Registration No.
Filed with the Securities and Exchange Commission
on April 16, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TALLEY INDUSTRIES, INC.
(Exact name of issuer as specified in its charter)
Delaware 86-0180396
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2702 North 44th Street, Phoenix, Arizona 85008
(Address of Principal Executive Offices) (Zip Code)
1996 NON-EMPLOYEE DIRECTOR STOCK PLAN
OF TALLEY INDUSTRIES, INC.
(Full title of the plan)
MARK S. DICKERSON, Esq.
Vice President, General
Counsel and Secretary
Talley Industries, Inc.
2702 North 44th Street
Phoenix, Arizona 85008
(602) 957-7711
FAX (602) 852-6972
(Name, address and telephone number, including area code, of agent for service)
Calculation of Registration Fee
Proposed Proposed
Title of Amount maximum maximum Amount of
securities to to be offering price aggregate registration
be registered Registered per share(1) offering price(1) fee
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Common Stock
($1.00 par value) 200,000 $6.94 $1,388,000 $479.00
(1)Estimated pursuant to Rule 457(h) solely for the purpose of calculating
the registration fee based on the average of the high and low prices for
the Common Stock on the New York Stock Exchange on April 10, 1996.
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This Registration Statement is filed to register 200,000
shares of Common Stock of Talley Industries, Inc. (the
"Registrant") which may be issued pursuant to the 1996 Non-
Employee Director Stock Plan of the Registrant.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part
I, Items 1 and 2, will be delivered to participants in accordance
with Form S-8 and Securities Act Rule 428.
PART II
Item 3: Incorporation of Documents by Reference.
The following documents filed with the Securities and
Exchange Commission by the Registrant are incorporated herein by
reference as of their respective dates and made a part hereof:
1. The Registrant's Annual Report on Form 10-K for the
year ended December 31, 1995;
2. The Registrant's Current Report on Form 8-K dated
February 2, 1996; and
3. The description of the Common Stock contained in the
registration statement of the Registrant on Form 10 filed under
the Securities Exchange Act of 1934, as amended, which became
effective on July 25, 1963 (File No. 1-4778), including any
amendment or report filed updating such description.
All documents filed by the Registrant pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
after the date hereof and prior to the filing of a post-effective
amendment which indicates that all the shares have been sold or
which deregisters all the shares then remaining unsold shall be
deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such
documents.
Item 4: Description of Securities.
Not Applicable.
Item 5: Interests of Named Experts and Counsel.
Not Applicable.
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Item 6: Indemnification of Directors and Officers.
The certificate of incorporation and bylaws of the
Registrant provide that every person who is a party to or
involved in a suit or other proceeding by reason of his being, or
by reason of a person for whom he is the legal representative
being, or having been, a director or officer of the Registrant or
the Registrant's representative in some other enterprise, as the
case may be, shall be indemnified and held harmless to the
fullest extent permitted by the General Corporation Law of the
State of Delaware ("DGCL") against expenses, liability and loss
incurred or suffered in connection therewith.
The bylaws of the Registrant also provide that such
corporation, as permitted by Delaware law, may maintain insurance
at such corporation's own expense, to protect itself and any
director, officer, or representative against any such expense,
liability or loss whether or not the corporation would have the
power to indemnify him against such expense, liability or loss
under the DGCL. The Registrant maintains such a policy covering
the officers and directors of the Registrant and its subsidiaries
for wrongful acts, as defined in the policy, in their capacities
as officers and directors.
The Registrant's certificate of incorporation provides that
directors shall not be liable to such corporation or its
stockholders for damages for breach of fiduciary duty as a
director. However, this provision does not eliminate or limit
the liability of a director (i) for any breach of the director's
duty of loyalty to the Registrant or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) for the payment
of dividends in violation of Section 174 of the DGCL or (iv) for
any transaction from which the director derived any improper
personal benefit. These provisions do not affect any liability
of directors under the federal securities laws.
The directors of the Registrant have each entered into an
Indemnification Procedures Agreement with the Registrant pursuant
to which certain procedures have been established to implement
the indemnification provisions in its bylaws and certificate of
incorporation. In this regard, the Registrant is obligated to
use its best efforts to purchase directors and officers insurance
and, in certain circumstances, to obtain a Letter of Credit to
secure its indemnification obligations.
