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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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</TABLE>
TALLEY INDUSTRIES, INC.
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(Name of Registrant as Specified In Its Charter)
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[TALLEY INDUSTRIES LOGO]
[TALLEY INDUSTRIES LETTERHEAD]
April 16, 1997
IMPORTANT
TALLEY INDUSTRIES, DELPHI AUTOMOTIVE SYSTEMS
AGREE IN PRINCIPLE TO FORM A STRATEGIC ALLIANCE
Dear Fellow Talley Stockholders:
As we reported to you recently in our 1996 annual report, Talley Industries is
now well-positioned, both operationally and financially, to develop new
opportunities in automotive airbag technologies. In this regard, I am pleased to
share with you the following announcement we made jointly last week with General
Motors' Delphi Automotive Systems:
PHOENIX, ARIZ./WARREN, MICH. (APRIL 10, 1997) (TAL:NYSE)-TALLEY
INDUSTRIES, INC. AND DELPHI AUTOMOTIVE SYSTEMS ANNOUNCED TODAY AN
AGREEMENT IN PRINCIPLE TO FORM A STRATEGIC ALLIANCE FOR THE PURPOSE OF
DEVELOPING AND MANUFACTURING ADVANCED TECHNOLOGY AUTOMOTIVE AIRBAG
INFLATORS.
THE ALLIANCE WILL BE STRUCTURED THROUGH A JOINT VENTURE MANUFACTURING
COMPANY AND A JOINT DEVELOPMENT AGREEMENT TO UTILIZE THE TECHNICAL
CAPABILITIES OF THE TWO COMPANIES TO DESIGN AND DEVELOP NEW AIRBAG
INFLATOR CONCEPTS.
THE COOPERATIVE ACTIVITIES WILL BE ACCOMPLISHED THROUGH DELPHI
INTERIOR & LIGHTING SYSTEM AND TALLEY DEFENSE SYSTEMS. A PRIMARY
BUSINESS OBJECTIVE OF THE JOINT VENTURE, WHICH WILL BE MAJORITY OWNED
BY TALLEY, WILL BE TO SUPPLY INFLATORS FOR DELPHI'S AIRBAG MODULE
NEEDS AND TO OTHER AIRBAG MODULE SUPPLIERS.
THE FIRST PRODUCT TO BE MANUFACTURED WILL BE THE D60 ALL PYROTECHNIC,
NON-SODIUM AZIDE DRIVER-SIDE INFLATOR. FORMAL DESIGN VALIDATION HAS
ALREADY BEEN COMPLETED, PLACING THE D60 IN POSITION FOR INTRODUCTION
AS EARLY AS 1998. THE JOINT VENTURE COMPANY WOULD BREAK GROUND THIS
YEAR ON A NEW PRODUCTION FACILITY THAT WOULD BE CAPABLE OF PRODUCING
10 MILLION INFLATORS PER YEAR. DEVELOPMENT OF ADDITIONAL NEW PRODUCTS
HAS ALREADY BEEN STARTED BY DELPHI AND TALLEY.
"WE LOOK FORWARD TO WORKING WITH DELPHI ON NEW AUTOMOTIVE AIRBAG
PRODUCTS," SAID WILLIAM H. MALLENDER, CHAIRMAN AND CHIEF EXECUTIVE
OFFICER OF TALLEY. "THERE ARE EXCITING PROSPECTS FOR ADAPTING THIS
TECHNOLOGY TO FUTURE PRODUCTS OF INTEREST TO OUR CUSTOMERS."
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"OUR TWO COMPANIES HAVE HAD A PRODUCTIVE RELATIONSHIP UNDER A SUPPLY
AGREEMENT AND THIS NEXT PHASE PROMISES TO CONTINUE TO BENEFIT BOTH
PARTNERS AND TO MEET THE NEEDS OF OUR GROWING CUSTOMER BASE WORLD
WIDE," PAUL J. TOSCH, DELPHI INTERIOR & LIGHTING GENERAL MANAGER,
COMMENTED.
FINALIZATION OF THE ALLIANCE IS CONTINGENT UPON A DEFINITIVE AGREEMENT
BEING NEGOTIATED, APPROPRIATE CORPORATE APPROVALS, AND CERTAIN OTHER
CUSTOMARY CLOSING CONDITIONS.
DELPHI, THEN KNOWN AS INLAND, AND TALLEY WERE PIONEERS IN THE EARLY
AUTO AIRBAG DAYS AND HAVE A LONG HISTORY OF SUCCESSFUL COOPERATIVE
PROJECTS BEGINNING IN THE EARLY 1970'S.
DELPHI AUTOMOTIVE SYSTEMS, WITH HEADQUARTERS IN PONTIAC, MICH., USA,
IS THE WORLD'S LARGEST AND MOST DIVERSIFIED SUPPLIER OF AUTOMOTIVE
COMPONENTS AND SYSTEMS. DELPHI OPERATES 191 MANUFACTURING FACILITIES,
46 VENTURES AND 17 TECHNICAL CENTERS IN 36 COUNTRIES. REGIONAL
HEADQUARTERS ARE LOCATED IN PARIS, TOKYO AND SAO PAULO. DELPHI HAS
PREVIOUSLY ANNOUNCED THAT IT INTENDS TO INCREASE ITS SALES OF PRODUCTS
TO CUSTOMERS OUTSIDE OF GENERAL MOTORS TO 50 PERCENT OF REVENUES BY
THE YEAR 2000. [NOTE: THE FOREGOING SENTENCE WAS NOT PART OF THE
ANNOUNCEMENT MADE LAST WEEK.]
SINCERELY,
/s/ WILLIAM H. MALLENDER
WILLIAM H. MALLENDER
CHAIRMAN OF THE BOARD
TALLEY INDUSTRIES, INC.
