As filed with the Securities and Exchange Commission December 24,
1998
Registration No._________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________________
Form S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
___________________________________
TAYLOR DEVICES, INC.
(Exact name of registrant as specified in its charter)
New York
(State or other jurisdiction
of incorporation or organization)
16-0797789
(I.R.S. Employer Identification No.)
90 Taylor Drive
North Tonawanda, New York 14120-0748
(716) 694-0800
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
_______________________________
1998 TAYLOR DEVICES, INC. STOCK OPTION PLAN
(Full title of the plan)
_______________________________
SANDRA S. O'LOUGHLIN, ESQ.
Hiscock & Barclay, LLP
50 Fountain Plaza
Buffalo, New York 14202-2291
Telephone (716) 856-0911
(Name, address and telephone number, including area code, of agent
for service)
Calculation of Registration Fee
Proposed Proposed
Title Of Maximum Maximum
Securities Amount Offering Aggregate Amount Of
To Be To Be Price Per Offering Registra-
Registered Registered Share (1) Price (1) tion Fee
Common Stock 125,000 $2.00 $250,000 $73.75
$.025 Par Value
_____________________
(1) Estimated pursuant to Rule 457 solely for the purpose of
calculating the registration fee. The price per share is estimated
to be $2.00 based on the average of the closing bid and ask prices
for the Common Stock in the over-the-counter market as of December
24, 1998, as reported on the NASDAQ SmallCap Market.<PAGE>
11/13/98
PROSPECTUS
TAYLOR DEVICES, INC.
Common Shares
Par Value $.025 Per Share
______________________
1998 Taylor Devices, Inc.
Stock Option Plan
______________________
The Common Shares, par value $.025 per share, of Taylor Devices,
Inc. (the "Company") offered hereby are those shares to be
purchased from time to time by exercise of employee stock options
("Options") granted under the 1998 Taylor Devices, Inc. Stock
Option Plan (the "Plan").
Options under the Plan are or will be granted as set forth herein
to eligible employees and directors of the Company and its
subsidiaries.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
_____________________
Neither delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there
has been no change in the affairs of Taylor Devices, Inc. since the
date hereof or the dates as of which information is set forth
herein.
_____________________
This document constitutes part of a Prospectus covering securities
that have been registered under the Securities Act of 1933.
______________________
The date of this Prospectus is December 24, 1998
<PAGE>
Information Required in the Section 10(a) Prospectus
No person is authorized to give any information or to
make any representation not contained in this Prospectus in
connection with the matters described in this Prospectus, and if
given or made, such information or representation must not be
relied upon. This Prospectus does not constitute an offer to sell
or a solicitation for an offer to purchase, any securities other
than the securities covered by this Prospectus, by the Company, or
any other person, to any person to whom it is unlawful to make such
offer. Neither the delivery of this Prospectus nor any
distribution of the securities made under this Prospectus shall,
under any circumstances, create an implication that there has been
no change in the affairs of the Company or in the information set
forth herein since the date of this Prospectus.
Filings with the Securities and Exchange Commission
The Company has filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-8
(the "Registration Statement", which term encompasses all
amendments, exhibits, annexes, and schedules thereto) under the
Securities Act of 1933 (the "Securities Act") with respect to the
Common Stock, par value $.025 per share, of the Company (the
"Common Shares") registered hereby. This Prospectus, which
constitutes a part of the Registration Statement, does not contain
all the information set forth in the Registration Statement and the
amendments, exhibits, annexes, and schedules thereto, to which
reference is hereby made. Statements made in this Prospectus as to
the contents of any contract, agreement, or other document referred
to are not necessarily complete. With respect to each such
contract, agreement, or other document filed as an exhibit to the
Registration Statement and the exhibits thereto, reference is
hereby made to the exhibit for a more complete description of the
matter involved, and each statement made herein shall be deemed
qualified in its entirety by such reference.
The Company is subject to the informational and reporting
requirements of the Securities Exchange Act of 1934 (the "Exchange
Act"), and in accordance therewith the Company files periodic
reports, proxy and information statements, and other information
with the Commission. The Registration Statement and the exhibits
thereto filed by the Company with the Commission, as well as such
reports, proxy and information statements and other information
filed by the Company with the Commission, may be inspected and
copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, or at some of the regional offices of the
Commission located at Seven World Trade Center, Thirteenth Floor,
New York, New York 10048, and The Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may also be obtained by mail at prescribed rates from the
Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549.
Documents Incorporated by Reference
The following documents or portions thereof filed by the
Company with the Commission are hereby incorporated by reference in
this Prospectus:
(a) the Company's latest annual report filed pursuant to
Section 13(a) or 15(d) of the Exchange Act; and
(b) all other reports filed by the Company pursuant to
Section 13(a) or 15(d) of the Exchange Act since the end of the
fiscal year covered by the annual report referred to in (a) above.
In addition to the above items, all reports and
definitive proxy statements filed pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act subsequent to the date of
this Prospectus, and prior to the filing with the Commission of a
post-effective amendment to the Registration Statement which
indicates that all Stock Options and Common Shares subject to the
Plan have been sold or which deregisters all such Stock Options and
Common Shares then remaining unsold, shall be deemed to be
incorporated by reference into this Prospectus and to be made a
part hereof from the date of filing of such documents. Any
statement contained herein, or in a document incorporated or deemed
to be incorporated by reference herein, shall be deemed to be
modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein, or in any subsequently
filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this Prospectus.