Item 7: Exemption from Registration Claimed.
Not Applicable.
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Item 8: Exhibits.
The Exhibits listed in the Exhibit Index on the pages
preceding the exhibits of this Registration Statement are filed
as a part of this Registration Statement.
Item 9: Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
registration statement (or the most recent post-
effective amendment thereof) which, individually
or in the aggregate, represent a fundamental
change in the information set forth in the
registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to
be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by
the Registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide
offering thereof.
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(3) To remove from registration by means of a post-
effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Phoenix, State of Arizona, on April 9, 1996.
TALLEY INDUSTRIES, INC.
By: William H. Mallender
-------------------------
William H. Mallender
Chairman of the Board,
Principal Executive Officer
and Director
POWER OF ATTORNEY
Know All Men By These Presents, that each person whose
signature appears below constitutes and appoints William H.
Mallender and Mark S. Dickerson, and each one of them
individually, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in
his name, place and stead, in any and all capacities to sign any
and all amendments (including post-effective amendments) to this
Registration Statement and to file the same with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and
perform each and every act and thing requisite or necessary to be
done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
William H. Mallender Chairman of the Board, April 9, 1996
- ----------------------- Principal Executive Officer
William H. Mallender and Director
Jack C. Crim Director, President and April 9, 1996
- ----------------------- Chief Operating Officer
Jack C. Crim
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Signature Title Date
- --------- ----- ----
Kenneth May Vice President and April 9, 1996
- ----------------------- Controller, Principal
Kenneth May Accounting Officer
Daniel R. Mullen Vice President and
- ----------------------- Treasurer, Principal April 9, 1996
Daniel R. Mullen Financial Officer
Neil W. Benson Director April 9, 1996
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Neil W. Benson
Paul L. Foster Director April 9, 1996
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Paul L. Foster
Townsend W. Hoopes Director April 9, 1996
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Townsend W. Hoopes
Fred Israel Director April 9, 1996
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Fred Israel
John D. MacNaughton, Jr. Director April 9, 1996
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John D. MacNaughton, Jr.
Joseph A. Orlando Director April 9, 1996
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Joseph A. Orlando
Alex Stamatakis Director April 9, 1996
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Alex Stamatakis
John W. Stodder Director April 9, 1996
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John W. Stodder
Donald J. Ulrich, Jr. Director April 9, 1996
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Donald J. Ulrich, Jr.
David Victor Director April 9, 1996
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David Victor
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EXHIBIT INDEX
4.1 Restated Certificate of Incorporation as presently in
effect, a copy of which was attached as Exhibit 2 to
the Registrant's current report on Form 8-K for the
month of July, 1976, incorporated herein by this
reference.
4.2 Certificate of Amendment of Certificate of
Incorporation dated May 22, 1987, attached as Exhibit 3
to the Registrant's Form 10-Q for the quarter ended
March 31, 1988, incorporated herein by this reference.
4.3 By-laws of the Registrant as amended March 9, 1993,
attached as Exhibit 3.3 to the Registrant's Form 10-K
for the year ended December 31, 1992, incorporated
herein by this reference.
4.4* 1996 Non-Employee Director Stock Plan of the
Registrant.
4.5 Indenture Agreement between the Registrant and Bank
One, Columbus, N.A., a national banking association, as
Trustee, dated as of October 15, 1993 relating to the
12 1/4% Senior Discount Debentures due 2005 issued by
the Registrant and the exhibits thereto, attached as
Exhibit 4.1 to the Registrant's Form 10-Q for the
quarter ended September 30, 1993, incorporated herein
by this reference.
4.6 Indenture Agreement among Talley Manufacturing and
Technology, Inc., the Subsidiary Guarantors (as
defined), the Registrant and Bank One, Columbus, N.A.,
a national banking association, as Trustee, dated as of
October 15, 1993 relating to the 10 3/4% Senior Notes
due 2003 issued by Talley Manufacturing and Technology,
Inc. and the exhibits thereto, attached as Exhibit 4.2
to the Registrant's Form 10-Q for the quarter ended
September 30, 1993, incorporated herein by this
reference.
