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[TALLEY INDUSTRIES LOGO]
[TALLEY INDUSTRIES LETTERHEAD]
April 29, 1997
A MATTER OF TRUST
Dear Talley Stockholder:
Who can you trust with your investment in Talley Industries? Two dissident
stockholders hand-picked, solely financed, indemnified and led by Saad Alissa,
want you to trust them with your upcoming proxy vote. Talley's management and
directors believe that Alissa, and his new, constantly changing slate of
directors, don't deserve your trust.
Consider the following: Saad Alissa, their leader, has never been an officer or
on the board of a public company. He runs the family investments from Saudi
Arabia and has no publicly available record of business experience in the United
States. Is he worthy of your trust? Is he qualified to control two seats on the
Talley board? TALLEY'S MANAGEMENT AND DIRECTORS URGE YOU TO VOTE FOR YOUR
CONTINUING DIRECTORS, AND VOTE AGAINST ALISSA'S NOMINEES AND HIS PROPOSALS.
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VOTE AGAINST SAAD ALISSA VOTE FOR TALLEY
BECAUSE WE BELIEVE: MANAGEMENT'S DIRECTOR NOMINEES BECAUSE:
HIS PROPOSALS ARE RECKLESS: THE COMPANY HAS BEEN TURNED AROUND BY THIS
Alissa proposed a stock buy-back that could MANAGEMENT:
have required the liquidation of the Company. -- Won the TRW litigation
Is that what he wants to do? Would that help -- Got out of unprofitable real estate
your investment? -- Cut debt by more than half
-- Improved the balance sheet
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HE DOESN'T UNDERSTAND HOW THE COMPANY WORKS: MANAGEMENT IS MOVING AHEAD WITH IMPORTANT NEW
His proposal would have required the Company INITIATIVES:
to break its debt covenants. Didn't he know -- Hired J.P. Morgan Securities Inc.
this? Or didn't he care? -- Sold the Canadian Steel business
-- Developing the next generation of airbag
technology
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HE IS OUT FOR HIS OWN INTERESTS NOT YOURS: TALLEY IS PARTNERING WITH LEADING COMPANIES IN
Alissa has also proposed that the Company GROWING BUSINESSES:
strip away shareholder protections there to On April 11th, General Motors' Delphi
prevent a single large shareholder, like him, Automotive Systems reached an agreement in
from exerting unfair influence on the company. principle with Talley to develop and
Why has he complained about "shark repellents" manufacture advanced technology automotive
if he's not a shark? Is he looking out for all airbag inflators.
stockholders or just himself?
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HE CAN'T MAKE UP HIS MIND: MANAGEMENT HAS A PROVEN RECORD OF PERFORMANCE:
First Alissa proposed three directors. Then he Between 1991 and 1996, Talley stock provided a
tried to change one of his nominees and now he total return of 111% compared to only 103% for
has decided to nominate only two. If he can't the S&P 500. Clearly, Talley has been a good
even decide who his own representatives should investment for its stockholders.
be, how will he make important decisions about
Talley's business?
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HE CAN'T BE TRUSTED WITH YOUR INVESTMENT. MANAGEMENT HAS EARNED YOUR TRUST AND WILL
CONTINUE TO EARN IT.
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What your Company needs now is the continuity of a management you can trust: an
experienced and steady management and board that know the Company, understand
the challenges and opportunities ahead. Our existing management is on the right
course. Don't let dissidents lead the Company astray.
The Company does not need Alissa and his associates. They have made it clear, in
our judgment, that they don't deserve your trust and they don't care about your
investment.
TALLEY MANAGEMENT AND DIRECTORS URGE YOU TO VOTE FOR MANAGEMENT'S DIRECTOR
NOMINEES AND AGAINST MR. ALISSA'S PROPOSALS.
Sincerely,
/s/ WILLIAM H. MALLENDER
William H. Mallender
Chairman of the Board
Talley Industries, Inc.
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YOUR VOTE IS IMPORTANT
Regardless of how many shares you own, your vote is important.
- - The Board urges you to DISCARD the blue proxy card recently sent to you by
"SCREAM." A "Withhold Authority" vote on SCREAM's blue proxy is not a vote for
Talley's nominees. To vote FOR your Company's nominees you must exercise a
WHITE proxy card.
- - If you are a registered stockholder or a participant in the Talley Savings
Plus plan, simply sign, date and mail the enclosed WHITE proxy card in the
postage paid envelope provided.
- - If your shares are held in the name of a bank or broker, only that bank or
broker can vote your shares upon receipt of your specific instructions. Please
call your bank or broker and instruct your representative to vote your shares
for management's nominees and against Alissa's proposals.
- - If you have already voted a proxy card solicited by "SCREAM" you have every
legal right to change your vote by signing, dating and mailing the enclosed
WHITE proxy card in the postage paid envelope provided. Only your latest dated
proxy card will be counted.
- - The Board of Directors recommends that you vote FOR management's slate of
Directors and AGAINST Alissa's proposals on the enclosed WHITE proxy card.
If you have any questions, or require assistance in voting your shares, please
call our proxy solicitors:
Kissel-Blake Inc.
110 Wall Street
New York, New York 10005
Toll Free: 800-554-7733
Banks and Brokers call: (212) 344-6733