Participants in the Plan can obtain additional
information about the Plan and its administrators, and copies of
the foregoing documents, without charge, upon written or oral
request, to Janice M. Nicely, Shareholder Relations Manager, Taylor
Devices, Inc., 90 Taylor Drive, North Tonawanda, New York 14120,
Telephone (716) 694-0800.<PAGE>
PART I
General
The Plan provides for the grant of Options to certain
employees of the Company and of any subsidiary, the majority of the
voting stock of which is owned, directly or indirectly, by the
Company ("Subsidiary"), as well as to the Company's Directors. The
employees will be selected by the Compensation Committee comprised
of two or more Directors who are appointed by the Board of
Directors, selected from those Directors who are not employees of
the Company or any Subsidiary ("Committee"). On the date of this
Prospectus, the Committee consists of Messrs. Randall L. Clark,
Joseph P. Gastel and Donald B. Hofmar. Committee members are
eligible to participate in the Plan on a restricted basis pursuant
to a predetermined formula.
The purpose of the Plan is to provide for the grant of
stock options to employees who are largely responsible for the
management, growth and protection of the Company's business, who
are making, and can continue to make, substantial contributions to
the success of the Company, and who thereby may be encouraged to
acquire a larger ownership interest in the Company. The Board of
Directors believe that by so doing, these employees will increase
their proprietary interest in the Company, will be provided with
greater incentive for their continued employment, and will promote
the interests of the Company and all its shareholders.
The Plan is not subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
Purchase of Securities Pursuant to the Plan and Payment for
Securities Offered
Designation of Options
At the time of granting the Option, the Committee may
designate an Option as either an Incentive Stock Option ("Incentive
Stock Option") intended to qualify under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or an
Option not intended to qualify under the Code ("Non-Qualified Stock
Option") (collectively, "Options"), or any combination thereof.
Any combination or portion of a grant of Options that is not
designated as Incentive Stock Options shall be Non-Qualified Stock
Options.
On April 18 of each year that the Plan is in effect,
commencing April 18, 1999, Incentive Stock Options to purchase
5,000 Common Shares will be granted to each employee-Director, and
Non-Qualified Stock Options to purchase 5,000 Common Shares will be
granted to each non-employee Director. Such Options shall vest
immediately and expire 10 years after date of grant. No additional
Options may be granted to such individuals, absent an amendment to
the Plan. If the President of the Company determines, in his sole
discretion, that on such date that the Company is in possession of
material non-public information concerning the Company's business,
the grant shall be delayed until the third day following
publication of such information or the date of the event which
renders such information immaterial.
No preemptive rights are applicable to the shares covered
by the Plan.
Exercise of Options
A person electing to exercise an Option shall give
written notice to the Company, in such form as the Committee shall
have prescribed or approved, of such election and of the number of
Common Shares he or she has elected to purchase and shall at the
time of exercise tender the full purchase price of any shares he or
she has elected to purchase. The purchase price upon the exercise
of an Option shall be paid in full in cash, except that, with the
approval of the Committee at or prior to exercise, an Option holder
may exercise his or her Option by tendering to the Company Common
Shares owned by him or her and having a fair market value equal to
the cash exercise price applicable to his or her Option, with the
then fair market value of such Common Shares to be determined in
the manner described below. If, however, an Option holder pays the
Option exercise price of a Non-Qualified Stock Option in whole or
in part in the form of unrestricted Common Shares already owned by
such Option holder, the Company may require that the Option holder
have owned the Common Shares for a period of time that would not
cause the exercise to create a charge to the Company's earnings.
Such provisions may be used by the Company to prevent a pyramid
exercise.
As conditions to exercising an Option, the holder must
(1) arrange to pay the Company any amount required to be withheld
under any tax law on the account of the exercise, and (2) in the
case of an Incentive Stock Option, agree to notify the Company of
any disqualifying disposition (as defined in Section 421 of the
Code) of the Common Shares acquired upon the exercise and agree to
pay the Company any amount required to be withheld under any tax
law on account of the disposition. Any payment on account of
withholding taxes shall be made in a form acceptable to the
Committee.
A person may, in accordance with other provisions of the
Plan, elect to exercise Options in any order, notwithstanding the
fact that Options granted to him or her prior to the grant of the
Options selected for exercise are unexpired.
An Option holder shall have no rights as a shareholder
with respect to any Common Shares covered by his or her Option
until the date a stock certificate is issued evidencing ownership
of such Common Shares. No adjustment shall be made for dividends
(ordinary or extraordinary) whether in cash, securities, or other
property, or distributions or other rights for which the record
date is prior to the date such Stock Certificate is issued, except
for changes in capitalization of the Company.
Common Shares offered under the Plan shall be either
authorized but unissued Common Shares or Common Shares reacquired
by the Company, including Common Shares purchased in the open
market. Should any outstanding Option expire or be terminated,
Common Shares allocable to the unexercised portion of such Option
may again be made subject to Option under the Plan
Options shall not be exercisable in whole or in part if
at any time the Board of Directors or the Committee determines in
its discretion that the listing, registration, or qualification of
the Common Shares subject to such Options on any securities
exchange or under any applicable law, or the consent or approval of
any governmental regulatory body, is necessary or desirable as a
condition or, or in connection with, the granting of the Options,
or the issuance of Common Shares unless the listing, registration,
qualification, consent, or approval is effected or obtained free of
any conditions not acceptable to the Board.
If the Board of Directors or the Committee, as the case
may be, determines that a registration statement under the
Securities Act with respect to the Common Shares issuable upon
exercise of any Options is not in effect at the time of exercise,
as a condition of the issuance of such Common Shares, the person
exercising such Options shall give the Committee a written
statement, satisfactory in form and substance to the Committee,
that he or she is acquiring the Common Shares for his or her own
account for investment purposes, and not with a view toward
disposition. The Company may place upon any stock certificate for
Common Shares issuable upon exercise of Options a legend to prevent
disposition of such Common Shares in violation of the Securities
Act or other applicable law.
