OSICOM TECHNOLOGIES INC, DEF 14A, 1999-12-03

OSICOM TECHNOLOGIES INC
DEF 14A, 1999-12-03
TELEPHONE & TELEGRAPH APPARATUS

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Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

OSICOM TECHNOLOGIES, INC.
.................................................................
(Name of Registrant as Specified In Its Charter)

.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11

(1) Title of each class of securities to which transaction
applies:

............................................................

(2) Aggregate number of securities to which transaction
applies:

.......................................................

(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):

.......................................................

(4) Proposed maximum aggregate value of transaction:

.......................................................

(5) Total fee paid:

.......................................................

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

.......................................................

(2) Form, Schedule or Registration Statement No.:

.......................................................

(3) Filing Party:

.......................................................

(4) Date Filed:

.......................................................

<PAGE>

[Logo]

December 1, 1999

NOTICE OF DEAR FELLOW SHAREHOLDERS:
1999 ANNUAL
PROXY STATEMENT We cordially invite you to attend the Meeting of the Shareholders of Osicom
WEDNESDAY, Technologies, Inc. (the 'Company') to be held at 9:00 a.m. on Wednesday,
JANUARY 5, 2000 January 5, 2000, at the Miramar Sheraton, 101 Wilshire Boulevard, Santa Monica,
AT 9:00 A.M. California.
THE MIRAMAR
SHERATON The purposes of this meeting are to elect a Board of four (4) directors,
101 WILSHIRE authorize an increase to the number shares available under the Company's stock
BOULEVARD option plan, and ratify the appointment of auditors. These matters are described
SANTA MONICA in the accompanying Notice of Meeting and Proxy Statement.
CALIFORNIA
The Board of Directors recommends that Shareholders vote in favor of each
proposal. We encourage all Shareholders to participate by voting their shares by
Proxy whether or not they plan to attend the meeting. Please sign, date and mail
the enclosed Proxy as soon as possible. If you do attend the Annual Meeting, you
may still vote in person.

Sincerely,

/s/ PAR CHADHA
PAR CHADHA
Chairman and Chief Executive Officer

</TABLE>

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[Logo]

------------------------
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
------------------------

To be held on January 5, 2000

Notice is hereby given that the Annual Meeting of Shareholders (the
'Meeting') of Osicom Technologies, Inc. (the 'Company') will be held at the
Miramar Sheraton, 101 Wilshire Boulevard, Santa Monica, California on January 5,
2000 at 9:00 a.m. Pacific Time, for the following purposes:

1. To elect a Board of Directors of four (4) persons to serve
until the 2000 Annual Meeting of Shareholders or until a
successor is duly elected and qualified.

2. To consider and vote upon a proposal to approve the Company's
Amended and Restated 1997 Incentive and Non-Qualified Stock
Option Plan, which incorporates amendments, among other
things, to increase from 1,000,000 to 1,500,000 the number of
shares of the Company's common stock that may be issued
thereunder.

3. To approve the appointment of BDO Seidman, LLP as the
Company's independent auditors.

4. To transact such other business as may properly come before
the Meeting or any adjournment thereof.

Only shareholders of record at the close of business on December 1, 1999
will be entitled to notice of and to vote at the Meeting.

Whether or not you intend to attend the Meeting, please complete, date and
sign the enclosed Proxy and return it promptly in the enclosed postage-paid
envelope. Your Proxy will be revocable, either in writing or by voting in person
at the Meeting, at any time prior to its exercise.

By Order of the Board of Directors

/s/ CHRISTOPHER E. SUE
CHRISTOPHER E. SUE

Santa Monica, California Secretary
December 1, 1999

<PAGE>

OSICOM TECHNOLOGIES, INC.
2800 28TH AVENUE
SANTA MONICA, CALIFORNIA 90405

------------------------------
PROXY STATEMENT
------------------------------

ANNUAL MEETING OF SHAREHOLDERS TO BE JANUARY 5, 2000

GENERAL INFORMATION

This Proxy Statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of Osicom Technologies, Inc. (the
'Company'), a New Jersey corporation, for use at the Company's Annual Meeting of
Shareholders (the 'Annual Meeting') to be held on January 5, 2000, and any
adjournment or postponements thereof, pursuant to notice of the meeting. The
approximate date on which this proxy material is first to be sent to
shareholders is December 1, 1999.

WHO CAN VOTE

Only holders of record of the Company's common stock, par value $.30 per
share (the 'Common Stock') at the close of business on December 1, 1999, are
entitled to vote at the Annual Meeting. As of December 1, 1999, the Company had
outstanding and entitled to vote 11,107,666 shares of common stock with par
value $0.30 per share. The 8,888 shares of common stock in the Company's
treasury on that date will not be voted.