4.7 Amended and Restated Rights Agreement between the
Registrant and Chemical Mellon Shareholder Services,
L.L.C., Successor to Manufacturers Hanover Trust
Company of California, as Rights Agent, dated as of
April 30, 1986, and amended as of July 21, 1986 and
further amended and restated as of February 2, 1996,
specifying the terms of the Rights (the "Amended Rights
Agreement"), attached as Exhibit 2.4 to the
Registrant's Form 8-A dated February 2, 1996,
incorporated herein by this reference.
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4.8 Certificate of Designations for the Registrant's Series
C Junior Participating Preferred Stock (Exhibit A to
the Amended Rights Agreement), attached as Exhibit 2.5
to the Registrant's Form 8-A dated February 2, 1996,
incorporated herein by this reference.
4.9 Form of Right Certificate (Exhibit B to the Amended
Rights Agreement), attached as Exhibit 1.1 to the
Registrant's Form 8-A dated February 2, 1996,
incorporated herein by this reference.
4.10 Report dated May 4, 1987 reporting the April 28, 1987
Board of Directors' declaration of a five-for-four
split of the Registrant's Common Stock, filed on Form
8-K on May 4, 1987, incorporated herein by this
reference.
5* Opinion of Osborn Maledon, P.A.
23.1* Consent of the Registrant's Independent Public
Accountants.
23.2* Consent of Osborn Maledon, P.A. (included in
Exhibit 5).
99.1 Loan and Security Agreement among Talley Manufacturing
and Technology, Inc., the Lenders listed therein and
Transamerica Business Credit Corporation, as Agent
dated October 22, 1993, attached as Exhibit 99.1 to the
Registrant's 10-Q for the quarter ended September 30,
1993, incorporated herein by this reference.
99.2 First Amendment to Loan and Security Agreement dated
April 29, 1994, by and among Talley Manufacturing and
Technology, Inc. and Transamerica Business Credit
Corporation, as agent, attached as Exhibit 10.1 to the
Company's Form 10-Q for the quarter ended June 30,
1994, incorporated herein by reference.
99.3 Second Amendment to Loan and Security Agreement dated
June 30, 1994, by and among Talley Manufacturing and
Technology, Inc. and Transamerica Business Credit
Corporation, as agent, attached as Exhibit 10.2 to the
Company's Form 10-Q for the quarter ended June 30,
1994, incorporated herein by reference.
99.4 Third Amendment to Loan and Security Agreement dated
December 16, 1994, by and among Talley Manufacturing
and Technology, Inc. and Transamerica Business Credit
Corporation, as agent, attached as Exhibit 99.5 to the
Company's Form 10-K for the year ended December 31,
1994, incorporated herein by reference.
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99.5 Form of Subsidiary Loan Agreement dated as of October
22, 1993 between Talley Manufacturing and Technology,
Inc. and each of certain subsidiaries, attached as
Exhibit 99.3 to the Registrant's 10-Q for the quarter
ended September 30, 1993, incorporated herein by this
reference.
99.6 Subsidiary Loan and Security Agreement dated as of
October 22, 1993 between Talley Manufacturing and
Technology, Inc. and Talley Technology, Inc., attached
as Exhibit 99.4 to the Registrant's 10-Q for the
quarter ended September 30, 1993, incorporated herein
by this reference.
99.7 First Amendment to Subsidiary Loan and Security
Agreement, dated as of December 16, 1994 between Talley
Manufacturing and Technology, Inc. and each of certain
subsidiaries, attached as Exhibit 99.10 to the
Company's Form 10-K for the year ended December 31,
1994, incorporated herein by reference.
________________________
* Filed herewith.
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Exhibit 4.4
1996 NON-EMPLOYEE DIRECTOR STOCK PLAN
of TALLEY INDUSTRIES, INC.