Determination of Fair Market Value
For purposes of the Plan, Fair Market Value shall be the
mean between the high and low prices for one Common Share, as
quoted by the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") for the date of grant; and if there is
only one price quoted for the date of grant, then the fair market
value shall be such price. If no such price is quoted for the
date of grant, the fair market value shall be the previous closing
price. In the event that no previous closing price is available,
then the fair market value of one Common Share on the date the
Option is granted shall be determined by the Committee or by the
Board of Directors.
The Option price shall be 100% of the Fair Market Value
of each Common Share on the date the Option is granted. If an
Incentive Stock Option is granted to an individual owning (directly
or indirectly) more than 10% of the total combined voting power of
outstanding Common Shares and common stock of any Subsidiary, the
purchase price per share shall be 110% of the Fair Market Value,
and the Option, by its terms, shall not be exercisable more than 5
years from the date of grant.
Resale Restrictions
No Option is assignable or transferable, other than by
will or the laws of descent and distribution; and during the
lifetime of the Option holder, the Option shall be exercisable only
by the Option holder.
Common Shares purchased upon the exercise of Options will
be freely transferable under the Securities Act, except for Common
Shares issued to any person who may be deemed to be an "affiliate"
of the Company, as defined in Rule 144 of the Commission under the
Securities Act, on the date of transfer by such person. Persons
who may be affiliates of the Company generally include individuals
and entities that control, are controlled by, or are under common
control with, the Company, and may include principal shareholders,
members of the Board of Directors, and executive officers of the
Company, of Tayco Developments, Inc. and of Tayco Realty
Corporation. Affiliates may not sell Common Shares, except
pursuant to an effective registration statement under the
Securities Act which covers such sale, or in compliance with Rule
144, or another applicable exemption from the registration
requirements of the Securities Act.
Common Shares acquired by persons subject to
Section 16(b) of the Exchange Act ("Reporting Persons") upon the
exercise of an Option shall not be sold or transferred until at
least 6 months after the date that the Option was granted.
Tax Effects of Plan Participation
The Company is advised by counsel that, under the present
provisions of the Code and the regulations thereunder, the federal
income tax treatment of Options under the Plan will depend upon
whether the Option is (1) an Incentive Stock Option intended to
qualify under Section 422 of the Code or (2) a Non-Qualified Stock
Option (all other options).
The federal income tax consequences described in this
section are based on laws and regulations in effect on August 3,
1998, and there is no assurance that the laws and regulations will
not change in the future and affect the tax consequences of the
matters discussed in this section. Option holders also may be
subject to additional taxes under state tax laws which may differ
from the applicable federal income tax laws described in this
section.
Incentive Stock Options. Incentive Stock Options granted under the
Plan have certain advantageous tax consequences under federal
income tax laws. Generally, no taxable ordinary income is
recognized by the Option holder at the time of the grant or
exercise of an Incentive Stock Option, and no federal income tax
deduction is available to the Company as a result of a grant or
exercise.
If Common Shares acquired pursuant to the exercise of an
Incentive Stock Option is held by the employee for at least 2 years
from the date of grant and at least 1 year from the date the Common
Shares are transferred to that employee, and if that employee
remains employed by the Company at all times (except in the case of
death) from the date of grant of the option until 3 months before
the date of exercise (or 1 year before the date of exercise in the
case of a disabled employee) the employee will recognize no
ordinary taxable income upon the exercise of the Option. Exercise
may result in recognition of income for alternative minimum tax
purposes. Upon the later sale of the Common Shares, the employee
will recognize long-term capital gain or loss equal to the
difference between the sales price and the purchase price. Under
these circumstances, the Company would not receive a tax deduction
at the time of either exercise or sale. If the Common Shares
acquired pursuant to the exercise of an Incentive Stock Option are
not held by the employee for the time periods indicated above or
otherwise fails to qualify, exercise will be treated as the
exercise of a Non-Qualified Stock Option and will be subject to the
federal income tax treatment described below under "Non-Qualified
Stock Options".
Under the terms of the Plan, a person whose employment
terminates due to permanent disability has the right to exercise an
Incentive Stock Option for 1 year after the date of termination.
If the Option is exercised later than 1 year after termination of
employment due to disability, the exercise will be treated for
income tax purposes as the exercise of a Non-Qualified Stock
Option.
The Committee may, in its discretion, grant Options that
expire later than three months after termination of employment.
Options exercised later than 3 months after
termination of employment (except in the case of disability of the
employee in which case the applicable period is one year) will be
treated for income tax purposes as Non-Qualified Stock Options.
The amount by which the fair market value of the Common
Shares on the exercise date of an Incentive Stock Option exceeds
the purchase price will be an item of "tax preference" for purposes
of the alternative minimum tax provisions of the Internal Revenue
Code.
Non-Qualified Stock Options. Unlike an Incentive Stock
Option, the exercise of a Non-Qualified Stock Option results in the
recognition of income for tax purposes which is subject to income
tax withholding and may be subject to FICA tax withholding.
However, the exercise of a Non-Qualified Stock Option does not
result in an item of "tax preference" for purposes of the federal
alternative minimum income tax.
Upon exercise of a Non-Qualified Stock Option, an Option
holder, other than a Reporting Person, will recognize compensation,
taxable as ordinary income, in an amount equal to the excess of the
fair market value of the common stock over the purchase price on
the date of exercise.
If, during the six months preceding the exercise of a
Non-Qualified Stock Option, a Reporting Person has had a
transaction in common stock which is treated as a purchase under
Section 16(b) of the Securities Exchange Act of 1934, then the
Reporting Person will not recognize compensation from the exercise
of such option until the expiration of six months following the
date of the purchase transaction. At the expiration of that six
month period, the Reporting Person will recognize compensation
equal to the excess of the then fair market value of the common
stock over any purchase price paid. However, a Reporting Person
may make an election under Section 83(b) of the Internal Revenue
Code within 30 days after the date of exercise, to be taxed at the
time of exercise upon the excess, if any, of the fair market value
of the Common Shares on the date of exercise over the purchase
price paid.
