AMPLICON, INC.
5 Hutton Centre Drive, Suite 500
Santa Ana, CA 92707
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 10,1995
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 Friday, November 10, 1995 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. Where no specification is made on a
properly executed and returned proxy, and unless otherwise
indicated in this proxy statement, the shares will be voted FOR
the election of all nominees for Directors named in the proxy and
FOR the approval of the 1995 Equity Participation Plan. 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 23, 1995. 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 5,873,959 shares of the
Company's Common Stock outstanding at the close of business on
October 6, 1995, 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. In order to
constitute a quorum for the conduct of business at the Annual
Meeting, a majority of the outstanding shares of Common Stock of
the Company entitled to vote at the meeting must be represented
in person or by proxy at the Meeting. Shares represented by
proxies that reflect abstentions or "broker non-votes" (shares
held by a broker or nominee which are represented at the Meeting,
but with respect to which the broker or nominee is not empowered
to vote on a particular proposal) will be counted as shares that
are present and entitled to vote for purposes of determining the
presence of a quorum. Abstentions are counted in tabulations of
the votes cast on proposals presented to shareholders, and
therefore will have the same effect as a negative vote, whereas
broker non-votes are not counted for purposes of determining
whether a proposal has been approved.
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 for whom
votes will be cumulated have been placed in nomination prior to
the voting and the shareholder has 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
<PAGE>
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. 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.
PRINCIPAL SHAREHOLDERS
The following table sets forth as of October 6, 1995 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 Percent of the
Name and Address of Company's Common Company's Common
Beneficial Owners Stock Stock
Beneficially Owned Beneficially Owned
<S> <C> <C>
Patrick E. Paddon 3,315,664 <F1> 55.1%
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 516,420 8.8%
c/o McGrath, Doyle & Phair
150 Broadway
New York, N.Y. 10038
All Directors and 4,088,450 <F2> 67.5%
Officers as a Group
(5 persons)
<FN>
<F1>Includes options to purchase 150,000 shares which are
exercisable within 60 days of October 6, 1995.
<F2> Includes options to purchase 186,000 shares which are
exercisable within 60 days of October 6, 1995.
</FN>
</TABLE>
ITEM 1
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 October 6, 1995 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 October 6, 1995, is set forth under "Directors and
Executive Officers" below.
The Board of Directors met four times during the year ended
June 30, 1995. The Board has established Audit and Stock Option
Committees. The Audit Committee consists of Messrs. Tsuma, Lowry
<PAGE>
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, 1995. 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 twice during the year ended June 30, 1995. All
board and committee meetings were attended by each director. The
entire Board of Directors of the Company serves as the
Compensation Committee.
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 Beneficially
Owned Owned
<S> <C> <C> <C> <C>
Patrick E. Paddon 44 Chief Executive 3,315,664 <F1> 55.1%
Officer, President,
Director
Glen T. Tsuma 42 Chief Operating 731,386 12.5%
Officer, Secretary,
Director
Michael H. Lowry 50 Director 8,000 <F2> *
Harris Ravine 52 Director 2,000 <F3> *
S. Leslie Jewett 40 Chief Financial Officer 33,400 <F4> *
* Less than one percent
<FN>
<F1>Includes options to purchase 150,000 shares which are
exercisable within 60 days of October 6, 1995.
<F2>Includes options to purchase 6,000 shares which are
exercisable within 60 days of October 6, 1995.
<F3>Includes options to purchase 2,000 shares which are
exercisable within 60 days of October 6, 1995
<F4>Includes options to purchase 30,000 shares which are
exercisable within 60 days of October 6, 1995.
</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 has been
Chief Operating Officer since August 1989 and Secretary since
October 1991. 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 has been Managing Director of BI
Capital, Limited and Technology Investment Officer with The Broe
Companies, a real estate investment company since June 1994.
Prior thereto, 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
<PAGE>
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.
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. From 1991 through May 1995, Ms. Jewett was a
director of Geonex Corporation which entered into Chapter 11
bankruptcy in 1995. 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, 1995:
<TABLE>
<CAPTION>
Long-term
Annual Compensation Compensation Other
Name and Principal Position Year Salary Bonus Options Compensation <F1>
<S> <C> <C> <C> <C> <C>
Patrick E. Paddon 1995 $375,000 -- -- $1,000
Chief Executive Officer 1994 375,000 -- -- 1,000
1993 375,000 -- -- 1,000
Glen T. Tsuma 1995 $180,000 -- -- $1,000
Chief Operating Officer 1994 180,000 -- -- 1,000
1993 120,000 30,000 -- 1,000
Thomas M. Cannon 1995 $ 55,385 -- -- $90,000 <F2>
Senior Vice President 1994 180,000 -- -- 1,000
Sales & Marketing 1993 180,000 -- 25,000 1,000
S. Leslie Jewett 1995 $150,000 -- -- $1,000
Chief Financial Officer 1994 131,000 -- 16,667 1,000
1993 120,000 10,000 -- 1,000
_________________
<FN>
<F1>Company contribution under the Company's 401(k) Plan,
subject to certain vesting restrictions.
<F2>Mr. Cannon's employment ended in December 1994. Under the
terms of his employment agreement, he received six months
severance pay.
</FN>
</TABLE>
Stock Options
During fiscal 1995, no executive officer received a stock
option grant under the Company's 1985 Stock Option Plan. and no
stock options were exercised by any of the executive officers.
The following table sets forth information with respect to the
unexercised options held by the executive officers as of the end
of the fiscal year.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-the-Money
Options at June 30, 1995 Options at June 30, 1995 <F1>
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Patrick E. Paddon 150,000 -- $1,312,500 --
Glen T. Tsuma -- -- -- --
S. Leslie Jewett 23,333 26,667 10,000 15,000
__________________________
<FN>
<F1>Represents the difference between the most recent closing
price of the Common Stock as of June 30, 1995 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. Mr.
<PAGE>
Paddon and Mr.Tsuma are also members of the Stock Option
Committee, however neither of them has received any stock option
grants in the last five years.
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. 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 1995 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 1995, the base salaries for all named executive officers
remained unchanged as compared to the prior year. 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 68% 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 1995.
Mr. Paddon's compensation in fiscal 1995 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 1995 levels.
BOARD OF DIRECTORS
Patrick E. Paddon
Michael H. Lowry
Harris Ravine
Glen T. Tsuma
<PAGE>
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>
6/30/90 9/30/90 12/31/90 3/31/91 6/30/91 9/30/91 12/31/91
<S> <C> <C> <C> <C> <C> <C> <C>
AMPI 100 111 129 218 214 214 202
NASD COMP. 100 75 83 107 106 118 133
PEER AVG. 100 106 119 144 119 121 142
(con't)
3/31/92 6/30/92 9/30/92 12/31/92 3/31/93 6/30/93 9/30/93
AMPI 193 168 214 229 284 286 279
NASD COMP. 137 127 133 149 157 161 173
PEER AVG. 151 128 111 106 99 98 120
(con't)
12/31/93 3/31/94 6/30/94 9/30/94 12/31/94 3/31/95 6/30/95
AMPI 289 286 293 279 264 232 225
NASD COMP. 176 168 160 175 173 188 215
PEER AVG. 138 128 132 146 153 183 190
</TABLE>
ITEM 2
APPROVAL OF THE 1995 EQUITY PARTICIPATION PLAN
In September 1995, the Company's Board of Directors adopted
the 1995 Equity Participation Plan of Amplicon, Inc. (the "1995
Plan"). The 1995 Plan succeeds the Company's Stock Option Plan
of 1985 (the "1985 Plan"), which covered 650,000 shares of the
Company's Common Stock and was adopted by the Board of Directors
and then approved by the shareholders in August 1985.
The principal purposes of the 1995 Plan are to provide
incentives for key employees, directors and consultants of the
Company and its subsidiaries through the granting of options,
restricted stock and stock appreciation rights ("SARs"), thereby
stimulating their personal and active interest in the Company's
development and financial success, and inducing them to remain in
the Company's employ.
