Edgar Filing: SL INDUSTRIES INC

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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 /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement

/ / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6
(e)(2))

/X/ Definitive Proxy Statement

/ / Definitive Additional Materials

/ / Soliciting Material Pursuant to ss. 240.14a-12

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

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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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/X/ No fee required.

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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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SL INDUSTRIES, INC.
520 FELLOWSHIP ROAD
SUITE A-114
MT. LAUREL, NEW JERSEY 08054
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD JUNE 9, 2004
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To The Holders of Our Common Stock:

We invite you to attend our annual meeting of shareholders on Wednesday,
June 9, 2004 at the Warwick Hotel, 65 West 54th Street, New York, New York at
10:00 A.M., Eastern Time. At the meeting, you will hear an update on our
operations, have a chance to meet some of our directors and executives, and will
act on the following matters:

1) To elect seven (7) directors until the next annual meeting in 2005 or
until their successors have been elected and qualified;

2) To ratify the appointment of Grant Thornton LLP as our independent
accountants for fiscal 2004; and

3) Any other matters that properly come before the meeting.

This booklet includes a formal notice of the meeting and the proxy
statement. The proxy statement tells you more about the agenda and procedures
for the meeting. It also describes how our Board of Directors operates and gives
personal information about our director nominees.

Only record holders of SL Industries, Inc. common stock at the close of
business on April 23, 2004, will be entitled to vote on the foregoing matters at
the annual meeting. Even if you only own a few shares of common stock, we want
your shares to be represented at the annual meeting. I urge you to complete,
sign, date and return your proxy card promptly in the enclosed envelope.

We have also provided you with the exact place and time of the meeting if
you wish to attend in person.

Sincerely yours,

DAVID R. NUZZO
Secretary

Dated: Mt. Laurel, New Jersey
April 29, 2004

SL INDUSTRIES, INC.
520 FELLOWSHIP ROAD
SUITE A-114
MT. LAUREL, NEW JERSEY 08054
(856) 727-1500

PROXY STATEMENT

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors (the "Board") of SL Industries, Inc., a New Jersey
corporation (the "Company") of proxies in the accompanying form to be used at
the Annual Meeting of Shareholders of the Company to be held on June 9, 2004,
and any adjournment or postponement thereof (the "Meeting"). This Proxy
Statement, the accompanying form of proxy and the Company's Annual Report for
the fiscal year ended December 31, 2003 (the "2003 Annual Report") are being
mailed to shareholders on or about April 29, 2004. The shares represented by the
proxies received pursuant to the solicitation made hereby and not revoked will
be voted at the Meeting.

MEETING OF SHAREHOLDERS

The Meeting will be held at the Warwick Hotel, 65 West 54th Street, New York,
New York, on Wednesday, June 9, 2004, at 10:00 A.M., Eastern Time.

RECORD DATE AND VOTING

The Board of Directors fixed the close of business on Friday, April 23, 2004, as
the record date (the "Record Date") for the determination of holders of
outstanding shares of the Company entitled to notice of and to vote on all
matters presented at the Meeting. Such shareholders will be entitled to one vote
for each share held on each matter submitted to a vote at the Meeting. On the
Record Date, there were 5,937,434 shares of the Company's Common Stock, $.20 par
value per share (the "Common Stock"), issued and outstanding, each of which is
entitled to one vote on each matter to be voted upon.

PURPOSES OF THE MEETING

The purposes of the Meeting are to vote upon (i) the election of seven (7)
directors until the next annual meeting in 2005 or until their successors have
been elected and qualified, (ii) the ratification of Grant Thornton LLP as the
Company's independent auditors for the fiscal year ending December 31, 2004, and
(iii) such other business as may properly come before the Meeting and any
adjournment or postponement thereof.

QUORUM AND REQUIRED VOTE

Under the By-Laws of the Company, the presence of a quorum is required for each
matter to be acted upon at the Meeting. The presence, either in person or by
properly executed proxy, of the holders of a majority of the outstanding shares
of Common Stock is necessary to constitute a quorum for the purpose of acting on
the matters referred to in the Notice of Annual Meeting of Shareholders

accompanying this Proxy Statement and any other proposals which may properly
come before the Meeting. Broker non-votes and abstentions will be counted only
for the purpose of determining whether a quorum is present at the Meeting.
Broker non-votes occur when a broker returns a proxy but does not have the
authority to vote on a particular proposal.

The director nominees receiving a plurality of the votes cast during the Meeting
will be elected to fill the seats of the Board. For the other proposal to be
approved, the favorable vote of a majority of the shares present and entitled to
vote thereon is required. Abstentions count for quorum purposes and will have
the same effect as an "against" vote for all other proposals.

PROXIES

The Board is asking for your proxy. Giving the Board your proxy means you
authorize it to vote your shares at the Meeting in the manner you direct. You
may vote for all, some or none of the director nominees. You may also vote for
or against the other proposals or abstain from voting.

On the matters coming before the Meeting as to which a choice has been specified
by a shareholder by means of the ballot on the proxy, the shares will be voted
accordingly. If no choice is so specified, the shares will be voted (i) FOR the
election of the nominees for director listed in this Proxy Statement, and (ii)
FOR the ratification of Grant Thornton LLP as the Company's independent
auditors, all as referred to in Items 1 and 2, respectively, in the Notice of
Annual Meeting of Shareholders and as described in this Proxy Statement.

The form of proxy accompanying this Proxy Statement confers discretionary
authority upon the named proxyholders with respect to amendments or variations
to the matters identified in the accompanying Notice of Annual Meeting of
Shareholders and with respect to any other matters which may properly come
before the Meeting. As of the date of this Proxy Statement, management of the
Company knows of no such amendment or variation or of any matters expected to
come before the Meeting which are not referred to in the accompanying Notice of
Annual Meeting of Shareholders.

A shareholder who has given a proxy may revoke it by voting in person at the
Meeting, by giving written notice of revocation to the Secretary of the Company
or by giving a later dated proxy at any time before voting.

Only holders of Common Stock, their proxy holders, and the Company's invited
guests may attend the Meeting. If you wish to attend the Meeting in person but
you hold your shares through someone else, such as a stockbroker, you must bring
proof of your ownership and identification with a photo at the Meeting. For
example, you could bring an account statement showing that you beneficially
owned Common Stock shares as of April 23, 2004 as acceptable proof of ownership.

COSTS OF SOLICITATION

The Company will bear the cost of printing and mailing proxy materials,
including the reasonable expenses of brokerage firms and others for forwarding
the proxy materials to beneficial owners of Common Stock. In addition to
solicitation by mail, solicitation may be made by certain directors, officers
and employees of the Company, or firms specializing in solicitation; and may be
made in person or by telephone or telegraph. No additional compensation will be
paid to any director, officer or employee of the Company for such solicitation.

The Company has retained Innisfree M&A, Inc. to assist the Company in the
solicitation of proxies for a fee of $6,500 plus expenses.

ITEM 1: ELECTION OF DIRECTORS

The Company has one class of directors, each serving a one-year term. Directors
elected at the Meeting will serve until the 2005 Annual Meeting of Shareholders
and until their respective successors are duly elected and qualified.

INFORMATION WITH RESPECT TO NOMINEES AND DIRECTORS

Set forth below are the names and ages of the nominees for directors and their
principal occupations at present and for the past five years. There are, to the
knowledge of the Company, no agreements or understandings by which these
individuals were so selected. No family relationships exist between any
directors or executive officers (as such term is defined in Item 402 of
Regulation S-K) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Board has adopted independence standards for directors that
conform to the standards required by the American Stock Exchange ("AMEX") for
listed companies. Based on the Company's director independence standards, the
Board has affirmatively determined that each of the nominees, other than Messrs.
Lichtenstein, Kassan and Henderson, is independent (including each of the
non-management directors, consisting of Messrs. Baumgardner, Schwarz, Gray and
Risher).
DIRECTOR
NAME AGE ALL OFFICES WITH THE COMPANY SINCE
------------------------- --- ------------------------------------------------- ---------
Warren G. Lichtenstein(1) 38 Chairman of the Board and Chief Executive Officer 2002

Glen Kassan(1) 60 President and Director 2002

J. Dwane Baumgardner(2)(3) 63 Director 1990

James Henderson 46 Director 2002

Avrum Gray(2)(4) 68 Director 2002

James A. Risher(3)(4) 61 Director 2003

Mark E. Schwarz(1)(2)(3)(4) 43 Director 2002

(1) Member of Executive Committee.
(2) Member of Audit Committee.
(3) Member of Compensation Committee.
(4) Member of Nominating and Corporate Governance Committee.