An Option holder's tax basis in common stock received
upon exercise of Options will generally be any purchase price paid
plus the amount of taxable compensation recognized.
To the Company. In general, the Company will be entitled
to a deduction (subject to any general limitations) in connection
with awards under the Plan only at such time, and in such amount,
as Option holders recognize ordinary income in connection with the
awards. Thus, in the case of an Incentive Stock Option, assuming
there is no disqualifying disposition, the Company will not be
entitled to a deduction because the Option holders will not
recognize ordinary income. When exercise of a Non-Qualified Stock
Option results in ordinary income to the Option holder, the Company
will be entitled to claim the available deduction. The Code
requires satisfaction of the applicable reporting requirements as
a condition to the Company's claiming its deduction.
Gain and Loss. If Common Shares acquired through the
exercise of a Non-Qualified Stock Option is sold, the Option holder
will generally recognize capital gain (or loss) equal to the amount
by which the proceeds of sale exceed (or are less than) the Option
holder's basis in that common stock. The gain (or loss) will be
long term if the common stock acquired under the 1998 Plan has been
held for more than 18 months. If an Option holder pays part or all
of the exercise price of a Non-Qualified Stock Option by
surrendering previously acquired Company common stock, then such
Option holder's tax basis (and capital gains holding period) in the
surrendered shares carries over to an equivalent number of shares
purchased by exercise of the Option. If the Option holder uses
stock previously acquired as Incentive Stock Option stock for
purposes of paying for stock in a later exercise but prior to the
expiration of the required holding period for the Incentive Stock
Option stock, this will be treated as a disqualifying disposition
for such stock.
General. The Common Shares to be issued or transferred
pursuant to the Plan will be stock which will be made available, at
the discretion of the Board of Directors of the Company, either
from authorized but unissued shares, or from shares reacquired by
the Company, including shares purchased on the open market. Shares
acquired pursuant to the exercise of options under the Plan by a
Reporting Person shall not be sold or transferred for at least 6
months after the date of grant.
Accounting Treatment
Under the Plan, neither the grant nor exercise of an
Option results in a charge against earnings.
Investment of Funds
The cash proceeds to be received by the Company upon
exercise of the Options will be used for general corporate
purposes.
Withdrawal from the Plan
Withdrawal from the Plan occurs only upon termination of
employment. However, the Committee is under no obligation to
continue awarding Options to employees to whom Options were
previously awarded.
Termination, Forfeitures and Penalties
No Options may be granted under the Plan after
November 6, 2003. Each Option shall terminate on the date
determined by the Committee, and specified in the applicable Option
Agreement but, in any event, not later than 10 years after the date
of grant (5 years in the case of any Incentive Stock Option granted
to a person who owns more than 10% of the Common Stock
outstanding). An Option held by an individual whose employment is
terminated shall terminate (1) if the Option holder is permanently
and totally disabled, one year after the date of termination of
employment (in the case of Incentive Stock Options) and upon the
expiration date (in the case of Non-Qualified Stock Options); (2)
in the case of a Non-Qualified Option held by an individual who
dies, 1 year from the date of death of such individual; (3)
immediately, if employment is terminated for cause, unless some
other expiration date is fixed by the Committee; or (4) 3 months
after the date employment terminates for any other reason (in the
case of Incentive Stock Options), or (in the case of Non-Qualified
Stock Options) 18 months after employment terminates, or such other
date as the Committee may fix. Whether an authorized leave of
absence for military or governmental service shall constitute
termination of employment for purposes of the Plan shall be
determined by the Committee. In no event, however, shall any
Option be exercisable after its expiration date. Options not
exercised by the applicable termination dates are forfeited.
From time to time, the Committee may place additional
limitations on the exercisability of Options.
Amendment of Plan
Under the Plan, the Board of Directors may at any time
terminate, modify, or suspend the Plan, or modify, extend, or
renew outstanding Options, but no such termination, modification,
extension, or renewal shall alter or impair any rights of an Option
holder under an Option already granted, unless the option holder
consents to such action. Except with the approval of the
shareholders, no amendment or modification shall be made by the
Board which (i) increases the maximum number of shares for which
Options may be granted, (ii) alters the method by which the Option
price is determined, (iii) extends any Option for a period longer
than 10 years after the date of the grant, (iv) materially modifies
the eligibility requirements for participation in the Plan, or
(v) alters the amendment provisions of the Plan to defeat their
purpose.
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
(INFORMATION NOT REQUIRED IN THE PROSPECTUS)
Incorporation of certain documents by reference
The following documents are hereby incorporated by
reference in this Registration Statement:
(a) The Company's latest annual report filed
pursuant to Section 13(a) or 15(d) of the Exchange Act; and
(b) All other reports filed by the Company pursuant
to Section 13(a) or 15(d) of the Exchange Act since the end of the
fiscal year covered by the annual report referred to in (a) above.
All documents filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, after the
date hereof and prior to the filing with the Commission of a
post-effective amendment which indicates that the securities
offered hereby have been sold or which deregisters the securities
covered hereby then remaining unsold, shall also be deemed to be
incorporated by reference into this Registration Statement and to
be a part hereof from the respective date of filing of such
documents.
Description of securities
Pursuant to the terms of the Plan, the Committee is
authorized to issue, upon exercise of the Options granted, Common
Shares either from authorized but unissued Common Shares, or from
Common Shares reacquired by the Company. The aggregate number of
Common Shares which may be distributed under the Plan shall not
exceed 125,000, subject to proportional adjustment in the event of
changes of capitalization of the Company.
