the GOLD proxy card are first being furnished to SL's
stockholders on or about November __, 2001.

SL has set the record date for determining stockholders entitled to
notice of and to vote at the Annual Meeting as of December 5, 2001 (the "Record
Date"). Stockholders 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. According to SL, as of the Record Date, there were
_________ shares of common stock, $.20 par value per share (the "Shares"),
outstanding and entitled to vote at the Annual Meeting. The Committee, along
with all of the participants in this solicitation, are the beneficial owners of
an aggregate of 850,800 Shares which represents approximately 14.9% of the
Shares outstanding (based on information publicly disclosed by SL). The
Committee intends to vote such Shares for the election of the Nominees.

THIS SOLICITATION IS BEING MADE BY THE COMMITTEE AND NOT ON BEHALF OF THE BOARD
OF DIRECTORS OR MANAGEMENT OF SL. THE COMMITTEE IS NOT AWARE OF ANY OTHER
MATTERS TO BE BROUGHT BEFORE THE ANNUAL MEETING OTHER THAN THE RATIFICATION OF
THE APPOINTMENT OF THE COMPANY'S AUDITORS. WE EXPRESS NO OPINION WITH RESPECT TO
THE PROPOSAL TO RATIFY THE APPOINTMENT OF THE COMPANY'S AUDITORS. HOWEVER,
SHOULD OTHER MATTERS, WHICH THE COMMITTEE IS NOT AWARE OF A REASONABLE TIME
BEFORE THIS SOLICITATION, BE BROUGHT BEFORE THE ANNUAL MEETING, THE PERSONS
NAMED AS PROXIES IN THE ENCLOSED GOLD PROXY CARD WILL VOTE ON SUCH MATTERS IN
THEIR DISCRETION.

WE URGE YOU TO SIGN, DATE AND RETURN THE GOLD PROXY CARD IN FAVOR OF THE
ELECTION OF OUR NOMINEES DESCRIBED IN THIS PROXY STATEMENT.

IF YOU HAVE ALREADY SENT A ____ PROXY CARD TO THE SL BOARD, YOU MAY REVOKE THAT
PROXY AND VOTE AGAINST THE ELECTION OF SL'S NOMINEES BY SIGNING, DATING AND
RETURNING THE ENCLOSED GOLD PROXY CARD. THE LATEST DATED PROXY IS THE ONLY ONE
THAT COUNTS. ANY PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE ANNUAL MEETING BY
DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER DATED PROXY FOR THE ANNUAL
MEETING TO THE COMMITTEE, C/O INNISFREE M&A INCORPORATED WHO IS ASSISTING IN
THIS SOLICITATION, OR TO THE SECRETARY OF SL, OR BY VOTING IN PERSON AT THE
ANNUAL MEETING.

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IMPORTANT

Your vote is important, no matter how many or how few Shares you
own. The Committee urges you to sign, date, and return the enclosed GOLD proxy
card today to vote FOR the election of the Nominees.

The Nominees are committed, subject to their fiduciary duty to SL's
stockholders, to giving all SL's stockholders the opportunity to receive the
maximum value for their Shares. A vote FOR the Nominees will enable you - as the
owners of SL - to send a message to SL'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 GOLD proxy card and return it to the Committee, 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
GOLD proxy card. The Committee 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 LOGO]
501 Madison Avenue, 20th Floor
New York, New York 10022

CALL TOLL FREE: (888) 750-5834
BANKERS AND BROKERS CALL COLLECT: (212) 750-5833

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PROPOSAL I - ELECTION OF DIRECTORS

REASONS FOR THE SOLICITATION

We are asking you to elect our Nominees in order to:

o remove five incumbent directors whose interests, we
believe, are not aligned with the interests of SL's
stockholders;

o take action that would give stockholders the greatest
return on their investment in the short term; and

o elect representatives who are committed to maximizing
value for all of SL's stockholders.

The Committee believes that the election of the Nominees represents
the best means for SL's stockholders to maximize the value of their Shares. The
Committee, as the second largest stockholder of SL, has a vested interest in the
maximization of the value of the Shares. In considering who is best capable of
maximizing value, the Committee shares the frustration of SL's stockholders in
the Board's inability to maximize stockholder value.

WE BELIEVE THAT SL'S SHARE PRICE OVER THE PAST SEVERAL YEARS DEMONSTRATES THE
BOARD'S FAILURE TO CREATE VALUE FOR ITS STOCKHOLDERS

o According to information contained in management's proxy
statement for the 1999 Annual Meeting of Stockholders
(the "Management Proxy Statement"), during the period
from July 31, 1994 through September 30, 1999, SL's
Share price performance trailed the S&P Electrical
Equipment Group index by a significant margin.

o According to the Management Proxy Statement, during this
period SL's Share price performance has trailed its peer
group index by over 90 percentage points with cumulative
total returns for the S&P Electrical Equipment Group
index of approximately 431% compared to cumulative total
returns for SL's Shares of approximately 339%.

o Since the Management Proxy Statement, SL has not mailed
proxy materials reporting comparisons of its Share price
with its peer group indexes due to SL's failure to hold
an annual meeting of stockholders in over two years.

o On September 30, 1999, the date on which SL last
compared its Share price to its peer group indexes, the
Share price closed at $14.25 per Share. Since then, the
Share price has plummeted to as low as $3.72 on October
9, 2001, representing a stunning 74% decrease.

o Since then, the Share price has been languishing between
$4.05 and $8.10 per Share, well below the $14.00 levels
seen in late 1999.