BUSINESS BACKGROUND

The following is a summary of the business background and experience of each of
the persons named above:

WARREN G. LICHTENSTEIN was elected Chairman of the Board on January 24, 2002,
and Chief Executive Officer of the Company on February 4, 2002. Mr. Lichtenstein
had previously served as a director of the Company from 1993 to 1997. Mr.
Lichtenstein has served as the Chairman of the Board, Secretary and the Managing
Member of Steel Partners, L.L.C., 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. ("Old 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 and the Chief Executive Officer of Gateway Industries, Inc.
("Gateway"), a provider of database development and Web site design and
development services, since 1994 and as Chairman of the Board from 1995 through
February 2004. He has served as a director of WebFinancial Corporation
("WebFinancial"), a consumer and commercial lender, since 1996 and as its Chief
Executive Officer since December 1997. From December 1997 to December 2003, he
also served as President of WebFinancial. Mr. Lichtenstein has served as a
director and the President and Chief Executive Officer of Steel Partners, Ltd.
("SPL"), a management and advisory company that provides management services to
Steel and other affiliates of Steel, since June 1999, and as its Secretary and
Treasurer from May 2001 to December 2003. Mr. Lichtenstein served as President
of an entity previously known as Steel Partners Services, Ltd. ("SPS"), a
management and advisory company, from October 1999 through March 2002. SPS
provided management services to Steel and other affiliates of Steel until March
2002, when SPL acquired the rights to provide certain management services from
SPS. He has also served as Chairman of the Board of Directors of Caribbean
Fertilizer Group Ltd. ("Caribbean Fertilizer"), a private company engaged in the
production and distribution of agricultural products in Puerto Rico and Jamaica,
since June 2000. Mr. Lichtenstein is also, since October 2003, the Chairman of
the Board of United Industrial Corporation ("UIC"), a designer and producer of
defense, training, transportation and energy systems. He has also served as a
director of Layne Christensen Company, a provider of products and services for
the water, mineral, construction and energy markets, since January 15, 2004. Mr.
Lichtenstein devotes such time to the business affairs and operations of the
Company as he deems necessary to perform his duties, which change from time to
time.

GLEN KASSAN was elected as a director on January 24, 2002 and as President of
the Company on February 4, 2002. Mr. Kassan has served as an Executive Vice
President of SPL since March 2002. Mr. Kassan served as an Executive Vice
President of SPS from June 2001 through March 2002 and Vice President from
October 1999 through May 2001. He has also served as Vice Chairman of the Board
of Directors of Caribbean Fertilizer since June 2000. Mr. Kassan has also served
as Vice President, Chief Financial Officer and Secretary of WebFinancial 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 of which he initially served as
Vice Chairman and Chief Financial Officer. Mr. Kassan is currently a director of
UIC. Mr. Kassan devotes such time to the business affairs and operations of the
Company as he deems necessary to perform his duties, which change from time to
time.

J. DWANE BAUMGARDNER has been a director since 1990. Mr. Baumgardner has been
Vice Chairman and President of Magna Donnelly Corporation, an automotive
supplier of exterior and interior mirror, lighting and engineered glass systems,
since January 2003. Prior to January 2003, he had been the Chief Executive
Officer and President of Magna Donnelly Corporation since October 2002. Magna
Donnelly Corporation is a wholly owned subsidiary of Magna International Inc.,
which was established in October 2002 by the merger of Donnelly Corporation and
Magna Mirror Systems. Prior to October 2002, Mr. Baumgardner had been the
Chairman and Chief Executive Officer of Donnelly Corporation, an automotive

supplier, since 1986. Mr. Baumgardner is currently a director of Wescast
Industries and Scanlon Leadership Network (where he served as President from
1983 to 1985).

AVRUM GRAY was elected as a director on May 23, 2002. Mr. Gray is the Chairman
of G-Bar Limited Partnership, one of the nation's largest independent options
trading firms and a leading specialist in computer-based arbitrage activities in
the derivative markets, and has held this position since 1981. Mr. Gray is also
a director of Nashua Corporation, a specialty paper, label and printing supplies
manufacturer; Lynch Corporation, a holding company with subsidiaries engaged in
manufacturing and distributing frequency control devices and glass forming and
other equipment; and Material Sciences Corporation, a materials solution
provider. Mr. Gray is the former Chairman of the Board of Lynch Systems, Inc., a
glass press supplier to the television and computer industry, and a former Chief
Executive Officer of a privately held manufacturer of components and devices for
the automotive aftermarket. Additionally, Mr. Gray has been Chairman of the
Board of Spertus College, as well as a board member of the Illinois Institute of
Technology, the Stuart School, and a number of philanthropic organizations,
including the Jewish Federation of Chicago.

JAMES R. HENDERSON was elected as a director on January 24, 2002. Mr. Henderson
has served as an Executive Vice President of SPL since March 2002. Mr. Henderson
served as a Vice President of SPS from August 1999 through March 2002. He has
also served as President of Gateway since December 2001. Mr. Henderson served as
a director and acting Chief Executive Officer of ECC International Corp., a
manufacturer and marketer of computer controlled simulators for training
personnel to perform maintenance and operator procedures on military weapons,
from December 1999 and July 2002, respectively, until September 2003. He has
also served as President and Chief Operating Officer of WebFinancial since
December 2003 and as Vice President of Operations of WebFinancial since
September 2000. Mr. Henderson has also served as a director of WebBank, a
subsidiary of WebFinancial, since March 2000. He has also served as a director
of Del Global Technologies Corp., a designer and manufacturer of medical imaging
and diagnostic systems, since November 2003. From January 2001 to August 2001,
Mr. Henderson served as President of MDM Technologies, Inc., a direct mail and
marketing company that was principally controlled by Mr. Lichtenstein. From 1996
to July 1999, Mr. Henderson was employed in various positions with Aydin
Corporation 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.

JAMES A. RISHER was elected as a director on May 29, 2003. Mr. Risher has been
the Managing Partner of Lumina Group, LLC, a private company engaged in the
business of consulting and investing in small and mid-size companies, since
1998. He also served as Chairman and Chief Executive Officer of BlueStar Battery
Systems International, Inc. ("BlueStar"), a Canadian public company that is an
e-commerce distributor of electrical and electronic products to selected
automotive aftermarket segments and targeted industrial markets, from February
2001 to May 2002. BlueStar filed CCAA (a petition for reorganization under
Canadian bankruptcy laws) in August 2001, and a plan of reorganization was
approved in November 2001. From 1986 to 1998, Mr. Risher served as a director,
Chief Executive Officer and President of Exide Electronics Group, Inc.
("Exide"), a global leader in the uninterruptible power supply industry. He also
served as Chairman of Exide from December 1997 to July 1998.

MARK E. SCHWARZ was elected as a director on January 24, 2002. Mr. Schwarz has
served as the general partner, directly or through entities which he controls,
of Newcastle Partners, L.P., a private investment firm, since 1993. Mr. Schwarz
was 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; Nashua Corporation, a specialty paper, label, and printing
supplies manufacturer; Bell Industries, Inc., a computer systems integrator; and
Chairman of the Board of Pizza Inn, Inc., a franchisor and food and supply
distributor, since February 2004. Mr. Schwarz has served as a director and Chief
Executive Officer and President of Geoworks Corporation, an entity with no
significant business operations, since May 2003. He has also served as Chairman
of the Board of Directors of Hallmark Financial Services, Inc., a property and
casualty insurance holding company, since October 2001, and as its President and
Chief Executive Officer since January 2003. From October 1998 through April
1999, Mr. Schwarz served as a director of Aydin Corporation ("Aydin"), a defense
electronics manufacturer.

DIRECTOR COMPENSATION

Independent (i.e., non-employee) directors receive the following fees:

- $5,000 quarterly retainer fee for each director;
- $1,250 quarterly retainer fee for each committee chairman;
- $1,000 for each Board meeting attended; and
- $750 for each committee meeting attended.

In fiscal year 1993, the Board of Directors adopted a Non-Employee Director
Non-Qualified Stock Option Plan (the "Directors' Plan"), which was approved by
the shareholders at the Company's 1993 Annual Meeting. Under the Directors'
Plan, non-employee directors had the right annually to elect to receive
non-qualified stock options in lieu of all or a stated percentage of retainer
and/or regular quarterly Board meeting attendance fees payable for the upcoming
year. The number of shares covered by such options was determined at the time
such fees would otherwise be payable based upon the fair market value of the
Common Stock at such times. However, if a director elected to defer all fees
during the year, the number of shares was determined based upon 133% of fair
market value at such times. Elections are irrevocable. The Directors' Plan
expired on May 31, 2003.

Prior to the expiration of the Directors' Plan, each director eligible under the
plan elected for fiscal year 2002 and through April 29, 2003 to receive
non-qualified options in lieu of all such fees. In addition to options granted
pursuant to the Directors' Plan, additional options to acquire an aggregate of
38,662 shares of Common Stock were also issued in lieu of director fees, all of
which are included in the amounts set forth below. Neither Messrs. Lichtenstein
nor Kassan were eligible to participate in the Directors' Plan. In accordance
with such elections, the directors received on February 28, 2003 the following
options to acquire shares of Common Stock:

OPTIONS RECEIVED
----------------
J. Dwane Baumgardner 29,027
Mark E. Schwarz 26,123
James Henderson 20,824
Steven Wolosky 22,338
Richard Smith 17,796
Avrum Gray 13,378

BOARD COMMITTEES AND MEETINGS

The Board met on seven occasions during the year ended December 31, 2003. Each
of the directors attended at least 75% of the aggregate of (i) the total number
of meetings of the Board (held during the period for which he was a director)
and (ii) the total number of meetings held by all committees of the Board on
which he served (during the periods that he served). There are four Committees
of the Board: the Executive Committee, the Audit Committee, the Compensation
Committee and the Nominating and Corporate Governance Committee.

Each director is expected to make reasonable efforts to attend Board meetings,
meetings of committees of which such director is a member and the Annual Meeting
of Shareholders. Three directors attended the 2003 Annual Meeting of
Shareholders.

