TAYCO DEVELOPMENTS, INC.
100 Taylor Drive
North Tonawanda, New York 14120
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF TAYCO DEVELOPMENTS, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
TAYCO DEVELOPMENTS, INC. ("Company") will be held at the University Inn
& Conference Center, 2401 North Forest Road, Amherst, New York, on
November 8, 1996, at 2:00 P.M. for the following purposes:
1. To elect five directors of the Company each to serve for the
ensuing year until the next annual meeting and the election and
qualification of his or her successor.
2. To consider and transact such other business as may properly
come before the meeting or any adjournment or adjournments thereof.
FURTHER NOTICE IS HEREBY GIVEN that the stock transfer books of the
Company will not be closed, but only shareholders of record at the close
of business on September 20, 1996, will be entitled to notice of the
meeting and to vote at the meeting.
SHAREHOLDERS WHO WILL BE UNABLE TO BE PRESENT PERSONALLY MAY ATTEND
THE MEETING BY PROXY. SUCH SHAREHOLDERS ARE REQUESTED TO DATE, SIGN AND
RETURN THE ENCLOSED PROXY. THE PROXY MAY BE REVOKED AT ANY TIME BEFORE
IT IS VOTED.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Joseph P. Gastel
Joseph P. Gastel, Secretary
DATED: October 1, 1996
North Tonawanda, New York
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF SHAREHOLDERS
OF
TAYCO DEVELOPMENTS, INC.
100 TAYLOR DRIVE
NORTH TONAWANDA, NEW YORK 14120
----------------------------------
TO BE HELD AT THE UNIVERSITY INN & CONFERENCE CENTER,
2401 NORTH FOREST ROAD
AMHERST, NEW YORK on
November 8, 1996
This Proxy Statement is furnished to shareholders by the Board of
Directors of Tayco Developments, Inc. (the "Company") in connection with
the solicitation of proxies for use at the Annual Meeting of Shareholders
to be held on November 8, 1996, at 2:00 P.M., and at any adjournments
thereof, for the purposes set forth in the accompanying Notice of Annual
Meeting of Shareholders. It is proposed first to give or mail this Proxy
Statement and the accompanying form of proxy to shareholders on or about
October 1, 1996.
If the enclosed form of proxy is properly executed and returned, the
shares represented thereby will be voted in accordance with the
instructions contained therein. Any proxy given pursuant to this
solicitation may be revoked by the shareholder at any time prior to its
use by written notice to the Secretary of the Company.
RECORD DATE AND VOTING SECURITIES
The Bylaws of the Company provide that the Annual Meeting of
Shareholders shall be held at any time within six (6) months after the
end of the fiscal year. In accordance with the Bylaws, the Board of
Directors has established November 8, 1996 as the date of this year's
Annual Meeting of Shareholders. The Board of Directors has fixed the
close of business on September 20, 1996 as the record date for
determining the holders of common stock entitled to notice of and to vote
at the meeting. On September 20, 1996, the Company had outstanding and
entitled to vote a total of 990,213 shares of common stock. Each
outstanding share of common stock is entitled to one vote on all matters
to be brought before the meeting.
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of September 20, 1996
as to persons known by the Company to be beneficial owners, directly or
indirectly, of more than five percent of the Company's common stock, as
well as shares owned by the named executive officer, each director and
all directors and executive officers as a group. The statements as to
securities beneficially owned are, in each instance, based upon
information provided by the persons concerned, or by the Company as
transfer agent.
Name and Address Direct/Indirect Percent of
of Beneficial Owner Ownership Ownership
Taylor Devices, Inc. 228,317 (1) 23%
90 Taylor Drive
North Tonawanda, NY 14120
Paul H. Taylor 155,913 (2) 15.7%
3677 East River Road
Grand Island, NY 14073
Douglas P. Taylor 52,594 (3) 5.3%
100 Taylor Drive
North Tonawanda, NY 14120
Joseph P. Gastel 0 0
722 Ellicott Square
Buffalo, NY 14203
David A. Lee 10,000 1%
2530 Wilshire Blvd. Third Floor
Santa Monica, CA 90403
Paul L. Tuttobene, Jr. 1,000 *
161 South Main St. Suite 1
Fairport, NY 14450
Janice M. Nicely 58 *
100 Taylor Drive
North Tonawanda, NY 14120
All Directors and 63,652 6.4%
officers as a group
* less than 1%
1. The shares owned by Taylor Devices, Inc. ("Devices") were purchased
in January 1992 in a private sale at the shares' fair market value, and
in consideration of Devices' partially discharging certain of the
Company's obligations as a grantor of the indebtedness of its former
affiliate Tayco Technology, Inc. ("Tayco Technology"). See "Transactions
with Management and Others".