Due to the Company's lagging Share price, the NYSE has notified the
Company that it is not in compliance with the market capitalization requirements
for continued listing of the Shares on the NYSE. According to the Company's Form
10-Q for the fiscal quarter ended September 30, 2001 (the "Form 10-Q"), the
Company must submit a plan to the NYSE no later than December 10, 2001
demonstrating how it intends to achieve and sustain compliance. The Committee is
extremely concerned that the potential delisting of the Shares from the NYSE
could adversely effect stockholders' liquidity.

WE BELIEVE THAT THE SL BOARD'S RESTRUCTURING PLAN IS NOT IN THE BEST INTERESTS
OF THE STOCKHOLDERS

On March 19, 2001, although SL announced that it had engaged Credit
Suisse First Boston to explore a sale of SL and solicited transaction proposals
from potential purchasers, the Committee questions whether the SL Board ever

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had a real intention to pursue a sale of the Company. This belief was
underscored by SL's press release issued on November 5, 2001 announcing that the
SL Board did not believe that it was in the best interests of the stockholders
to sell the entire company at that time. The SL Board further disclosed that it
is in the process of negotiating the sale of two subsidiaries of SL. It is the
Committee's opinion that SL should be sold in its entirety at the current time.
The Committee is concerned that the potential sale of these two subsidiaries
will be for substantial losses similar to previous sales of SL business units,
as discussed in SL's public filings, and will not maximize stockholder value for
the SL stockholders in the immediate future.

The Committee believes that SL's Share price has suffered as a
result of continued losses, including losses from operations which have already
been discontinued in the current fiscal year.

o According to the Form 10-Q, SL realized net losses of
approximately $7.5 million for the nine month period
ended September 30, 2001 compared to net income of
approximately $2.1 million for the comparable period in
2000.

o According to SL's public filings, during 2001, SL
implemented a plan to restructure certain of its
operations including (i) the closure of the engineering
and sales support facility of its Condor D.C. Power
Supplies subsidiary ("Condor"), (ii) the elimination of
personnel at Condor's manufacturing facility in Reynosa,
Mexico and Mexicali, Mexico and headquarters in Oxnard,
California, (iii) the closure of Condor's manufacturing
facility in Reynosa, Mexico, and (iv) the disposition of
its SL Waber business.

o According to the Form 10-Q, the Company recorded losses
from the Company's restructuring plan of approximately
$8.2 million and $4.1 million in the second and third
fiscal quarters of 2001, respectively.

o The Company expects to record approximately $1.2 million
in losses from the Company's restructuring plan in the
fourth fiscal quarter of 2001.

o It is the Committee's opinion that the SL Board's
strategy to continue divesting its individual business
units is too late and is not necessarily the best way to
maximize stockholder value.

WE ARE EXTREMELY CONCERNED WITH THE COMPANY'S ABILITY TO CONTINUE AS A GOING
CONCERN

o According to public filings, the Company has
historically financed its operations and growth
primarily with funds generated from operations and
borrowings under its revolving credit facility.
According to the Form 10-Q, the Company has exhausted
the availability of funds under its credit facility with
$38.8 million of principal outstanding of the maximum
$40 million available under the credit facility.

o According to the Form 10-Q, the Company has advised its
banks that it was in default of the financial covenants
in its credit facility at September 30, 2001, and is in
discussions with its banks to amend its financial
covenants.

o The Company previously entered into a waiver and
amendment to the credit facility after failing to comply
with certain financial covenants at March 31, 2001.

o According to the Form 10-Q, the Company's independent
auditors have advised the Company that failure to
resolve these matters prior to the completion of their
audit of the consolidated financial statements for 2001
may result in a modification of their report with
respect to the Company's ability to continue as a going
concern.

o On November 15, 2001, SL announced in a press release
that the SL Board has voted to suspend the Company's
regular semi-annual cash dividend, which would have been
payable in November 2001. The Company is precluded from
paying cash dividends to its stockholders in the event
it is not in compliance with certain financial covenants
in its credit facility.

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EXECUTIVE OFFICERS OF SL HAVE RECENTLY ENTERED INTO CHANGE IN CONTROL AGREEMENTS
WITH SL INDICATING TO THE COMMITTEE THAT CURRENT MANAGEMENT'S INTERESTS MAY NOT
BE ALIGNED WITH THE INTERESTS OF SL STOCKHOLDERS

In the report of the SL Board Compensation Committee in SL's Form
10-K for the year ended December 31, 2000, the Compensation Committee stated
that it "believes that executive compensation should be linked to value
delivered to shareholders" and that the Company's compensation programs have
been "designed to provide a correlation between the financial success of the
executive and the shareholders." On May 1, 2001, the Company entered into change
in control agreements with executive officers Owen Farren, David Nuzzo and Jacob
Cherian which we believe are inconsistent with the Compensation Committee
philosophy. Under the agreements, the executive officers will be entitled to
severance payments and full benefits for up to 36 months in the event the
executives are terminated by the Company or its successor (other than for death
or disability), or the executives terminate their employment with the Company or
its successor, and either termination occurs within one year following a "change
in control" (as defined in the agreements), or within one year following
execution by the Company of a definitive agreement contemplating a change in
control that occurs, whichever is later. For example, in the event of a change
in control, Owen Farren would be entitled to a lump sum cash payment of the
product of 2.99 times the average of Mr. Farren's combined annual salary and
cash bonus paid for each of the three full calendar years ending prior to the
change in control. Based on Mr. Farren's annual salary and cash bonus from 1998
to 2000, he would be entitled to a lump sum cash payment of over $1.1 million
upon a change in control, subject to the provisions of the agreement.