HOW YOU CAN VOTE BY PROXY

If you are a registered stockholder (you hold your stock in your own name),
you may vote by one of the following methods:

PROXY CARD, by completing and mailing the enclosed proxy card;

TELEPHONE VOTING, by dialing 1-800-PROXIES and following the enclosed
instructions for telephone voting;

VIA THE INTERNET, by going to the web address
HTTP://WWW.VOTEPROXY.COM and following the enclosed instructions for
Internet voting.

If you return your signed proxy card or use the telephone or Internet
voting before the Annual Meeting, we will vote your shares as you direct. You
have three choices on each matter to be voted upon. For the election of
directors, you may vote for (1) all of the nominees, (2) none of the nominees,
or (3) all of the nominees except those you designate. See 'Item 1. Election of
Directors.' For each of the other items, you may vote 'FOR,' 'AGAINST,' or
'ABSTAIN' from voting.

If you do not specify on your proxy card or through internet or telephone
prompts how you want to vote your shares, we will vote them 'for' the election
of director nominees, 'for' the amendments to the 1997 Incentive and
Non-Qualified Stock Option Plan, and 'for' ratification of the independent
auditors.

If your shares are held in 'street name' (through a broker or other
nominee), you will need to contact your broker or other nominee to determine
whether you will be able to vote electronically via the Internet or by
telephone.

<PAGE>

HOW YOU MAY REVOKE OR CHANGE YOUR VOTE

You can revoke your proxy at any time before it is voted at the Annual
Meeting by:

(1) Sending written notice of revocation to the Secretary; or

(2) Submitting another proper proxy with a more recent date that that
of the proxy first given by (i) following the Internet voting
instructions, or (ii) following the telephone voting instructions,
or (iii) by signed and returning a proxy card to the Company; or

(3) Attending the Annual Meeting and voting in person.

Another person at the meeting may also represent you by executing a proper
proxy designating that person.

Any notice of revocation that is delivered at the Annual Meeting should be
hand delivered to the Inspector of Election at or before the taking of the vote.
A shareholder may be requested to present such documents as shall be reasonably
requested for the purpose of establishing such shareholder's identity.

QUORUM, VOTING REQUIREMENTS AND EFFECT OF ABSTENTIONS AND NON-VOTES

At the Annual Meeting, Inspectors of Election will determine the presence
of a quorum and tabulate the results of the voting by the shareholders. The
holders of one-third of the total number of outstanding shares of Common Stock
that are entitled to vote at the Meeting must be present in person or by proxy
in order to have the quorum that is necessary for the transaction of business at
the Annual Meeting. The Inspectors will treat properly executed proxies marked
'abstain' or require to be treated as 'non-votes' as present for purposes of
determining whether there is a quorum at the Annual Meeting. A 'non-vote' occurs
when a broker or nominee holding shares for a beneficial owner votes on one
proposal but does not vote on another proposal because the broker or nominee
does not have discretionary voting power and has not received instructions from
the Beneficial Owner.

The four nominees for director who receive a plurality of the votes cast by
the holders of the Common Stock in person or by proxy at the Annual Meeting will
be elected. All other matters will require the approval of a majority of the
votes cast by the holders of Common Stock in person or by proxy at the Annual
Meeting. Abstentions and non-votes will have the same effect as a vote against
the proposals to adopt the Amended and Restated 1997 Incentive and Non-Qualified
Stock Option Plan and to ratify the appointment of the independent auditors.

COSTS OF SOLICITATION

The Company will bear the cost of preparing, printing, and mailing material
in connection with this solicitation of proxies. In addition to mailing
material, regular employees of the Company may make solicitations personally and
by telephone. The Company is required to reimburse brokerage firms, banks, and
others for their reasonable out-of-pocket expenses, including clerical expenses,
related to forwarding proxy material to beneficial owners of stock or otherwise
in connection with this solicitation of proxies.

ANNUAL REPORT

The Annual Report on Form 10-K of the Company for the fiscal year ended
January 31, 1999, containing audited financial statements for such year, and
Quarterly Update for the 2nd Quarter ended July 31, 1999 is enclosed with this
Proxy Statement. This Proxy Statement and the enclosed Proxy are being sent to
the shareholders of the Company on or about December 1, 1999.

IN ORDER THAT YOUR SHARES MAY BE REPRESENTED AT THIS MEETING, YOU ARE
REQUESTED TO PLEASE SIGN, DATE AND MAIL THE PROXY PROMPTLY.