Section 1. Purpose. The purpose of this 1996 Non-Employee Director
Stock Plan of Talley Industries, Inc. is to assist Talley Industries,
Inc. (the "Company") in attracting and retaining Non-Employee
Directors, enable such directors to acquire or increase a proprietary
interest in the Company in order to promote a closer identity of
interests between such directors and the Company's stockholders, and
provide to such directors an increased incentive to expend their
maximum efforts for the success of the Company's business.
Section 2. Definitions. For purposes of the Plan, the following
terms shall be defined as set forth below:
(a) "Award" means any Restricted Stock or Option granted to a
Participant under the Plan.
(b) "Award Agreement" means any written agreement, contract, or
other instrument or document evidencing an Award.
(c) "Board" means the Board of Directors of the Company.
(d) "Change of Control" means and includes each of the
following: (i) the acquisition, in one or more transactions, of
beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) by any person or entity or any group of persons or
entities who constitute a group (within the meaning of Section
13(d)(3) of the Exchange Act), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or a
Subsidiary, of any securities of the Company such that, as a result of
such acquisition, such person, entity or group either (A) beneficially
owns (within the meaning of Rule 13d-3 under the Exchange Act),
directly or indirectly, more than 20% of the Company's outstanding
voting securities entitled to vote on a regular basis for a majority
of the Board or (B) otherwise has the ability to elect, directly or
indirectly, a majority of the members of the Board; (ii) a change in
the composition of the Board such that a majority of the members of
the Board are not Continuing Directors; or (iii) the stockholders of
the Company approve a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the total voting power represented
by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the
stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company
of (in one or more transactions) all or substantially all the
Company's assets.
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(e) "Committee" means the Executive Compensation Committee of
the Board, or such other Board committee as may be designated by the
Board to administer the Plan.
(f) "Company" means Talley Industries, Inc., a corporation
organized under the laws of the State of Delaware, or any successor
corporation.
(g) A "Continuing Director" means, as of any date of
determination, any member of the Board who (i) was a member of such
Board on the effective date of the Plan or (ii) was nominated for
election or elected to such Board with the affirmative vote of a
majority of the Continuing Directors who were members of such Board at
the time of such nomination or election.
(h) "Disability" means a permanent and total disability as
determined by the Committee in good faith, upon receipt of sufficient
competent medical advice from one or more individuals, selected by the
Committee, who are qualified to give professional medical advice.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time. References to any provision of the
Exchange Act shall be deemed to include successor provisions thereto
and regulations thereunder.
(j) "Fair Market Value" means, with respect to Stock, the fair
market value of such Stock determined by such methods or procedures as
shall be established from time to time by the Committee in good faith
and in accordance with applicable law. Unless otherwise determined by
the Committee, the Fair Market Value of Stock shall mean the mean of
the high and low sales prices of the Stock on the relevant date as
reported on the stock exchange or market on which the Stock is
primarily traded, or if no sale is made on such date, then the Fair
Market Value is the weighted average of the mean of the high and low
sales prices of the Stock on the next preceding day and the next
succeeding day on which such sales were made as reported on the stock
exchange or market on which the Stock is primarily traded.
(k) "Non-Employee Director" means any individual who is a member
of the Board of Directors of the Company, but who is not otherwise an
employee of the Company or any of its Subsidiaries.
(l) "Option" means a right, granted to a Participant under
Section 7, to purchase Stock at a specified price during specified
time periods.
(m) "Participant" means a Non-Employee Director of the Company
who has been granted an Award under the Plan.
(n) "Plan" means this 1996 Non-Employee Director Stock Plan of
the Company.
(o) "Restricted Stock" means Stock awarded to a Participant
under Section 6 that may be subject to certain restrictions and to a
risk of forfeiture.
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(p) "Rule 16b-3" means Rule 16b-3, as from time to time in
effect and applicable to the Plan and Participants under Section 16 of
the Exchange Act.
(q) "Stock" means the common stock of the Company and such other
securities as may be substituted for Stock or such other securities
pursuant to Section 4.
(r) "Subsidiary" means any corporation in which the Company owns
directly or indirectly at least 50% of the total combined voting power
of all classes of stock, or any other entity (including, but not
limited to, partnerships and joint ventures) in which the Company owns
directly or indirectly at least 50% of the voting power, capital or
profits thereof.