We believe that the change in control agreements are unwarranted and
a waste of corporate assets in view of SL's disastrous Share price and operating
performance described above. How are these change in control agreements "linked
to value delivered to shareholders"? We find it suspect that the change in
control agreements were entered into shortly after the Committee nominated its
slate of directors in February 2001 to challenge the incumbent Board at the next
annual meeting. Under the terms of the change in control agreements, the
election of our slate to the SL Board would constitute a "change in control." We
are extremely concerned that the change in control agreements were executed in
order to provide golden parachutes for SL's executives rather than incentivizing
them to create stockholder value and to have a chilling effect on the
stockholders' rights to elect directors.

WE ALSO QUESTION WHETHER THE INTERESTS OF THE SL BOARD AND MANAGEMENT ARE
ALIGNED WITH THE INTERESTS OF SL STOCKHOLDERS IN VIEW OF THEIR LIMITED OWNERSHIP
OF SECURITIES OF SL

As the beneficial owners of an aggregate of 850,800 Shares, or 14.9%
of the Shares outstanding, we have a significant investment at stake. Of these
850,800 Shares, 623,150 Shares are owned outright by Steel, of which Warren
Lichtenstein is the managing member of its general partner, 10,300 Shares are
owned outright by Mr. Lichtenstein, and 217,350 Shares are owned outright by
Newcastle, of which Mark Schwarz is the sole general partner. Although James
Henderson, Glen Kassan and Steven Wolosky do not own any Shares of SL, in
agreeing to serve as Nominees they are committed to the objectives of the
Committee described herein. Our interests are clearly aligned with yours. We are
committed to maximizing stockholder value. In contrast, as of March 16, 2001,
all of the members of the SL Board and its most highly compensated executive
officers named in the Management Proxy Statement collectively owned barely 1% of
the Shares outright, based on information disclosed in the Management Proxy
Statement. We believe that the lack of significant actual ownership of the
Shares by the SL Board and management may contribute to the SL Board's and
management's lack of commitment to maximizing the value of the Shares.
Additionally, we believe that the lack of significant actual ownership of the
Shares by the SL Board and management may result in actions taken by SL that are
not always in the best interests of the greater majority of unaffiliated
stockholders. The table set forth below which has been derived from the
Management Proxy Statement contains information regarding the actual ownership
of the Shares by the SL Board and management. Reference is made to Schedule II
of this Proxy Statement which contains information regarding beneficial
ownership of the SL Board and management which has also been derived from the
Management Proxy Statement.

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Shares Owned Percentage Shares Beneficially Percentage
Name of Beneficial Owner Outright Owned(1) Owned(2) Owned(1)
------------------------ -------- -------- -------- --------
J. Dwane Baumgardner .............. 2,000 * 57,153 *
Richard E. Caruso ................. 0 * 5,992 *
Owen Farren ....................... 37,314 * 239,914 4.22%
Charles T. Hopkins ................ 1,000 * 1,000 *
David R. Nuzzo .................... 6,281 * 40,781 *
J. Edward Odegaaard ............... 2,000 * 2,000 *
Walter I. Rickard ................. 338 * 12,669 *
Robert J. Sanator ................. 8,000 * 8,000 *
All Directors and Executive ....... 56,933 1% 367,509 6.46%
Officers as Group
----------------------------------
* Less than one percent (1%).

(1) Assuming 5,687,057 outstanding Shares, as reported in the Management
Proxy Statement.

(2) Includes Shares subject to immediately exercisable options as
follows: Mr. Baumgardner, 55,153 Shares; Mr. Caruso, 5,992 Shares;
Mr. Farren, 202,600 Shares; Mr. Nuzzo, 34,500 Shares; Mr. Rickard,
12,331 Shares; and all directors and executive officers as a group,
310,576 Shares.

WE BELIEVE THAT THE SL BOARD MUST PROMPTLY EXPLORE OTHER ALTERNATIVES TO
MAXIMIZE STOCKHOLDER VALUE INCLUDING A SALE OF THE ENTIRE COMPANY

The Committee believes that the value of the Company has not been
maximized by the SL Board and believes that the election of the Nominees
represents the best means for stockholders to have the ability to maximize the
present value of their Shares. If elected, the Nominees will, subject to their
fiduciary duties, explore all available alternatives to maximize stockholder
value including, but not limited to (i) selling the entire company by means of a
merger, tender offer or otherwise; or (ii) divesting assets of the Company on a
tax efficient basis. Additionally, if elected, the Nominees will retain a
nationally recognized investment banking firm to assist in the review and
implementation of the alternatives that the Nominees believe will in the
immediate future maximize stockholder value for all of the Company's
stockholders.

Subject to their fiduciary duties, the Nominees will make their best
effort to maximize stockholder value to pursue a sale of SL to the highest
bidder and on the most favorable terms available to SL. The Nominees would work
to solicit bids from potential acquirors, including competitors of SL. Bids
would be carefully 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. We believe that the evaluation process described, as well
as any other reasonable evaluation process, can be conducted quickly.

We wish to provide the stockholders, the true owners of SL, with the
opportunity to elect directors that are unaffiliated with the existing Board. If
all are elected, the Nominees will constitute a majority of the current eight-
member Board. Your vote to elect the Nominees does not constitute a vote in
favor of our value enhancing plans including pursuing a sale of SL to the
highest bidder. Your vote to elect the Nominees will have the legal effect of

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replacing five incumbent directors with our Nominees. If the Nominees are
elected to the Board and a transaction involving the sale of SL is proposed by
the Board, stockholders will have an opportunity to vote on such transaction to
the extent required by law.