EXECUTIVE COMMITTEE

The Executive Committee has and may exercise all the authority of the Board of
Directors, except that the Executive Committee cannot make, alter or repeal any
By-Law of the Company, elect or appoint any director or remove any officer or
director, submit to shareholders any action that requires shareholder approval,
or amend or repeal any resolution previously adopted by the Board, which by its
terms is amendable or repealable only by the Board. The members of the Executive
Committee are Warren G. Lichtenstein, Glen Kassan and Mark E. Schwarz. The
Executive Committee met one time during the year ended December 31, 2003.

AUDIT COMMITTEE

The Company has a separately-designated standing Audit Committee established in
accordance with section 3(a)(58)(A) of the Exchange Act. The Audit Committee has
adopted a written charter, which is filed as Appendix A to this Proxy Statement.
The adequacy of the charter has been reviewed and reassessed by the Audit
Committee on an annual basis. The members of the Audit Committee are Avrum Gray,
Mark E. Schwarz and J. Dwane Baumgardner. The Company certifies that it has and
will continue to have, an Audit Committee of at least three members, each of
whom meets the criteria for being "independent" set forth under Section 121(A)
of the listing standards of the AMEX. In addition, the Board has determined that
Mark E. Schwarz, who is a non-management director, is a financial expert serving
on the Audit Committee. The primary purpose of the Audit Committee is to assist
the Board in fulfilling its responsibility to oversee the Company's financial
reporting activities. The Audit Committee annually selects independent public
accountants to serve as auditors of the Company's books, records and accounts,
reviews the scope of the audits performed by such auditors and the audit reports
prepared by them and reviews and monitors the Company's internal accounting
procedures. A report from the Audit Committee is also included in this Proxy
Statement. See Audit Committee Report. The Audit Committee met on seven

occasions during the year ended December 31, 2003.

COMPENSATION COMMITTEE

The Compensation Committee reviews compensation arrangements and personnel
matters. The Compensation Committee has adopted a written charter. The members
of the Compensation Committee are James A. Risher, Mark E. Schwarz and J. Dwane
Baumgardner. Each member of the Compensation Committee meets the criteria for
being "independent" set forth under Section 121(A) of the listing standards of
the AMEX. The Compensation Committee met on three occasions during the year
ended December 31, 2003.

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

The Nominating and Corporate Governance Committee recommends criteria for
service as a director, reviews candidates and recommends appropriate governance
practices and compensation for directors. The Nominating and Corporate
Governance Committee has adopted a written charter, which is included as
Appendix A to this Proxy Statement and is available on the Company's website at
www.slindustries.com. The members of the Nominating and Corporate Governance
Committee are Mark E. Schwarz, Avrum Gray and James A. Risher. Each member of
the Nominating and Corporate Governance Committee meets the criteria for being
"independent" set forth under Section 121(A) of the listing standards of the
AMEX. The Nominating and Corporate Governance Committee met one time during the
fiscal year ended December 31, 2003.

The Nominating and Corporate Governance Committee considers and makes
recommendations to the Board with respect to the size and composition of the
Board and identifies potential candidates to serve as directors, to the extent
there are vacancies on the Board. The Nominating and Corporate Governance
Committee considers recommendations for director nominees from a wide variety of
sources, including members of the Board, business contacts, community leaders,
third-party advisory services and members of management. The Nominating and
Corporate Governance Committee also considers shareholder recommendations for
director nominees that are properly received in accordance with the Company's
Bylaws and applicable rules and regulations of the Securities and Exchange
Commission (the "SEC"). The Nominating and Corporate Governance Committee does
not evaluate director candidates recommended by shareholders differently than
director candidates recommended by other sources.

In considering Board candidates, the Nominating and Corporate Governance
Committee takes into consideration all factors that it deems appropriate,
including, but not limited to, the individual's character, education,
experience, knowledge and skills. The Nominating and Corporate Governance
Committee will also consider the extent of the individual's experience in
business, education or public service, his or her ability to bring a desired
range of skills, diverse perspectives and experience to the Board and whether
the individual possesses high ethical standards, a strong sense of
professionalism and is capable of serving the interests of shareholders. In
addition to reviewing a candidate's background and accomplishments, candidates
for director nominees are reviewed in the context of the current composition of
the Board and the evolving needs of the Company's businesses. It is the Board's
policy that at all times at least a majority of its members meet the standards
of independence promulgated by the AMEX and the SEC. Additionally, the
Nominating and Corporate Governance Committee will consider the number of boards

on which the candidate already serves when assessing whether the candidate has
the appropriate time to devote to service on the Board.

Shareholders wishing to bring a nomination for a director candidate prior to a
meeting of shareholders must give written notice to David R. Nuzzo, Secretary,
SL Industries, Inc., 520 Fellowship Road, Suite A-114, Mt. Laurel, New Jersey
08054, either by personal delivery or by United States mail, postage prepaid.
The shareholder's notice must be received by the Secretary not later than the
close of business on the 120th calendar day prior to the anniversary of the date
on which notice of the prior year's annual meeting of shareholders was first
mailed to shareholders. The shareholder's written notice to the Secretary shall
set forth (a) as to each person whom the shareholder proposes to nominate for
election or reelection as a director all information relating to such person
that is required to be disclosed in solicitations of proxies for election of
directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Exchange Act, including such person's written consent to being named
in the proxy statement as a nominee and to serving as a director if elected; and
(b) as to the shareholder giving the notice and the beneficial owner, if any, on
whose behalf the nomination is made (i) the name and address of such
shareholder, as they appear on the Company's books, and of such beneficial
owner, (ii) the class and number of shares of the Common Stock that are owned
beneficially and of record by such shareholder and such beneficial owner and
(iii) a representation that the shareholder is a holder of record of shares of
the Common Stock and intends to appear in person or by proxy at the meeting of
shareholders to propose such business.

The Nominating and Corporate Governance Committee initially evaluates a
prospective nominee on the basis of his or her resume and other background
information that has been made available to the committee. A member of the
Nominating and Corporate Governance Committee will contact for further review
those candidates who the committee believes are qualified, who may fulfill a
specific Board need and who would otherwise best make a contribution to the
Board. If, after further discussions with the candidate, and other further
review and consideration as necessary, the Nominating and Corporate Governance
Committee believes that it has identified a qualified candidate, it will make a
recommendation to the Board.

Except as set forth above, the Nominating and Corporate Governance Committee
does not have a formal policy regarding the handling or consideration of
director candidate recommendations received from a shareholder, or a formal
process for identifying and evaluating nominees for directors (including
nominees recommended by shareholders).

CODE OF CONDUCT AND ETHICS

The Company has adopted a code of conduct and ethics (the "Code") that applies
to all of its directors, officers and employees. The Code is reasonably designed
to deter wrongdoing and to promote (i) honest and ethical conduct, including the
ethical handling of actual or apparent conflicts of interest between personal
and professional relationships, (ii) full, fair, accurate, timely and
understandable disclosure in reports and documents filed with, or submitted to,
the SEC and in other public communications made by the Company, (iii) compliance
with applicable governmental laws, rules and regulations, (iv) the prompt
internal reporting of violations of the Code to appropriate persons identified
in the Code, and (v) accountability for adherence to the Code. Amendments to the
Code and any grant of a waiver from a provision of the Code requiring disclosure

under applicable SEC rules will be disclosed on the Company's website at
WWW.SLINDUSTRIES.COM. The Code has been filed as an exhibit to the Company's
annual report on Form 10-K for the year ended December 31, 2003. A copy of the
Code will also be sent to shareholders upon request, without charge, by writing
to: David R. Nuzzo, Secretary, SL Industries, Inc., 520 Fellowship Road, Suite
A-114, Mt. Laurel, New Jersey 08054.

PROCEDURES FOR CONTACTING DIRECTORS

The Company has adopted a procedure by which shareholders may send
communications as defined within Item 7(h) of Schedule 14A under the Exchange
Act to one or more directors by writing to such director(s) or to the whole
Board care of the Corporate Secretary, SL Industries, Inc., 520 Fellowship Road,
Suite A-114, Mt. Laurel, New Jersey 08054. Any such communications will be
promptly distributed by the Secretary to such individual director(s) or to all
directors if addressed to the whole Board.

SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE

Section 16(a) of the Exchange Act requires the Company's directors and officers,
and persons who own more than 10% of a registered class of its equity
securities, to file reports of ownership and changes in ownership of such equity
securities with the SEC and the AMEX. Such entities are also required by SEC
regulations to furnish the Company with copies of all such Section 16(a)
reports.

Based solely on a review of Forms 3 and 4 and amendments thereto furnished to
the Company, and written representations that no Form 5 or amendments thereto
were required, the Company believes that during the fiscal year ended December
31, 2003, its directors and officers, and greater than 10% beneficial owners,
have complied with all Section 16(a) filing requirements.

EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS

DAVID R. NUZZO has served as Vice President-Finance and Administration and
Secretary since December 1997. Mr. Nuzzo has served as Treasurer since January
2001.

