AMPLICON, INC.
5 Hutton Centre Drive, Suite 500
Santa Ana, CA 92707
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 7, 1994
PROXY STATEMENT
SOLICITATION OF PROXIES
The accompanying proxy is solicited by the Board of
Directors of Amplicon, Inc. (the "Company" or "Amplicon")
for use at the Company's Annual Meeting of Shareholders to
be held at the Company's corporate offices at Five Hutton
Centre Drive, Suite 500, Santa Ana, California on Monday,
November 7, 1994 10:00 a.m., local time, and at any and all
adjournments thereof. All shares represented by each
properly executed, unrevoked proxy received in time for the
Annual Meeting will be voted in the manner specified
therein. Any shareholder has the power to revoke his or her
proxy at any time before the Annual Meeting. A proxy may be
revoked by delivering a written notice of revocation to the
Secretary of the Company, by a subsequent proxy executed by
the person executing the proxy and presented to the Annual
Meeting or by attendance at the Annual Meeting and voting in
person by the person executing the proxy.
This Proxy Statement is being mailed to the Company's
shareholders on or about October 14, 1994. The solicitation
of proxies will be made by mail and expenses will be paid by
the Company, and will include forwarding solicitation
materials regarding the meeting to beneficial owners of the
Company's Common Stock. Further solicitation of proxies may
be made by telephone or oral communication with some
shareholders. All such further solicitation will be made by
the Company's regular employees who will not receive
additional compensation for that solicitation. The mailing
address of the Company's principal executive offices is Five
Hutton Centre Drive, Suite 500, Santa Ana, California 92707.
OUTSTANDING SHARES AND VOTING RIGHTS
Only holders of record of the 5,857,022 shares of the
Company's Common Stock outstanding at the close of business
on September 23, 1994, the record date with respect to this
solicitation, will be entitled to notice of and to vote at
the Annual Meeting and any adjournments thereof. No
shareholder will be entitled to cumulate votes (i.e., cast
for any candidate for election to the Board of Directors, a
number of votes greater than the number of the shareholder's
shares) unless the names of the candidate or candidates have
been placed in nomination prior to the voting and the
shareholder is given notice at the meeting, prior to voting,
of the shareholder's intention to cumulate votes. If any
one shareholder has given such notice, all shareholders may
cumulate their votes for candidates who have been nominated.
If voting for directors is conducted by cumulative voting,
each share will be entitled to a number of votes equal to
the number of directors to be elected and the votes may be
cast for a single candidate or may be distributed among two
or more candidates in such proportions as the shareholder
may determine. In the event of cumulative voting, the proxy
holders intend to distribute the votes represented by the
proxies solicited hereby in such proportions as they see
fit. If the voting is not conducted by cumulative voting,
each share will be entitled to one vote and the holders of
the majority of the shares voting at the meeting will be
able to elect all of the directors if they choose to do so.
In such event, the other shareholders will be unable to
elect any director. The candidates receiving the highest
number of votes, up to the number of directors to be
elected, will be elected. On all other matters, each share
is entitled to one vote.
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth as of September 23, 1994
certain information as to the number of shares of the
Company's Common Stock beneficially owned by each person who
is known by the Company to beneficially own more than five
percent of the outstanding shares of the Company's Common
Stock and by all directors and officers as a group.
<TABLE>
<CAPTION>
Amount of the Company's Percent of the Company's
Name and Address Common Stock Common Stock
of Beneficial Owners Beneficially Owned Beneficially Owned
<S> <C> <C>
Patrick E. Paddon 3,415,664 <F1> 56.9%
c/o Amplicon, Inc.
5 Hutton Centre Drive
Santa Ana, CA 92707
Glen T. Tsuma 731,386 12.5%
c/o Amplicon, Inc.
5 Hutton Centre Drive
Santa Ana, CA 92707
Twin Oaks Partners 457,550 7.8%
c/o McGrath, Doyle &
Phair
150 Broadway
New York, N.Y. 10038
All Directors and 4,216,950 <F2> 69.5%
Officers as a
Group (6 persons)
<FN>
<F1> With respect to 150,000 of such shares, Mr. Paddon
has sole voting power only. Includes options to purchase
150,000 shares which are exercisable within 60 days of
September 23, 1994.
