SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 5, 1997
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TALLEY INDUSTRIES, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-4778 86-0180396
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(State or other jurisdiction (Commission (IRS Employer Identi-
of incorporation) File Number) fication No.)
2702 North 44th Street, Suite 100A, Phoenix, Arizona 85008
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 602/957-7711
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(Former name or former address, if changed since last report)
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Item 1. Changes in Control of Registrant.
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On December 5, 1997, Score Acquisition Corp.("Purchaser"), a
Delaware corporation and a wholly-owned subsidiary of Carpenter
Technology Corporation, a Delaware corporation ("Carpenter"),
accepted for payment approximately 10,777,195 shares of the
Registrant's Common Stock, par value $1 per share, including the
associated Preferred Stock Purchase Rights (the "Common Shares"),
approximately 12,509 shares of the Registrant's Series A
Convertible Preferred Stock ("Series A Preferred Shares") and
approximately 497,618 shares of the Registrant's Series B $1
Cumulative Convertible Preferred Stock ("Series B Preferred
Shares," and together with the Common Shares and the Series A
Preferred Shares, the "Shares"). The Shares were acquired
pursuant to the Agreement and Plan of Merger dated September 25,
1997 among Carpenter, Purchaser and the Registrant, a copy of
which is attached as Exhibit 2.1 hereto and incorporated herein
by reference (the "Merger Agreement"), and upon the terms and
subject to the conditions set forth in Purchaser's Offer to
Purchase dated October 2, 1997 (as amended to date, the "Offer to
Purchase") and the related Letter of Transmittal (together with
the Offer to Purchase, and as amended to date, the "Offer"). The
Offer expired at 12:00 midnight (EST) on Thursday, December 4,
1997, and all Shares validly tendered by stockholders and not
withdrawn prior to such time were accepted for payment by
Purchaser. As a result of the consummation of the Offer,
Purchaser holds approximately 74.4% (measured by aggregate voting
power on a fully diluted basis) of the Registrant's issued and
outstanding voting securities. A copy of the press releases
issued by Carpenter and the Registrant on December 5, 1997
announcing the preliminary results of the Offer are attached
hereto as Exhibits 99.1 and 99.2, respectively.
The total consideration paid by Purchaser for the purchase of
Shares pursuant to the Offer was approximately $137.6 million.
Based on information reported by Purchaser in the Offer to
Purchase and in the Schedule 14D-1 filed by Purchaser on October
2, 1997, and the amendments thereto, the Registrant believes that
(i) Purchaser's source of funds to acquire the Shares is through
a capital contribution and/or a loan from Carpenter; and (ii)
Carpenter's source of funds is principally through an increase in
its unsecured revolving credit agreement to $400 million.
According to Purchaser, the four lenders under the amended
revolving credit facility are Morgan Guaranty Trust Company of
New York acting as agent, Mellon Bank, N.A. as syndication agent,
CoreStates Bank, N.A. and PNC Bank, National Association.
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The Merger Agreement provides that, following consummation of the
Offer and subject to approval by the stockholders of the
Registrant and the satisfaction of certain limited conditions,
Purchaser will acquire all of the issued and outstanding Shares
not tendered in the Offer through a cash merger of Purchaser or
another wholly-owned subsidiary of Carpenter with and into the
Registrant (the "Merger"), with the Registrant as the surviving
corporation. The Merger Agreement will be submitted to the
Registrant's stockholders for approval at a special meeting of
stockholders which the Registrant anticipates will be held on
February 12, 1998. Because Purchaser has sufficient voting power
to approve the Merger Agreement and is contractually obligated to
vote all Shares held by Purchaser in favor of the Merger
Agreement, approval of the Merger Agreement by the stockholders
is assured. The other conditions to consummation of the Merger
are expected by the Registrant to be fulfilled.
On December 9, 1997, in accordance with the terms of the Merger
Agreement, Robert T. Craig, Jack C. Crim, Fred Israel, Alex
Stamatakis and Donald J. Ulrich, Jr. resigned as directors of the
Registrant and the Registrant's subsidiary, Talley Manufacturing
and Technology, Inc., a Delaware corporation ("Talley
Manufacturing"), and Robert W. Cardy, Dennis M. Draeger, G.
Walton Cottrell, Robert W. Lodge, John R. Welty, and Edward B.
Bruno, each of whom is a designee of Purchaser, were appointed to
the Board of Directors of the Registrant and Talley
Manufacturing. Paul L. Foster, Joseph A. Orlando, John W.
Stodder and David Victor continue to serve as directors of the
Registrant and Talley Manufacturing, but Admiral Foster has
resigned as Chairman of the Board and Chief Executive Officer of
the Registrant and Talley Manufacturing. Robert W. Cardy has
been appointed as Chairman of the Board and Chief Executive
Officer of the Registrant and Talley Manufacturing.