Neither we (nor to our knowledge, any other person on our behalf)
has made or undertaken any analysis or reports as to whether stockholder value
will be maximized as a result of this solicitation or obtained reports from
consultants or other outside parties as to whether the proposals presented
herein would have an effect on stockholder value. There can be no assurance that
stockholder value will be maximized as a result of this solicitation or the
election of the Nominees.

THE NOMINEES

The following information sets 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 the Committee 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 __, 1996. Each person listed below is
a citizen of the United States.

Warren G. Lichtenstein (36) has served as the Chairman of the Board,
Secretary and the Managing Member of Steel Partners, L.L.C., the general partner
of Steel, since January 1, 1996. Prior to such time, Mr. Lichtenstein was the
Chairman and a director of Steel Partners, Ltd., the general partner of Steel
Partners Associates, L.P., which was the general partner of Steel, from 1993
until prior to January 1, 1996. 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 has served as a director of
WebFinancial Corporation, a consumer and commercial lender, since 1996 and as
its President and Chief Executive Officer since December 1997. He served as a
director and the Chief Executive Officer of Gateway Industries, Inc., a provider
of database development and Web site design and development services, since 1994
and as the Chairman of the Board since 1995. Mr. Lichtenstein has served as a
director and the President and Chief Executive Officer of CPX Corp., a company
with no significant operating business, since June 1999 and as its Secretary and
Treasurer since May 2001. Mr. Lichtenstein is also a director of the following
publicly held companies: TAB Products Co., a document management company;
Tandycrafts, Inc., a manufacturer of picture frames and framed art; Puroflow
Incorporated, a designer and manufacturer of precision filtration devices; ECC
International Corp., a manufacturer and marketer of computer-controlled
simulators for training personnel to perform maintenance and operator procedures
on military weapons; United Industrial Corporation, a designer and producer of
defense, training, transportation and energy systems; and US Diagnostic Inc., an
operator of outpatient medical diagnostic imaging and related facilities. He is
a former director of Saratoga Beverage Group, Inc., a beverage manufacturer and
distributor, Alpha Technologies, Inc., an electronics components manufacturer,
Tech-Sym Corporation, an electronics engineering and manufacturing company, and
PLM International, Inc., an equipment leasing company. He also served as a
director of SL from 1993 to 1997. Mr. Lichtenstein served as Chairman of the
Board of Aydin Corporation, a provider of products and systems for the
acquisition and distribution of information over electronic communications
media, 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 date hereof, Mr.
Lichtenstein beneficially owned 633,450 Shares, including 623,150 Shares owned
by Steel. The business address of Mr. Lichtenstein is c/o Steel Partners II,
L.P., 150 E. 52nd Street, 21st Floor, New York, New York 10022. For information
regarding Mr. Lichtenstein's purchases and sales of Shares during the past two
years, see Schedule I.

Mark E. Schwarz (41) has served as the sole general partner of
Newcastle, a private investment firm, since 1993. Mr. Schwarz was also Vice
President and Manager of Sandera Capital, L.L.C., a private investment firm
affiliated with Hunt Financial Group, L.L.C., a Dallas-based investment firm
associated with the Lamar Hunt family ("Hunt"), from 1995 to September 1999 and
a securities analyst and portfolio Manager for SCM Advisors, L.L.C., formerly a
Hunt-affiliated registered investment advisor, from May 1993 to 1996. Mr.
Schwarz currently serves as a director of the following companies: WebFinancial
Corporation, a commercial and consumer lender; Nashua Corporation, a specialty
paper, label and printing supplies manufacturer; Bell Industries, Inc., a
computer systems integrator; and Tandycrafts, Inc., a manufacturer of picture
frames and framed art. Mr. Schwarz has also served as Chairman of the Board of
Directors of Hallmark Financial Services, Inc., a property-and-casualty
insurance holding

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company, since October 2001. From October 1998 through April 1999, Mr. Schwarz
served as a director of Aydin Corporation, a defense-electronics manufacturer.
As of the date hereof, Mr. Schwarz beneficially owned an aggregate of 217,350
Shares, all of which were owned directly by Newcastle. The business address of
Mr. Schwarz is c/o Newcastle Partners, L.P., 200 Crescent Court, Suite 670,
Dallas, Texas 75201. For information regarding Mr. Schwarz's purchases and sales
of Shares during the past two years, see Schedule I.

James R. Henderson (42) has served as a Vice President of Steel
Partners, L.L.C. since August 1999. He has also served as Vice President of
Operations of WebFinancial Corporation, a commercial and consumer lender, since
September 2001. From 1996 to July 1999, Mr. Henderson was employed in various
positions with Aydin Corporation, a defense-electronics manufacturer, which
included a tenure as president and Chief Operating Officer from October 1998 to
June 1999. Prior to his employment with Aydin Corporation, Mr. Henderson was
employed as an executive with UNISYS Corporation, an e-business solutions
provider. Mr. Henderson is a director of ECC International Corp., a manufacturer
and marketer of computer-controlled simulators for training personnel to perform
maintenance and operator procedures on military weapons. As of the date hereof,
Mr. Henderson did not beneficially own any Shares. Mr. Henderson has not
purchased or sold any Shares during the past two years. The business address of
Mr. Henderson is c/o Steel Partners II, L.P., 150 East 52nd Street, 21st Floor,
New York, New York 10022.