<F2> Includes options to purchase 214,000 shares which
are exercisable within 60 days of September 23, 1994.
</FN>
</TABLE>
ELECTION OF DIRECTORS
Directors are elected at each Annual Meeting of
Shareholders and hold office until their respective
successors are duly elected and qualified. It is the
intention of the persons named in the enclosed form of
proxy, unless the proxy specifies otherwise, to vote the
shares represented by the proxy for the election of the
nominees set forth below. Although it is anticipated that
each nominee will be available to serve as a director,
should any nominee become unavailable to serve, the proxies
will be voted for such other person as may be designated by
the Company's Board of Directors.
The nominees for the Board of Directors are Patrick E.
Paddon, Glen T. Tsuma, Michael H. Lowry, and Harris Ravine.
Certain information as of September 23, 1994 with respect to
the nominees for election as directors, including the
number of shares of the Company's Common Stock beneficially
owned by each of them as of September 23, 1994, is set forth
under "Directors and Executive Officers" below.
The Board of Directors met five times during the year
ended June 30, 1994. The Board has established Audit and
Stock Option Committees. The Audit Committee consists of
Messrs. Tsuma, Lowry and Ravine. The Audit Committee has
responsibility for consulting with the Company's officers
regarding the scope of the auditor's examination and review
of the annual financial statements and accounting policies
of the Company. The Audit Committee met twice during the
year ended June 30, 1994. The Stock Option Committee,
composed of Messrs. Tsuma, Paddon and Conrad F. Hohener,
III, makes recommendations to the Board of Directors with
regard to the granting of stock options. The Stock Option
Committee met four times during the year ended June 30,
1994. All board and committee meetings were attended by each
director who was a director at the time of such meeting. The
entire Board of Directors of the Company serves as the
Compensation Committee.
<PAGE>
Directors who are employees of the Company do not
receive any fees for their services as directors. Directors
of the Company who are not employees are paid a quarterly
retainer of $2,500 plus expenses.
DIRECTORS AND EXECUTIVE OFFICERS
Current members of the Board of Directors and executive
officers, together with certain information regarding them,
are as follows:
<TABLE>
<CAPTION>
Shares of Percent of
Common Stock Common Stock
Name Age Position Beneficially Owned Beneficially Owned
<S> <C> <C> <C> <C>
Patrick E. Paddon 43 Chief Executive 3,415,664<F1> 56.9%
Officer, President,
Director
Glen T. Tsuma 41 Chief Operating 731,386 12.5%
Officer, Secretary,
Director
Michael H. Lowry 49 Director 6,000<F2> <F5>
Harris Ravine 51 Director - <F5>
Thomas M. Cannon 46 Senior Vice President 40,500<F3> <F5>
President -
Marketing and Sales
S. Leslie Jewett 39 Chief Financial Officer 23,400<F4> <F5>
<FN>
<F1> With respect to 150,000 of such shares, Mr. Paddon
has sole voting power only. Includes options to purchase
150,000 shares which are exercisable within 60 days of
September 23, 1994.
<F2> Includes options to purchase 4,000 shares which are
exercisable within 60 days of September 23, 1994.
<F3> Includes options to purchase 40,000 shares which are
exercisable within 60 days of September 23, 1994.
<F4> Includes options to purchase 20,000 shares which are
exercisable within 60 days of September 23, 1994.
<F5> Less than one percent.
</FN>
</TABLE>
PATRICK E. PADDON founded Amplicon in 1977 and has
served as the President and a director of the Company since
its inception. Prior to 1977, Mr. Paddon was the Manager of
Corporate Planning and Budgets at Business Systems
Technologies, a manufacturer of IBM plug-compatible
peripheral equipment. Mr. Paddon is the spouse of Ms.
Jewett.
GLEN T. TSUMA joined the Company in May 1981 and since
that time has served as Vice President, Treasurer and
director, and additionally as Secretary effective October
17, 1991. Effective August 10, 1989, Mr. Tsuma became Chief
Operating Officer of the Company. Prior to joining
Amplicon, he was an audit manager with Arthur Young &
Company.