Under the 1995 Plan, the maximum number of shares of Common
Stock that may be issued upon the exercise of options or SARs, or
upon the vesting of restricted stock awards, is 500,000. Each
fiscal year beginning with the fiscal year beginning July 1,
1996, the maximum number of shares of Common Stock that may be
issued upon the exercise of options or SARs, or upon the vesting
of restricted stock, shall increase by an amount equal to one
percent (1%) of the total number of issued and outstanding shares
of Common Stock as of June 30 of the fiscal year immediately
preceding such fiscal year. However, in no event shall more than
500,000 shares of Common Stock be issued pursuant to the exercise
of incentive stock options (except as subject to adjustments
resulting from stock splits and the like). As of June 30, 1995,
a total of 469,350 shares were subject to outstanding stock
options held by approximately 42 executives, key employees and
directors under the 1985 Plan, and only 10,949 shares remained
available for the grant of new stock options under the 1985 Plan.
No further grants will be made under the 1985 Plan. On October
6, 1995, the closing price of a share of the Company's Common
Stock on the NASDAQ National Market System was $16.75.
The shares of Common Stock available under the 1995 Plan
upon the exercise of stock options and SARs, and for issuance as
restricted stock, may be either previously unissued shares or
treasury shares. The 1995 Plan provides for appropriate
adjustments in the number and kind of shares subject to
<PAGE>
the 1995 Plan and to outstanding grants thereunder in the event
of a stock split, stock dividend or certain other types of
recapitalizations, including restructurings.
If any portion of an option, SAR or restricted stock award
terminates or lapses unexercised, or is canceled upon grant of a
new option, SAR or restricted stock (which may be at a higher or
lower exercise price than the option or SAR so canceled), the
shares which were subject to the unexercised portion of such
option, SAR or restricted stock will continue to be available for
issuance under the 1995 Plan.
The principal features of the 1995 Plan are summarized
below, but the summary is qualified in its entirety by reference
to the 1995 Plan itself. Copies of the 1995 Plan will be
available at the Annual Meeting and can also be obtained by
making written request of the Company's Secretary.
Administration
The 1995 Plan is administered by the Stock Option Committee
or a subcommittee thereof (referred to herein as the
"Committee"), consisting of at least two members of the Board.
The Committee is authorized to select from among the eligible
employees, directors and consultants the individuals to whom
options, SARs and restricted stock purchase rights are to be
granted and to determine the number of shares to be subject
thereto and the terms and conditions thereof, consistent with the
1995 Plan. The Committee is also authorized to adopt, amend and
rescind rules relating to the administration of the 1995 Plan.
Payment for Shares
The exercise or purchase price for all options and
restricted stock awards, together with any applicable tax
required to be withheld, must be paid in full in cash at the time
of exercise or purchase. However, restricted stock and shares
underlying options may, with the approval of the Committee, be
paid in whole or in part in Common Stock of the Company owned by
the optionee or restricted stockholder (or Common Stock issuable
to the optionee upon exercise of an option) and having a fair
market value on the date of exercise equal to the aggregate
exercise or purchase price of the shares to be purchased plus any
taxes required to be withheld. The Committee may also authorize
other lawful consideration to be applied to the purchase price of
restricted stock.
Amendment and Termination
Amendments of the 1995 Plan to increase the number of shares
as to which options, SARs and restricted stock may be granted
(except for the automatic yearly upward adjustments discussed
above and adjustments resulting from stock splits and the like)
require the approval of the Company's shareholders. In all other
respects the 1995 Plan can be amended, modified, suspended or
terminated by the Board, unless such action would otherwise
require shareholder approval as a matter of applicable law,
regulation or rule. Amendments of the 1995 Plan will not,
without the consent of the participant, affect such person's
rights under an award previously granted, unless the award itself
otherwise expressly so provides.
Eligibility
Options, SARs and restricted stock awards under the 1995
Plan may be granted to individuals who are then officers or other
employees of the Company or any of its present or future
subsidiaries and who are determined by the Committee to be key
employees. Such awards (other than incentive stock options) also
may be granted to directors and consultants of the Company
selected by the Committee for participation in the 1995 Plan.
Approximately 200 employees (including one executive officer) and
two non-employee Board members are eligible to participate in the
1995 Plan. More than one option, SAR or restricted stock award
may be granted to a key employee, director or consultant, but the
aggregate fair market value (determined at the time of grant)
of shares with respect to which an incentive stock option
is first exercisable by an optionee during any calendar year
cannot exceed $100,000.
<PAGE>
Awards under the 1995 Plan
The 1995 Plan provides that the Committee may grant or issue
stock options, SARs, restricted stock or any combination thereof.
Each grant or issuance will be set forth in a separate agreement
with the person receiving the award and will indicate the type,
terms and conditions of the award.
Nonqualified stock options ("NSOs") will provide for the
right to purchase Common Stock at a specified price which may be
greater than, equal to or less than fair market value on the date
of grant (but not less than par value), and usually will become
exercisable (in the discretion of the Committee) in one or more
installments after the grant date. NSOs may be granted for any
term specified by the Committee.
Incentive stock options, if granted, will be designed to
comply with the provisions of the Code and will be subject to
restrictions contained in the Code, including the requirement
that their exercise price be equal to at least 100% of fair
market value of Common Stock on the grant date and that their
term be no greater than ten years. Any incentive stock option
granted under the Plan may be subsequently modified by the
Committee to disqualify it from treatment as an incentive stock
option. Incentive stock options may be granted only to
employees. In no event may any incentive stock option be granted
later than ten years after the date the Plan is adopted by
the Board.
Restricted stock may be sold to participants at various
prices and made subject to such restrictions as may be determined
by the Committee. Restricted stock, typically, may be
repurchased by the Company at the original purchase price if the
conditions or restrictions are not met. In general, restricted
stock may not be sold, or otherwise transferred or hypothecated,
until the restrictions are removed or expire. Purchasers of
restricted stock, unlike recipients of options, will have voting
rights and will receive dividends prior to the time when the
restrictions lapse.
Stock appreciation rights may be granted in connection with
stock options, or separately. SARs granted by the Committee in
connection with stock options provide for payments to the holder
based upon increases in the price of the Company's Common Stock
over the exercise price of the related option. There are no
restrictions specified in the 1995 Plan on the exercise of SARs
or the amount of gain realizable therefrom, although they can be
imposed by the Committee in the SAR agreements. The Committee
may elect to pay SARs in cash or in Common Stock or in a
combination of cash and Common Stock.
Miscellaneous Provisions
Options and other rights to acquire Common Stock of the
Company granted under the 1995 Plan may provide for their
termination upon dissolution or liquidation of the Company, the
merger or consolidation of the Company into another corporation,
the acquisition by another corporation of all or substantially
all of the Company's assets, or the acquisition by another
corporation of 80% or more of the Company's then outstanding
voting stock; but in such event the Committee may also give
optionees and other grantees the right to exercise their
outstanding options or rights in full during some period prior to
such event, even though the options or rights have not yet become
fully exercisable. Options and other rights granted under the
1995 Plan may provide that in the event of a "change in control"
of the Company (as defined in the option or grant agreement) all
previously unexercisable options and rights become immediately
exercisable unless such options and rights, or portions thereof,
are determined by the Committee to constitute, when exercised,
"parachute payments" (as defined in Section 280G of the Code).
If any option or other right does not contain such limitation,
and its exercisability is accelerated upon a change in control,
it is possible that an optionee may be liable for an excise tax
on the amount attributable to such acceleration (and any other
payments made in connection with such change in control).
The 1995 Plan specifies that the Company may make loans to
Plan participants to enable them to exercise options, or to
purchase shares of restricted Stock under the Plan. The terms
and conditions of such loans, if any are made, are to be set by
the Committee.
In consideration of the granting of a stock option, SAR or
restricted stock award, the employee, director or consultant must
agree in the written agreement embodying such award to remain in
the employ of, or to
<PAGE>
continue to be of service to, the Company or a subsidiary of the
Company for such period as may be determined in the discretion of
the Committee.
The dates on which options, SARs and awards of restricted
stock first become exercisable or vest, and the dates on which
they expire, will be set forth in the individual agreements
embodying the awards. Such agreements generally will provide
that options, SARs and restricted stock awards expire upon
termination of the optionee's or grantee's status as a director,
employee or consultant, although the Committee may provide that
certain SARs continue to be exercisable following a termination
without cause, or following a change in control of the Company,
or because of the grantee's retirement, death, disability or
otherwise. Similarly, restricted stock granted under the 1995
Plan which has not vested generally will be subject to repurchase
by the Company in the event of the grantee's termination of
employment or consultancy, although the Committee may make
exceptions, based on the reason for termination or on other
factors, in the terms of an individual restricted stock
agreement.