JAMES C. TAYLOR has served as Executive Vice President and Chief Operating
Officer of the Company since January 2004. Mr. Taylor has previously served as
President of the Company's Power Electronics Group since August 2002, and as
President of the Company's subsidiary, Teal Electronics Corp., since January
2000. From September 1997 to December 1999, Mr. Taylor was President of
Transicoil, a division of Horizon Aerospace, LLC, a privately held company
specializing in military, aerospace, and medical motors.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding ownership of the
Common Stock, as of April 23, 2004 (except as otherwise noted), by (i) each
person or entity (including such person's or entity's address) who is known by
the Company to own beneficially more than five percent of the Common Stock, (ii)
each of the Company's directors and nominees for director who beneficially owns
shares of the Common Stock, (iii) each Named Executive Officer (as defined under
the Executive Compensation section of this Proxy Statement) who beneficially
owns shares of the Common Stock, 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 SEC by such persons or upon information otherwise provided by
such persons to the Company.

Number of Shares
Name of Beneficial Owner Beneficially Owned(1) Percentage Owned(2)
------------------------ --------------------- -------------------
The Gabelli Funds 1,655,533(3) 27.9%
One Corporate Center
Rye, NY 10580-1435

Steel Partners II, L.P. 1,402,950(4) 23.6%
590 Madison Avenue
32nd Floor
New York, NY 10022

Warren Lichtenstein 1,413,250(4)(5) 23.8%

Glen Kassan 0(4) *

David R. Nuzzo 68,186(6) 1.0%

James C. Taylor 41,850(7) *

J. Dwane Baumgardner 96,725(8) 1.6%

Avrum Gray 39,578(9) *

James Henderson 20,824(4)(10) *

Mark E. Schwarz 243,473(11) 4.1%

Steven Wolosky(12) 22,338(10) *

James A. Risher 0 *

All Directors and Executive
Officers as a Group 1,947,224(13) 31.4%

* Less than one percent (1%).

(1) Beneficial ownership is determined in accordance with the rules of the SEC.
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) Based upon 5,937,434 shares outstanding as of April 23, 2004.

(3) Based upon a Schedule 13D/A Amendment No. 21 filed on March 12, 2004 with
the SEC by Gabelli Group Capital Partners, Inc. ("Gabelli Partners"), Gabelli
Asset Management Inc. ("GBL"), Gabelli Funds, LLC ("Gabelli Funds"), GAMCO
Investors, Inc. ("GAMCO"), Gabelli Advisers, Inc. ("Gabelli Advisers"), Gabelli
Securities, Inc. ("GSI"), Gabelli & Company, Inc. ("Gabelli & Company"), Gabelli

& Company, Inc. Profit Sharing Plan (the "Plan"), MJG Associates, Inc. ("MJG
Associates"), Gabelli Foundation, Inc. ("Foundation"), Mario J. Gabelli, Lynch
Corporation ("Lynch") and Lynch Interactive Corporation ("Interactive")
(collectively, the "Reporting Persons") in addition to other information.
Gabelli Partners makes investments for its own account and is the parent company
of GBL. GBL, a public company listed on the New York Stock Exchange, is the
parent company for of a variety of companies engaged in the securities business,
including (i) GAMCO Investors, Inc., a wholly-owned subsidiary of GBL, an
investment adviser registered under the Investment Advisers Act of 1940, as
amended, which provides discretionary managed account services for employee
benefit plans, private investors, endowments, foundations and others; (ii) GSI,
a majority-owned subsidiary of GBL, which acts as a general partner or
investment manager to limited partnerships and offshore investment companies and
as a part of its business may purchase or sell securities for its own account;
(iii) Gabelli Funds, a wholly-owned subsidiary of GBL, which is an investment
adviser registered under the Investment Advisers Act of 1940, as amended, which
presently provides discretionary managed account services for various registered
investment companies; and (iv) Gabelli Advisors, a subsidiary of GBL, which is
an investment advisor providing discretionary advisory services to The Gabelli
Westwood Mighty Mites Fund.

Gabelli & Company, a wholly-owned subsidiary of GSI, is a broker-dealer
registered under the Exchange Act, which as a part of its business regularly
purchases and sells securities for its own account. The Plan, a qualified
employee profit sharing plan, covers substantially all employees of GBL and its
affiliates. MJG Associates provides advisory services to private investment
partnerships and offshore funds, and Mario J. Gabelli is its sole stockholder,
director and employee. The Foundation is a private foundation in which Mario J.
Gabelli is President, a Trustee and the Investment Manager of the Foundation.
Lynch is a public company traded on the AMEX engaged in manufacturing.
Interactive is a public company listed on the AMEX and is a holding company with
operating subsidiaries engaged primarily in the rural telephone industry. Lynch
and Interactive actively pursue new business ventures and acquisitions. Lynch
and Interactive make investments in marketable securities to preserve capital
and maintain liquidity for financing their business activities and acquisitions
and are not engaged in the business of investing, reinvesting, or trading in
securities. Mario J. Gabelli is a director, officer and a substantial
shareholder of Lynch and Interactive. Mario J. Gabelli is also the majority
stockholder and Chairman of the Board of Directors and Chief Executive Officer
of Gabelli Partners and GBL, and the Chief Investment Officer for each of the
Reporting Persons. Gabelli Partners is the majority shareholder of GBL. GBL, in
turn, is the sole stockholder of GAMCO. GBL is also the majority stockholder of
GSI and the largest shareholder of Gabelli Advisers. Gabelli & Company is a
wholly-owned subsidiary of GSI.

Includes the following shares deemed to be owned beneficially by the following
affiliates: 1,364,433 shares held by GAMCO; 153,000 shares held by MJG
Associates; 111,500 shares held by Gabelli Funds; 24,600 shares held by Gabelli
Advisors; and 2,000 shares held by Foundation. The foregoing persons do not
admit to constituting a group within the meaning of Section 13(d) of the
Exchange Act. Mario J. Gabelli is deemed to have beneficial ownership of the
securities owned beneficially by each of the foregoing persons. GSI is deemed to
have beneficial ownership of the securities owned beneficially by Gabelli &
Company. GBL and Gabelli Partners are deemed to have beneficial ownership of the
securities owned beneficially by each of the foregoing persons other than the
Foundation.

Gabelli Partners, GBL, GAMCO, and Gabelli & Company are New York corporations
and GSI and Gabelli Advisers are Delaware corporations, each having its
principal business office at One Corporate Center, Rye, New York 10580. Gabelli
Funds is a New York limited liability company having its principal business
office at One Corporate Center, Rye, New York 10580. MJG Associates is a
Connecticut corporation having its principal business office at 140 Greenwich
Avenue, Greenwich, CT 06830. The Foundation is a Nevada corporation having its
principal offices at 165 West Liberty Street, Reno, Nevada 89501. Lynch is an
Indiana corporation having its principal business office at 50 Kennedy Plaza,
Suite 1250, Providence, Rhode Island 02903. Interactive is a Delaware
corporation having its principal place of business at One Corporate Center, Rye,
New York 10580.

(4) Based upon a Schedule 13D/A Amendment No. 12 filed jointly on September 5,
2003 with the SEC by Steel, Mr. Lichtenstein, Mr. Kassan and Mr. Henderson, in
addition to other information. In such filing Mr. Kassan reports that he
beneficially owns no shares of common stock and Mr. Henderson reports that he
beneficially owns the right to acquire 20,824 shares at any time upon exercise
of stock options.

(5) Includes the 1,402,950 shares of which, by virtue of his position as
Chairman of the Board, Chief Executive Officer and Secretary of Steel, Mr.
Lichtenstein has the power to vote and dispose.

(6) Includes 4,500 shares owned by Mr. Nuzzo, 5,936 shares beneficially owned by
Mr. Nuzzo as a participant in the Company's Savings and Pension Plan, and 57,750
shares which Mr. Nuzzo has the right to acquire at any time upon exercise of
stock options.

(7) Includes 5,000 shares owned directly by Mr. Taylor, 100 shares owned
indirectly by Mr. Taylor through a family member, and 36,750 shares which Mr.
Taylor has the right to acquire at any time upon exercise of stock options.

(8) Includes 4,496 shares owned by Mr. Baumgardner and 92,229 shares which Mr.
Baumgardner has the right to acquire at any time upon exercise of stock options.

(9) Includes 3,500 shares held by Mr. Gray's Individual Retirement Account,
13,400 shares held by 1993 GF Limited Partnership, in which the general partner
is a corporation owned solely by Mr. Gray, and 6,800 shares held by AVG Limited
Partnership, in which Mr. Gray is a general partner. Also includes 2,500 shares
held by JYG Limited Partnership, in which Mr. Gray's spouse is a general
partner, and 13,378 shares which Mr. Gray has the right to acquire at any time
upon exercise of stock options. Except for the shares held in his Individual
Retirement Account and by JYG Limited Partnership, Mr. Gray disclaims beneficial
ownership of these shares.

(10) Represents options to acquire shares of Common Stock at any time.

(11) Includes 217,350 shares of which, by virtue of his position as Managing
Member of Newcastle Capital Group, L.L.C., which is the general partner of
Newcastle Capital Management, L.P., which is the general partner of Newcastle
Partners, L.P, Mr. Schwarz has the power to vote and dispose. Also includes
26,123 shares which Mr. Schwarz has the right to acquire at any time upon
exercise of stock options.

(12) Steven Wolosky is not standing for re-election to the Board.

(13) Includes 270,392 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.