MICHAEL H. LOWRY was elected to the Board of Directors
in August 1992. Mr. Lowry is a Managing Director of Nomura
Securities International, Inc., an investment banking firm.
Prior to joining Nomura Securities in February 1994, Mr.
Lowry had been employed by the investment banking firm of
Bear Stearns & Co., Inc. from 1991 to 1993 and by the
investment banking firm of Kidder, Peabody & Co.
Incorporated from 1970 to 1990.
HARRIS RAVINE was elected to the Board of Directors in
February 1994. Mr. Ravine is Technology Investment Officer
with The Broe Companies, a real estate investment company.
Prior to joining the Broe Companies in June 1994, Mr. Ravine
was employed by Storage Technology Corporation, a computer
manufacturer, in various capacities, including Executive
Vice President, Chief Administrative Officer and Group
Officer for Midrange Markets from June 1992 to January 1994,
Executive Vice President -- Europe, Africa and Middle-East
from March 1991 to June 1992, and Executive Vice President
and Chief Financial Officer from June 1989 to March 1991.
<PAGE>
THOMAS M. CANNON joined the Company in July 1991 and
since that time has served as Senior Vice President -
Marketing and Sales. Prior to joining Amplicon, he was a
partner and chief executive officer of Cardiff Capital, an
investment banking and consulting firm, from August 1988 to
June 1991 and president and chief executive of Gascard
Inc., an electronics processing and information services
company, from July 1985 to July 1988. Prior thereto, Mr.
Cannon had been senior vice president, marketing and sales,
for First Data Resources and spent 10 years in various
executive marketing and management positions with
International Business Machines Corporation.
S. LESLIE JEWETT joined the Company in September 1991
as Vice President - Finance. In April 1994, Ms. Jewett was
named Chief Financial Officer of the Company. From 1981 to
1990, she held various management positions at Kidder,
Peabody & Co. Incorporated, including senior vice president,
corporate finance. Ms. Jewett has a BA from Swarthmore
College and an MBA from Stanford University and is a
director of Geonex Corporation. Ms. Jewett is the spouse of
Mr. Paddon.
Executive Compensation
The following table discloses compensation paid by the
Company to the Chief Executive Officer and the remaining
most highly-paid executive officers for the three fiscal
years ended June 30, 1994:
<TABLE>
<CAPTION>
Long-term Other
Annual Compensation Compensation Compen-
Name and Principal Position Year Salary Bonus Options sation<F1>
<S> <C> <C> <C> <C> <C>
Patrick E. Paddon 1994 $375,000 -- -- $1,000
Chief Executive 1993 375,000 -- -- 1,000
Officer 1992 375,000 -- -- --
Glen T. Tsuma 1994 $180,000 -- -- $1,000
Chief Operating 1993 120,000 $30,000 -- 1,000
Officer 1992 100,000 40,000 -- --
Thomas M. Cannon 1994 $180,000 -- -- $1,000
Senior Vice 1993 180,000 -- $25,000 1,000
President -
Sales & Marketing 1992 180,000 -- 50,000 --
S. Leslie Jewett 1994 $131,000 -- $16,667 $1,000
Chief Financial 1993 120,000 $10,000 -- 1,000
Officer 1992 95,000<F2> -- 33,333 --
<FN>
<F1> Company contribution under the Company's 401(k) Plan,
subject to certain vesting restrictions.
<F2> Officer was not employed by the Company for the full
fiscal year.
</FN>
</TABLE>
The terms of Mr. Cannon's employment provide that in
the event the Company were to terminate Mr. Cannon's
employment without cause, he would receive up to a maximum
of six months severance pay, depending upon his length of
service.
STOCK OPTION PLAN
The Company's Stock Option Plan (the "Plan") provides
for the grant of options to purchase up to 650,000 shares of
the Company's Common Stock to executive officers and key
employees of the Company and consultants and other persons
who are not employees but who have made or will make
contributions toward the growth and development of the
Company. Options granted under the Plan are either
"incentive stock options" or "non-qualified stock options."