No option, SAR or restricted stock award granted under the
1995 Plan may be assigned or transferred by the optionee or
grantee, except by will or the laws of intestate succession,
although the shares underlying such rights may be transferred if
all applicable restrictions have lapsed. During the lifetime of
the holder of any option or right, the option or right may be
exercised only by the holder.
The Company requires participants to discharge withholding
tax obligations in connection with the exercise of any option or
SAR granted under the 1995 Plan, or in connection with the lapse
of restrictions on restricted stock, as a condition to the
issuance or delivery of stock or the payment of other
compensation. Shares held by, or to be issued to, a participant
may be used to discharge tax withholding obligations related to
the exercise of options or SARs, or the receipt of restricted
stock awards, subject to the discretion of the Committee to
disapprove such use.
Federal Income Tax Consequences
The tax consequences of the 1995 Plan under current federal
law are summarized in the following discussion which deals with
the general tax principles applicable to the 1995 Plan, and is
intended for general information only. In addition, the tax
consequences described below are subject to the limitation of the
1993 Omnibus Budget Reconciliation Act ("OBRA"), as discussed in
further detail below. Alternative minimum tax and state and
local income taxes are not discussed, and may vary depending on
individual circumstances and from locality to locality.
Nonqualified Stock Options. For federal income tax
purposes, the recipient of NSOs granted under the 1995 Plan will
not have taxable income upon the grant of the option, nor will
the Company then be entitled to any deduction. Generally, upon
exercise of NSOs the optionee will realize ordinary income, and
the Company will be entitled to a deduction, in an amount equal
to the difference between the option exercise price and the fair
market value of the stock at the date of exercise. An optionee's
basis for the stock for purposes of determining his gain or loss
on his subsequent disposition of the shares generally will be the
fair market value of the stock on the date of exercise of the
NSO.
Incentive Stock Options. There is no taxable income to an
employee when an ISO is granted to him or when that option is
exercised; however, the amount by which the fair market value of
the shares at the time of exercise exceeds the option price will
be an "item of adjustment" for the optionee for purposes of
alternative minimum tax. Gain realized by an optionee upon sale
of stock issued on exercise of an ISO is taxable at capital gains
rates, and no tax deduction is available to the Company, unless
the optionee disposes of the shares within two years after the
date of grant of the option or within one year of the date the
shares were transferred to the optionee. In such event the
difference between the option exercise price and the fair market
value of the shares on the date of the option's exercise will be
taxed at ordinary income rates, and the Company will be entitled
to a deduction to the extent the employee must recognize ordinary
income. An ISO exercised more than three months after an
optionee's retirement from employment, other than by reason of
death or disability, will be taxed as an NSO, with the optionee
recognizing income upon such exercise taxable at ordinary income
tax rates. The Company will be entitled to a tax deduction equal
to the ordinary income, if any, realized by the optionee.
<PAGE>
Stock Appreciation Rights. No taxable income is realized
upon the receipt of an SAR, but upon exercise of the SAR the fair
market value of the shares (or cash in lieu of shares) received
must be treated as compensation taxable as ordinary income to the
recipient in the year of such exercise. The Company will be
entitled to a deduction for compensation paid in the same amount
which the recipient realized as ordinary income.
Restricted Stock. An employee to whom restricted stock is
issued will not have taxable income upon issuance and the Company
will not then be entitled to a deduction, unless an election is
made under Section 83(b) of the Code. However, when restrictions
on shares of restricted stock lapse, such that the shares are no
longer subject to repurchase by the Company, the employee will
realize ordinary income and the Company will be entitled to a
deduction in an amount equal to the fair market value of the
shares at the date such restrictions lapse, less the purchase
price therefor. If an election is made under Section 83(b), the
employee will realize ordinary income at the date of issuance
equal to the difference between the fair market value of the
shares at that date less the purchase price therefor and the
Company will be entitled to a deduction in the same amount.
Effect of 1993 Omnibus Budget Reconciliation Act on the 1995
Plan. Under OBRA, which became law in August 1993, income tax
deductions of publicly-traded companies may be limited to the
extent total compensation (including base salary, annual bonus,
stock option exercises and nonqualified benefits paid in 1994 and
thereafter) for certain executive officers exceeds $1 million
(less the amount of any "parachute payments" as defined in
Section 280G of the Code) in any one taxable year. However,
under OBRA, the deduction limit does not apply to certain
"performance-based" compensation established by an independent
compensation committee which conforms to certain restrictive
conditions stated under the Code and related regulations.
Because the Company currently does not expect the deductible
compensation for any executive in any taxable year to exceed $1
million, the Company is not seeking to conform the 1995 Plan to
the restrictive conditions of the OBRA legislation and related
regulations.
Reasons for Adoption of the 1995 Plan
The 1985 Plan currently provides that 650,000 shares of
Common Stock are authorized for issuance. As of July 1, 1995,
approximately 10,949 shares remained available for future awards
under the 1985 Plan. Also on that date, options held by
approximately 42 executives, key employees and directors covering
approximately 469,350 shares were outstanding under the 1985
Plan, of which approximately 219,000 were exercisable. No further
grants may be made under the 1985 Plan. The Board of Directors
has determined that it is advisable to continue to provide
stock-based incentive compensation to the Company's key employees
and consultants, and additionally to directors, thereby
continuing to align the interests of such individuals with those
of the shareholders, and that awards under the 1995 Plan are an
effective means of providing such compensation. Therefore, the
Board recommends that the 1995 Plan be adopted, and that 500,000
shares of Common Stock (subject to automatic yearly upward
adjustments, as discussed above) be reserved for issuance upon
the exercise of options and SARs, or upon the sale of restricted
stock.
Required Vote for Approval and Recommendation of the Board of
Directors
The affirmative vote of a majority of the shares present or
represented and entitled to vote at the Annual Meeting is
required to approve the 1995 Plan. The Board of Directors
recommends a vote FOR approval of the 1995 Plan.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has not yet selected its independent public
accountants for the year ended June 30, 1996 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, 1995, 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.
<PAGE>
ANNUAL REPORT AND OTHER SEC FILINGS
The Company's Annual Report, containing audited financial
statements for the fiscal years ended June 30, 1995 and 1994,
accompanies this Proxy Statement. Upon 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,
1995, 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 1995 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.
PROPOSALS OF SHAREHOLDERS
All proposals of shareholders intended to be presented at
the Company's 1996 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 June 26, 1996 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 /s/
Secretary
Santa Ana, California
October 23, 1995
<PAGE>
APPENDIX 1
THE 1995 EQUITY PARTICIPATION PLAN
OF
AMPLICON, INC.
Amplicon, Inc., a California corporation, has adopted
The 1995 Equity Participation Plan of Amplicon, Inc. (the
"Plan"), effective September 25, 1995, for the benefit of its
eligible Employees, consultants and Directors. The purposes of
this Plan are as follows:
(1) To provide an additional incentive for Directors,
key Employees and consultants to further the growth, development
and financial success of the Company by personally benefiting
through the ownership of Company stock and/or rights which
recognize such growth, development and financial success.
(2) To enable the Company to obtain and retain the
services of Directors, key Employees and consultants considered
essential to the long range success of the Company by offering
them an opportunity to own stock in the Company and/or rights
which will reflect the growth, development and financial success
of the Company.
ARTICLE I
DEFINITIONS
1.1 General. Wherever the following terms are used in
this Plan they shall have the meanings specified below, unless
the context clearly indicates otherwise.
1.2 Board. "Board" shall mean the Board of Directors
of the Company.
1.3 Code. "Code" shall mean the Internal Revenue Code
of 1986, as amended.
1.4 Committee. "Committee" shall mean the Stock
Option Committee of the Board, or a subcommittee of the Board,
appointed as provided in Section 8.1.
1.5 Common Stock. "Common Stock" shall mean the
common stock of the Company, par value $.01 per share.
1.6 Company. "Company" shall mean Amplicon, Inc., a
California corporation.
1.7 Director. "Director" shall mean a member of the
Board.