EXECUTIVE COMPENSATION

The following table sets forth certain information regarding compensation
awarded to, earned by or paid to the Chief Executive Officer and each of the
Company's other executive officers whose total annual salary and bonus exceeded
$100,000 during the year ended December 31, 2003 (the "Named Executive
Officers") for services in all capacities during the years ended December 31,
2003, 2002 and 2001.

SUMMARY COMPENSATION TABLE

Long-Term
Compensation
Awards Securities All Other
Name and Annual Compensation Underlying Compensation
Principal Position Year Salary ($) Bonus ($) Options/SARs(#) ($)
----------------------------------- ---- ---------- --------- ----------------- ------------
Warren G. Lichtenstein(1) 2003 0 0 0 475,000(1)
Chairman of the Board and Chief 2002 0 0 0 362,000(1)
Executive Officer

Glen Kassan(1) 2003 0 0 0 475,000(1)
President 2002 0 0 0 362,000(1)

David R. Nuzzo 2003 171,000 25,500 0 4,000(2)
Vice President-Finance 2002 171,000 10,000 0 353,384(3)
and Administration, Treasurer and 2001 171,000 0 17,000 19,567(2)
Secretary

(1) Mr. Lichtenstein was elected Chairman of the Board on January 24, 2002, and
named Chief Executive Officer on February 4, 2002. Mr. Kassan was named
President on February 4, 2002. Neither Messrs. Lichtenstein nor Kassan
receive direct compensation from the Company. Mr. Lichtenstein's services
as Chairman of the Board and Chief Executive Officer and Mr. Kassan's
services as President are provided to the Company in accordance with the
provisions of a management agreement with SPL. The fee paid to SPL by the
Company was $475,000 in fiscal year 2003 and $362,000 in fiscal year 2002.
See "Compensation Committee Report on Executive Compensation" and "Certain
Relationships and Related Transactions" presented below.
(2) Includes our matching contributions and profit sharing contributions made
to the SL Industries, Inc. Savings and Pension Plan in the amount of $8,500
in 2001 and $4,000 in 2003. Our contribution to the plan is based on a
percentage of the participant's elective contributions up to the maximum
defined under the plan and a fixed percentage, determined annually by the
Board of Directors, of the participant's total annual earnings. Under the
plan, benefits are payable at retirement as a lump sum or as an annuity.
Also includes premiums paid for group term life insurance for Mr. Nuzzo.
(3) Consists of payments made to Mr. Nuzzo relating to payments made under a
change-in-control agreement and group life insurance premiums in the
amounts of $352,556 and $828, respectively.

STOCK OPTION GRANTS IN LAST FISCAL YEAR

The Company did not grant options to the Named Executive Officers during the
fiscal year ended December 31, 2003.

AGGREGATED STOCK OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END STOCK
OPTION VALUES

The following table sets forth the number of shares received upon exercise of
stock options by each of the Named Executive Officers during the last completed
fiscal year and the aggregate options to purchase shares of the Common Stock
held by the Named Executive Officers at December 31, 2003.

NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED IN-
UNEXERCISED OPTIONS THE-MONEY OPTIONS AT
AT FISCAL YEAR-END (#) FISCAL YEAR-END($)(1)
---------------------- ---------------------

EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
---------------------- ------------- -------------
Warren G. Lichtenstein 0/0 0/0
Glen Kassan 0/0 0/0
David R. Nuzzo 57,750/4,250 0/0

(1) Computed by multiplying the number of options by the difference between (i)
the per share closing price at fiscal year-end and (ii) the exercise price
per share.

EQUITY COMPENSATION PLAN SUMMARY

The following table sets forth information as of December 31, 2003 regarding the
number of shares of Common Stock issued and available for issuance under the
Company's existing equity compensation plans:

NUMBER OF SECURITIES
REMAINING AVAILABLE FOR
FUTURE ISSUANCE UNDER
NUMBER OF SECURITIES TO BE WEIGHTED-AVERAGE EQUITY COMPENSATION
ISSUED UPON EXERCISE OF EXERCISE PRICE OF PLANS (EXCLUDING
PLAN CATEGORY OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, SECURITIES REFLECTED
WARRANTS AND RIGHTS WARRANTS AND RIGHTS IN COLUMN (A))
--------------------------------- -------------------------- -------------------- -----------------------
(a) (b) (c)
Equity compensation plans approved by
security holders 812,066 $10.04 0
Equity compensation plans not approved by
security holders 38,662 $6.00 0

Total 850,728 $9.85 0

LONG-TERM INCENTIVE PLANS-AWARDS IN LAST FISCAL YEAR

The Company did not grant awards to any of its executive officers under any
long-term incentive plans during the fiscal year ended December 31, 2003.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. Schwarz and Wolosky each served as a member of the Compensation
Committee of the Board of Directors through July 1, 2003 and Messrs. Risher,
Schwarz and Baumgardner served from July 1, 2003 through December 31, 2003. None
of the committee members were officers or employees of the Company at any time
prior to December 31, 2003 or had any relationship requiring disclosure below
under the caption "Certain Relationships and Related Transactions."

EMPLOYMENT CONTRACTS, TERMINATION AND CHANGE-IN-CONTROL ARRANGEMENTS

James C. Taylor was named the Company's Executive Vice President and Chief
Operating Officer in January of 2004, prior to which he served as President of
the Company's Power Electronics Group and of the Company's subsidiary, Teal
Electronics Corp. Pursuant to an agreement dated as of August 5, 2002 (the
"Agreement"), Mr. Taylor shall be paid a bonus (i) upon the occurrence of a
change in control (the "Change in Control Bonus") or (ii) upon delivery of a
notice by Mr. Taylor requesting the payment of the bonus, which may be in one or
two parts (together with the Change in Control Bonus, the "Bonus"). The Bonus
shall be an amount equal to the product of (i) 100,000 and (ii) the amount by
which the price of the Common Stock exceeds $5.45. Upon his termination of
employment with the Company for any reason, Mr. Taylor shall have no further
right to receive the Bonus.

Mr. Taylor is party to a change in control agreement dated as of April 20, 2004
(the "Change in Control Agreement") by and between him and the Company. Pursuant
to the Change in Control Agreement, Mr. Taylor shall receive a payment equal to
two times his annual salary in the event he is terminated as Chief Operating
Officer without cause or he terminates his employment as Chief Operating Officer
for good reason within one year of a change in control of the Company or the
execution of a definitive agreement contemplating a change in control of the
Company.

PERFORMANCE GRAPH

The following Performance Graph summarizes the cumulative total shareholder
return on an investment of $100 on July 31, 1998 in the Company's Common Stock
for the period from that date to December 31, 2003, as compared to the
cumulative total return on a similar investment of $100 on that date in stocks
comprising the S&P Electrical Components & Equipment Group and the Russell 2000
Stock Index. The graph assumes the reinvestment of all dividends. The
Performance Graph is not necessarily indicative of future performance.

7/31/98 7/30/99 12/31/99 12/29/00 12/31/01
------- ------- -------- -------- --------
SL Industries, Inc. $100.00 $84.83 $80.41 $79.94 $40.88
S&P Electrical Components & Equipment Group $100.00 $138.92 $156.56 $188.99 $146.81
Russell 2000 Stock Index $100.00 $106.31 $120.54 $115.34 $116.51

12/31/02 12/31/03
-------- --------
SL Industries, Inc. $37.04 $56.05
S&P Electrical Components & Equipment Group $139.84 $201.01
Russell 2000 Stock Index $91.37 $132.83

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

BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board is responsible for the establishment of
the level and manner of compensation of the Company's executive officers
(including its Named Executive Officers). In addition, the Compensation
Committee seeks to ensure that sound compensation policies and practices exist
and are being followed. At the end of fiscal year 2003, the members of the
Compensation Committee were James A. Risher (Chairman), Mark E. Schwarz and J.
Dwane Baumgardner, each of whom is a non-employee directors of the Company.

The following describes the Compensation Committee's compensation policies
applicable to its executive officers (including its Named Executive Officers),
including the relationship of corporate performance to executive compensation,
with respect to compensation reported for the last fiscal year.

The Compensation Committee believes that executive compensation should be linked
to value delivered to shareholders. The Company's compensation programs have
been designed to provide a correlation between the financial success of the
executive and the shareholders. Both long and short-term incentives are intended
to align the interests of executives and shareholders and to reward the
executive for building value within the Company.

The functions of the Compensation Committee are to oversee general compensation
policies for the Company's employees, to review and approve compensation
packages annually for the Company's executive officers and subsidiary
presidents, to approve cash incentive programs for all subsidiaries, and to
grant stock options to officers of the Company and other key employees as
appropriate. The Company seeks to provide executive compensation that will
support the achievement of the Company's financial goals, while attracting and
retaining talented executives and rewarding superior performance. In performing
this function, the Compensation Committee reviews executive compensation
surveys, the compensation levels of executive officers of companies in competing
businesses and in the Company's geographic markets, and recommendations by
Messrs. Lichtenstein and Kassan, the Company's Chairman of the Board and Chief
Executive Officer and President, respectively. The Compensation Committee may
also from time to time consult with independent compensation consultants and
others.

