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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:
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<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
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TALLEY 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)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[TALLEY INDUSTRIES LETTERHEAD]
March 14, 1997
IMPORTANT
Dear Talley Stockholder:
"SCREAM," a group of four individuals led by Saad Alissa, the son of a Saudi
Arabian auto dealer, has filed with the SEC its intent to solicit proxies on
various proposals at the May 8, 1997 Annual Meeting of Stockholders, including
an opposing slate of nominees for the Company's Board of Directors. THE COMPANY
URGES YOU NOT TO SUPPORT ALISSA AND HIS GROUP. ALISSA IS NOT WHAT HE
APPEARS -- ASK YOURSELF THE FOLLOWING:
WHAT IS THIS MAN UP TO? CAN HE BE TRUSTED?
- - Is Alissa's aim to break up the Company and reap special profits for
himself? If this were not his real motive, WHY DOES HE WANT TO STRIP AWAY
VITAL STOCKHOLDER PROTECTIONS designed to make sure that all shareholders
are fairly and equally treated? Why have he and his investment adviser
recently formed a company for "acquiring and operating manufacturing
companies in the United States and Europe?" DO THEY HAVE PARTS OF TALLEY IN
THEIR SIGHTS?
- - Is Alissa a long-term investor? If so, then why did his own investment
advisor, Bill Danzell, publicly state about him, "HE'S NOT THE INVESTOR TO
STAY WITH [A] COMPANY FOR THEM TO . . . GROW THE REVENUE STREAM"?(1)
- - WHY has Alissa doubled the amount of Talley stock he controls over the past
two years? DOES HE KNOW SOMETHING YOU DON'T?
- - WHY has Alissa URGED TALLEY MANAGEMENT TO EFFECT A PARTIAL LIQUIDATION of
the Company? This will prevent long-term value through continued investment
in the large, growing automotive markets where Talley has developed
superior, proprietary technology.
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(1)The State, Columbia, South Carolina, Business Section, page B9, February
26, 1997.
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- - Do you really believe Alissa's interests are aligned with yours? If so, why
has Alissa aligned himself with TWO FORMER TALLEY MANAGERS WHO WERE LET GO
BY THE COMPANY AND A FORMER EXECUTIVE OF TRW, A COMPANY ONLY RECENTLY FOUND
LIABLE TO TALLEY FOR DAMAGES IN EXCESS OF $150 MILLION? Why did one of his
SCREAM nominees abruptly withdraw from Alissa's group, barely weeks after
being enlisted?
- - Why does this Saudi Arabian want to take creeping control of your Company
with actions that could JEOPARDIZE CRITICAL RELATIONSHIPS THAT MANAGEMENT
HAS DEVELOPED IN THE AUTOMOTIVE INDUSTRY AND THE DEPARTMENT OF DEFENSE? WITH
CURRENT INSTABILITY IN THE MIDDLE EAST, HOW COMFORTABLE DO YOU BELIEVE
AUTOMOTIVE MANUFACTURERS AND THE DEPARTMENT OF DEFENSE WILL BE TO GRANT NEW
CONTRACTS TO A COMPANY UNDER SIEGE BY ALISSA CRONIES?
MAXIMIZING VALUE FOR ALL TALLEY STOCKHOLDERS
TALLEY MANAGEMENT REPRESENTS YOUR INTERESTS. WE WANT TO MAXIMIZE VALUE FOR ALL
TALLEY STOCKHOLDERS. WE WANT ALL TALLEY STOCKHOLDERS, NOT JUST SAAD ALISSA, TO
REAP THE BENEFITS OF THE COMPANY'S GROWTH AND PROFIT OPPORTUNITIES. Our
definition of MAXIMIZING STOCKHOLDER VALUE is:
- - PROTECTING YOUR INVESTMENT FROM OPPORTUNISTS LIKE TRW, WHO WAS FORCED TO PAY
THE COMPANY MORE THAN $150 MILLION WHEN IT BREACHED ITS CONTRACT WITH
TALLEY;
- - REDUCING THE COMPANY'S TOTAL DEBT BY APPROXIMATELY $113 MILLION FROM
DECEMBER 31, 1995 TO DECEMBER 31, 1996, OR 50%;
- - SHELTERING THE TRW INCOME FROM TAXES AND REFOCUSING THE COMPANY ON CORE
GROWTH BUSINESSES THROUGH THE DIVESTITURE OF THE REAL ESTATE BUSINESS;
- - DEVELOPING SUPERIOR PROPRIETARY, COMMERCIALLY COMPETITIVE AUTOMOTIVE SAFETY
PRODUCTS, WHICH PROMISE TO BEGIN GENERATING SIGNIFICANT REVENUES OVER THE
NEXT SEVERAL YEARS.