1.8 Employee. "Employee" shall mean any officer or
other employee (as defined in accordance with Section 3401(c) of
the Code) of the Company, or of any corporation which is a
Subsidiary.
<PAGE>
1.9 Exchange Act. "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.
1.10 Fair Market Value. "Fair Market Value" of a share
of Common Stock as of a given date shall be (i) the mean between
the highest and lowest selling price of a share of Common Stock
on the principal exchange on which shares of Common Stock are
then trading, if any, on such date, or if shares were not traded
on such date, then on the most recent preceding date on which a
trade occurred, or (ii) if Common Stock is not traded on an
exchange, the mean between the closing representative bid and
asked prices for a share of Common Stock on such date as reported
by NASDAQ or, if NASDAQ is not then in existence, by its
successor quotation system; or (iii) if Common Stock is not
publicly traded, the fair market value of a share of Common Stock
as established by the Committee acting in good faith.
1.11 Grantee. "Grantee" shall mean an Employee, Director
or consultant granted a Stock Appreciation Right under this Plan.
1.12 Incentive Stock Option. "Incentive Stock Option"
shall mean an Option which conforms to the applicable provisions
of Section 422 of the Code and which is designated as an
Incentive Stock Option by the Committee.
1.13 Independent Director. "Independent Director"
shall mean a Director who is not an Employee.
1.14 Non-Qualified Stock Option. "Non-Qualified Stock
Option" shall mean an Option which is not designated as an
Incentive Stock Option by the Committee.
1.15 Option. "Option" shall mean a stock option
granted under Article III of this Plan. An Option granted under
this Plan shall, as determined by the Committee, be either a Non-
Qualified Stock Option or an Incentive Stock Option; provided,
however, that Options granted to Independent Directors and
consultants shall be Non-Qualified Stock Options.
1.16 Optionee. "Optionee" shall mean a Director,
Employee or consultant granted an Option under this Plan.
1.17 Plan. "Plan" shall mean The 1995 Equity
Participation Plan of Amplicon, Inc.
1.18 QDRO. "QDRO" shall mean any qualified domestic
relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act of 1974, as amended, or the rules
and regulations thereunder.
1.19 Restricted Stock. "Restricted Stock" shall mean
shares of Common Stock awarded under Article VI of this Plan.
1.20 Restricted Stockholder. "Restricted Stockholder"
shall mean an Employee, Director or consultant granted an award of
Restricted Stock under Article VI of this Plan.
1.21 Rule 16b-3. "Rule 16b-3" shall mean that certain
Rule 16b-3 under the Exchange Act, as such Rule may be amended
from time to time.
<PAGE>
1.22 Stock Appreciation Right. "Stock Appreciation
Right" shall mean a stock appreciation right granted under
Article VII of this Plan.
1.23 Subsidiary. "Subsidiary" shall mean any
corporation in an unbroken chain of corporations beginning with
the Company if each of the corporations other than the last
corporation in the unbroken chain then owns stock possessing 50
percent or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
1.24 Termination of Consultancy. "Termination of
Consultancy" shall mean the time when an Optionee who is a
consultant ceases to be a consultant for any reason. The Board,
in its sole and absolute discretion, shall determine the effect
of all matters and questions relating to Termination of
Consultancy.
1.25 Termination of Directorship. "Termination of
Directorship" shall mean the time when an Optionee who is a
Director ceases to be a Director for any reason,
including, but not by way of limitation, a termination by
resignation, removal, failure to be elected, death or retirement.
The Board, in its sole and absolute discretion, shall determine
the effect of all matters and questions relating to Termination
of Directorship.
1.26 Termination of Employment. "Termination of
Employment" shall mean the time when the employee-employer
relationship between an Optionee, Grantee or Restricted
Stockholder and the Company or any Subsidiary is terminated for
any reason, including, but not by way of limitation, a
termination by resignation, discharge, death, disability or
retirement; but excluding (i) a termination where there is a
simultaneous reemployment or continuing employment of the
Optionee, Grantee or Restricted Stockholder by the Company or any
Subsidiary, (ii) at the discretion of the Committee, a
termination which results in a temporary severance of the
employee-employer relationship, and (iii) at the discretion of
the Committee, a termination which is followed by the
simultaneous establishment of a consulting relationship by the
Company or a Subsidiary with the former employee. The Committee,
in its absolute discretion, shall determine the effect of all
matters and questions relating to Termination of Employment,
including, but not by way of limitation, the question of whether
a Termination of Employment resulted from a discharge for good
cause, and all questions of whether particular leaves of absence
constitute Terminations of Employment; provided, however, that,
with respect to Incentive Stock Options, a leave of absence or
other change in the employee-employer relationship shall
constitute a Termination of Employment if, and to the extent
that, such leave of absence or other change interrupts employment
for the purposes of Section 422(a)(2) of the Code and the then
applicable regulations and revenue rulings under said Section.
Notwithstanding any other provision of this Plan, the Company or
any Subsidiary has an absolute and unrestricted right to
terminate an Employee's employment at any time for any reason
whatsoever, with or without cause, except to the extent expressly
provided otherwise in writing.
<PAGE>
ARTICLE II
SHARES SUBJECT TO PLAN
2.1 Shares Subject to Plan. The shares of stock
subject to Options, awards of Restricted Stock or Stock
Appreciation Rights shall be shares of Common Stock. The
aggregate number of shares of Common Stock that may be issued
pursuant to the exercise of Options or Stock Appreciation Rights
under the Plan, or pursuant to an award of Restricted Stock under
the Plan, shall not exceed five hundred thousand (500,000). On
the July 1 of each fiscal year beginning with the fiscal year
commencing July 1, 1996, the aggregate number of shares of Common
Stock that may be issued pursuant to the exercise of Options or
Stock Appreciation Rights under the Plan, or pursuant to an award
of Restricted Stock under the Plan, shall increase by an amount
equal to one percent (1%) of the total number of issued and
outstanding shares of Common Stock as of June 30 of the fiscal
year immediately preceding such fiscal year; provided, however,
that in no event, except as subject to adjustment as provided in
Section 9.3, shall more than five hundred thousand (500,000)
shares of Common Stock be issued pursuant to the exercise of
Incentive Stock Options.
2.2 Unexercised Options and Other Rights. If any
Option, or other right to acquire shares of Common Stock under
any other award under this Plan, expires or is cancelled without
having been fully exercised, the number of shares subject to such
Option or other right but as to which such Option or other right
was not exercised prior to its expiration or cancellation may
again be optioned, granted or awarded hereunder, subject to the
limitations of Section 2.1.
ARTICLE III
GRANTING OF OPTIONS
3.1 Eligibility. Any Director, Employee
or consultant selected by the Committee pursuant to Section
3.4(a)(i) shall be eligible to be granted an Option.
3.2 Disqualification for Stock Ownership. No person
may be granted an Incentive Stock Option under this Plan if such
person, at the time the Incentive Stock Option is granted, owns
stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or
any then existing Subsidiary unless such Incentive Stock Option
conforms to the applicable provisions of Section 422 of the Code.
3.3 Qualification of Incentive Stock Options. No
Incentive Stock Option shall be granted unless such Option, when
granted, qualifies as an "incentive stock option" under Section
422 of the Code. No Incentive Stock Option shall be granted to
any person who is not an Employee.
3.4 Granting of Options
(a) The Committee shall from time to time, in its
absolute discretion, and subject to applicable limitations of
this Plan:
<PAGE>
(i) Determine which Employees are key Employees
and select from among the Directors, key Employees
or consultants (including Employees or consultants
who have previously received Options or other awards under
this Plan) such of them as in its opinion should be granted
Options;
(ii) Determine the number of shares to be
subject to such Options granted to the selected Directors,
key Employees or consultants;
(iii) Determine whether such Options are to be
Incentive Stock Options or Non-Qualified Stock Options; and
(iv) Determine the terms and conditions of such
Options, consistent with this Plan.