2. Mr. Paul Taylor is father of Douglas P. Taylor and father-in-law of
Richard G. Hill, who are both executive officers and directors of
Devices. Including shares held by Messrs. Douglas P. Taylor, Paul H.
Taylor and Joyce Taylor Hill, daughter of Paul H. Taylor and wife of
Richard G. Hill, the Taylor family owns 232,792 shares, or approximately
23.5% of the Company's common stock. Joyce Taylor Hill, sister of
Douglas P. Taylor, holds 14,274 shares as custodian for her minor
children, with 2,511 shares in her name.
3. Includes 20,542 shares held beneficially and of record by Sandra
Taylor, wife of Mr. Douglas Taylor, as custodian for their minor
children, and as to which Mr. Taylor disclaims any beneficial ownership.
ELECTION OF DIRECTORS
Five directors of the Company are to be elected to hold office until
the election and qualification of their successors at the next Annual
Meeting of Shareholders. Unless the proxy directs otherwise, the persons
named in the enclosed proxy will vote for the election of the five
nominees named below. In the event that any of the nominees are unable
to serve as a director, or for good reason will not serve, the proxy will
be voted in accordance with the best judgment of the person or persons
acting under it. The Company does not anticipate that any of the
nominees will be unable to serve.
Nominees, Douglas P. Taylor, David A. Lee, Joseph P. Gastel, Paul L.
Tuttobene and Janice M. Nicely have held their positions since the last
Annual Meeting of Shareholders held on November 10, 1995.
Nominees and Directors
The nominees for director, their ages, principal occupations,
positions and offices with the Company and the date each was first
elected a director of the Company are as set forth below.
DOUGLAS P. TAYLOR, (48), President and Chief Executive Officer of the
Company since April 1991, was Executive Vice President since 1979 and a
Director since 1972. Since 1976, and 1977, he has served as Director of
Devices, and Tayco Realty Corporation ("Tayco Realty"), respectively.
DAVID A. LEE, (65), has served as Vice President of the Company since
April 1991, and a Director since November 1991. Dr. Lee has also served
as a consultant to Devices since 1974. He has a Ph.D. and M.E. degree
in mechanical engineering from the University of Southern California at
Los Angeles, and a B.S. degree in mechanical engineering from the
California Institute of Technology. Mr. Lee is the co-inventor on five
U.S. patents assigned to the Company.
JOSEPH P. GASTEL, (71), is a patent attorney, and has served as a
Director and Secretary of the Company and Devices since 1984.
PAUL L. TUTTOBENE, JR., (33), President of PLT Associates, a firm
which has served as a manufacturer's representative and consultant to
Devices since 1989, has served as a Director of the Company since
November 1991. Mr. Tuttobene has a B.S. degree in marketing from St.
John Fisher College.
JANICE M. NICELY, (56), serves the Company and Devices as Shareholder
Relations Manager and has been with the Company since 1980. Ms. Nicely
has been a Director since November, 1992.
Board of Directors and Committee Meetings
In fiscal 1996, the Board of Directors met four (4) times.
The Company does not have any standing committees.
In fiscal 1996, each member of the Board of Directors received a fee
of $1,000 per meeting attended. In addition, the Secretary of the
meeting received a $2,250 fee for preparing the minutes of each meeting.
Prior to and including November 10, 1995, the Director fees were $750
with the secretary of the meeting receiving an additional $2,000 for
preparing the minutes.
For each Director's ownership of the Company's common stock, see
"Certain Beneficial Owners and Management."
EXECUTIVE COMPENSATION
The Company's officers receive no salary. Douglas P. Taylor receives
$20,000 per year for royalties earned on his inventions.
SUMMARY COMPENSATION TABLE
ANNUAL
COMPENSATION
All
Other
Compensation
Position Year Salary (1) Total (2)
Douglas P. Taylor, 1996 $0 $ 8,500
Chairman, President and 1995 $0 $ 8,000
Chief Executive Officer 1994 $0 $ 8,000
(1) The Company's officers receive no salary.
(2) The following is a summary of All Other Compensation earned:
Directors'
Fees Royalties Total
Fiscal Year Ended 6/30/96 $ 3,500 $ 5,000 $ 8,500
Fiscal Year Ended 6/30/95 $ 3,000 $ 5,000 $ 8,000
Fiscal Year Ended 6/30/94 $ 3,000 $ 5,000 $ 8,000
Directors' fees in fiscal 1996 were increased on November 10, 1995
from $750 to $1,000 per meeting.