(s) "Trading Day" means a day on which the trading floor of the
New York Stock Exchange is open for general business.
Section 3. Administration.
(a) Authority of the Committee. The Plan shall be administered
by the Committee. The Committee has the full power, discretion, and
authority to interpret and administer the Plan in a manner that is
consistent with the Plan's provisions. However, the Committee does
not have the power to (i) determine Plan eligibility, or to determine
the number, the price, the vesting period, or the timing of Awards to
be made under the Plan to any Participant, or (ii) take any action
that would result in the Awards not being treated as "formula awards"
within the meaning of Rule 16b-3 of the Exchange Act or any successor
provision thereto.
(b) Manner of Exercise of Committee Authority. Unless authority
is specifically reserved to the stockholders of the Company or to the
Board under the terms of the Plan, the Company's Certificate of
Incorporation or By-laws, or applicable law, the Committee shall have
sole discretion in exercising authority under the Plan. Any action of
the Committee with respect to the Plan shall be final, conclusive, and
binding on all persons, including the Company, Subsidiaries,
Participants, any person claiming any rights under the Plan from or
through any Participant, and stockholders. The express grant of any
specific power to the Committee, and the taking of any action by the
Committee, shall not be construed as limiting any power or authority
of the Committee. The Committee may delegate to officers or managers
of the Company or any Subsidiary the authority, subject to such terms
as the Committee shall determine, to perform administrative functions
and to perform such other functions as the Committee may determine, to
the extent permitted under Rule 16b-3 and applicable law.
Section 4. Stock Subject to Plan.
(a) Subject to adjustment as hereinafter provided, the total
number of shares of Stock available for issuance in connection with
Awards under the Plan shall be 200,000.
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No Award may be granted if the number of shares to which such
Award relates, when added to the number of shares previously issued
under the Plan and the number of shares to which other then-
outstanding Awards relate, exceeds the number of shares available for
the Plan. If any shares subject to an Award are forfeited or such
Award otherwise terminates for any reason whatsoever without an actual
distribution of shares to the Participant, any shares counted against
the number of shares available under the Plan with respect to such
Award shall, to the extent of any such forfeiture or termination,
again be available for Awards under the Plan.
(b) Any shares of Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued shares or
treasury shares.
(c) In the event that any stock dividend, recapitalization,
forward split or reverse split, reorganization, merger, consolidation,
spin-off, combination, repurchase or share exchange, or other similar
corporate transaction or event, affects the Stock, (i) the number and
kind of shares of Stock which may thereafter be issued in connection
with Awards, (ii) the number and kind of shares of Stock subject to
any outstanding Awards, (iii) the aggregate number and kind of shares
of Stock available under the Plan, and (iv) the Option exercise price
per share of Stock will be automatically adjusted to give effect to
the occurrence of such event.
Section 5. Eligibility. Eligibility to participate in the Plan is
limited to Non-Employee Directors.
Section 6. Annual Restricted Stock Grants.
(a) Annual Grant of Restricted Stock. Each year beginning with
1996, as of the first business day of the month following the
adjournment of the Annual Meeting of Stockholders of the Company for
that year, each Non-Employee Director who has been elected or
reelected, or continues as a member of the Board as of the adjournment
of the Annual Meeting shall be granted 1,000 shares of Restricted
Stock. The specific terms of the Restricted Stock grant is subject to
the provisions of this Section 6 and the Award Agreement executed
pursuant to Section 6(b).
(b) Award Agreement. Each Restricted Stock grant shall be
evidenced by an Award Agreement that will not include any terms or
conditions that are inconsistent with the terms and conditions of the
Plan.
(c) Nontransferability of Restricted Stock. Except as otherwise
provided in Section 6(d), a Participant may not sell, transfer,
pledge, assign or otherwise alienate, other than by will or the laws
of descent and distribution, any shares of Restricted Stock if such
transaction would cause the average over the 10 consecutive Trading
Days preceding the date of such transaction of the Fair Market Value
of all of the shares of Stock, including Restricted Stock, but
excluding any options, warrants or rights to purchase Stock
beneficially owned, directly or indirectly, by the Participant to be
less than five times the then current annual cash retainer (exclusive
of any per meeting fees, committee fees or expense reimbursements)
paid to Non-Employee Directors.