The foregoing summary of certain terms and provisions of the
Merger Agreement is qualified in its entirety by the Merger
Agreement, which is an Exhibit to this Report.
Item 5. Other Events.
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On December 9, 1997, the Registrant's Board of Directors approved
Amendment No. 1 (the "Amendment") to the Amended and Restated
Rights Agreement (as so amended, the "Amended Rights Agreement")
originally dated as of April 30, 1986, as amended as of July 21,
1986 and as further amended and restated as of February 2, 1996,
between the Registrant and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent. The Amendment provides that immediately
prior to the "Effective Time" (as such term is defined in the
Merger Agreement) of the Merger, all Preferred Stock Purchase
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Rights (the "Rights") outstanding or issuable under the Amended
Rights Agreement shall be null and void and of no further force
and effect, and the Registrant's obligations to issue additional
Rights and its obligations under the Amended Rights Agreement
shall terminate. The foregoing summary of certain terms and
provisions of the Amended Rights Agreement and the Amendment is
qualified in its entirety by the Amended Rights Agreement and the
Amendment, copies of which are attached hereto as Exhibits 4.1
and 4.2, respectively, and incorporated herein by reference.
This Report contains forward-looking statements that are based on
the Registrant's current expectations. Words such as "expects"
and "anticipates" are intended to identify such forward-looking
statements. These statements are not guarantees of future
performance or actions and involve certain risks, uncertainties
and assumptions. Therefore, actual outcomes and results may
differ materially from what is expressed or forecasted in such
forward-looking statements. The Registrant undertakes no
obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or
otherwise.
Item 7. Financial Statements, Pro Forma Financial Information
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and Exhibits.
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(c) Exhibits
2.1 Agreement and Plan of Merger dated September
25, 1997, among Carpenter Technology
Corporation, a Delaware corporation, Score
Acquisition Corp., a Delaware corporation, and
the Registrant. (Incorporated herein by
reference to Exhibit B to Schedule 14D-9 filed
by the Registrant on October 2, 1997.)
4.1 Amended and Restated Rights Agreement
originally dated as of April 30, 1986, as
amended as of July 21, 1986 and as further
amended and restated as of February 2, 1996,
between the Registrant and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent
(as so amended and restated, the "Rights
Agreement"). (Incorporated herein by reference
to Exhibit 2.4 to the Registrant's Form 8-A
dated as of February 2, 1996.)
4.2 Amendment No. 1 to the Rights Agreement
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99.1 Press Release dated December 5, 1997 issued by
Purchaser regarding completion of the Offer
99.2 Press Release dated December 5, 1997 issued by
the Registrant regarding completion of the
Offer
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this Report on Form 8-K
to be signed on its behalf by the undersigned, thereunto duly
authorized.
TALLEY INDUSTRIES, INC.
Dated: December 17, 1997 By /s/ Mark S. Dickerson
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Mark S. Dickerson,
Vice President and
Secretary
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EXHIBIT INDEX
EXHIBIT
NO.
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EXHIBIT
2.1 Agreement and Plan of Merger dated
September 25, 1997, among Carpenter
Technology Corporation, a Delaware
corporation, Score Acquisition Corp., a
Delaware corporation, and the
Registrant. (Incorporated herein by
reference to Exhibit B to Schedule 14D-9
filed by the Registrant on October 2,
1997.)
4.1 Amended and Restated Rights Agreement
originally dated as of April 30, 1986,
as amended as of July 21, 1986 and as
further amended and restated as of
February 2, 1996, between the Registrant
and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent (as so amended
and restated, the "Rights Agreement").
(Incorporated herein by reference to
Exhibit 2.4 to the Registrant's Form 8-A
dated as of February 2, 1996.)
4.2 Amendment No. 1 to the Rights Agreement
99.1 Press Release dated December 5, 1997
issued by Purchaser regarding completion
of the Offer
99.2 Press Release dated December 5, 1997
issued by the Registrant regarding
completion of the Offer
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EXHIBIT 4.2
AMENDMENT NO. 1
to the
AMENDED AND RESTATED RIGHTS AGREEMENT
between
TALLEY INDUSTRIES, INC.