Glen Kassan (58) has served as Executive Vice President of Steel
Partners Services, Ltd., a management and advisory company, since June 2001 and
Vice President since October 1999. Steel Partners Services, Ltd. provides
management services to Steel. Mr. Kassan has served as Vice President, Chief
Financial Officer and Secretary of Gateway Industries, Inc., a provider of
database development and Web site design and development services, since June
2000. He has also served as Vice President, Chief Financial Officer and
Secretary of WebFinancial Corporation, a commercial and consumer lender, since
June 2000. From 1997 to 1998, Mr. Kassan served as Chairman and Chief Executive
Officer of Long Term Care Services, Inc., a privately owned healthcare services
company which Mr. Kassan co-founded in 1994 and initially served as Vice
Chairman and Chief Financial Officer. Mr. Kassan is currently a director of
Tandycrafts, Inc., a manufacturer of picture frames and framed art, Puroflow
Incorporated, a designer and manufacturer of precision filtration devices, and
the Chairman of the Board of US Diagnostic Inc., an operator of outpatient
diagnostic imaging. As of the date hereof, Mr. Kassan did not beneficially own
any Shares. Mr. Kassan has not purchased or sold any Shares during the past two
years. The business address of Mr. Kassan is c/o Steel Partners II, L.P., 150
East 52nd Street, 21st Floor, New York, New York 10022.

Steven Wolosky (46) has been a partner of Olshan Grundman Frome
Rosenzweig & Wolosky LLP, counsel to Steel, for more than five years. Mr.
Wolosky is also Assistant Secretary of WHX Corporation, a NYSE listed holding
company and a director of CPX Corp., a company with no significant operating
business. As of the date hereof, Mr. Wolosky did not beneficially own any
Shares. Mr. Wolosky has not purchased or sold any Shares during the past two
years. The business address of Mr. Wolosky is c/o Olshan Grundman Frome
Rosenzweig & Wolosky LLP, 505 Park Avenue, New York, New York 10022.

The Nominees will not receive any compensation from the Committee
for their services as a director of SL. On February 15, 2001, Steel, Newcastle
and the Nominees (collectively, the "Group") entered into a Joint Filing
Agreement (the "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 Shares of SL, (ii) they agreed to form the Committee for the
purpose of soliciting proxies or written consents for the election of the
Nominees, or any other person(s) nominated by Steel, to the SL Board at the next
annual meeting of stockholders, and (iii) Steel agreed to bear all expenses
incurred in connection with the Group's activities, including approved expenses
incurred by any of the parties in the solicitation of proxies or written
consents by the Committee.

Other than as stated above, there are no arrangements or
understandings between the Committee and each Nominee or any other person or
persons 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 SL if elected
as such at the Annual Meeting. The Nominees have not been convicted in any
criminal proceedings (excluding traffic violations or similar misdemeanors) over
the past ten years. Except as provided for under "Legal Proceedings" herein,
none of the Nominees is a party adverse to SL or any of its subsidiaries or has
a material interest adverse to SL or any of its subsidiaries in any material
pending legal proceedings.

-9-

The Committee 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 GOLD proxy card will be voted for alternate
nominees. In addition, the Committee reserves the right to nominate substitute
or additional persons if SL 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 GOLD proxy card
will be voted for such substitute or additional nominees.

YOU ARE URGED TO VOTE FOR THE ELECTION OF THE NOMINEES ON THE ENCLOSED GOLD
PROXY CARD.

VOTING AND PROXY PROCEDURES

Only stockholders 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.
Stockholders who sell Shares before the Record Date (or acquire them without
voting rights after the Record Date) may not vote such Shares. Stockholders 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, the Committee believes that the only outstanding
class of securities of SL entitled to vote at the Annual Meeting are the Shares.

Shares represented by properly executed GOLD 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 the Nominees to the Board, and
in the discretion of the persons named as proxies on all other matters as may
properly come before the Annual Meeting. Directors are elected by a plurality of
the votes cast (assuming a quorum is present). An abstention from voting will be
tabulated as a vote withheld on the election and will be included in computing
the number of Shares present for purposes of determining the presence of a
quorum, but will not be considered in determining whether each of the nominees
has received a plurality of the votes cast at the Annual Meeting. Proxies
relating to "street name" Shares that are voted by brokers only on some of the
proposals will nevertheless be treated as present for purposes of determining
the presence of a quorum on all matters but will not be entitled to vote on any
proposal which the broker does not have discretionary voting power and has not
received instructions from the beneficial owner ("broker non-votes"). Directors
are elected by a plurality of the votes cast and the nominees who receive the
most votes will be elected.

Stockholders of SL may revoke their proxies at any time prior to
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 the
Committee in care of Innisfree M&A Incorporated at the address set forth on the
back cover of this Proxy Statement or to SL at 520 Fellowship Road, Suite A114,
Mt. Laurel, New Jersey 08054 or any other address provided by SL. Although a
revocation is effective if delivered to SL, the Committee requests that either
the original or photostatic copies of all revocations be mailed to the Committee
in care of Innisfree M&A Incorporated at the address set forth on the back cover
of this Proxy Statement so that the Committee 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 SL BOARD, PLEASE
SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED GOLD PROXY CARD IN THE POSTAGE-PAID
ENVELOPE PROVIDED.

SOLICITATION OF PROXIES

The solicitation of proxies pursuant to this Proxy Statement is
being made by the Committee. Proxies may be solicited by mail, facsimile,
telephone, telegraph, Internet, in person and by advertisements.

The Committee has retained Innisfree M&A Incorporated for
solicitation and advisory services in connection with this solicitation, for
which Innisfree M&A Incorporated will receive a fee not to exceed $______,
together with reimbursement for its reasonable out-of-pocket expenses, and will
be indemnified against certain liabilities and

-10-

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. The Committee 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. The Committee 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 SL's
stockholders for the Annual Meeting.