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(d) Termination of Service on Board. If any Participant ceases
to be a Non-Employee Director by reason of death, Disability,
completion of his elected term of office, or failure to be reelected
as a member of the Board, any Restricted Stock held by that
Participant shall not be subject to the restrictions set forth in
Section 6(c). If a Participant ceases to be a Non-Employee Director
for any reason other than those stated in the preceding sentence, any
Restricted Stock held by that Participant as of that date immediately
shall be forfeited.
(e) Certificates for Stock. Restricted Stock granted under the
Plan may be evidenced in such manner as the Committee shall determine.
If certificates representing Restricted Stock are registered in the
name of the Participant, such certificates may bear an appropriate
legend referring to the terms, conditions, and restrictions applicable
to such Restricted Stock.
(f) Dividends. Non-Employee Directors holding shares of
Restricted Stock granted hereunder shall be entitled to receive any
dividend or other distribution paid with respect to those shares while
they are so held. If any such dividends or distributions are paid in
Stock, the Stock shall be subject to restrictions and a risk of
forfeiture to the same extent as the Restricted Stock with respect to
which Stock has been distributed.
(g) Voting Rights. Non-Employee Directors holding shares of
Restricted Stock granted hereunder shall have voting rights with
respect to those shares.
(h) Taxes. Each Participant who receives Restricted Stock
pursuant to the Plan shall be paid in cash in the year in which the
value of the Restricted Stock is included in the gross income of the
Participant an amount equal to the federal, foreign, if any, and
applicable state and local income and self-employment tax liabilities
payable by the Participant as a result of (i) the amount included in
gross income as a result of the receipt of the Restricted Stock and
(ii) the payment of the amount in clause (i) and the amount in this
clause (ii). For purposes of determining the amount to be paid to
the Participant pursuant to the preceding sentence, the Participant
shall be deemed to pay federal, foreign, if any, and state and local
income taxes at the highest marginal rate of tax imposed upon ordinary
income for the year in which an amount in respect of the Restricted
Stock is included in gross income, after giving effect to any
deductions therefrom or credits available with respect to the payment
of any such taxes.
Section 7. Annual Option Grants.
(a) Annual Grant of Options. Each year beginning with 1996, as
of the first business day of the month following the adjournment of
the Annual Meeting of Stockholders of the Company for that year, each
Non-Employee Director who has been elected or reelected, or continues
as a member of the Board as of the adjournment of the Annual Meeting
shall be granted an Option to purchase 1,000 shares of Stock. The
specific terms of the Option grant is subject to the provisions of
this Section 7 and the Award Agreement executed pursuant to Section
7(b)
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(b) Award Agreement. Each Option grant shall be evidenced by an
Award Agreement that will not include any terms or conditions that are
inconsistent with the terms and conditions of the Plan.
(c) Option Exercise Price Per Share. The exercise price per
share of Stock under an Option granted pursuant to this Section 7
shall be equal to the Fair Market Value of such Stock on the date the
Option is granted.
(d) Duration of Options. Participants shall be entitled to
exercise Options granted under this Section 7 at any time and from
time to time, within the time period beginning at the end of the sixth
month following the date the Option is granted, and ending on the
fifth (5th) anniversary date of its grant, unless the Option is
earlier terminated, forfeited, or surrendered pursuant to a provision
of the Plan or the applicable Award Agreement.
(e) Payment. Options are exercised by delivering a written
notice of exercise to the Secretary of the Company specifying the
number of Options to be exercised and payment in full is made for the
shares of Stock being acquired thereunder at the time of exercise.
Such payment shall be made: (i) in cash or its equivalents; (ii) by
tendering to the Company shares of Stock (not including Restricted
Stock) owned by the Participant exercising the Option and having a
Fair Market Value equal to the cash exercise price applicable to such
Option; (iii) by directing the Company to withhold from the shares of
Stock that would otherwise be issued upon exercise of the Options that
number of shares of Stock having a Fair Market Value equal to the cash
exercise price applicable to such Option; (iv) through "cashless
exercise" arrangements; or (v) by a combination of (i), (ii), (iii)
and (iv).