The Certificate of Incorporation authorizes the Company
to issue up to 8,000,000 Common Shares, of which, on the date of
this Prospectus, 2,757,543 Common Shares are issued and
outstanding; 28,432 Common Shares are held in the Company's
Treasury; 119,000 Common Shares are reserved for issuance of
unexercised options under the 1994 Taylor Devices, Inc. Stock
Option Plan (which plan expired on November 14, 1998); 41,739
Common Shares are reserved for issuance under the Taylor Devices,
Inc. Employees Stock Purchase Plan; and 125,000 Common Shares are
reserved for issuance under the Plan. Common Shares are entitled
(a) to dividends when and as declared by the Board of Directors,
subject to any rights of preferred stock of the Company that may be
hereafter issued; (b) to one vote per share on each matter properly
submitted to shareholders for their vote; and (c) to participate
ratably in the net assets of the Company in the event of
liquidation, subject to any prior rights of preferred stock of the
Company that may hereafter be issued. The Company is currently
restricted from issuing dividends under credit arrangements with
its lender. Outstanding Common Shares are fully paid and are not
subject to further calls or assessments. Holders of Common Shares
do not have preemptive rights.
The Certificate of Incorporation of the Company
authorizes the Board of Directors to issue up to 2,000,000 shares
of preferred stock, $.05 par value, with such rights and
privileges, including voting rights, as it may deem appropriate. As
of the date of this Prospectus, 5,000 preferred shares have been
designated by the Board of Directors as "Series A Junior
Participating Preferred Stock" ("Series A Stock") in connection
with the issuance by the Company of certain shareholder rights
("Rights"), as more particularly described in the Rights Agreement
between the Company and Regan & Associates, Inc., as Rights Agent,
dated October 5, 1998 and attached as Exhibit 4 to the Company's
Registration Statement on Form 8-A filed with the Commission on or
about October 6, 1998 ("Rights Agreement"). The Certificate of
Amendment to the Company's Certificate of Incorporation designating
the Series A Stock was filed by the New York Secretary of State on
October 9, 1998 (the "Amendment").
In accordance with the Amendment and the Rights
Agreement, the Company declared a dividend of one Right for each
outstanding share of the Company's Common Stock, to shareholders of
record at the close of business on October 19, 1998 (the "Record
Date"). Each Right entitles the registered holder to purchase from
the Company a unit consisting of one two-thousandths (1/2000th)of
a share of Series A Stock, at a purchase price of $5.00 per unit of
1/2000th of a share, subject to adjustment.
Initially, the Rights will be attached to all Common
Stock certificates representing shares then outstanding, and no
separate Rights Certificates will be distributed. A distribution
date will occur and the Rights will separate from the Common Stock
upon the earliest of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 30% or more of the shares of Common Stock
then outstanding, (ii) 10 business days following the commencement
of a tender offer or exchange offer that would result in a person
or group beneficially owning 24% or more of such outstanding shares
of Common Stock (unless such tender offer or exchange offer is an
offer for all outstanding shares of Common Stock which a majority
of the unaffiliated Directors who are not officers of the Company
determine to be fair to and otherwise in the best interests of the
Company and its shareholders) and (iii) the date the Board of
Directors declares a person to be an "Adverse Person", upon a
determination by the Board that such Person, together with his
affiliates or associates, is or has become the beneficial owner of
24% or more of the shares of Common Stock outstanding, and upon a
determination by at least a majority of the continuing Directors
who are not officers of the Company, after reasonable inquiry and
investigation, that (a) such beneficial ownership by such person is
intended to cause the Company to repurchase the Common Stock
beneficially owned by such person or to cause pressure on the
Company to take action or enter into a transaction or series of
transactions intended to provide such person with short-term
financial gain under circumstances where such continuing Directors
determine that the best long-term interests of the Company and its
shareholders would not be served by taking such action or entering
into such transactions or series of transactions at that time, or
(b) such beneficial ownership is causing or reasonably likely to
cause a material adverse impact (including, but not limited to,
impairment of relationships with customers, impairment of the
Company's ability to maintain its competitive position or
impairment of the Company's business reputation or ability to deal
with governmental agencies) on the business or prospects of the
Company.
The power of the Board of Directors to issue preferred
shares, such as Series A Stock, may enable the Board of Directors
to prevent a change in control despite a shift in ownership of the
Common Shares. In addition, the Board of Directors' power to issue
additional Common Shares may delay or deter a change in control by
increasing the number of Common Shares needed to gain control.
In addition, under New York law, the Company cannot enter
into certain business combinations involving persons beneficially
owing 20% or more of the Common Shares unless the Board of
Directors has approved the business combination or the stock
acquisition by which the person's interest reached 20% ("Stock
Acquisition") prior to the date of the Stock Acquisition. This
restriction applies for 5 years after the date of the Stock
Acquisition, and thereafter, the Company may enter into a business
combination with the interested person (1) if the combination is
approved by vote of the holders of a majority of the Common Shares
beneficially owned by disinterested shareholders or (2) as part of
the business combination if the disinterested shareholders receive
a price for their Common Shares equal to or greater than the price
determined in accordance with a statutory formula intended to
assure that the shareholder will receive an equitable price in the
business combination. New York law also prevents the Company from
purchasing more than 10% of the Common Shares for more than their
market value unless the purchase is approved by the Board of
Directors and by a majority vote of all outstanding Common Shares,
unless the offer to purchase is extended to all shareholders, or
unless the offer is for Common Shares the holder has held for more
than 2 years.
The Common Shares are listed on the NASDAQ SmallCap
Issues Market.