TALLEY HAS BEEN A GOOD INVESTMENT FOR ITS STOCKHOLDERS
The accomplishments of Talley management have been reflected in Talley's market
value. As you will see in the Company's proxy statement, on a cumulative basis,
during the five-year period FROM DECEMBER 31, 1991 TO DECEMBER 31, 1996, TALLEY
INDUSTRIES' STOCK PROVIDED A TOTAL RETURN OF 111 PERCENT TO STOCKHOLDERS. THIS
COMPARES TO 103 PERCENT FOR THE S&P 500 INDEX AND 81 PERCENT FOR AN INDEX OF
DIVERSIFIED COMPANIES. Clearly, TALLEY HAS BEEN A GOOD INVESTMENT FOR ITS
STOCKHOLDERS DURING THE LAST FIVE YEARS.
Talley Industries is well-positioned to realize strong future returns from the
Company's participation in large and growing businesses. Management's
accomplishments during 1996 have made this possible. WE WANT ALL OF TALLEY'S
STOCKHOLDERS TO REAP THE BENEFITS. WE HOPE THAT YOU SEE THROUGH THE MANEUVERS OF
ALISSA AND RECOGNIZE HIS REAL MOTIVE, WHICH WE BELIEVE IS TO BREAK-UP TALLEY AND
BUY THE PIECES AT BARGAIN PRICES. We think this short term speculator is looking
to enrich himself at your expense.
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Stockholders need not take any action in relation to Alissa and his group's
proposals, until we are able to write to you again. Forms of proxy, along with
the Company's proxy statement and 1996 annual report will be sent to you in
advance of the Annual Meeting. Should you have any questions or require
additional copies of these materials, please call our proxy solicitors,
Kissel-Blake Inc. at 1-800-554-7733. IN THE MEANTIME, YOUR BOARD URGES YOU NOT
TO SIGN OR RETURN ANY PROXY CARD SENT TO YOU BY ALISSA AND HIS GROUP, SCREAM,
AND TO DISCARD ANY PROXY MATERIALS YOU MAY RECEIVE FROM THEM.
SINCERELY,
/s/ WILLIAM H. MALLENDER
WILLIAM H. MALLENDER
CHAIRMAN OF THE BOARD
TALLEY INDUSTRIES, INC.
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CERTAIN ADDITIONAL INFORMATION: Talley Industries, Inc. (the "Company") will be
soliciting proxies against SCREAM'S proposals and nominees and revocations of
any proxies given to SCREAM. Members of the Company's board of directors and
certain key officers may be deemed to be participants in the Company's
solicitation of proxies and revocations of proxies; their names and beneficial
ownership of the Company's voting securities as of March 13, 1997 is set forth
below:
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NUMBER OF SHARES
NAME OF BENEFICIAL OWNER OF STOCK
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<S> <C>
William H. Mallender 433,925
Jack C. Crim 293,208
Daniel R. Mullen 171,998
Kenneth May 145,348
Mark S. Dickerson 134,717
Neil W. Benson 3,000
Paul L. Foster 12,000
Townsend Hoopes 3,800
Fred Israel 4,000
Joseph A. Orlando 3,250
Alex Stamatakis 7,250
John W. Stodder 5,950
Donald J. Ulrich, Jr. 7,300
David Victor 5,750
All Directors and Executive
Officers 1,231,496
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