The Committee shall determine acceptable methods for a
Participant to use the payment methods described in clauses (ii),
(iii) and (iv) of this Section 7(e) and the Committee may impose such
conditions on the use of such payment methods as it deems appropriate.
In addition, a Participant may not use the payment method described in
clause (ii) of this Section 7(e) if such transaction would cause the
average over the 10 consecutive Trading Days preceding the date of
such transaction of the Fair Market Value of all of the shares of
Stock (including Restricted Stock, but excluding any options, warrants
or rights to purchase Stock) beneficially owned, directly or
indirectly, by the Participant to be less than five times the then
annual cash retainer (exclusive of any per meeting fees, committee
fees, or expense reimbursements) paid to Non-Employee Directors.
As soon as practicable after a written notification of exercise
and full payment, the Company shall cause to be delivered to the
Participant, in the Participant's name, Stock certificates in an
appropriate amount based upon the number of shares of Stock purchased
pursuant to the exercise of the Options.
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<PAGE>
(f) Termination of Service on Board. If any Participant ceases
to be a Non-Employee Director by reason of death, Disability,
completion of his elected term of office, or failure to be reelected
as a member of the Board, any Options held by that Participant shall
remain exercisable at any time prior to their expiration date, or for
one (1) year after the date the Participant ceases to be a Non-
Employee Director for such reasons, whichever period is shorter. If a
Participant ceases to be a Non-Employee Director for any reason other
than those stated in the preceding sentence, any Options held by that
Participant as of that date immediately shall be forfeited.
(g) Restrictions on Stock Transferability. To the extent
necessary to ensure that Options granted under this Section 7 comply
with applicable law, the Board shall impose restrictions on any Stock
acquired pursuant to the exercise of an Option under this Section 7,
including, without limitation, restrictions under applicable federal
securities laws, under the requirements of any stock exchange or
market upon which such Stock is then listed and/or traded, and under
any blue sky or state securities laws applicable to such Stock.
(h) Nontransferability of Options. No Option granted under this
Section 7 may be sold, transferred, pledged, assigned, or otherwise
alienated, other than by will or by the laws of descent and
distribution. Further, all Options granted to a Participant under
this Section 7 shall be exercisable during his or her lifetime only by
such Participant.
Section 8. Change of Control. In the event of a Change of Control of
the Company, all shares of Restricted Stock granted under the Plan
that are still subject to restrictions shall be free of such
restrictions, as of the first date that the definition of Change of
Control has been fulfilled. All Options that are exercisable as of
the effective date of the Change of Control shall remain exercisable
for the remaining life of the Option.
Section 9. General Provisions.
(a) Compliance With Legal and Other Requirements. The Plan, the
granting of Awards thereunder, and the other obligations of the
Company under the Plan and any Award Agreement, shall be subject to
all applicable federal and state laws, rules, and regulations, and to
such approvals by any regulatory or governmental agency as may be
required. The Company may, in its discretion, postpone the issuance
or delivery of Stock under any Award until completion of such
registration or qualification of such Stock or other required action
under any federal or state law, rule, or regulation, listing or other
required action with respect to any automated quotation system or
stock exchange upon which the Stock or other Company securities are
designated or listed, or compliance with any other contractual
obligation of the Company, as the Company may consider appropriate,
and may require any Participant to make such representations and
furnish such information as it may consider appropriate in connection
with the issuance or delivery of Stock in compliance with applicable
laws, rules, and regulations, designation or listing requirements, or
other contractual obligations.
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<PAGE>
(b) Compliance with Rule 16b-3. It is the intent of the Company
that this Plan comply in all respects with applicable provisions of
Rule 16b-3 under the Exchange Act in connection with any grant of
Awards to or other transaction by a Participant who is subject to
Section 16 of the Exchange Act (except for transactions exempted under
alternative Exchange Act rules). Accordingly, if any provision of
this Plan or any Award Agreement does not comply with the requirements
of Rule 16b-3 as then applicable to any such transaction, such
provision will be construed or deemed amended to the extent necessary
to conform to the applicable requirements of Rule 16b-3 so that such
Participant shall avoid liability under Section 16(b).