The Committee's current philosophy is to balance short-term performance of
executives with achievement of long-range strategic goals resulting in
continuously improving shareholder value, and to engender and preserve a sense
of fairness and equity among employees, shareholders, and customers. In keeping
with that philosophy, it has set the following objectives: (1) to link a
significant portion of annual compensation directly to operating performance;
(2) to promote achievement of the Company's long-term strategic goals and
objectives; (3) to align the interest of Company executives with long-term
shareholder interest; (4) to align the interest of Company employees with
long-term shareholder interest; and (5) to attract, retain, and motivate
executives critical to the Company's long-term success.

The Company's executive compensation program consists of base salary and annual
cash bonus incentive. At the present time, the Company does not have any option
plans in effect. (Along with all other employees, executives also participate in
one of the Company's defined contribution pension plans.) Salary levels of

executive officers are reviewed annually by the Compensation Committee. In order
to align the interests of executive officers with long-term shareholder
interest, bonus payments are awarded only if Company performance targets are
met, or if the Compensation Committee believes there are special circumstances.
If the Company performance targets are met, bonus payments are based on the
achievement of such targets and the achievement of individual performance goals,
including certain non-financial performance measurements such as improvements in
productivity, improvement of product quality, development and introduction of
new products, and relationships with customers.

Bonus amounts are calculated after fiscal year-end financial results become
available to the Compensation Committee and are determined in accordance with
guidelines established by the Compensation Committee. Compensation in any
particular case will vary on the basis of the Company's annual and long-term
performance as well as individual performance.

No specific weight or relative importance was assigned to the various
non-quantitative factors and compensation information which the Compensation
Committee considered. Accordingly, the Company's compensation policies and
practices may be deemed informal and subjective, although they were based on
both the financial and non-financial factors and detailed considerations
described above.

The Compensation Committee believes stock options and stock ownership contribute
to the aligning of the executive's interests with those of the shareholders.
From time to time, the Compensation Committee has provided long term incentive
compensation in the form of stock options where appropriate as compensation for
its executive officers. In determining whether individual stock option grants
will be made, the Compensation Committee evaluates each participant's job
responsibilities and performance during the last completed fiscal year, as well
as the perceived potential that the individual has in contributing to the
success of the Company. The Company did not grant any options to employees in
2003 because the Company's stock option plans were expired.

Mr. Lichtenstein's services as Chairman of the Board and Chief Executive Officer
and Mr. Kassan's services as President are provided to the Company in accordance
with the provisions of a management agreement with SPL. Under this agreement,
SPL provides management services to the Company for an annual fee plus all
reasonable and necessary business expenses incurred in the performance of such
services. The aggregate annual fee paid under this agreement for fiscal year
2003 was $475,000. Neither Messrs. Lichtenstein nor Kassan receives direct
compensation from the Company. The Compensation Committee considers the
management services provided by SPL important to achieving the Company's
objectives and believes the fees paid are less than what the Company would have
to pay a Chief Executive Officer and President. See "Certain Relationships and
Related Transactions."

The Company did not pay cash bonuses or grant stock options to its Named
Executive Officers for fiscal year 2003, other than to Mr. Nuzzo who received a
bonus in the amount of $25,500.

Sincerely yours,

COMPENSATION COMMITTEE
James A. Risher
Mark E. Schwarz
J. Dwane Baumgardner

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

As a result of certain services being provided to the Company by SPL, a company
controlled by the Chairman of the Board and Chief Executive Officer of the
Company, Warren Lichtenstein, the Compensation Committee engaged an independent
firm to provide a report and advice regarding the amount of management fees that
should be payable to SPL. These fees are the only consideration for the services
of the Chairman of the Board and Chief Executive Officer, Warren Lichtenstein,
the Company's President, Glen Kassan, and other assistance from SPL. The
services provided include management and advisory services with respect to
operations, strategic planning, finance and accounting, merger, sale and
acquisition activities and other aspects of the businesses of the Company. A fee
of $475,000 and $362,000 was paid by the Company for SPL's 2003 and 2002
services.

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
NOMINEES.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee assists the Board in fulfilling its responsibility for
oversight of the quality and integrity of the accounting, auditing and financial
reporting practices of the Company. Each member of the Audit Committee meets the
criteria for being "independent" set forth under AMEX Rule P. 10,021, Sec. 121.
During the fiscal year ended December 31, 2003, the Committee met seven times.

In discharging its responsibility for oversight of the audit process, the Audit
Committee obtained from the independent auditors, Grant Thornton LLP, a formal
written statement describing any relationships between the auditors and the
Company that might bear on the auditors' independence consistent with the
Independent Standards Board Standard No. 1, "Independence Discussions with Audit
Committees," and discussed with the auditors any relationships that might impact
the auditors' objectivity and independence and satisfied itself as to the
auditors' independence.

The committee discussed and reviewed with the independent auditors the
communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees" and discussed and reviewed the results of
the independent auditors' examination of the financial statements for the year
ended December 31, 2003.

The committee reviewed the audited financial statements of the Company as of and
for the year ended December 31, 2003, with management and the independent
auditors. Management has the responsibility for preparation of the Company's
financial statements and the independent auditors have the responsibility for
examination of those statements.

Based upon the above-mentioned review and discussions with management and the
independent auditors, the committee recommended to the Board that the Company's
audited financial statements be included in its Annual Report on Form 10-K for
the year ended December 31, 2003, for filing with the SEC.

AUDIT COMMITTEE
Mark Schwarz
Avrum Gray
J. Dwane Baumgardner

ITEM 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

The Board has selected Grant Thornton LLP to serve as the Company's independent
auditors. Grant Thornton LLP has served as the Company's independent auditors
since July, 2002. While it is not required to do so, the Board is submitting to
shareholders for ratification the selection of Grant Thornton LLP as the
Company's independent auditors for the year ending December 31, 2004. This
submission for shareholders ratification is being undertaken in order to
ascertain the shareholders' views. Such ratification of the selection of Grant
Thornton LLP will require the affirmative vote of the holders of a majority of
the shares of Common Stock entitled to vote thereon and represented at the
Meeting. The Board will reconsider its selection should the shareholder votes
evidence disapproval.

On July 18, 2002, the Company announced that it dismissed Arthur Andersen LLP as
its independent accountants and engaged Grant Thornton LLP as its new
independent accountants. The decision to dismiss Arthur Andersen and to engage
Grant Thornton LLP was recommended by the Audit Committee of the Board and
approved by the Board.

Arthur Andersen's reports on the Company's financial statements for the year
ended December 31, 2001 did not contain an adverse opinion or a disclaimer of
opinion, and it was not qualified or modified as to audit scope, or accounting
principles.

However, as a result of an impairment charge related to the write-off of
intangible assets of a subsidiary of the Company recognized at December 31,
2001, the Company was in violation of its net income covenant for the fourth
quarter of 2001 under its revolving credit facility. Additionally, on March 1,
2002 the Company received a notice from its lenders stating that the Company was
in default under the revolving credit facility due to its failure to meet a
scheduled debt reduction. Consequently, Arthur Andersen's report for the period
ended December 31, 2001 dated March 15, 2002 contained the following paragraph:
"The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company was in technical default under
its revolving credit facility at December 31, 2001 and an additional event of
default occurred on March 1, 2002. Due to these events of default, the lenders
that provide the revolving credit facility do not have to provide any further
financing and have the right to terminate the facility and demand repayment of
all amounts outstanding. The existence of these events of default raises
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to this matter are also described in Note 1. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty."

On May 23, 2002, the Company and its lenders reached an agreement, pursuant to
which the lenders granted a waiver of default and amended certain financial
covenants of the revolving credit facility. As a result of this agreement, the
Company was in full compliance with the revolving credit facility.

On January 6, 2003, the Company entered into a senior credit facility, which
provides for debt financing for a term of three years. See Note 10 in the Notes
to Consolidated Financial Statements included in Part IV of the Company's 2003
Annual Report on Form 10-K filed with the SEC.

During the year ended December 31, 2001, and subsequent interim periods through
July 18, 2002, there were no disagreements with Arthur Andersen on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure which, if not resolved to Arthur Andersen's satisfaction,
would have caused them to make reference to the subject matter in connection
with their report on the Company's consolidated financial statements for the
year ended December 31, 2001, and there were no reportable events as defined in
Item 304(a)(1)(v) of Regulation S-K of the Exchange Act.

During the year ended December 31, 2001 and subsequent interim periods through
July 18, 2002, the Company did not consult with Grant Thornton LLP regarding the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
the Company's consolidated financial statements, or any other matters or events
as set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K of the Exchange Act.

AUDIT FEES

The aggregate fees billed by Grant Thornton LLP for professional fees rendered
in connection with the audit of the Company's annual financial statements and
the reviews of the Company's financial statements included in the Company's
quarterly reports on Form 10-Q, including services related thereto, were
$223,000 for the year ended December 31, 2003 and $234,260 for the year ended
December 31, 2002.

AUDIT-RELATED FEES

The aggregate fees billed by Grant Thornton LLP for assurance and related
services that are reasonably related to the performance of the audit or review
of the Company's financial statements and are not reported as "Audit Fees,"
including statutory audits of the Company's foreign subsidiaries, due diligence
related to mergers and acquisitions, work performed on the Company's proposed
Registration Statement on Form S-1 filed with the SEC, and consultations
concerning financial accounting and reporting matters not classified as audit,
were $19,063 for the year ended December 31, 2003 and $156,668 for the year
ended December 31, 2002.