The legal services provided by Mr. Gastel, resulting in fees less
than $26,000, are on terms similar to those that would have been arranged
with third parties, and are favorable to the Company.
The Company has no nominating, audit or other committee of the
Board.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Devices is the largest single shareholder of the Company as a result
of the private sale purchase of the Company's common stock, and Paul H.
Taylor is the second largest. See "Certain Beneficial Owners and
Management". The Company is the largest single shareholder of Devices,
owning approximately 26.1% of Devices' outstanding common stock. The
Company owns 42% of Tayco Realty, with the remaining 58% owned by
Devices.
Under a license agreement ("License Agreement"), dated November 1,
1959, the Company granted Devices preferential rights to manufacture and
sell in the United States and Canada certain of the Company's patented
products. Certain of these patents were assigned to Devices in
connection with Devices' assumption of the Company's portion of the
indebtedness of Tayco Technology under certain guarantees. The term of
the License Agreement is the life of the last-to-expire patent on which
Devices is paying royalties, which is December 1, 2014. Devices pays a
five percent royalty to the Company on sales of items sold and shipped.
During fiscal 1996, Devices accrued royalties to the Company of $129,325.
No other allocation of expenses is made from the Company to Devices.
The License Agreement also provides for the Company to pay Devices
10% of the gross royalties received from third parties who are permitted
to make, use and sell machinery and equipment under patents not subject
to the License Agreement, and apparatus and equipment subject to the
License Agreement but modified by Devices, with rights to such
modifications having been assigned to the Company. No royalties were
received in 1996. Royalties, if any, are paid quarterly.
In 1987, the Company guaranteed 60% and Devices 40% of certain
obligations of their former affiliate, Tayco Technology, in the
approximate amount of $850,000. In March 1991, certain of the lenders
called their loans. Since Tayco Technology was unable to repay the loans
and the Company was unable to assume its portion of the obligations under
the guaranties, Devices assumed all obligations and continues to make all
payments as they came due. In January 1992, Devices acquired
approximately 23% of the restricted common stock of the Company at its
fair market value in consideration of Devices' discharging certain of the
Company's obligations as a guarantor. See "Certain Beneficial Owners and
Management". In addition, the Company granted Devices an irrevocable
proxy to vote the 697,567 shares which the Company owns in Devices, which
proxy was renewed until July 1, 1997, or until the indebtedness is
discharged in full, whichever is the earlier to occur.
As of July 1, 1994, Tech was merged into Devices, and in so doing,
Devices formally agreed to assume all of Tayco Technology's obligations.
As of July 31, 1996, approximately $23,424 remains outstanding on these
loans, of which $14,054 is the Company's portion. The merger also
permited Devices to utilize approximately $876,000 of the net tax
operating losses generated by Tayco Technology. This NOL was used in its
entirety by the end of FY96.
Pursuant to the settlement of litigation between the Company and
Devices commenced by Paul H. Taylor, whereby the arrangement resulted in
the dismissal of all claims between the parties, the settlement includes
an annual payment of principal and interest in the amount of $35,000 paid
by the Company over a six year period that commenced January 1, 1994.
As a term of the settlement, Paul H. Taylor agreed to neither
manufacture, sell or distribute the Company's products, nor interfere
with the management of the Company, Devices or any affiliate by way of
soliciting proxies, nominating opposing directors or, in general, attempt
to regain control of the companies.
The Company, Devices, and Tayco Realty share common management and
a close business relationship. Particularly as it relates to the Company
and Devices, as separate corporations responsible to their own
shareholders, corporate interests may from time to time diverge regarding
development and licensing of future inventions and patents. In that
case, the Company would be permitted to license future patents and
inventions to licensees other than Devices, which may render Devices'
present License Agreement only minimally beneficial.
In 1996, the Company paid patent fees of $25,190 to Joseph P.
Gastel.
All transactions described above are on as favorable a basis to the
Company as if entered into with an unaffiliated party.
INDEPENDENT AUDITORS
Representatives of J.D. Elliott & Co., P.C., the Company's auditors
for fiscal 1996, are expected to attend the Annual Meeting of
Shareholders and will be available to respond to questions raised orally,
and will be given the opportunity to make statements if they so desire.
FINANCIAL STATEMENTS
The Board of Directors incorporates by reference the financial
statements contained in the 1996 Annual Report on Form 10-KSB, which is
being mailed to shareholders of record together with this Proxy
Statement, Notice of Annual Meeting and form of proxy.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented to the 1997 Annual
Meeting of Shareholders must be received by the Secretary of the Company
prior to June 1, 1997, for inclusion in the Proxy Statement and form of
proxy.