(b) Upon the selection of a Director, Employee or
consultant to be granted an Option, the Committee shall instruct
the Secretary of the Company to issue the Option and may
impose such conditions on the grant of the Option as it
deems appropriate. Without limiting the generality of the
preceding sentence, the Committee may, in its discretion and on
such terms as it deems appropriate, require as a condition on the
grant of an Option to a Director, Employee or consultant that
such individual surrender for cancellation some or all of the
unexercised Options, awards of Restricted Stock, Stock
Appreciation Rights or other rights which have been previously
granted to him under this Plan or otherwise. An Option,
the grant of which is conditioned upon such surrender,
may have an option price lower (or higher) than the exercise
price of such surrendered Option or other award, may cover the
same (or a lesser or greater) number of shares as such
surrendered Option or other award, may contain such other terms
as the Committee deems appropriate, and shall be exercisable in
accordance with its terms, without regard to the number of
shares, price, exercise period or any other term or condition of
such surrendered Option or other award.
(c) Any Incentive Stock Option granted under this
Plan may be modified by the Committee to disqualify such option
from treatment as an "incentive stock option" under Section 422
of the Code.
ARTICLE IV
TERMS OF OPTIONS
4.1 Option Agreement. Each Option shall be evidenced
by a written Stock Option Agreement, which shall be executed by
the Optionee and an authorized officer of the Company and which
shall contain such terms and conditions as the Committee shall
determine, consistent with this Plan. Stock Option Agreements
evidencing Incentive Stock Options shall contain such terms and
conditions as may be necessary to meet the applicable provisions
of Section 422 of the Code.
4.2 Option Price. The price per share of the shares
subject to a Non-Qualified Stock Option shall be set by the
Committee and may be greater than, equal to or less than the Fair
Market Value of the shares subject to the Option on the grant
date; provided, however, that such price shall be no less than
the par value of a share of Common Stock. In the
<PAGE>
case of an Incentive Stock Option, the price per share of the
shares subject to the Option shall not be less than the greater
of: (i) 100% of the Fair Market Value of a share of Common
Stock on the date the Option is granted, or (ii) 110% of the
Fair Market Value of a share of Common Stock on the date the
Option is granted in the case of an Optionee then owning
(within the meaning of Section 424(d) of the Code) more than 10%
of the total combined voting power of all classes of stock of
the Company or any Subsidiary.
4.3 Option Term. The term of an Option shall be set
by the Committee in its discretion; provided, however, that, in
the case of an Incentive Stock Option, the term shall not be more
than ten (10) years from the date the Incentive Stock Option is
granted, or five (5) years from such date if the Incentive Stock
Option is granted to an Optionee then owning (within the meaning
of Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company or
any Subsidiary. Except as limited by the requirements of Section
422 of the Code and the regulations and rulings thereunder
applicable to Incentive Stock Options, the Committee may extend
the term of any outstanding Option in connection with any
Termination of Employment or Termination of Directorship of the
Optionee, or amend any other term or condition of such Option
relating to such a termination.
4.4 Option Vesting
(a) The period during which the right to exercise an
Option in whole or in part vests in the Optionee shall be set by
the Committee and the Committee may determine that an Option may
not be exercised in whole or in part for a specified period after
it is granted. At any time after grant of an Option, the
Committee may, in its sole discretion and subject to whatever
terms and conditions it selects, accelerate the period during
which an Option vests.
(b) No portion of an Option which is unexercisable at
Termination of Employment, Termination of Directorship or
Termination of Consultancy, as applicable, shall thereafter
become exercisable, except as may be otherwise provided by the
Committee either in the Stock Option Agreement or in a resolution
adopted following the grant of the Option.
(c) To the extent that the aggregate Fair Market
Value of stock with respect to which "incentive stock options"
(within the meaning of Section 422 of the Code, but without
regard to Section 422(d) of the Code) are exercisable for the
first time by an Optionee during any calendar year (under the
Plan and all other incentive stock option plans of the Company
and any Subsidiary) exceeds $100,000, the Options (or portions
thereof) granted to such Optionee shall be treated as Non-
Qualified Stock Options as required by Section 422 of the Code.
The rule set forth in the preceding sentence shall be applied by
taking Options and other options into account in the order in
which they were granted. For purposes of this Section 4.4(c),
the Fair Market Value of stock shall be determined as of the time
the Option or option with respect to such stock is granted.
4.5 Consideration. In consideration of the granting
of an Option, the Optionee shall agree, in the written Stock
Option Agreement, to remain in the employ of (or to consult for
or to serve as a Director of, as applicable) the Company
or any Subsidiary for such period of time as may be
determined in the discretion of the Committee (or until the next
annual meeting of shareholders of the Company, in the case of a
Director). Nothing in this Plan or in any Stock
Option Agreement hereunder shall confer upon
<PAGE>
any Optionee any right to continue in the employ of, or as a
consultant for, the Company or any Subsidiary, or as a director
of the Company, or shall interfere with or restrict in any way
the rights of the Company and any Subsidiary, which are hereby
expressly reserved, to discharge any Optionee at any time for
any reason whatsoever, with or without good cause.
ARTICLE V
EXERCISE OF OPTIONS
5.1 Partial Exercise. An exercisable Option may be
exercised in whole or in part. However, an Option shall not be
exercisable with respect to fractional shares and the Committee
may require that, by the terms of the Option, a partial exercise
be with respect to a minimum number of shares.
5.2 Manner of Exercise. All or a portion of an
exercisable Option shall be deemed exercised upon delivery of all
of the following to the Secretary of the Company or his office:
(a) A written notice complying with the applicable
rules established by the Committee stating that the Option, or a
portion thereof, is exercised. The notice shall be signed by the
Optionee or other person then entitled to exercise the Option or
such portion;
(b) Such representations and documents as the
Committee, in its absolute discretion, deems necessary or
advisable to effect compliance with all applicable provisions of
the Securities Act of 1933, as amended, and any other federal or
state securities laws or regulations. The Committee may, in its
absolute discretion, also take whatever additional actions it
deems appropriate to effect such compliance including, without
limitation, placing legends on share certificates and issuing
stop-transfer notices to agents and registrars;
(c) In the event that the Option shall be exercised
pursuant to Section 9.1 by any person or persons other than the
Optionee, appropriate proof of the right of such person or
persons to exercise the Option; and
(d) Full cash payment to the Company for the shares
with respect to which the Option, or portion thereof, is
exercised. However, at the discretion of the Committee, the
terms of the Option may (i) allow payment, in whole or in part,
through the delivery of shares of Common Stock owned by the
Optionee, duly endorsed for transfer to the Company with a Fair
Market Value on the date of delivery equal to the aggregate
exercise price of the Option or exercised portion thereof;
(ii) subject to the timing requirements of Section 5.3, allow
payment, in whole or in part, through the surrender of shares of
Common Stock then issuable upon exercise of the Option having a
Fair Market Value on the date of Option exercise equal to the
aggregate exercise price of the Option or exercised portion
thereof; (iii) allow payment, in whole or in part, through the
delivery of a full recourse promissory note bearing interest (at
no less than such rate as shall then preclude the imputation of
interest under the Code) and payable upon such terms as may be
prescribed by the Committee, or (iv) allow payment through any
combination of the consideration provided in the foregoing
subparagraphs (i), (ii) and (iii). In the case of a promissory
note, the Committee may also prescribe the form of such note and
the security to be given for such note. The Option may not be
exercised, however, by delivery of a promissory note
<PAGE>
or by a loan from the Company when or where such loan or other
extension of credit is prohibited by law.
5.3 Certain Timing Requirements. At the discretion
of the Committee, shares of Common Stock issuable to the Optionee
upon exercise of the Option may be used to satisfy the Option
exercise price or the tax withholding consequences of such
exercise, in the case of persons subject to Section 16 of the
Exchange Act, only (i) during the period beginning on the third
business day following the date of release of the quarterly or
annual summary statement of sales and earnings of the Company and
ending on the twelfth business day following such date or
(ii) pursuant to an irrevocable written election by the Optionee
to use shares of Common Stock issuable to the Optionee upon
exercise of the Option to pay all or part of the Option price or
the withholding taxes, provided, however, that such irrevocable
written election must be made at least six months prior to the
payment of such Option price or withholding taxes.