The entire expense of soliciting proxies is being borne by the
Committee. If the Nominees are elected to the SL Board, the Committee intends to
seek reimbursement of the costs of this solicitation from SL. Unless otherwise
required by law, the Committee does not currently intend to submit the question
of reimbursement of the costs of this solicitation to a stockholder vote. Costs
of this solicitation of proxies are currently estimated to be approximately
$___. The Committee estimates that through the date hereof, its expenses in
connection with this solicitation are approximately $____________.

PARTICIPANT INFORMATION

The general partner of Steel is Steel Partners, L.L.C. ("Steel
LLC"), a Delaware limited liability company. The principal business of Steel is
investing in the securities of small-cap companies. The principal business
address of Steel 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. James Henderson is a Vice President of Steel
LLC. Glen Kassan is a Vice President of Steel Partners Services, Ltd., an
affiliate of Steel. As of the date hereof, Steel is the beneficial owner of
623,150 Shares. Steel LLC does not beneficially own any Shares on the date
hereof, except by virtue of its role in Steel. For information regarding
purchases and sales of Shares during the past two years by Steel, see Schedule
I.

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 200 Crescent Court,
Suite 670, Dallas, Texas 75201. Mark E. Schwarz is the sole general partner of
Newcastle. As of the date hereof, Newcastle is the beneficial owner of 217,350
Shares. For information regarding the purchases and sales of Shares during the
past two years by Newcastle, see Schedule I.

The Board of Directors of SL has a single class of directors. At
each annual meeting of stockholders, the directors are elected to a one-year
term. The Nominees, if elected, would serve as directors until the next annual
meeting of stockholders and until the due election and qualification of their
successors. The Committee has no reason to believe any of the Nominees will be
disqualified or unable or unwilling to serve if elected.

LEGAL PROCEEDINGS

On October 23, 2001, Steel filed an action in the Superior Court of
New Jersey Chancery Division, Morris County, to compel SL to hold its annual
meeting of stockholders on December 19, 2001. Section 14A:5-2 of the New Jersey
Business Corporation Act permits the Superior Court to compel an annual meeting
of stockholders upon application of any stockholder if there is a failure to
hold an annual meeting of stockholders for a period of 13 months after the
corporation's last annual meeting. Steel believes that SL has not held or
scheduled an annual meeting of stockholders since November 9, 1999. On November
9, 2001, Steel and SL stipulated that an annual meeting of stockholders of SL
will be convened on January 22, 2002 at which time only the following matters
will be voted upon by the stockholders: (i) the election of no more than eight
(8) directors; (ii) the ratification of the appointment of an accounting firm;
and (iii) such other matters which properly may come before the meeting. None of
the Nominees are otherwise adverse to SL or any of its subsidiaries in any
material pending legal proceedings.

CERTAIN TRANSACTIONS BETWEEN THE COMMITTEE AND SL

Except as set forth in this Proxy Statement (including the Schedules
hereto), neither the Committee nor 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 SL; (ii) has had any
relationship with SL in any capacity other than as a stockholder, or is or has
been a party to any transactions, or series of similar transactions, or was
indebted to SL

-11-

during the past year with respect to any Shares of SL; or (iii) knows of any
transactions during the past year, currently proposed transactions, or series of
similar transactions, to which SL 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 the Committee 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 SL'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.

Except as set forth in this Proxy Statement (including the Schedules
hereto), neither the Committee 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 SL or its affiliates or (ii) any future transactions to which SL
or any of its affiliates will or may be a party. However, the Committee has
reviewed, and will continue to review, on the basis of publicly available
information, various possible business strategies that it might consider in the
event that the Nominees are elected to the Board.

OTHER MATTERS AND ADDITIONAL INFORMATION

The Committee is unaware of any other matters to be considered at
the Annual Meeting other than the ratification of the appointment of the
Company's auditors. We express no opinion with respect to the proposal to ratify
the appointment of the Company's auditors. However, should other matters, which
the Committee is not aware of a reasonable time before this solicitation, be
brought before the Annual Meeting, the persons named as proxies on the enclosed
GOLD proxy card will vote on such matters in their discretion.

-12-

The information concerning SL contained in this Proxy Statement and
the Schedules attached hereto has been taken from, or is based upon, publicly
available information. To date, the Committee has not had access to the books
and records of SL.

THE RORID COMMITTEE

November __, 2001

-13-

SCHEDULE I
----------

TRANSACTIONS IN THE SHARES DURING THE PAST TWO YEARS
---------------------------------------------------

Shares of Common Stock Price Per Date of
Purchased Share Purchase
--------- ----- --------

STEEL PARTNERS II, L.P.
-----------------------

4,000 $10.73250 10/06/00
500 $10.79000 10/12/00
16,000 $10.78090 10/17/00
18,400 $10.08230 10/18/00
9,200 $10.80000 10/25/00
2,000 $10.55000 11/22/00
1,500 $11.00830 11/27/00
100 $10.95000 11/30/00
7,500 $10.82080 12/04/00
9,800 $10.99900 12/05/00
2,000 $11.05000 12/06/00
200 $10.86250 12/11/00
6,000 $10.85440 12/12/00
4,700 $10.76010 12/13/00
2,600 $10.71590 12/14/00
1,000 $10.98750 12/15/00
500 $10.86250 12/18/00
700 $10.98750 12/20/00
1,500 $10.34170 12/22/00
5,100 $10.67500 12/26/00
3,500 $11.22860 12/28/00
2,500 $11.45000 12/29/00
18,300 $11.10460 01/04/01
1,800 $11.05000 01/05/01
3,500 $10.92500 01/08/01