(c) Changes to the Plan and Awards. The Board may amend, alter,
suspend, discontinue, or terminate the Plan without the consent of the
Company's stockholders or Participants, except that any such
amendment, alteration, suspension, discontinuation, or termination
shall be subject to the approval of the Company's stockholders within
one year after such Board action if such stockholder approval is
required by any federal or state law or regulation or the rules of any
stock exchange or automated quotation system on which the Stock may
then be listed or quoted, and the Board may otherwise, in its
discretion, determine to submit other such changes to the Plan to the
stockholders for approval; provided, however, that without the
consent of an affected Participant, no amendment, alteration,
suspension, discontinuation, or termination of the Plan may materially
and adversely affect the rights of such Participant under any Award
theretofore granted and any Award Agreement relating thereto.
Notwithstanding the foregoing, unless approved by the stockholders of
the Company, no amendment will: (i) change the class of persons
eligible to receive Awards; (ii) materially increase the benefits
accruing to Participants under the Plan; or (iii) increase the number
of shares of Stock subject to the Plan.
(d) No Stockholder Rights. No Award shall confer on any
Participant any of the rights of a stockholder of the Company unless
and until Stock is duly issued or transferred to the Participant in
accordance with the terms of the Award.
(e) Severability. If any provision of the Plan shall be deemed
to be illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining provisions of the Plan, but shall be
fully severable and the Plan shall be construed and enforced as if the
illegal or invalid provision had never been included herein.
(f) Governing Law. The validity, construction, and effect of
the Plan, any rules and regulations relating to the Plan, and any
Award Agreement shall be determined in accordance with the laws
(including those governing contracts) of the State of Delaware,
without giving effect to principles of conflicts of laws, and
applicable federal law.
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<PAGE>
(g) Effective Date; Plan Termination. The Plan shall become
effective as of January 1, 1996; provided, however, that, within one
year after such date, the Plan shall have been approved by the
affirmative vote of the holders of a majority of the voting power
present in person or represented by proxy, and entitled to vote on the
Plan at a meeting of the Company's stockholders duly held in
accordance with the laws of the State of Delaware, or any adjournment
thereof; provided, however, that a quorum is present at the meeting or
any adjournment thereof. The Plan shall terminate on the earlier of
ten years after approval by the stockholders of the Company or at such
time as no Stock remains available for issuance pursuant to Section 4.
The Plan shall continue in effect with respect to Awards made before
termination of the Plan until such Awards have been settled,
terminated or forfeited.
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Exhibit 5
April 11, 1996
Talley Industries, Inc.
2702 North 44th Street
Phoenix, Arizona 85008
Re: Registration Statement on
Form S-8/1996 Non-Employee Director Stock Plan
Ladies and Gentlemen:
We have represented Talley Industries, Inc. (the "Company")
in connection with the Registration Statement on Form S-8 (the
"Registration Statement") to be filed with the Securities and
Exchange Commission on or about April 15, 1996 with respect to
the registration of 200,000 shares of Common Stock, $1 par value,
of the company (the "Shares") which may be issued pursuant to the
1996 Non-Employee Director Stock Plan of the Company to certain
directors of the Company (the "Plan"). We have reviewed such
records and documents as we considered necessary or appropriate
for purposes of this opinion, and we have reviewed with various
officers of the Company certain information relevant for the
purposes of this opinion.
Based upon the foregoing, we are of the opinion that when
issued pursuant to the Plan, the Shares will be validly issued,
fully paid and non-assessable.
We hereby consent to the filing of this opinion as an
Exhibit to the Registration Statement.
OSBORN MALEDON, a Professional
Association
By: William Hardin
-------------------
William Hardin
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of Talley Industries, Inc. of
our report dated February 19, 1996 appearing on page F-48 of the
Annual Report on Form 10-K.
PRICE WATERHOUSE LLP
Phoenix, Arizona
April 12, 1996