TAX FEES

The aggregate fees billed by Grant Thornton LLP for professional services
rendered for tax compliance, tax advice and tax planning were $26,594 for the
year ended December 31, 2003 and $48,128 for the year ended December 31, 2002.
The services comprising the fees reported as "Tax Fees" included tax return
preparation in various foreign jurisdictions, consultation regarding various tax
issues, and support provided to management in connection with income and other
tax audits.

ALL OTHER FEES

The aggregate fees billed by Grant Thornton LLP for products and services other
than those described above were $1,330 for the year ended December 31, 2003 and
$30,207 for the year ended December 31, 2002. The services comprising the fees
reported as "All Other Fees" primarily related to services performed in
connection with the Company's proposed rights offering, which was subsequently
terminated.

PRE-APPROVAL POLICIES AND PROCEDURES

All audit and non-audit services to be performed by the Company's independent
accountant must be approved in advance by the Audit Committee. Consistent with
applicable law, limited amounts of services, other than audit, review or attest
services, may be approved by one or more members of the Audit Committee pursuant
to authority delegated by the Audit Committee, provided each such approved
service is reported to the full Audit Committee at its next meeting.

All of the engagements and fees for the year ended December 31, 2003 were
approved by the Audit Committee. Of the total number of hours expended on Grant
Thornton LLP's engagement to audit the Company's financial statements for year
ended December 31, 2003, none of the hours were attributed to work performed by
persons other than Grant Thornton LLP's full-time, permanent employees.

The Audit Committee considered whether the provision of non-audit services by
Grant Thornton LLP was compatible with its ability to maintain independence from
an audit standpoint and concluded that Grant Thornton LLP's independence was not
compromised.

Representatives of Grant Thornton LLP are expected to be present at the Meeting
and available to respond to appropriate questions. Such representatives will
have the opportunity to make a statement if they desire to do so.

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE SELECTION
OF GRANT THORNTON LLP.

SHAREHOLDER PROPOSALS

In order to be considered for inclusion in the proxy materials to be distributed
in connection with the next annual meeting of shareholders of the Company,
shareholder proposals for such meeting must be submitted to the Company no later
than December 30, 2004. Shareholders wishing to nominate directors or bring a
proposal before the 2005 annual meeting of shareholders (but not include it in
the Company's proxy material) must provide written notice of such nomination or
proposal to the attention of the corporate secretary, no later than March 15,
2005.

OTHER MATTERS

So far as now known, there is no business other than that described above to be
presented for action by the shareholders at the Meeting, but it is intended that
the proxies will be voted upon any other matters and proposals that may legally
come before the Meeting or any adjournment thereof, in accordance with the
discretion of the persons named therein.

ANNUAL REPORT

The Company is concurrently sending all of its shareholders of record as of
April 23, 2004 a copy of its Annual Report for the year ended December 31, 2003.
Such report contains the Company's certified consolidated financial statements
for the year ended December 31, 2003, including that of the Company's
subsidiaries.

Whether or not you intend to be present at the Meeting you are urged to sign and
return your proxy promptly.

By order of the Board of Directors,
Warren Lichtenstein
Chairman

Mt. Laurel, New Jersey
April 29, 2004

A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K AND ANY AMENDMENTS THERETO
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS PROVIDED WITH CERTAIN OTHER
SHAREHOLDER INFORMATION IN THE MATERIALS ACCOMPANYING THIS PROXY STATEMENT. TO
OBTAIN ADDITIONAL COPIES WITHOUT CHARGE, PLEASE WRITE TO: DAVID R. NUZZO,
SECRETARY, SL INDUSTRIES, INC., 520 FELLOWSHIP ROAD, SUITE A-114, MT. LAUREL,
NEW JERSEY 08054.

APPENDIX A

AUDIT COMMITTEE CHARTER

SL INDUSTRIES, INC.

January 2004

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PURPOSE OF THE AUDIT COMMITTEE

The Audit Committee (the "Committee") is a committee of the Board of Directors
(the "Board") of SL Industries, Inc. (the "Company") established for the purpose
of overseeing the accounting and financial reporting processes of the Company
and audits of its financial statements.

The purposes of the Committee shall be to assist the Board in fulfilling its
oversight responsibilities to the stockholders, potential stockholders, the
investment community, and others, with respect to: (i) the integrity of the
Company's financial statements; (ii) the Company's compliance with legal and
regulatory requirements; (iii) the independent auditors' qualifications and
independence; and (iv) the performance of the Company's internal audit function
and independent auditors.

The Committee shall serve as an independent and objective party to monitor the
Company's financial reporting process and internal control system. In so doing,
the Committee shall maintain free and open communication between the Committee,
the independent auditors, and the management of the Company. In discharging its
oversight role, the Committee is empowered to investigate any matter brought to
its attention with full access to all books, records, facilities and personnel
of the Company and to engage, determine funding for, and obtain advice and
assistance from independent counsel and other advisors as the Committee deems
necessary to carry out its duties. The Company shall also provide funding for
ordinary administrative expenses of the Committee that the Committee deems
necessary or appropriate in carrying out its duties.

COMPOSITION AND MEMBERSHIP REQUIREMENTS

The Board shall appoint the Committee and shall designate its Chairman. The
Committee shall consist of at least three independent directors, each of whom
shall satisfy the independence requirements of the American Stock Exchange
("AMEX"), the Securities and Exchange Commission (the "SEC"), and applicable
law, including the Sarbanes-Oxley Act of 2002 and the regulations thereunder
(the "Act"). Each appointed director shall be independent of the management of

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the Company, both directly and indirectly, and free from any relationship that,
in the opinion of the Board, would interfere with the exercise of his or her
independent judgment as a member of the Committee. In particular, the members
will not have any compensatory relationship with, or receive any form of
compensation from, the Company other than as a director or Board committee
member, accept any consulting, advisory or other compensatory fee from the
Company or be an affiliated person of the Company or any subsidiary of the
Company.

The Committee members shall be financially literate and have the knowledge and
experience required to fulfill their responsibilities, as specified in the AMEX
requirements. At least one member of the Committee shall have past employment
experience in finance or accounting, requisite professional certification in
accounting, or any other comparable experience or background which results in
that individual's financial sophistication, including being or having been a
chief executive officer, a chief financial officer or other senior officer with
financial oversight responsibilities. The Committee members shall satisfy all
other requirements of the AMEX, the SEC and the Act.

COMMITTEE MEETINGS

1. COMMITTEE MEETINGS. The Committee shall meet as a committee at least
quarterly, or more frequently as circumstances require, either in person or by
telephone conference call. The Committee shall maintain minutes of meetings and
report to the Board on significant results of the foregoing activities.

2. MEETINGS WITH INDEPENDENT AUDITORS. The Committee shall meet with the
independent auditors at least four times during each year and at such other
times that the Chairman may deem necessary or appropriate for any reason,
including at the request of the independent auditors.

3. SEPARATE MEETINGS. The Committee shall meet in executive session at
least annually with management, the independent auditors and the internal
auditors, separately.

COMMITTEE RESPONSIBILITIES AND DUTIES

The following shall be the principal recurring processes of the Committee in
carrying out its oversight responsibilities. The processes are set forth as a
guide with the understanding that the Committee may supplement them as
appropriate:

1. REVIEW AND OVERSIGHT PROCEDURES.

a. REVIEW OF CHARTER. The Committee shall review and reassess the
adequacy of this Charter at least annually, propose changes to this Charter to
the Board for its approval as necessary, and have this Charter published at
least every three (3) years in accordance with SEC regulations.

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b. REVIEW OF FILINGS, FINANCIAL STATEMENTS AND OTHER DISCLOSURES.

(i) The Committee shall review with management
(including the principal accounting officers of the Company) and the independent
auditors, prior to filing, the filings required to be made by the Company with
the SEC on an annual and quarterly basis, as well as any other required interim
reports, filings or documents that contain financial information about the
Company. The Committee shall specifically review the results of the annual audit
of the Company's consolidated financial statements prior to the filing thereof,
including the Company's disclosures under "Management's Discussion and Analysis
of Financial Condition and Results of Operations," any appropriate matters
regarding the clarity of the disclosures in such financial statements,
accounting principles, practices and judgments and the independent auditors'
opinion as to the quality thereof, and any other matters required to be
communicated to the Committee by the independent auditors under generally
accepted auditing standards. The Committee shall cause the independent auditors
to conduct a SAS 71 Interim Financial Review prior to each filing of the
Company's Form 10-Q.

(ii) The Company's consolidated financial statements
are the responsibility of management. The external auditors are responsible for
planning and conducting the audits to determine whether the financial statements
present fairly in all material respects the financial position of the Company.
The Committee is responsible for reviewing: (a) major issues regarding
accounting principles and financial statement presentations, including any
significant changes in the Company's selection or application of accounting
principles, and major issues as to the adequacy of the Company's internal
controls and any special audit steps adopted in light of material control
deficiencies; (b) analyses prepared by management and/or the independent
auditors setting forth significant financial reporting issues and judgments made
in connection with the preparation of the financial statements, including
analyses of the effects of alternative GAAP methods on the financial statements;
(c) the effect of regulatory and accounting initiatives, as well as off-balance
sheet structures, on the financial statements of the Company; and (d) the type
and presentation of information to be included in earnings press releases
(paying particular attention to any use of "pro forma," or "adjusted" non-GAAP,
information), as well as review of any financial information and earnings
guidance provided to analysts and rating agencies.