Indemnification of Directors and Officers
The Certificate of Incorporation of the Company limits
the personal liability of the members of the Company's Board of
Directors to the fullest extent permitted under the New York
Business Corporation Law (the "BCL"), providing that Directors will
not be liable to the Company or its shareholders for monetary
damages for breach of fiduciary duty as a Director, except to the
extent required by law. The BCL requires that a Director be liable
if a judgment or other final disposition adverse to the Director
establishes that (1) such Director's acts or omissions were in bad
faith or involved intentional misconduct or knowing violation of
law; or (2) such Director personally gained in fact a financial
profit or other advantage to which the Director was not legally
entitled; or (3) the acts of such Director violated Section 719 of
the BCL. Section 719 provides that, unless a Director performs the
duties of a Director in good faith and with a degree of care which
an ordinary prudent person in a like position would use under
similar circumstances, the Director may be liable for voting or
concurring in the following corporate actions; (a) the declaration
of an illegal dividend; (b) a corporation's repurchase of its own
shares when the repurchase is not authorized by New York law;
(c) the distribution of assets to shareholders after dissolution of
the corporation without adequately providing for known liabilities
of the corporation; and (d) a loan by a corporation to any Director
unless the loan is authorized by a vote of shareholders.
The Company's By-Laws require the Company to indemnify
any person (including any director, officer or employee) to the
full extent permitted by law, who is made, or threatened to be
made, a party to any action or proceeding, whether criminal or
civil, by reason of the fact that such person is or was a director
or officer of the Company or serves or serves any other corporation
in any capacity at the request of the Company.
In 1996, the Company also entered into Indemnity
Agreements with certain of its executive officers and directors
(the "Indemnitees") by which the Company formally agreed to
indemnify them in the event that they, or any of them, is made a
party to or is threatened to be made a party to, or is otherwise
involved in a proceeding (other than a proceeding by or in the
right of the Corporation to procure a judgment in its favor),
against all expenses, liabilities, judgments, fines and penalties
actually and reasonably incurred by Indemnitee in connection with
the defense or settlement of such proceeding, but only if
Indemnitee acted in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the
Corporation and, in the case of a criminal proceeding, in addition,
had no reasonable cause to believe that his conduct was unlawful.
Under the Indemnity Agreement, no indemnification can be
made for (i) judgments, fines, penalties, or amounts paid in
settlement by or on behalf of Indemnitee; or (ii) other expenses
with respect to any claim, issue or matter as to which Indemnitee
shall have been adjudged to be liable to the Corporation, unless
and only to the extent that any court in which such proceeding was
brought determines upon application that, despite any adjudication
of liability but in view of all circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such
judgments, fines, penalties, or expenses as such court shall deem
proper. The Indemnity Agreement also excludes, among others, any
right to payments made under any insurance policy, or payments
paid to an Indemnitee, otherwise than pursuant to the Indemnity
Agreement.
Exemption from Registration Claimed
Not Applicable.
Exhibits
Exhibit Number Description
4.1 1998 Taylor Devices, Inc. Stock
Option Plan (incorporated by
reference to Exhibit "A" to Taylor
Devices, Inc. Proxy Statement dated
September 28, 1998, Commission File
No. 0-3498).
4.2 Form of Stock Option Agreement.
5 Opinion of Hiscock & Barclay, LLP
regarding legality of common stock
being registered.
23.1 Consent of Lumsden & McCormick, LLP
23.2 Consent of Hiscock & Barclay, LLP
(included in their Opinion filed as
Exhibit 5).<PAGE>
Undertakings
1. The undersigned Company hereby undertakes:
(a) To file, during any period in which offers
or sales are being made, a post-effective amendment to this
Registration Statement, to include any additional or changed
material information on the plan of distribution not previously
disclosed in this Registration Statement.
(b) That, for the purpose of determining any
liability under the Securities Act, to treat each post-effective
amendment as a new registration statement of the securities
offered, and the offering of such securities at that time to be the
initial bona fide offering.
(c) To file a post-effective amendment to
remove from registration any of the securities which remain unsold
at the end of the offering.
2. Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Company pursuant to the
foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of
such issue.<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Company certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of North Tonawanda, State of New York, on the 24th day of
December, 1998.
TAYLOR DEVICES, INC.
By: /s/ Douglas P. Taylor
President and Director
(Principal Executive Officer)
and
By: /s/ Kenneth G. Bernstein
Treasurer
(Principal Financial and
Accounting Officer)
POWER OF ATTORNEY
Each person whose signature appears below constitutes and
appoints Douglas P. Taylor his attorney-in-fact, with the power of
substitution, for him in any and all capacities, to sign any
amendments to this registration statement, and to file the same,
with exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and
confirming all that said attorney-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of
1933, this registration statement has been signed below by the
following persons on the 24th day of December, 1998.
Signature Title
/s/ Richard G. Hill Director
/s/ Joseph P. Gastel Director
/s/ Donald B. Hofmar Director
/s/Randall L. Clark Director
S-8 Exhibit No. 4.2
SUMMARY OF OPTION GRANT
1998 TAYLOR DEVICES, INC. STOCK OPTION PLAN
Name of Optionee: ____________________________
Address of Optionee: ____________________________
____________________________
Taxpayer identification Number: ____________________________
Number of Options: _________
Exercise Price per Share: _________
_________ Incentive Stock Options
OR
_________ Non-Qualified Stock Options
Date of Grant: _________ Expiration Date:__________
STOCK OPTION AGREEMENT
The undersigned TAYLOR DEVICES, INC., a New York
corporation with offices at 90 Taylor Drive, North Tonawanda, New
York 14120 (the "Company") and the above named Optionee, an
individual residing at the address shown in the above, hereby enter
into this STOCK OPTION AGREEMENT effective as of the Date of Grant
as stated above the ("Agreement"), upon the terms and conditions
hereinafter set forth:
TAYLOR DEVICES, INC.
