Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 27, 1995
TALLEY MANUFACTURING AND TECHNOLOGY, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 33-49869-01 86-0739329
(State or other jurisdiction (Commission (IRS Employer Identi-
or incorporation) File Number) fication No.)
2702 North 44th Street, Phoenix, Arizona 85008
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 602-957-7711
(Former name or former address, if changed since last report)
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Item 5. Other Events
On June 27, 1995, the federal district court for the District
of Arizona entered judgment against TRW Inc. and in favor of the
Registrant in TRW Inc. v. Talley Industries, Inc., et al. The
court dismissed, in their entirety, TRW's claims against the
Registrant, while the jury reached a verdict in favor of the
Registrant on its counterclaims against TRW, awarding the
Registrant a total of $138 million. The award (which is in
addition to (i) royalty payments of $24.4 million paid prior to the
judgment and during the pendency of this action pursuant to an
earlier preliminary injunction order, and (ii) attorneys' fees and
recoverable costs relating to this litigation which the Registrant
will seek to recover under the governing 1989 agreements)
represents the jury's determination of the present value of the
royalties that would otherwise have been paid to the Registrant by
TRW post-judgment through April, 2001.
The litigation in which this judgment was entered arose out of
the 1989 agreements between TRW and the Registrant under which TRW
acquired the Registrant's airbag business. The court dismissed
TRW's claims that the Registrant had breached a non-compete
provision of the 1989 agreements, by rendering services to
competitors of TRW, and TRW thereby became entitled to terminate
airbag royalty payments to the Registrant (which it purported to do
in February 1994) and obtain a paid-up license to use the
Registrant's airbag technology. The jury found in fact that TRW
had improperly terminated and repudiated the 1989 license
agreement, and that the Registrant had not defaulted under the
license agreement.
TRW has indicated its intention to appeal the judgment; if it
does so, and if it is able to obtain a stay pending appeal, payment
of the judgment to the Registrant would not be required unless and
until the judgment is affirmed on appeal. The Registrant intends
to seek an order requiring TRW to post a bond securing payment of
the entire judgment and to continue to make quarterly payments in
the amount of royalties that would be due under the 1989 license
agreement. Upon affirmation of the judgment on appeal, TRW would
be required to pay the judgment plus interest (which the court has
ruled will accrue from June 27, 1995 at the rate specified by the
1989 license agreement - prime rate plus five percent), offset by
any such ongoing quarterly royalty payments ordered by the court.
The foregoing discussion is qualified in its entirety by the
text of the judgment and the verdict, copies of which are attached
hereto as Exhibits 99.1 and 99.2, respectively, and incorporated by
reference herein.
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Certain other claims asserted by TRW and the Registrant
against each other are the subject of a separate action which
remains pending. In that action, TRW has asserted that the airbag
manufacturing plant included in the assets sold to TRW by the
Registrant in 1989 failed to meet certain government requirements
and industry standards, and that the associated real estate was
insufficient to permit construction of certain additional
facilities, in violation of the 1989 asset purchase agreement. The
Registrant's claims against TRW include claims that TRW
intentionally interfered with certain of its business
relationships, failed to exert reasonable efforts to exploit the
exclusive technology license granted to TRW by the Registrant in
1989 and denied the Registrant certain contractually provided audit
rights. It is anticipated that these remaining claims will come to
trial within the next six months.
Item 7. Exhibits.
(c) Exhibits
99.1 Judgment - In the United States District Court for
the District of Arizona, TRW, Inc. Plaintiff/
Counterdefendant vs. Talley Industries, Inc., et
al., Defendant/Counterclaimants, and Related
Counterclaims and Interpleader, dated June 27,
1995
99.2 Special Verdict Form - In the United States
District Court for the District of Arizona, TRW,
Inc. Plaintiff/Counterdefendant, vs. Talley
Industries, Inc., Talley Defense Systems, Inc.,
Talley Automotive Products, Inc., Talley
Manufacturing and Technology, Inc., and Universal
Propulsion Company, Inc. - Defendant/ Counter-
claimants, and Related Counterclaims and
Interpleader, dated June 6, 1995
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned hereto duly authorized.
Talley Manufacturing and
Technology, Inc.
(Registrant)
Date: July 10, 1995 Mark S. Dickerson
Mark S. Dickerson, Vice President
and Secretary
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Exhibit 99.1
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
TRW INC., ) No. CIV 94-0350 PHX PGR
)
Plaintiff/Counterdefendant, )
)
vs. ) JUDGMENT
)
TALLEY INDUSTRIES, INC., et al., )
)
Defendants/Counterclaimants. )
)
)
AND RELATED COUNTERCLAIMS )
AND INTERPLEADER )
)
WHEREAS on February 15, 1994 plaintiff/counterdefendant TRW
Inc. ("TRW") filing a Civil Complaint against
defendants/counterclaimants Talley Industries, Inc., Talley Defense
Systems, Inc., Talley Automotive Products, Inc., Talley
Manufacturing and Technology, Inc., Talley Technology, Inc. and
Universal Propulsion Company, Inc. (collectively "Talley") and upon
Talley's motion for summary judgment, the Court after due
deliberation having granted Talley's motion for summary judgment
and dismissing a certain portion of the Complaint on August 24,
1994, and TRW filing an Amended Civil Complaint on September 13,
1994; and
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WHEREAS this action, having come on for trial before this
Court and a jury beginning on April 5, 1995, the Honorable Paul G.