(iii) The Committee shall review analyses and
significant findings by the independent auditors with respect to financial
reporting issues and judgments made in connection therewith, including (a)
analyses of the effects of alternative generally accepted auditing standards,
(b) any material difficulties or problems with any audit work, (c) any
restrictions on the scope of the independent auditors' activities or access to
requested information, (d) any significant disagreements with management and the
independent auditors and any accounting adjustments noted or proposed by the
independent auditors, but not accepted by management, (e) any communications
between the independent auditing team and the firm's national office respecting
auditing or accounting issues that are otherwise required to be disclosed to the
Committee by the independent auditors, (f) any management or internal control
letter issues raised, or proposed to be raised, by the independent auditors to
the Company, and (g) any major issue as to the adequacy of the Company's
internal controls and specific audit steps adopted in light of material control
deficiencies.

A-3

(iv) Committee Oversight of Internal Audit. The
Committee shall ensure that the Company has an internal audit function to
provide management and the Committee with ongoing assessments. The Committee
shall also review and concur in the appointment, replacement or dismissal of the
head of the Company's internal auditing department. The Committee shall also
review the responsibilities, budget and staffing of the Company's internal audit
function.

c. ANNUAL PERFORMANCE EVALUATION. The Committee shall perform an
annual self-evaluation of the Committee's performance.

2. INDEPENDENT AUDITORS.

a. COMMITTEE OVERSIGHT OF INDEPENDENT AUDITORS. The Committee
shall have the sole authority regarding, and shall be directly responsible for,
the appointment, compensation, oversight, termination and replacement of, as
well as funding for, the independent auditors for the purpose of preparing or
issuing an audit report or related work, or any non-audit work, subject, if
applicable, to stockholder ratification. The independent auditors shall report
directly to the Committee, and are ultimately accountable to the Committee and
the Board.

b. INDEPENDENT AUDITORS' INDEPENDENCE. The Committee shall
annually request from the independent auditors, a formal written statement
delineating all relationships between the independent auditors and the Company,
including fees paid by the Company to the independent auditors, in accordance
with the SEC, the AMEX and the Act's requirements; actively engage in a dialogue
with the independent auditors regarding all relationships between the
independent auditors and management of the Company that in the Committee's
judgment (or the independent auditors' judgment) may reasonably be thought to
bear on the independence of the independent auditors; and take appropriate
action in response to the independent auditor's report to satisfy itself of the
independent auditors' independence.

c. PRE-APPROVAL OF INDEPENDENT AUDITORS' FEES. The Committee shall
pre-approve all auditing services and non-auditing services provided to the
Company by the independent auditors. Such approval may be given at the beginning
of each year up to a pre-established amount to be determined by the Committee.
Any permitted non-audit services not included in the pre-approved category shall
be approved prior to the commencement of any such services.

d. INDEPENDENT AUDITORS' REPORT ON PRACTICES. The independent
auditors shall report promptly to the Committee (a) all critical accounting
policies and practices to be used; (b) all alternative treatments of financial
information, ramifications of such treatment, and the treatment preferred by the
accounting firm; and (c) all material written communications between the
independent auditors' firm and Company management. The independent auditors
shall also report on generally accepted accounting principles adopted by the
accounting profession, the Company's compliance therewith, and the effect of
unusual or extraordinary transactions. The independent auditors must discuss
their judgments about the quality and content of the Company's accounting
principles with the Committee.

A-3

e. QUALITY CONTROL OF INDEPENDENT AUDITORS. On an annual basis,
the Committee shall obtain a report from the independent auditors describing (i)
the independent auditors' internal quality-control procedures, and (ii) any
material issues raised by the most recent internal quality-control review, or
peer review, of the firm, or by any inquiry or investigation by governmental or
professional authorities, within the preceding five years, respecting one or
more independent audits carried out by such firm, and any steps taken to deal
with any such issues. The Committee shall then present its conclusions with
respect to the independent auditors to the full Board.

f. ROTATION OF INDEPENDENT AUDITORS. The Committee shall annually
(i) assess the qualifications, performance and independence of the independent
auditors and the lead (or coordinating) audit partner (or other audit partner
having primary responsibility for the audit); (ii) take any actions necessary to
ensure the rotations not less than every five (5) years of the audit partner;
and (iii) consider whether, in order to ensure continuing auditor independence,
the independent accounting firm should be rotated on a regular basis.

g. HIRING POLICIES. The Committee shall establish clear hiring
policies for the Company's hiring of employees or former employees of the
independent auditors, after consultation with management.

h. AUDIT PROBLEMS. The Committee shall review with the independent
auditors any audit problem or difficulties encountered during the course of
their work and management's response.

3. LEGAL COMPLIANCE.

a. REVIEW OF DISCLOSURES BY OFFICERS. The Committee shall review
disclosures made by the Company's principal executive officer(s) and principal
financial officer(s) regarding compliance with their certification obligations
under the Act, including the Company's disclosure controls and procedures and
internal controls for financial reporting.

b. FRAUD. The Committee shall discuss with management and the
independent auditors any fraud disclosed to the Committee, whether or not
material, that involves management or other employees who have a significant
role in the Company's internal controls.

c. RELATED PARTY TRANSACTIONS. The Committee shall be responsible
for reviewing and approving all related party transactions involving the Company
and any director, executive officer, other employee, or family member.

A-4

4. OTHER COMMITTEE ACTIVITIES.

a. EARNINGS PRESS RELEASES. The Committee shall discuss earnings
press releases, as well as financial information and earnings
guidance provided to analysis and rating agencies.

b. COMPLAINT PROCEDURES. The Committee shall establish procedures
for the receipt, retention and treatment of complaints received by the Company
regarding the Company's accounting, internal accounting controls and auditing
matters and for the confidential, anonymous submissions by employees of the
Company of concerns relating to questionable accounting or auditing matters.

c. COMMITTEE REPORTS. The Committee shall prepare reports to
stockholders as required by the SEC 's proxy rules to be included in the
Company's annual proxy statement, or, if the Company does not file a proxy
statement, in the Company's Annual Report filed on Form 10K with the SEC.

d. OTHER. The Committee shall have the power and authority to
perform any other activities consistent with this Charter, the Company's
by-laws, and governing law, as the Committee or the Board deems necessary or
appropriate.

LIMITATION

Nothing in this Charter is intended to alter in any way the standard of conduct
required of any of the directors of the Company under the New Jersey Business
Corporation Act, as amended, and this Charter does not impose, nor shall it be
interpreted to impose, any duty on any director greater than, or in addition to,
the duties or standards established by the New Jersey Business Corporation Act
or applicable requirements of federal law or the AMEX.

A-5

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF

SL INDUSTRIES, INC.

PROXY -- ANNUAL MEETING OF SHAREHOLDERS
JUNE 9, 2003

The undersigned, a shareholder of SL Industries, Inc., a New Jersey
corporation (the "Company"), does hereby appoint Warren Lichtenstein and Glen
Kassan, and each of them (with full power to act alone), the true and lawful
attorneys and proxies with full power of substitution, for and in the name,
place and stead of the undersigned, to vote all of the shares of Common Stock of
the Company which the undersigned would be entitled to vote if personally
present at the 2004 Annual Meeting of Stockholders of the Company to be held at
the Warwick Hotel, 65 West 54th Street, New York, New York on June 9, 2004, at
10:00 A.M., Eastern Time, or at any adjournment or postponements thereof.

The undersigned hereby revokes any proxy or proxies heretofore given and
acknowledges receipt of a copy of the Notice of Annual Meeting and Proxy
Statement, both dated April 29, 2004, and a copy of the Company's Annual Report
for the year ended December 31, 2003.

THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREIN GIVEN. UNLESS
OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO ELECT THE DIRECTORS, AND TO
RATIFY THE APPOINTMENT OF GRANT THORNTON LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS.

CONTINUED TO BE COMPLETED, SIGNED
AND DATED ON THE REVERSE SIDE

THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR PROPOSALS 1 AND 2

1. ELECTION OF DIRECTOR NOMINEES

WARREN G. LICHTENSTEIN JAMES HENDERSON
GLEN KASSAN AVRUM GRAY
J. DWANE BAUMGARDNER JAMES A. RISHER
MARK E. SCHWARZ

[ ] For the election as directors for the ensuing year of all nominees listed
above (except as stricken above) (TO WITHHOLD AUTHORITY TO VOTE FOR ANY SPECIFIC
NOMINEES, CHECK THE FORGOING BOX AND CLEARLY STRIKE OUT OR LINE THROUGH WITH
DARK INK SUCH NOMINEE'S NAME IN THE LIST ABOVE.)

[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED ABOVE.

2. RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS THE INDEPENDENT
PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31,
2004.

FOR / / AGAINST / / ABSTAIN / /

3. DISCRETIONARY AUTHORITY: To vote with discretionary authority with respect
to all other matters that may come before the Meeting and any adjournment
of postponement thereof.

NOTE: Your signature should appear the same as your name appears hereon. In
signing as attorney, executor, administrator, trustee or guardian, please
indicate the capacity in which signing. When signing as joint tenants, all
parties in the joint tenancy must sign. When a proxy is given by a corporation,
it should be signed by an authorized officer and the corporate seal affixed. No
postage is required if mailed in the United States.

Signature: Date
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MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW:
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