5.4 Conditions to Issuance of Stock Certificates.
The Company shall not be required to issue or deliver any
certificate or certificates for shares of stock purchased upon
the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all
stock exchanges on which such class of stock is then listed;
(b) The completion of any registration or other
qualification of such shares under any state or federal law, or
under the rulings or regulations of the Securities and Exchange
Commission or any other governmental regulatory body which the
Committee, in its absolute discretion, deem necessary or
advisable;
(c) The obtaining of any approval or other clearance
from any state or federal governmental agency which the Committee
shall, in its absolute discretion, determine to be necessary or
advisable;
(d) The lapse of such reasonable period of time
following the exercise of the Option as the Committee may
establish from time to time for reasons of administrative
convenience; and
(e) The receipt by the Company of full payment for
such shares, including payment of any applicable withholding tax.
5.5 Rights as Shareholders. A holder of an Option
shall not be, nor have any of the rights or privileges of, a
shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of an Option unless and until
certificates representing such shares have been issued by the
Company to such holder.
5.6 Ownership and Transfer Restrictions. The
Committee, in its absolute discretion, may impose such
restrictions on the ownership and transferability of the shares
purchasable upon the exercise of an Option as it deems
appropriate. Any such restriction shall be set forth in the
respective Stock Option Agreement and may be referred to on the
certificates evidencing such shares. The Committee may require
an Employee to give the Company prompt notice of any disposition
of shares of Common Stock acquired by exercise of an Incentive
Stock Option within (i) two years from the date of granting such
Option to such Employee or (ii) one
<PAGE>
year after the transfer of such shares to such Employee. The
Committee may direct that the certificates evidencing shares
acquired by exercise of an Option refer to such requirement
to give prompt notice of disposition.
ARTICLE VI
AWARD OF RESTRICTED STOCK
6.1 Award of Restricted Stock
(a) The Committee shall from time to time, in its
absolute discretion:
(i) Select from among the key Employees,
Directors or consultants (including any who have previously
received Restricted Stock or other awards under this Plan)
such of them as in its opinion should be awarded
Restricted Stock; and
(ii) Determine the purchase price, if any, and
other terms and conditions applicable to such Restricted
Stock, consistent with this Plan.
(b) The Committee shall establish the purchase price,
if any, and form of payment for Restricted Stock. In all cases,
legal consideration shall be required for each issuance of
Restricted Stock.
(c) Upon the selection of a key Employee, Director or
consultant to be awarded Restricted Stock, the Committee shall instruct
the Secretary of the Company to issue such Restricted Stock and
may impose such conditions on the issuance of such Restricted
Stock as it deems appropriate.
6.2 Restricted Stock Agreement. Restricted Stock
shall be issued only pursuant to a written Restricted Stock
Agreement, which shall be executed by the selected key Employee,
Director or consultant and an authorized officer of the Company and
which shall contain such terms and conditions as the Committee shall
determine, consistent with this Plan.
6.3 Consideration. As consideration for the issuance
of Restricted Stock, in addition to payment of any purchase
price, the Restricted Stockholder shall agree, in the written
Restricted Stock Agreement, to remain in the employ of, or to
consult for, the Company or any Subsidiary for such period of
time as may be determined in the discretion of the Committee.
Nothing in this Plan or in any Restricted Stock Agreement
hereunder shall confer on any Restricted Stockholder any right to
continue in the employ of, or as a consultant for, the Company or
any Subsidiary or shall interfere with or restrict in any way the
rights of the Company and any Subsidiary, which are hereby
expressly reserved, to discharge any Restricted Stockholder at
any time for any reason whatsoever, with or without good cause.
6.4 Rights as Shareholders. Upon delivery of the
shares of Restricted Stock to the escrow holder pursuant to
Section 6.7, the Restricted Stockholder shall have, unless
otherwise provided by the Committee, all the rights of a
shareholder with respect to said shares, subject to the
restrictions in his Restricted Stock Agreement, including the
right to receive all dividends and other distributions paid or
made with respect to the shares; provided, however, that
<PAGE>
in the discretion of the Committee, any extraordinary
distributions with respect to the Common Stock shall be subject
to the restrictions set forth in Section 6.5.
6.5 Restriction. All shares of Restricted Stock
issued under this Plan (including any shares received by holders
thereof with respect to shares of Restricted Stock as a result of
stock dividends, stock splits or any other form of
recapitalization) shall, in the terms of each individual
Restricted Stock Agreement, be subject to such restrictions as
the Committee shall provide, which restrictions may include,
without limitation, restrictions concerning voting rights and
transferability and restrictions based on duration of employment
or consultancy with the Company, Company performance and
individual performance; provided, however, that, by a resolution
adopted after the Restricted Stock is issued, the Committee may,
on such terms and conditions as it may determine to be
appropriate, remove any or all of the restrictions imposed by the
terms of the Restricted Stock Agreement. Restricted Stock may
not be sold or encumbered until all restrictions are terminated
or expire. Unless provided otherwise by the Committee, if no
consideration was paid by the Restricted Stockholder upon
issuance, a Restricted Stockholder's rights in unvested
Restricted Stock shall lapse upon Termination of Employment,
Termination of Directorship or Termination of Consultancy,
as applicable.
6.6 Repurchase of Restricted Stock. The Committee
shall provide in the terms of each individual Restricted Stock
Agreement that the Company shall have the right to repurchase
from the Restricted Stockholder the Restricted Stock then subject
to restrictions under the Restricted Stock Agreement immediately
upon a Termination of Employment, Termination of Directorship or
Termination of Consultancy,as applicable, at a cash price per share
equal to the price paid by the Restricted Stockholder for such
Restricted Stock; provided, however, that provision may be made
that no such right of repurchase shall exist in the event of a
Termination of Employment, Termination of Directorship or
Termination of Consultancy without cause, or following a change in
control of the Company or because of the Restricted Stockholder's
retirement, death or disability, or otherwise.
6.7 Escrow. The Secretary of the Company or such
other escrow holder as the Committee may appoint shall retain
physical custody of each certificate representing shares of
Restricted Stock until all of the restrictions imposed under the
Restricted Stock Agreement with respect to the shares evidenced
by such certificate expire or shall have been removed.
6.8 Legend. In order to enforce the restrictions
imposed upon shares of Restricted Stock hereunder, the Committee
shall cause a legend or legends to be placed on certificates
representing all shares of Restricted Stock that are still
subject to restrictions under Restricted Stock Agreements, which
legend or legends shall make appropriate reference to the
conditions imposed thereby.
<PAGE>
ARTICLE VII
STOCK APPRECIATION RIGHTS
7.1 Grant of Stock Appreciation Rights. A Stock
Appreciation Right may be granted to any key Employee, Director or
consultant selected by the Committee. A Stock Appreciation Right
may be granted (i) in connection and simultaneously with the
grant of an Option, (ii) with respect to a previously granted
Option, or (iii) independent of an Option. A Stock Appreciation
Right shall be subject to such terms and conditions not
inconsistent with this Plan as the Committee shall impose and
shall be evidenced by a written Stock Appreciation Right Agree
ment, which shall be executed by the Grantee and an authorized
officer of the Company. Without limiting the generality of the
foregoing, the Committee may, in its discretion and on such terms
as it deems appropriate, require as a condition of the grant of a
Stock Appreciation Right to an Employee, Director or consultant that
the Employee, Director or consultant surrender for cancellation some
or all of the unexercised Options, awards of Restricted Stock, Stock
Appreciation Rights or other rights which have been previously
granted to him under this Plan or otherwise. A Stock
Appreciation Right, the grant of which is conditioned upon such
surrender, may have an exercise price lower (or higher) than the
exercise price of the surrendered Option or other award, may
cover the same (or a lesser or greater) number of shares as such
surrendered Option or other award, may contain such other terms
as the Committee deems appropriate, and shall be exercisable in
accordance with its terms, without regard to the number of
shares, price, exercise period or any other term or condition of
such surrendered Option or other award.
7.2 Coupled Stock Appreciation Rights
(a) A Coupled Stock Appreciation Right ("CSAR") shall
be related to a particular Option and shall be exercisable only
when and to the extent the related Option is exercisable.
(b) A CSAR may be granted to the Grantee for no more
than the number of shares subject to the simultaneously or
previously granted Option to which it is relates.