Rosenblatt, U.S.D.J. presiding, and certain of the issues having
been duly tried, and a special verdict having been rendered, and
pursuant to Federal Rule of Civil Procedure 54(a); and
WHEREAS at the close of all the evidence and upon Talley's
motions for judgment as a matter of law with respect to all of the
claims underlying TRW's "First Claim for Relief: Declaratory
Judgment" and "Second Claim for Relief: Breach of the APA and the
License", and the Court after due deliberation having granted on
May 30, 1995 the motions of each defendant in all respects and
disposing of all claims in the Amended Complaint; and
WHEREAS TRW withdrew its "Third Claim for Relief: Interference
with Contract Rights by UPCO" and its "Fourth Claim for Relief:
Constructive Trust on Information Regarding Licensed Products"; and
WHEREAS Talley's "First Counterclaim (Anticipatory Breach)"
and "Second Counterclaim (Breach of Implied Duty of Good Faith and
Fair Dealing)" having been duly tried and submitted to the jury,
and the jury having duly rendered a verdict in favor of Talley as
to the First Counterclaim and in favor of TRW as to the Second
Counterclaim; and
WHEREAS Talley's "Third Counterclaim (Breach of Implied Duty
to Exercise Reasonable Efforts to Exploit the Exclusive License)",
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"Fourth Counterclaim on Behalf of Talley and UPCO for Intentional
Interference with Prospective Business Relationships", and "Fifth
Counterclaim on Behalf of Talley (Breach of Contract)" having been
severed from this action by agreement of the parties and
consolidated with the claims remaining in the action between the
parties pending before this Court in CIV No. 89-1920 PHX PGR, filed
February 12, 1990, and for good cause appearing therefor.
IT IS HEREBY ORDERED, ADJUDGED AND DECREED as follows:
1. In accordance with the Court's granting of judgment as a
matter of law, TRW's Amended Complaint and all of TRW's claims that
were or could have been set forth therein and in the Joint Pretrial
Statement filed March 29, 1995 be, and the same hereby are,
dismissed with prejudice and that TRW take nothing of Talley.
2. In accordance with the jury's special verdict, Talley has
judgment on its First Counterclaim as follows: Talley shall
recover against TRW a judgment in the sum of One Hundred Thirty
Eight Million Dollars ($138,000,000.00) together with interest
thereon pursuant to Section 13.19 of the License at the rate of
prime plus five (5) per cent per annum from date of judgment until
paid.
3. Talley is entitled to and shall recover from TRW Talley's
costs and attorneys' fees pursuant to Section 12.16 of the APA and
Section 13.12 of the License and as provided by law with interest
thereon to be taxed as the Court determines.
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4. Upon expiration of ten (10) days from the entry hereof,
execution shall promptly issue in favor of Talley with respect to
the enforcement hereof, including, without limitation, the
enforcement and collection of all amounts to be paid hereunder to
Talley.
5. This Court shall retain jurisdiction with respect to the
enforcement of the terms of this judgment.
6. The Clerk is directed to enter judgment accordingly.
DATED this 27th day of June, 1995.
Paul G. Rosenblatt
Hon. Paul G. Rosenblatt
U.S.D.J.
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Exhibit 99.2
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
TRW Inc., ) No. CIV 94-0350 PHX PGR
)
Plaintiff/Counterdefendant ) SPECIAL VERDICT FORM
)
vs. )
)
TALLEY INDUSTRIES, INC., TALLEY )
DEFENSE SYSTEMS, INC., TALLEY )
AUTOMOTIVE PRODUCTS, INC., TALLEY )
MANUFACTURING AND TECHNOLOGY, INC.,)
TALLEY TECHNOLOGY, INC., and )
UNIVERSAL PROPULSION COMPANY, INC.,)
)
Defendants/Counterclaimants. )
)
)
AND RELATED COUNTERCLAIMS AND )
INTERPLEADER )
)
1. Did TRW anticipatorily breach the License?
X YES NO
Please proceed to Question No. 2.
2. Did TRW breach the implied covenant of good faith and fair
dealing when it terminated the License?
YES X NO
Please proceed to Question No. 3.
3. Was TRW obligated under the terms of the License to pay
royalties to Talley on sales of augment and hybrid inflators?
YES X NO
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If you answered "Yes" to Question No. 1 or Question No. 2 or both,
please proceed to Questions No. 4 and 5.
4. What amount of money will fully and fairly compensate Talley
for the royalties it is entitled to receive? (In determining this
amount, you should refer to the measure of damages the Court has
set forth in the Instructions.)
$ 138,000,000
5. Did Talley suffer any damages in addition to the loss of the
royalties from TRW's termination of the License and, if so, in what
amount?
YES X NO
$
(if the answer to Question No. 5 if "Yes")
Dated: June 6, 1995
Stephen Simpson
Foreperson
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