By:
Douglas P. Taylor, President
The Optionee agrees to the terms and
conditions hereinafter set forth and
acknowledges receipt from the
Company of a copy of the 1998 Plan
and a Plan Prospectus dated
December 24, 1998:
OPTIONEE:
[NAME]<PAGE>
TERMS AND CONDITIONS
The Optionee is an [employee/ director] of the Company.
The Compensation Committee of the Company (the "Committee") has
determined that the Optionee is a key employee of the Company, or
has otherwise met the criteria necessary for the grant of options
under the 1998 Taylor Devices, Inc. Stock Option Plan (the "1998
Plan"). The 1998 Plan was adopted by the Board of Directors of the
Company and approved by shareholders on November 6, 1998. The
Committee has elected to grant options to the Optionee, which
options shall be exercised in accordance with this Agreement and
the 1998 Plan.
The Optionee wishes to accept this grant.
NOW, THEREFORE, the Company and the Optionee agree as follows:
1. Grant of Options. By this Agreement, the Company grants
to the Optionee, and the Optionee accepts from the Company as of
the date of this Agreement, on the terms and conditions set forth
herein, options (individually or collectively referred to as the
"Options") to purchase the number of shares of its common stock,
$0.025 par value (the "Common Stock"), at the purchase price per
share, set forth above in the Summary of Option Grant. As
specified in such Summary of Option Grant, the Options are either
Incentive Stock Options, or Non-Qualified Stock Options which will
not be treated as "Incentive Stock Options" under the Internal
Revenue Code of 1986, as amended (the "Code").
The Options are issued under and subject to all of the terms
and conditions of the 1998 Plan. The 1998 Plan, except as expressly
modified by the provisions set forth in this Agreement, is hereby
incorporated by reference into this Agreement. Terms defined in
the 1998 Plan and not otherwise defined in this Agreement shall
have the meanings set forth in the 1998 Plan.
2. Term of Option. The Options shall terminate on and shall
not be exercisable after the Expiration Date set forth above in the
Summary of Option Grant. In the event that the Options shall be
designated as Incentive Stock Options and granted to a more than
10% shareholder of the Company, the Options shall terminate not
later than 5 years after the date of the grant, as set forth in
this Agreement. Except as provided herein, the Options may be
exercised only during the continuance of the Optionee's employment
with the Company.
a. Options held by an Optionee who is Permanently and
Totally Disabled shall terminate (i) in the case of Incentive Stock
Options, 1 year after the date of termination of employment, and
(ii) in the case of Non-Qualified Stock Options, upon their
Expiration Date.
b. Non-Qualified Stock Options held by an Optionee
shall be exercisable within a period of 1 year from the date of the
Optionee's death by the executor or administrator of the Optionee's
estate, or by the person to whom the Optionee shall have
transferred such right by last will and testament or by the laws of
descent or distribution.
c. Options held by an Optionee who is terminated for
cause, as determined by the Committee, shall expire immediately
upon the date of termination unless some other expiration date is
fixed by the Committee.
d. Options held by an Optionee whose employment with
the Company terminates for any reason other than those specified in
subsections (a), (b) or (c) above shall expire (i) in the case of
Incentive Stock Options, 3 months after the date of termination;
and (ii) in the case of Non-Qualified Stock Options, 18 months
after the date of termination.
e. Notwithstanding the foregoing, no Option shall be
exercisable after the Expiration Date.
The Committee shall determine in its discretion whether an
authorized leave of absence or an absence for military or
governmental service shall constitute termination of employment for
purposes of the 1998 Plan. Any determination by the Committee
shall be final, conclusive and binding upon the affected Optionee
and any person claiming under or through such Optionee.
Termination of employment with any Subsidiary in order to accept
employment with another Subsidiary or while remaining an employee
of the Company or of any Subsidiary shall not be termination of
employment for the purposes of this Agreement.
3. Exercise of Options. The Optionee shall exercise all or
any part of the vested Options by giving written notice to the
Company, in such form as the Committee shall have prescribed or
approved, of such election and of the number of shares he or she
has elected to purchase. The purchase price per share of the
Options shall be the price set forth in the Summary above. The
full purchase price of the shares as to which the Options are being
exercised shall be paid in cash; provided, however, that in lieu of
cash, with the approval of the Committee at or prior to exercise,
an Optionee may exercise his or her Options by tendering to the
Company shares of Common Stock owned by him or her pursuant to
Section 9(b) of the 1998 Plan.
4. Shareholder Rights. Neither the Optionee nor any
transferee under this Agreement shall have any rights as a
shareholder with respect to any shares subject to Options until the
date a stock certificate is issued evidencing ownership of such
shares. The Company shall deliver to the Optionee a certificate
representing the shares as to which options have been exercised as
soon as administratively feasible following such exercise.
5. Non-Transferability. Options shall not be assignable or
transferable by the Optionee other than by will or the laws of
descent and distribution. During the lifetime of an Optionee, the
Options shall be exercisable only by such Optionee. Any transfer
of Options attempted in violation of this Agreement shall be void.
6. Compliance with Securities Laws. No Options shall be
exercisable in whole or in part if at any time the Committee or the
Board of Directors, as the case may be, shall determine, in its
discretion, that the listing, registration, or qualification of the
shares subject to such Options on any securities exchange or under
any applicable law, or the consent or approval of any government
regulatory body, is necessary or desirable as a condition of or in
connection with the granting of such Options or the issue of shares
thereunder unless such listing, registration, qualification,
consent, or approval shall have been effected or obtained free of
any conditions not acceptable to the Board. If a registration
statement under the Securities Act of 1933 with respect to shares
issuable upon exercise of any Options is not in effect at the time
of exercise, the person exercising such Option shall give the
Committee a written statement, satisfactory in form and substance
to the Committee, that he or she is acquiring the shares for his or
her own account for investment and not with a view to their
distribution, and the Company may place upon any stock certificate
for shares issuable upon exercise of such Options such legend as
the Committee may prescribe to prevent disposition of the shares in
violation of the Securities Act of 1933 and any other applicable
law.