-14-

200 $10.80000 01/11/01
500 $11.05000 01/18/01
2,500 $11.28750 01/22/01
15,600 $11.30000 01/23/01
6,500 $11.75460 02/02/01
17,000 $5.70820 09/28/01
10,000 $4.99000 10/08/01
30,000 $3.78000 10/09/01
26,150 $4.61720 10/11/01
2,500 $5.10200 10/12/01
33,500 $4.99990 10/19/01
1,000 $5.03000 10/22/01

NEWCASTLE PARTNERS, L.P.
------------------------

10,000 $10.8725 02/04/00
5,000 $10.6750 02/09/00
4,700 $10.5600 02/11/00
10,000 $10.5600 02/11/00
300 $10.5600 02/14/00
9,000 $10.4944 02/14/00
4,000 $10.4350 02/16/00
800 $10.4350 02/17/00
200 $10.4350 02/18/00
3,000 $10.1750 03/13/00
15,000 $10.1333 03/14/00
2,700 $9.9250 03/15/00
3,000 $9.9250 03/17/00
1,000 $9.9250 03/20/00
10,000 $9.9875 03/28/00
5,000 $9.7375 04/11/00

-15-

6,500 $9.8625 04/14/00
4,000 $9.5188 05/11/00
2,000 $9.4250 05/12/00
3,000 $9.4250 05/15/00
2,000 $9.8000 06/26/00
2,000 $9.8000 07/03/00
2,000 $9.4875 07/05/00
3,000 $9.4667 07/07/00
4,000 $10.4250 12/22/00
4,000 $11.4100 06/01/01
500 $11.4000 06/04/01
100 $11.4000 06/05/01
300 $11.4000 06/06/01
1,000 $11.4000 06/07/01
1,000 $11.4000 06/08/01
900 $11.4000 06/11/01
1,200 $11.4100 06/15/01
6,000 $7.4363 07/30/01
10,000 $7.5500 08/01/01
2,000 $7.5000 08/01/01
10,000 $7.6000 08/06/01
5,000 $7.7410 09/17/01
26,150 $4.6178 10/11/01
2,500 $5.1080 10/12/01
33,500 $5.0003 10/19/01
1,000 $5.0450 10/22/01

-16-

WARREN G. LICHTENSTEIN
----------------------

NONE(1)

MARK E. SCHWARZ
---------------

NONE(2)

JAMES R. HENDERSON
------------------

NONE

GLEN KASSAN
-----------

NONE

STEVEN WOLOSKY
--------------

NONE
-----------------
1 By virtue of his position with Steel Partners II, L.P., Mr.
Lichtenstein has the power to vote and dispose of SL's Shares owned
by Steel Partners II, L.P. Accordingly, Mr. Lichtenstein is
considered the beneficial owner of the Shares of SL owned by Steel
Partners II, L.P.

2 By virtue of his position with Newcastle Partners, L.P., Mr. Schwarz
has the power to vote and dispose of SL's Shares owned by Newcastle
Partners, L.P. Accordingly, Mr. Schwarz is considered the beneficial
owner of the Shares of SL owned by Newcastle Partners, L.P.

-17-

SCHEDULE II
-----------

SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
-----------------------------------------------------------

THE FOLLOWING IS BASED SOLELY ON INFORMATION PROVIDED IN THE COMPANY'S FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2000

The following table sets forth certain information regarding
ownership of the shares, as of March 16, 2001 (except as otherwise noted), by:
(i) each person or entity (including such person's or entity's address) who is
known by SL to own beneficially more than five percent of the Company's shares,
(ii) each of the Company's Directors and nominees for Director who beneficially
owns shares, (iii) each Named Executive Officer 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 SL.

Number of
Shares
Beneficially
Name of Beneficial Owner Owned(1) Percentage Owned
------------------------ -------- ----------------

Dimensional Fund Advisors, Inc.
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401.......................... 296,400(2) 5.21%

The Gabelli Funds
One Corporate Center
Rye, NY 10580-1435.............................. 1,269,620(3) 22.32%

Oaktree Capital Management, LLC
333 South Grand Avenue
28th Floor
Los Angeles, CA 90071........................... 525,000(4) 9.23%

Steel Partners II, L.P.
150 E. 52nd Street
21st Floor
New York, NY 10022.............................. 503,500(5) 8.85%

J. Dwane Baumgardner............................ 57,153(6) *

Richard E. Caruso............................... 5,992(7) *

Owen Farren..................................... 239,914(8) 4.22%

Charles T. Hopkins.............................. 1,000 *

David R. Nuzzo.................................. 40,781(9) *

J. Edward Odegaaard............................. 2,000(10) *

Walter I. Rickard .............................. 12,669(11) *

Robert J. Sanator............................... 8,000 *

All Directors and Executive Officers as a Group. 367,509(12) 6.46%

-18-

* 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
296,400 shares, as of February 2, 2001, 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, all of which Dimensional serves as
investment manager. Dimensional disclaims beneficial ownership of
all such shares.