(c) A CSAR shall entitle the Grantee (or other person
entitled to exercise the Option pursuant to this Plan) to surren
der to the Company unexercised a portion of the Option to which
the CSAR relates (to the extent then exercisable pursuant to its
terms) and to receive from the Company in exchange therefor an
amount determined by multiplying the difference obtained by
subtracting the Option exercise price from the Fair Market Value
of a share of Common Stock on the date of exercise of the CSAR,
by the number of shares of Common Stock with respect to which the
CSAR shall have been exercised, subject to any limitations the
Committee may impose.
<PAGE>
7.3 Independent Stock Appreciation Rights
(a) An Independent Stock Appreciation Right ("ISAR")
shall not be related to any Option and shall have a term set by
the Committee. An ISAR shall be exercisable in such installments
as the Committee may determine. An ISAR shall cover such number
of shares of Common Stock as the Committee may determine. The
exercise price per share of Common Stock subject to each ISAR
shall be set by the Committee. An ISAR is exercisable only while
the Grantee is an Employee or consultant; provided, however, that
the Committee may determine that the ISAR may be exercised
subsequent to Termination of Employment, Termination of Directorship
or Termination of Consultancy without cause, or following a change
in control of the Company, or because of the Grantee's retirement,
death or disability, or otherwise.
(b) An ISAR shall entitle the Grantee (or other
person entitled to exercise the ISAR pursuant to this Plan) to
exercise all or a specified portion of the ISAR (to the extent
then exercisable pursuant to its terms) and to receive from the
Company an amount determined by multiplying the difference
obtained by subtracting the exercise price per share of the ISAR
from the Fair Market Value of a share of Common Stock on the date
of exercise of the ISAR, by the number of shares of Common Stock
with respect to which the ISAR shall have been exercised, subject
to any limitations the Committee may impose.
7.4 Payment and Limitations on Exercise
(a) Payment of the amount determined under Section
7.2(c) and 7.3(b) above shall be in cash, in shares of Common
Stock (based on its Fair Market Value as of the date the Stock
Appreciation Right is exercised) or a combination of both, as
determined by the Committee. To the extent such payment is
effected in shares of Common Stock, it shall be made subject to
satisfaction of all provisions of Section 5.4 hereinabove
pertaining to Options.
(b) Grantees of Stock Appreciation Rights who are
subject to Section 16 of the Exchange Act may, in the discretion
of the Committee, be required to comply with any timing or other
restrictions under Rule 16b-3 applicable to the settlement or
exercise of a Stock Appreciation Right.
7.5 Consideration. In consideration of the granting
of a Stock Appreciation Right, the Grantee shall agree, in the
written Stock Appreciation Right Agreement, to remain in the
employ of, or to consult for, the Company or any Subsidiary for
such period of time as may be determined in the discretion of the
Committee. Nothing in this Plan or in any Stock Appreciation
Right Agreement hereunder shall confer on any Grantee any right
to continue in the employ of, or as a consultant for, the Company
or any Subsidiary or shall interfere with or restrict in any way
the rights of the Company and any Subsidiary, which are hereby
expressly reserved, to discharge any Grantee at any time for any
reason whatsoever, with or without good cause.
<PAGE>
ARTICLE VIII
ADMINISTRATION
8.1 Stock Option Committee. The Stock Option
Committee (or a subcommittee of the Board assuming the functions
of the Committee under this Plan) shall consist of two or more
Directors appointed by and holding office at the pleasure of the
Board, each of whom is a "disinterested person" as defined by
Rule 16b-3. Appointment of Committee members shall be effective
upon acceptance of appointment. Committee members may resign at
any time by delivering written notice to the Board. Vacancies in
the Committee may be filled by the Board.
8.2 Duties and Powers of Committee. It shall be the
duty of the Committee to conduct the general administration of
this Plan in accordance with its provisions. The Committee shall
have the power to interpret this Plan and the agreements pursuant
to which Options, awards of Restricted Stock or Stock
Appreciation Rights are granted or awarded, and to adopt such
rules for the administration, interpretation, and application of
this Plan as are consistent therewith and to interpret, amend or
revoke any such rules. Any such grant or award under this Plan
need not be the same with respect to each Optionee, Grantee or
Restricted Stockholder. Any such interpretations and rules with
respect to Incentive Stock Options shall be consistent with the
provisions of Section 422 of the Code and the regulations
thereunder. In its absolute discretion, the Board may at any
time and from time to time exercise any and all rights and duties
of the Committee under this Plan except with respect to matters
which under Rule 16b-3 are required to be determined in the sole
discretion of the Committee.
8.3 Majority Rule. The Committee shall act by a
majority of its members in attendance at a meeting at which a
quorum is present or by a memorandum or other written instrument
signed by all members of the Committee.
8.4 Compensation; Professional Assistance; Good Faith
Actions. Members of the Committee shall receive such compensa
tion for their services as members as may be determined by the
Board. All expenses and liabilities which members of the
Committee incur in connection with the administration of this
Plan shall be borne by the Company. The Committee may, with the
approval of the Board, employ attorneys, consultants, accoun
tants, appraisers, brokers or other persons. The Committee, the
Company and the Company's officers and Directors shall be enti
tled to rely upon the advice, opinions or valuations of any such
persons. All actions taken and all interpretations and determina
tions made by the Committee in good faith shall be final and
binding upon all Optionees, Grantees, Restricted Stockholders,
the Company and all other interested persons. No members of the
Committee or Board shall be personally liable for any action,
determination or interpretation made in good faith with respect
to this Plan, Options, awards of Restricted Stock or Stock
Appreciation Rights, and all members of the Committee shall be
fully protected by the Company in respect of any such action,
determination or interpretation.
<PAGE>
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Not Transferable. Options, Restricted Stock
awards and Stock Appreciation Rights under this Plan may not be
sold, pledged, assigned, or transferred in any manner other than
by will or the laws of descent and distribution, unless and until
such rights or awards have been exercised, or the shares
underlying such rights or awards have been issued, and all
restrictions applicable to such shares have lapsed. No Option,
Restricted Stock award, Stock Appreciation Right or interest or
right therein, shall be liable for the debts, contracts or
engagements of the Optionee, Grantee or Restricted Stockholder or
his successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition
thereof shall be null and void and of no effect; provided,
however, that this Section 9.1 shall not prevent (i) transfers by
will or by the applicable laws of descent and distribution, (ii)
the designation by the Optionee or Grantee of a beneficiary to
exercise the Optionee's Option or other right or award (or any
portion thereof) granted under the Plan after the Optionee's or
Grantee's death, or (iii) transfers in accordance with such
requirements as are prescribed by the Committee and in
accordance with the Code and applicable regulations.
During the lifetime of the Optionee or Grantee, only
he, or an alternate payee under a QDRO, may exercise an Option or
other right or award (or any portion thereof) granted to him
under the Plan. After the death of the Optionee or Grantee, any
exercisable portion of an Option or other right or award may,
prior to the time when such portion becomes unexercisable under
the Plan or the applicable Stock Option Agreement or other
agreement, be exercised by his personal representative or by any
person empowered to do so under the deceased Optionee's or
Grantee's beneficiary designation, will or under the then appli
cable laws of descent and distribution.
9.2 Amendment, Suspension or Termination of this
Plan. This Plan may be wholly or partially amended or otherwise
modified, suspended or terminated at any time or from time to
time by the Board. However, without approval of the Company's
shareholders given within twelve months before or after the
action by the Board, no action of the Board may, except as
provided in Section 9.3, increase the limits imposed in Section
2.1 on the maximum number of shares which may be issued under
this Plan, and no action of the Board may be taken that would
otherwise require shareholder approval as a matter of applicable
law, regulation or rule. No amendment, suspension or termination
of this Plan shall, without the consent of the holder of Options,
Restricted Stock awards or Stock Appreciation Rights alter or
impair any rights or obligations under any Options, Restricted
Stock awards or Stock Appreciation Rights theretofore granted or
awarded, unless the award itself otherwise expressly so provides.
No Options, Restricted Stock or Stock Appreciation Rights may be
granted or awarded during any period of suspension or after
termination of this Plan, and in no event may any Incentive Stock
Option be granted under this Plan after the first to occur of the
following events:
(a) The expiration of ten years from the date the
Plan is adopted by the Board; or
<PAGE>
(b) The expiration of ten years from the date the
Plan is approved by the Company's shareholders under Section 9.5.