OTHER MATTERS
Voting
Under the New York Business Corporation Law ("BCL") and the Company's
Bylaws, the presence, in person or by proxy, of a majority of the
outstanding common shares is necessary to constitute a quorum of the
shareholders to take action at the Annual Meeting. The shares which are
present, or represented by a proxy, will be counted for quorum purposes
regardless of whether or not a broker with discretionary authority fails
to exercise discretionary voting authority with respect to any particular
matter.
Once a quorum is established, under the BCL and the Company's Bylaws,
the directors standing for election must be elected by a plurality of the
votes cast. Other actions to be taken must be approved by a majority of
the votes cast. For voting purposes, all votes cast "for", "against",
"abstain" or "withhold authority" will be counted in accordance with such
instruction as to each item.
The expenses of this solicitation, including the cost of preparing
and mailing this Proxy Statement and accompanying material, will be borne
by the Company. The Company has retained the services of Regan &
Associates, Inc. to assist in the solicitation of proxies under a
contract providing for payment of $2,500, plus reimbursement of
reasonable out-of-pocket expenses. In addition to solicitations by mail,
Regan & Associates, Inc. and regular employees of the Company may solicit
proxies in person, by mail, or by telephone, but no employee of the
Company will receive any compensation for solicitation activities in
addition to their regular compensation. Expenses may also include the
charges and expenses of brokerage houses, nominees, custodians, and
fiduciaries for forwarding proxies and proxy materials to beneficial
owners of shares.
The Board of Directors know of no other matters to be voted upon at
the Annual Meeting. If any other matters properly come before the Annual
Meeting, it is the intention of the persons named in the enclosed form
of proxy to vote on such matters in accordance with their judgment.
Annual Report
In addition to the 1996 Annual Report on Form 10-KSB, copies of the
Company's 1996 Annual Report to Shareholders, together with copies of
this Notice of Meeting, Proxy Statement, and form of proxy, are being
mailed to shareholders of record. Additional copies of the Company's
Annual Report on Form 10-KSB may be obtained from JOSEPH P. GASTEL,
SECRETARY, TAYCO DEVELOPMENTS, INC., 100 TAYLOR DRIVE, NORTH TONAWANDA,
NEW YORK 14120.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Joseph P. Gastel
Joseph P. Gastel, Secretary
DATED: October 1, 1996
North Tonawanda, New York
TAYCO DEVELOPMENTS, INC.
PROXY SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 8, 1996, AT 2:00 P.M.
UNIVERSITY INN & CONFERENCE CENTER,
2401 NORTH FOREST ROAD, AMHERST, NEW YORK
The undersigned hereby appoints Douglas P. Taylor and Joseph P.
Gastel, and each of them, with full power of substitution as proxies for
the undersigned to attend the Annual Meeting of Shareholders of TAYCO
DEVELOPMENTS, INC. to be held at the, University Inn & Conference Center,
2401 North Forest Road, Amherst, New York at 2:00 P.M. on November 8,
1996, and at any adjournment thereof, to vote and act with respect to all
common shares of the Company which the undersigned would be entitled to
vote with all the power the undersigned would possess if present in
person, as follows:
The Board of Directors recommends that you vote FOR:
1. ELECTION OF DIRECTORS.
Withhold Withhold DIRECTORS
authority authority
FOR all for all as Douglas P. Taylor,
nominees nominees indicated David A. Lee,
Joseph P. Gastel,
Paul L. Tuttobene
Janice M. Nicely
[ ] [ ] [ ]
_______________________________________________________________
(Withhold authority for nominees whose name(s)are written above)
2. In their discretion, the proxies are authorized to vote on any
other business that may properly come their way.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This proxy will be voted as directed, but if no direction is indicated,
it will be voted FOR the nominees described in Item 1 above, and in the
discretion of the proxies, on such other matters as may properly come
before the Annual Meeting or any adjournments
or postponements thereof.
Receipt of the Notice of Annual Meeting of Shareholders and accompanying
Proxy Statement is hereby acknowledged.
[ ] Please check ( ) this box if you plan to attend the Annual
Meeting.
Dated _________________, 1996
Please sign exactly as your name appears on
this proxy. Joint owners should each sign
personally. If signing as attorney,
executor, administrator, trustee or
guardian, please include your full title.
Corporate proxies should be signed by an
authorized officer.
PLEASE SIGN, DATE AND RETURN THIS CARD BY
USING THE ENCLOSED ENVELOPE.