(3) Includes the following shares deemed to be owned beneficially, as of
March 6, 2001, by the following affiliates (the "Gabelli
Affiliates"): 73,600 shares held by Gabelli Funds, LLC, a registered
investment advisor and wholly-owned subsidiary of Gabelli Asset
Management, Inc. ("GAMI"), a public company and subsidiary of
Gabelli Group Capital Partners, Inc. ("Gabelli Partners"); 1,001,520
shares held by GAMCO Investors, Inc., a registered investment
advisor and wholly-owned subsidiary of GAMI; 25,000 shares held by
Gabelli Advisors, Inc., an investment advisor and subsidiary of
GAMI; 1,000 shares held by Gabelli Foundation, Inc. (the
"Foundation"), a private foundation; 60,000 shares held by Gabelli
Performance Partnership LP ("GPP"), whose primary purpose is
investing in securities; and 108,500 shares held by Gabelli
International Limited, whose primary business purpose is investing
in a portfolio of equity securities and securities convertible into
or exchangeable for equity securities in order to achieve its
investment objective of significant long-term growth of capital.
Each of the Gabelli Affiliates claims sole voting and dispositive
power over the shares held by it. The foregoing persons do not admit
to constituting a group within the meaning of Section 13(d) of the
Securities Exchange Act. Mario J. Gabelli is the Chief Investment
Officer of each of the Gabelli Affiliates; the majority stockholder
and Chairman of the Board of Directors and Chief Executive Officer
of Gabelli Partners and GAMI; the President, a Trustee and the
Investment Manager of the Foundation; and the portfolio manager for
GPP. The general partner of GPP is MJG Associates, Inc., the sole
shareholder, director and employee of which is Mario J. Gabelli.

GAMCO Investors, Inc. is a New York corporation, Gabelli Advisors,
Inc. is a Delaware corporation, and Gabelli Funds, LLC is a New York
limited liability company, each having its principal business office
at One Corporate Center, Rye, New York 10580. GPP is a New York
limited partnership having its principal business office at 401
Theodore Fremd Ave., Rye, New York 10580. Gabelli International
Limited is a corporation organized under the laws of the British
Virgin Islands, having its principal business office at c/o
MeesPierson (Cayman) Limited, British American Centre, Dr. Roy's
Drive-Phase 3, George Town, Grand Cayman, British West Indies. The
Foundation has its principal offices at 165 West Liberty Street,
Reno, Nevada 90501.

(4) Oaktree Capital Management, LLC, a California limited liability
company ("Oaktree"), is deemed to have beneficial ownership of
525,000 shares as of December 31, 2000. The principal business of
Oaktree is providing investment advice and management services to
institutional and individual investors. Oaktree's General Partner is
OCM Principal Opportunities Fund, L.P., a Delaware limited
partnership.

(5) Steel Partners II, L.P., ("Steel Partners II"), is a Delaware
limited partnership. Steel Partners II is deemed to have beneficial
ownership of 503,500 shares as of February 15, 2001. The principal
business of Steel Partners II is investing in the securities of
microcap companies. Steel Partners II's General Partner is Steel
Partners L.L.C., a Delaware limited liability company.

-19-

(6) Includes 55,153 shares which Mr. Baumgardner has the right to
acquire at any time upon exercise of stock options.

(7) Includes 5,992 shares, which Mr. Caruso has the right to acquire at
any time upon exercise of stock options.

(8) 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, 20,245 shares beneficially owned as a participant in the
Company's Savings and Pension Plan, and 202,600 shares which Mr.
Farren has the right to acquire, at any time, upon the exercise of
stock options.

(9) Includes 1,781 shares beneficially owned by Mr. Nuzzo as a
participant in the Company's Savings and Pension Plan, and 34,500
shares which Mr. Nuzzo has the right to acquire at any time upon
exercise of stock options.

(10) Shares owned jointly by Mr. Odegaaard and his wife, who share voting
and investment power.

(11) Includes 12,331 shares which Mr. Rickard has the right to acquire at
any time upon exercise of stock options.

(12) Includes 87,597 shares which 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 4,385
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.

-20-

IMPORTANT

Tell your Board what you think! Your vote is important. No matter
how many Shares you own, please give Steel your proxy FOR the election of the
Nominees by taking three steps:

1. SIGNING the enclosed GOLD proxy card,

2. DATING the enclosed GOLD proxy card, and

3. MAILING the enclosed GOLD 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 or 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 GOLD
proxy card representing your Shares. The Committee urges you to confirm in
writing your instructions to the Committee in care of Innisfree M&A Incorporated
at the address provided below so that the Committee 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 LOGO]
501 Madison Avenue, 20th Floor
New York, New York 10022

CALL TOLL FREE: (888) 750-5834
BANKERS AND BROKERS CALL COLLECT: (212) 750-5833

-21-

PRELIMINARY COPY SUBJECT TO COMPLETION
DATED NOVEMBER 20, 2001

SL INDUSTRIES, INC. ANNUAL MEETING OF STOCKHOLDERS

THIS PROXY IS SOLICITED ON BEHALF OF THE RORID COMMITTEE

The undersigned appoints Warren G. Lichtenstein and Mark E. Schwarz and each of
them, attorneys and agents with full power of substitution to vote all shares of
common stock of SL Industries, Inc. (the "Company") which the undersigned would
be entitled to vote if personally present at the Annual Meeting of Stockholders
of the Company, and including at any adjournments or postponements thereof and
at any meeting called in lieu thereof, as follows:

1. ELECTION OF DIRECTORS: FOR WITHHOLD FOR ALL
ALL ALL Except nominee(s)
Nominees: Warren Lichtenstein, Mark written below
Schwarz, James Henderson, Glen Kassan, [ ] [ ] [ ]
and Steven Wolosky

------------------------------------

2. 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 proposal, this
proxy will be voted FOR the election of the Nominees, or any substitutions or
additions thereto.

This proxy will be valid until the sooner of one year from the date
indicated below and the completion of the Annual Meeting.

DATED: _________________________________, 2001.

PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS PROXY.

-------------------------------------------------------
(Signature)

-------------------------------------------------------
(Signature, if held jointly)

-------------------------------------------------------
(Title)

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 MAIL THIS PROXY CARD PROMPTLY!