9.3 Changes in Common Stock or Assets of the Company.
In the event that the outstanding shares of Common Stock are
hereafter changed into or exchanged for cash or a different
number or kind of shares or other securities of the Company, or
of another corporation, by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock splitup,
stock dividend, or combination of shares, appropriate adjustments
shall be made by the Committee in the number and kind of shares
for which Options, Restricted Stock awards or Stock Appreciation
Rights may be granted, including adjustments of the limitation in
Section 2.1 on the maximum number and kind of shares which may be
issued.
In the event of such a change or exchange, other than
for shares or securities of another corporation or by reason of
reorganization, the Committee shall also make an appropriate and
equitable adjustment in the number and kind of shares as to which
all outstanding Options or Stock Appreciation Rights, or portions
thereof then unexercised, shall be exercisable and in the number
and kind of shares of outstanding Restricted Stock. Such
adjustment shall be made with the intent that after the change or
exchange of shares, each Optionee's and each Grantee's and each
Restricted Stockholder's proportionate interest shall be
maintained as before the occurrence of such event. Such
adjustment in an outstanding Option or Stock Appreciation Right
may include a necessary or appropriate corresponding adjustment
in Option or Stock Appreciation Right exercise price, but shall
be made without change in the total price applicable to the
unexercised portion of the Option or Stock Appreciation Right
(except for any change in the aggregate price resulting from
rounding-off of share quantities or prices).
Where an adjustment of the type described above is made
to an Incentive Stock Option under this Section, the adjustment
will be made in a manner which will not be considered a "modifica
tion" under the provisions of subsection 424(h)(3) of the Code
and the regulations thereunder.
Notwithstanding the foregoing, in the event of such a
reorganization, merger, consolidation, recapitalization, reclassi
fication, stock splitup, stock dividend or combination, or other
adjustment or event which results in shares of Common Stock being
exchanged for or converted into cash, securities or other
property, the Company will have the right to terminate this Plan
as of the date of the exchange or conversion, in which case all
options, rights and other awards under this Plan shall become the
right to receive such cash, securities or other property, net of
any applicable exercise price.
In the event of a "spin-off" or other substantial dis
tribution of assets of the Company which has a material diminu
tive effect upon the Fair Market Value of the Company's Common
Stock, the Committee may in its discretion make an appropriate
and equitable adjustment to the Option or Stock Appreciation
Right exercise price to reflect such diminution.
9.4 Merger of the Company. In the event of the
merger or consolidation of the Company with or into another
corporation, the exchange of all or substantially all of the
assets of the Company for the securities of another corporation,
the acquisition by another corporation
<PAGE>
or person of all or substantially all of the Company's assets
or 80% or more of the Company's then outstanding voting stock,
or the liquidation or dissolution of the Company:
(a) At the discretion of the Committee, the terms of
an Option or Stock Appreciation Right may provide that it cannot
be exercised after such event.
(b) In its discretion, and on such terms and condi
tions as it deems appropriate, the Committee may provide either
by the terms of such Option or Stock Appreciation Right or by a
resolution adopted prior to the occurrence of such event that,
for a specified period of time prior to such event, such Option
or Stock Appreciation Right shall be exercisable as to all shares
covered thereby, notwithstanding anything to the contrary in this
Plan or in the provisions of such Option or Stock Appreciation
Right.
(c) In its discretion, and on such terms and condi
tions as it deems appropriate, the Committee may provide either
by the terms of such Option or Stock Appreciation Right or by a
resolution adopted prior to the occurrence of such event that
upon such event, such Option or Stock Appreciation Right shall be
assumed by the successor corporation, or a parent or subsidiary
thereof, or shall be substituted for by similar options, rights
or awards covering the stock of the successor corporation, or a
parent or subsidiary thereof, with appropriate adjustments as to
the number and kind of shares and prices.
(d) In its discretion, and on such terms and condi
tions as it deems appropriate, the Committee may provide either
by the terms of a Restricted Stock award or by a resolution
adopted prior to the occurrence of such event that, for a
specified period of time prior to such event, the restrictions
imposed under a Restricted Stock Agreement upon some or all
shares of Restricted Stock may be terminated, and some or all
shares of such Restricted Stock may cease to be subject to
repurchase under Section 6.6 after such event.
9.5 Approval of Plan by Shareholders. This Plan will
be submitted for the approval of the Company's shareholders
within twelve months after the date of the Board's initial
adoption of this Plan. Options or Stock Appreciation Rights may
be granted and Restricted Stock may be awarded prior to such
shareholder approval, provided that such Options or Stock
Appreciation Rights shall not be exercisable and such Restricted
Stock shall not vest prior to the time when this Plan is approved
by the shareholders, and provided further that if such approval
has not been obtained at the end of said twelve-month period, all
Options or Stock Appreciation Rights previously granted and all
Restricted Stock previously awarded under this Plan shall
thereupon be cancelled and become null and void.
9.6 Tax Withholding. The Company shall be entitled
to require payment in cash or deduction from other compensation
payable to each Optionee, Grantee or Restricted Stockholder of
any sums required by federal, state or local tax law to be
withheld with respect to the issuance, vesting or exercise of any
Option, Restricted Stock award or Stock Appreciation Right.
Subject to the timing requirements of Section 5.3, the Committee
may in its discretion and in satisfaction of the foregoing
requirement allow such Optionee, Grantee or Restricted
Stockholder to elect to have the Company withhold shares of
Common Stock (or allow the return of shares of Common Stock)
having a Fair Market Value equal to the sums required to be
withheld.
<PAGE>
9.7 Loans. The Committee may, in its discretion,
extend one or more loans to key Employees in connection with the
exercise or receipt of an Option or Stock Appreciation Right
granted under this Plan, or the issuance of Restricted Stock
awarded under this Plan. The terms and conditions of any such
loan shall be set by the Committee.
9.8 Limitations Applicable to Section 16 Persons.
Notwithstanding any other provision of this Plan, any Option or
Stock Appreciation Right granted, or Restricted Stock awarded, to
a key Employee or Director who is then subject to
Section 16 of the Exchange Act, shall be subject to any addi
tional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 of the Exchange Act) that are requirements for the
application of such exemptive rule, and this Plan shall be deemed
amended to the extent necessary to conform to such limitations.
9.9 Effect of Plan Upon Options and Compensation
Plans. The adoption of this Plan shall not affect any other
compensation or incentive plans in effect for the Company or any
Subsidiary. Nothing in this Plan shall be construed to limit the
right of the Company (i) to establish any other forms of incen
tives or compensation for Employees of the Company or any Subsid
iary or (ii) to grant or assume options or other rights otherwise
than under this Plan in connection with any proper corporate
purpose, including but not by way of limitation, the grant or
assumption of options in connection with the acquisition by
purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, partnership, firm
or association.
9.10 Compliance with Laws. This Plan, the granting
and vesting of Options, Restricted Stock awards or Stock
Appreciation Rights under this Plan and the issuance and delivery
of shares of Common Stock and the payment of money under this
Plan or under Options or Stock Appreciation Rights granted or
Restricted Stock awarded hereunder are subject to compliance with
all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law
and federal margin requirements) and to such approvals by any
listing, regulatory or governmental authority as may, in the
opinion of counsel for the Company, be necessary or advisable in
connection therewith. Any securities delivered under this Plan
shall be subject to such restrictions, and the person acquiring
such securities shall, if requested by the Company, provide such
assurances and representations to the Company as the Company may
deem necessary or desirable to assure compliance with all appli
cable legal requirements. To the extent permitted by applicable
law, the Plan, Options, Restricted Stock awards or Stock
Appreciation Rights granted or awarded hereunder shall be deemed
amended to the extent necessary to conform to such laws, rules
and regulations.
9.11 Titles. Titles are provided herein for
convenience only and are not to serve as a basis for
interpretation or construction of this Plan.
9.12 Governing Law. This Plan and any agreements
hereunder shall be administered, interpreted and enforced under
the internal laws of the State of California without regard to
conflicts of laws thereof.
* * *
<PAGE>
I hereby certify that the foregoing Plan was duly
adopted by the Board of Directors of Amplicon, Inc. on
September 25, 1995, and by the Shareholders of Amplicon, Inc. on
______________, 199__.
Executed on this ____ day of _______________, 199___
Glen T. Tsuma /s/
Secretary