7. Reporting. In the event the Optionee disposes of the
shares acquired from the Options and, as a result of the
disposition, recognizes ordinary income, the Optionee shall give
written notice to the Company, as soon as reasonably practicable,
of such disposition and the amount taxable as ordinary income to
the Optionee as a result of the disposition.
8. Notices. All notices provided for under this Agreement
shall be in writing and shall be delivered by hand or sent by
certified mail to the addresses specified in the Summary of Option
Grant above or to such other addresses that the respective parties
may designate in writing.
9. No Right to Employment. Nothing contained in this
Agreement, nor the granting of any Options to the Optionee
hereunder, shall constitute or be evidence of any agreement or
understanding, express or implied, on the part of the Company to
employ or continue employment of Optionee for any specific period.
10. Interpretation. This Agreement shall be governed by and
construed under the laws of the State of New York, without
reference to conflict-of-laws principles. All decisions and
interpretations made by the Committee or the Board of Directors
with respect to any question arising under this Agreement or the
1998 Plan shall be conclusive and binding upon the Optionee.
11. Amendment. No term, condition, understanding or
agreement purporting to modify the terms of this Agreement shall be
binding unless made in writing and signed by both parties hereto.
12. Waiver. No failure of a party to exercise any power
given to it under this Agreement or to insist upon strict
compliance with any obligation or condition thereunder, and no
custom or practice of the parties at variance with the terms hereof
shall constitute a waiver by such party of its rights to demand
exact compliance with the terms of this Agreement.
13. Binding on Heirs, etc. This Agreement shall inure to the
benefit of and be binding upon the Company and its successors and
the Optionee and his or her heirs, executors and administrators.
S-8 Exhibit No. 5
December 11, 1998
Taylor Devices, Inc.
90 Taylor Drive
PO Box 748
North Tonawanda, New York 14120-0748
Attention: Douglas P. Taylor, President and CEO
Re: 1998 Taylor Devices, Inc. Stock Option Plan
Ladies and Gentlemen:
We have represented Taylor Devices, Inc. (the "Company")
in connection with the issuance by the Company of up to 125,000
shares of its common stock, par value $.025 per share ("Shares"),
subject to options to be granted ("Stock Options") pursuant to the
1998 Taylor Devices, Inc. Stock Option Plan ("Plan"). This opinion
is being submitted at your request for use as an Exhibit to the
Company's Registration Statement on Form S-8 in accordance with the
Securities Act of 1933 ("Act"), which Registration Statement is to
be filed with the Securities and Exchange Commission ("SEC") on or
about December 11, 1998 ("Registration Statement").
Further to preparing this opinion, we examined (1) the
Plan; (2) the Company's Certificate of Incorporation and By-laws,
each as amended; (3) the Annual Report on Form 10-KSB for the
fiscal year ended May 31, 1998; (4) the Quarterly Report on Form
10-QSB for the fiscal quarter ended August 31, 1998; (5) the Proxy
Statement, dated September 28, 1998, mailed to shareholders in
connection with the Annual Meeting of Shareholders held on November
6, 1998; (6) the Resolutions of the Board of Directors approving
the Plan, dated May 26, 1998; and (7) the Issuer Statement on
Form M-11 filed with the New York Department of Law on or about
December 10, 1998 (collectively, the "Reviewed Documents"). We
have also reviewed such questions of law as we have deemed
necessary or appropriate. Other than our review of the Reviewed
Documents, in rendering this opinion we have made no inquiry as to
any factual matter.
For purposes of this opinion, we have assumed that: (a)
the Plan was duly adopted; (b) on the dates of exercise, the Stock
Options (i) will have been duly granted in accordance with the
Plan; (ii) will constitute the legal, valid, and binding
obligations of the Company; and, (iii) subject to applicable
bankruptcy, insolvency and other laws affecting the enforceability
of creditors' rights generally, will be enforceable as to the
Company in accordance with the terms of the Plan; (c) the
securities laws of the State of New York and any other applicable
jurisdiction have been complied with; and (d) no change occurs in
the applicable law or the pertinent facts.
Based on the preceding, and subject to the qualifications
herein set forth, it is our opinion that the Shares are duly
authorized and, when the Stock Options are exercised in accordance
with their terms and the terms of the Plan, the Shares will be
validly issued, fully paid and nonassessable.
The foregoing opinion is limited to the federal laws of
the United States and the laws of the State of New York, and we
express no opinion as to the effect of the laws of any other
jurisdiction.
We consent to the use of this opinion as an Exhibit to
the Registration Statement. In giving our consent, we do not
thereby admit that we are in the category of persons whose consent
is required under Section 7 of the Act, or of the Rules and
Regulations promulgated thereunder by the SEC.
Very truly yours,
/s/Hiscock & Barclay, LLP
<PAGE>
S-8 Exhibit No. 23.1
CONSENT OF INDEPENDENT AUDITORS
Board of Directors
Taylor Devices, Inc.
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated July 31,
1998, which appears on page 25 of the Annual Report to the
Securities and Exchange Commission of Taylor Devices, Inc. On Form
10-KSB for the fiscal year ended May 31, 1998.
/s/ LUMSDEN & MC CORMICK, LLP
Buffalo, New York
December 11, 1998
