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 October 30, 1997, 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 23, 1997, 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, Secretary
Joseph P. Gastel, Secretary
DATED: September 26, 1997
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
October 30, 1997
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 October 30, 1997, 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 September
26, 1997.
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 October 30, 1997 as the date of
this year's Annual Meeting of Shareholders. The Board of Directors
has fixed the close of business on September 23, 1997 as the record
date for determining the holders of common stock entitled to notice
of and to vote at the meeting. On September 23, 1997, 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 23,
1997 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
Bruce Paul 139,400 14%
1 Hampton Road
Purchase, NY 10577
Paul H. Taylor 105,779 (2) 10.7%
3677 East River Road
Grand Island, NY 14073
Douglas P. Taylor 60,994 (3) 6.2%
100 Taylor Drive
North Tonawanda, NY 14120
Joseph P. Gastel 0 0
295 Main Street, Suite 722
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 62 *
100 Taylor Drive
North Tonawanda, NY 14120
All Directors and 72,056 7.3%
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 the 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 and his family, Paul H. Taylor and his wife, Isabel, and
the family of Joyce Taylor Hill, daughter of Paul H. Taylor and
wife of Richard G. Hill, the Taylor family owns 203,686 shares, or
approximately 20.6% of the Company's common stock. Isabel B.
Taylor is the beneficial owner of 8,928 shares of Company stock and
Joyce Taylor Hill, sister of Douglas P. Taylor, holds 22,674 shares
as custodian for her minor children, with 3,511 shares in her name
and Richard Hill is the beneficial owner of 1,800 shares.
3. Includes 28,942 shares held beneficially and of record by
Sandra Taylor, wife of Mr. Douglas Taylor, as custodian for their
minor children, 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 8,
1996.
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, (49), 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, (66), 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. Dr. Lee
is the co-inventor on five U.S. patents assigned to the Company.
JOSEPH P. GASTEL, (72), is a patent attorney, and has served as
a Director and Secretary of the Company and Devices since 1984.
PAUL L. TUTTOBENE, JR., (34), 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, (57), 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 1997, the Board of Directors met three (3) times,
with all directors present. The Company has no nominating, audit
or other standing committee of the Board.
In fiscal 1997, each member of the Board of Directors received
a fee of $1,000 per meeting attended. The Secretary of the
meeting, Mr. Gastel received an additional fee $2,250 for preparing
the minutes of each meeting. In 1997, the Company paid patent fees
of $32,623 to Joseph P. Gastel for his services as the Company's
patent attorney.
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
however receives royalties earned on his inventions. The
Compensation Table follows:
SUMMARY COMPENSATION TABLE
ANNUAL
COMPENSATION
All
Other
Compensation
Position Year Salary (1) Total (2)
Douglas P. Taylor, 1997 $0 $18,000
Chairman, President and 1996 $0 $ 8,500
Chief Executive Officer 1995 $0 $ 8,000
(1) The Company's officers receive no salary.
(2) The following is a summary of All Other Compensation paid or
accrued:
Directors'
Fees Royalties Total
Fiscal Year Ended 6/30/97 (A) $ 3,000 $15,000 $18,000
Fiscal Year Ended 6/30/96 $ 3,500 $ 5,000 $ 8,500
Fiscal Year Ended 6/30/95 $ 3,000 $ 5,000 $ 8,000
(A) A Royalty Agreement with the Chief Executive Officer beginning
October 1, 1996. The new Agreement provides for a monthly payment
of $1,666.66 ($20,000 per year) beginning on October 1 of each
year. Fiscal 97 royalties earned is for the 9 month period October
1, 1996 to June 30, 1997.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Just as Devices is the largest single shareholder of the
Company, similarly, the Company is the largest single shareholder
of Devices, owning approximately 25.4% of Devices' outstanding
common stock. See "Certain Beneficial Owners and Management." The
Company also owns 42% of Tayco Realty, with the remaining 58% owned
by Devices. The Company rents space from Tayco Realty. See Item
2. "Description of Property."
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. 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 1997, Devices incurred royalties to the Company of $167,810.
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 1997. Royalties, if any,
are paid quarterly.
The patents which are the subject of the License Agreement were
assigned to Devices in connection with Devices' assumption of the
Company's portion of the indebtedness of their former affiliate,
Tayco Technology. For the same reason, the Company also granted
Devices an irrevocable proxy to vote the 697,567 shares which the
Company owns in Devices. With the Company's payment in full to
Devices of the Company's share of the Tayco Technology debt on or
about June 9, 1997, the assignment was released and the patents
returned and proxy terminated. All transactions described above
are on as favorable a basis to the Company as if entered into with
an unaffiliated party.
Pursuant to a 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 included 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.
BY-LAWS AMENDED
On February 17, 1997, the Board of Directors adopted an updated
version of the Company's By-Laws. As adopted, the By-Laws
incorporated all prior amendments into one document with modest
stylistic emendations, as well as incorporated two new amendments
adopted by the Board, to wit:
Article II, Section 4(d) was added to authorize members of the
Board of Directors, or any committee of the Board, to participate
in a meeting "by means of a conference telephone or similar
equipment."
Article II, Section 5 clarified the prior provision authorizing
compensation of the Board of Directors for attendance at meetings,
to state, "in the manner and to the extent determined, from time to
time, by action of the Board."
INDEPENDENT AUDITORS
Representatives of J.D. Elliott & Co., P.C., the Company's
auditors for fiscal 1997, 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 1997 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 1998
Annual Meeting of Shareholders must be received by the Secretary of
the Company prior to June 1, 1998, 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 1997 Annual Report on Form 10-KSB, copies of
the Company's 1997 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, P.O. Box 748, NORTH TONAWANDA, NEW YORK
14120.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Joseph P. Gastel, Secretary
Joseph P. Gastel, Secretary
DATED: September 26, 1997
North Tonawanda, New York
TAYCO DEVELOPMENTS, INC.
PROXY SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 30, 1997, 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 October 30, 1997, 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 _________________, 1997
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.