The Plan provides that the exercise price of shares subject
to an option may be equal to, greater than, or less than the
fair market value of the shares on the date the option is
granted. In consideration of the granting of an option, the
Board of Directors may require an optionee to remain in the
continuous employment of the Company for a period of at
least one year following the date of grant.
<PAGE>
No option may be exercised after ten years from the date of
grant. The Board of Directors or the Committee is authorized
to determine the persons to be granted options, the number of
shares to be subject to each option, whether the options
will be incentive stock options or non-qualified stock
options and the terms and conditions of the options
consistent with the Plan and also is authorized to
adopt, interpret, amend and rescind rules relating to the
administration of the Plan.
OPTION GRANTS IN LAST FISCAL YEAR
During fiscal 1994, Ms. Jewett was the only named
executive officer to receive a stock option grant.
<TABLE>
<CAPTION>
% of Total
Options Granted Grant Date
Options to Employees in Exercise Expiration Present
Name Granted Fiscal Year Price Date Value <F1>
<S> <C> <C> <C> <C> <C>
S. Leslie Jewett 16,667 13% $20.25 2/25/2004 $227,340
<FN>
<F1> Based on the Black-Scholes Option Pricing model. The
Company's use of this model should not be construed as an
endorsement of its accuracy in valuing options or of the
assumptions used in the model. The actual value, if any,
an executive may realize from any option depends upon the
actual performance of Amplicon common stock during the
applicable period.
</FN>
</TABLE>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR END OPTION VALUE
During fiscal 1994, no stock options were exercised by
the Chief Executive Officer and the other named executive
officers.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-the-Money
Options at June 30, 1994 Options at June 30, 1994 <F1>
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Patrick E. Paddon 150,000 -- $2,025,000 --
Glen T. Tsuma -- -- -- --
Thomas M. Cannon 25,000 50,000 153,750 340,000
S. Leslie Jewett 13,333 36,667 73,333 141,166
<FN>
<F1> Represents the difference between the most recent
closing price of the Common Stock as of June 30, 1994 as
reported by NASDAQ and the exercise price of the options.
</FN>
</TABLE>
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
Amplicon has not established a standing compensation
committee but instead all executive compensation issues are
subject to the review of the entire Board of Directors. The
compensation of the Company's Chief Executive Officer has
been reviewed and approved by the Company's Board of
Directors. The compensation of other key officers has
generally been established by the Chief Executive Officer,
subject to the review of the Board of Directors. Mr. Paddon
and Mr. Tsuma, as executive officers and directors of the
Company, therefore participate in all board executive
compensation decisions.
The Company's compensation practices have generally
been designed to bind the interests of the Company's key
executives to the long-term performance of the Company and
its shareholders. Compensation for all executives is
comprised primarily of 1) base salary and 2) equity
participation through common stock ownership or common
stock options. Annual bonuses are paid to certain executives
from time to time.
<PAGE>
Base salaries are established according
to the particular position of the individual executive, the
current economic and business circumstances
of the Company, and competitive conditions in the employment
marketplace. Bonus amounts are determined based upon an
analysis of individual and Company performance, but are not
tied to any direct quantitative or qualitative performance
factors. To assess the 1994 compensation level of
Amplicon's key executives relative to their peers, the
Company examined the compensation plans of other public
leasing companies, comparable financial service firms and
similar emerging growth companies. In fiscal 1994, the base
salaries for Mr. Tsuma and Ms. Jewett were increased to
reflect increased responsibilities and to better match
competitive market conditions. The Company believes that
the cash compensation paid to the Company's executive
officers is generally less than that paid to others in
comparable positions. However, the equity participation of
Amplicon's executive officers, both through direct ownership
and common stock options, is generally greater than other
comparable companies. The executive officers of Amplicon
beneficially own approximately 69% of the Company's common
stock outstanding. Through having a substantial portion of
each executive's long-term compensation derived from
participation in the Company's common stock, the Board of
Directors believes that the Company has aligned the
financial interests of the executive officers with those of
the Company's other shareholders.
