AMPLICON, INC.
5 Hutton Centre Drive, Suite 500
Santa Ana, CA 92707
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 25, 1996
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, October 25, 1996 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.
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 1, 1996. 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 5,833,959 shares of the
Company's Common Stock outstanding at the close of business on
September 20, 1996, 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 shareholders'
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 September 20, 1996
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 3,302,164 <F1,F2> 55.2%
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 563,850 9.7%
c/o McGrath, Doyle & Phair
150 Broadway
New York, N.Y. 10038
Wellington Management 392,500 <F3> 6.7%
Company
75 State Street
Boston, MA 02109
All Directors and Officers 4,092,850 <F2,F4> 67.8%
as a Group (5 persons)
<FN>
<F1> Includes options to purchase 150,000 shares which are
exercisable within 60 days of September 20, 1996.
<F2> Does not include 11,595 shares of Common Stock held by
Mr. Paddon's children, as to which Mr. Paddon disclaims any
beneficial interest.
<F3> Wellington Management Company, in its capacity as
investment adviser, may be deemed to have beneficial ownership
of such shares that are owned by numerous investment advisory
clients, none of which is known to have such interest with
respect to more than five percent .
<F4> Includes options to purchase 202,000 shares which are
exercisable within 60 days of September 20, 1996.
</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
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<PAGE>
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 20, 1996 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 20, 1996, is set forth under "Directors
and Executive Officers" below.
The Board of Directors met four times during the year ended
June 30, 1996. 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 two
times during the year ended June 30, 1996. 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 once during the year ended June 30, 1996. 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 45 Chief Executive 3,302,164<F1> 55.2%
Officer, President,
Director
Glen T. Tsuma 43 Chief Operating 731,386 12.5%
Officer, Secretary,
Director
Michael H. Lowry 51 Director 10,000<F2> *
Harris Ravine 53 Director 4,000<F3> *
S. Leslie Jewett 41 Chief Financial 45,300<F4> *
Officer
* Less than one percent
<FN>
<F1> Includes options to purchase 150,000 shares which are
exercisable within 60 days of September 20, 1996 but excludes
11,595 shares held by Mr. Paddon's children, as to which Mr.
Paddon disclaims any beneficial interest.
<F2> Includes options to purchase 8,000 shares which are
exercisable within 60 days of September 20, 1996.
<F3> Includes options to purchase 4,000 shares which are
exercisable within 60 days of September 20, 1996.
<F4> Includes options to purchase 40,000 shares which are
exercisable within 60 days of September 20, 1996.
</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.
3
<PAGE>
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 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, 1996:
<TABLE>
<CAPTION>
Long-term
Annual Compensation Compensation Other
Name and Principal Year Salary Bonus Options Compensation<F1>
Position
<S> <C> <C> <C> <C> <C>
Patrick E. Paddon 1996 $375,000 -- -- $1,000
Chief Executive 1995 375,000 -- -- 1,000
Officer 1994 375,000 -- -- 1,000
Glen T. Tsuma 1996 $180,000 -- -- $1,000
Chief Operating 1995 180,000 -- -- 1,000
Officer 1994 180,000 -- -- 1,000
S. Leslie Jewett 1996 $150,000 -- -- $1,000
Chief Financial 1995 150,000 -- -- 1,000
Officer 1994 131,000 -- 16,667 1,000
_____________
<FN>
<F1> Company contribution under the Company's 401(k) Plan,
subject to certain vesting restrictions.
</FN>
</TABLE>
Stock Options
During fiscal 1996, no executive officer received a stock
option grant under the Company's 1995 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, 1996 Options at June 30, 1996 <F1>
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Patrick E. Paddon 150,000 -- $1,462,500 --
Glen T. Tsuma -- -- -- --
S. Leslie Jewett 33,333 16,667 46,666 11,667
__________________________
<FN>
<F1> Represents the difference between the most recent closing
price of the Common Stock as of June 30, 1996 as reported by
NASDAQ and the exercise price of the options.
</FN>
</TABLE>
4
<PAGE>
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. 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 1996 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 1996, 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 67% 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 1996.
Mr. Paddon's compensation in fiscal 1996 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 and determined at that time that his
compensation in fiscal 1997 would remain at $375,000.
BOARD OF DIRECTORS
Patrick E. Paddon
Michael H. Lowry
Harris Ravine
Glen T. Tsuma
5
<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.,
DVI Inc. and Electro Rent Corporation, each of which are engaged
in the equipment leasing industry as a substantial part of their
business, and whose shares have traded publicly for at least five
years.
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 47 52 60 102 100 100 94
NASD COMP. 94 71 78 101 100 112 125
PEER AVG. 78 87 99 120 100 99 118
(con't)
3/31/92 6/30/92 9/30/92 12/31/92 3/31/93 6/30/93 9/30/93
AMPI 90 78 100 107 133 133 130
NASD COMP. 129 120 125 146 148 151 164
PEER AVG. 130 114 103 99 94 92 112
(con't)
12/31/93 3/31/94 6/30/94 9/30/94 12/31/94 3/31/95 6/30/95
AMPI 135 133 137 130 123 108 105
NASD COMP. 167 160 153 165 163 178 204
PEER AVG. 132 125 133 144 156 186 198
(con't)
9/30/95 12/31/95 3/31/96 6/30/96
AMPI 108 107 106 112
NASD COMP. 228 231 242 261
PEER AVG. 225 264 271 301
</TABLE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has not yet selected its independent public
accountants for the year ended June 30, 1997 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, 1996, 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, 1996 and 1995,
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,
1996, 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 1996 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. Paddon and Ms. Jewett were late in
filing Form 4's in connection with certain stock gifts.
PROPOSALS OF SHAREHOLDERS
All proposals of shareholders intended to be presented at
the Company's 1997 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 30, 1997 if they
6
<PAGE>
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 1, 1996
7