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C. , as Rights Agent
Originally dated as of April 30, 1986,
and amended as of July 21, 1986,
and amended and restated as of February 2, 1996
Section 29 of the Amended and Restated Rights Agreement originally dated as of
April 30, 1986, as amended as of July 21, 1986, and as further amended and
restated as of February 2, 1996 (the "Amended Rights Agreement"), is hereby
amended to add the following additional sentence at the end of said Section 29:
Notwithstanding any other provision of this Agreement, effective
immediately prior to the "Effective Time" (as such term is defined in
the Agreement and Plan of Merger dated September 25, 1997
among Carpenter Technology Corporation, a Delaware corporation
("Carpenter"), Score Acquisition Corp., a Delaware corporation and
a wholly-owned subsidiary of Carpenter, and the Company), all
Rights then outstanding (or issuable under this Agreement) shall
be null and void and of no further force and effect, and the
Company's obligations to issue additional Rights and its obligations
under this Agreement shall terminate.
IN WITNESS WHEREOF, the undersigned have caused this Amendment
to be duly executed and attested as of December 9, 1997.
Attest: TALLEY INDUSTRIES, INC.
By /s/ Mark S. Dickerson By /s/ Jack C. Crim
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Secretary President
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Attest: CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By /s/ Joseph Cannata By /s/ Martha O. Mijango
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Its Assistant Vice President Its Assistant Vice President
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EXHIBIT 99.1
CARPENTER
Carpenter Technology Corporation
P.O. Box 14662
Reading, Pennsylvania, 19612-4662
Robert J. Dickson
(610) 208-2165
IMMEDIATE RELEASE
CARPENTER SUCCESSFULLY COMPLETES TENDER OFFER FOR TALLEY
Reading, PA (December 5, 1997) - Carpenter Technology Corporation
(NYSE:CRS) announced today that it successfully completed its
tender offer for all outstanding shares of Talley Industries, Inc.
(NYSE:TAL). The offer expired as scheduled at midnight (EST) on
Thursday, December 4.
Based on a preliminary count from the depositary for the offer,
approximately 10,777,195 shares of common stock, 12,509 shares of Series
A convertible preferred stock and 497,618 shares of Series B $1
cumulative convertible preferred stock of Talley had been tendered
and accepted for payment. On a fully diluted basis, this represents
approximately 74.4 percent of Talley's outstanding shares of common
stock, Series A convertible preferred stock and Series B $1 cumulative
convertible preferred stock.
Carpenter now will take the necessary steps to merge its
subsidiary, Score Acquisition Corp., with Talley during the first quarter
of 1998. Any remaining Talley shares then will be converted into cash
amounts equivalent to the tender offer, which are $12 per share of
common stock, $11.70 per share of Series A convertible preferred stock
and $16 per share of Series B $1 cumulative convertible preferred stock.
MORE
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Carpenter Technology Corporation/page 2
Carpenter, a specialty materials company based in Reading, Pa.,
that makes and sells stainless steel, titanium and other specialty alloys,
and various engineered products, is acquiring Talley to expand its
metals manufacturing capacity and distribution outlets. The aggregate
value of the transaction will be approximately $312 million.
Carpenter's sales for fiscal year 1997 (ended June 30, 1997) were
$939 million. In 1996, Phoenix-based Talley, a diversified manufacturer,
had revenues of $502.7 million.
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EXHIBIT 99.2
Talley Industries, Inc.
2702 N. 44th St., 100A
Phoenix, Arizona 85008
http://www.talleyind.com
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FOR IMMEDIATE RELEASE Contact: Daniel R. Mullen
V.P. & Treasurer
(602) 957-7711
CARPENTER CONCLUDES SUCCESSFUL TALLEY TENDER OFFER
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PHOENIX, Ariz. (December 5, 1997)(TAL:NYSE) -- Talley Industries,
Inc. announced today that is shareholders have tendered a majority
of the outstanding shares to Score Acquisition Corp., a wholly-owned
subsidiary of Carpenter Technology Corporation (NYSE:CRS). The tender
offer expired at midnight (EST) on Thursday, December 4, 1997.
Based on a preliminary count from the depositary for the offer,
11,442,202 shares were tendered and accepted for payment. Shares tendered
represented 74% of the aggregate voting power of Talley on a fully diluted
basis.
The all-cash tender offer was $12 per share of Talley Common Stock,
$16 per share of Talley Series B Preferred Stock (NYSE:TALprB) and $11.70
per share of Talley Series A Preferred Stock.
"We are pleased with the overwhelming number of shares tendered, as
this is an extremely positive endorsement of the cash offer by Carpenter
Technology," commented Paul L. Foster, Talley Chairman and Chief Executive
Officer. "It represents the successful culmination of efforts by the
Talley Board of Directors to maximize value for our shareholders,"
Mr. Foster concluded.
Talley Industries, Inc. designs, manufactures, and supplies
specialized industrial, commercial, and aerospace products and services,
including stainless steel bar and wire rod, and high reliability
electronic components. The Company was a pioneer in the automotive airbag
industry and is currently developing new airbag technologies.
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