CEO COMPENSATION
Patrick E. Paddon, the Chief Executive Officer of the
Company, cash compensation was set at $375,000 for fiscal
1994. Mr. Paddon's compensation in fiscal 1994 was not
specifically tied to any measures of return on equity or
earnings targets. Mr. Paddon's compensation was set at
$375,000 by the Board of Directors several years ago based
upon a review of compensation levels at comparable public
companies. Following the most recent review, the Board of
Directors believes Mr. Paddon's compensation is still
reasonable.
The Board has made no determination as to adjustments
to fiscal 1994 levels.
COMMON STOCK PERFORMANCE GRAPH
The graph below shows a comparison of five-year
cumulative return among Amplicon, the NASDAQ Composite Index
and a peer group of public leasing companies comprised of
Comdisco, Inc., LDI Corporation, DVI Inc. and Electro Rent
Corporation, each of which are engaged in the equipment
leasing industry as a substantial part of their business.
PERFORMANCE GRAPH OMITTED. REPRESENTED BY THE FOLLOWING TABLE:
<TABLE>
<CAPTION>
6/30/89 9/30/89 12/31/89 3/31/90 6/30/90 9/30/90 12/31/90
<S> <C> <C> <C> <C> <C> <C> <C>
AMPI 100 96 75 70 49 54 63
NASD COMP 100 109 105 101 108 81 89
PEER AVG. 100 108 98 93 98 119 136
(con't)
<CAPTION>
3/31/91 6/30/91 9/30/91 12/31/91 3/31/92 6/30/92 9/30/92
<S> <C> <C> <C> <C> <C> <C> <C>
AMPI 107 105 105 99 95 82 105
NASD COMP 116 114 128 143 148 137 143
PEER AVG. 163 126 126 156 164 133 113
(con't)
<CAPTION>
12/31/92 3/31/93 6/30/93 9/30/93 12/31/93 3/31/94 6/30/94
<S> <C> <C> <C> <C> <C> <C> <C>
AMPI 112 139 140 137 142 140 144
NASD COMP 160 169 174 187 189 182 173
PEER AVG. 106 92 93 124 140 130 131
</TABLE>
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has not yet selected its independent public
accountants for the year ended June 30, 1995 because its
Audit Committee has not yet made a recommendation.
Representatives of Arthur Andersen & Co., the Company's
independent public accountants for the year ended June 30,
1994, are expected to be present at the Annual Meeting and
will be available to respond to appropriate questions and to
make such statements as they may desire.
ANNUAL REPORT AND OTHER SEC FILINGS
The Company's Annual Report, containing audited
financial statements for the fiscal years ended June 30,
1994 and 1993, accompanies this Proxy Statement. Upon your
written request, the Company will send to any shareholder,
without charge, a copy of the Annual Report on Form 10-K for
the fiscal year ended June 30, 1994, including the financial
statements and schedules thereto, which the Company has
filed with the Securities and Exchange Commission. The
written request must be directed to the attention of the
Secretary of the Company, at the address of the Company set
forth on the first page of this Proxy Statement.
Based solely on a review of the copies of Forms 3, 4
and 5 and amendments thereto furnished to the Company, the
Company believes that during fiscal 1994 no officer,
director or more-than 10% beneficial owner failed to file on
a timely basis all reports required by Section 16(a) of the
Securities and Exchange Act of 1934, except that Mr. Cannon
was less than 5 days late in filing a Form 4 in February
1994.
PROPOSALS OF SHAREHOLDERS
All proposals of shareholders intended to be presented
at the Company's 1994 Annual Meeting of Shareholders must be
directed to the attention of and received by the Secretary
of the Company, at the address of the Company set forth on
the first page of this Proxy Statement, before May 28, 1994
if they are to be considered for inclusion in the Proxy
Statement and form of Proxy used in connection with the
meeting, in accordance with the rules and regulations of the
Securities and Exchange Commission.
OTHER MATTERS
At the time of the preparation of this Proxy Statement,
the Board of Directors knows of no other matters which will
be acted upon at the Annual Meeting. If any other matters
are properly presented for action at the Annual Meeting or
any adjournment thereof, proxies will be voted with respect
thereto in accordance with the best judgment and in the
discretion of the proxy holders.
By Order of the Board of Directors
Glen T. Tsuma
Secretary
Santa Ana, California
October 14, 1994