<PAGE>

PROPOSAL 1
ELECTION OF DIRECTORS

According to the Company's By-Laws, the Board of Directors is composed of
four (4) to nine (9) members. At each Annual Meeting, all directors will be
elected to serve for one year expiring on the date of the Annual Meeting of
Shareholders the following year. Each director elected will continue in office
until a successor has been elected or until resignation or removal in the manner
provided by the Company's By-Laws. The names of the nominees for the Board of
Directors are listed below. Shares represented by a properly executed proxy in
the accompanying form will be voted for such nominees. However, discretionary
authority is reserved to vote such shares in the best judgment of the persons
named in the event that any person or persons other than the nominees listed
below are to be voted on at the meeting due to the unavailability of any nominee
so listed.

All persons named below are directors of the Company at the present time.
There are no family relationships between any nominee, director or executive
officer of the Company.

NOMINEES FOR ONE YEAR TERMS

Par Chadha, 44, has been Chief Executive Officer of the Company since
November 1996. Mr. Chadha founded the Company in 1981 and has been a director
for the Company since that time. He served as President and Chief Executive
Officer of the Company from July 1981 through May 1993, and as Chairman from
July 1981 through June 1996. Mr. Chadha was a director and Chairman of Builders'
Warehouse Association, Inc. from March 1995 through September 1996. Mr. Chadha
was a director of Saratoga Brands, Inc. from January 1995 through July 1995. He
was Chairman, President and Chief Executive Officer of Oxford Acquisitions
Group, Inc. from 1994 to 1998. Mr. Chadha is also a director of Rand Research
Corporation, RII Partners, Inc., and RT Investments, Inc., which are privately
held companies.

Xin Cheng, Ph.D., 43, has been President and director of the Company since
September 1995, and was Secretary from June 1993 to February 1997. Dr. Cheng
holds a Ph.D. in electrical engineering from the University of California,
Irvine. From 1988 to 1990, Dr. Cheng served as Senior Staff Scientist and from
1990 to 1993 as Director of Advanced Technology for the Company. Dr. Cheng is
responsible particularly for business and technology development of the
Company's photonic transmission products.

Leonard N. Hecht, 63, has been a director of the Company since June 1996.
Since 1994, he has been President of Chrysalis Capital Group, an investment
banking company specializing in mergers, acquisitions and financing that he
founded. From 1987 to 1993, Mr. Hecht was Managing Director of the Investment
Banking Group and head of the Technology Assessment Group of Houlihan Lokey
Howard & Zukin, a financial advisory firm. From 1984 to 1987, Mr. Hecht was the
Vice Chairman of the Board and Chief Executive Officer of Quantech Electronics
Corp., a diversified publicly held electronics company. Prior to joining
Quantech, Mr. Hecht was a founding principal of Xerox Development Corporation, a
wholly owned subsidiary of the Xerox Corporation. Xerox Development Corporation
was active in strategic planning, mergers and acquisition, divestitures,
licensing, joint ventures and venture investing for the Xerox Corporation.

Renn Zaphiropoulos, 73, became a director of the Company on March 25, 1998.
Mr. Zaphiropoulos also serves as a director of Optical Coating Laboratories,
Inc. and a director and consultant to a number of private, development stage
high-tech firms. Mr. Zaphiropoulos is presently an Adjunct Professor of Business
at Southern Utah University and is a frequent lecturer on a variety of
management subjects at the University of California at Santa Clara, Harvard
Business School, Columbia University and Stanford University. Mr. Zaphiropoulos
is a pioneer in the development of the electrostatic writing techniques for the
production of hard copy. In 1969 he co-founded Versatec which was merged into
Xerox Corporation in December 1975.

<PAGE>

INFORMATION CONCERNING BOARD

The Board of Directors met 3 times in fiscal 1999. No director attended
fewer than 75% of the meetings of the Board of Directors. In addition, the Board
acted by unanimous consent 9 times during fiscal 1999. In addition, the Board of
Directors regularly consults by telephone and in person.

The Board of Directors has an Audit Committee and a Compensation Committee.
The Audit Committee is responsible for reviewing the Company's audited financial
statements, meeting with the Company's independent accountants to review the
Company's internal controls and financial management practices and examining all
agreements or other transactions between the Company and its directors and
officers (other than those compensation functions assigned to the Compensation
Committee) to determine whether such agreements or transactions are fair to the
Company's shareholders. Messrs. Hecht and Powell, who has not been nominated for
re-election to the Board of Directors, currently serve on the Audit Committee.

The Compensation Committee is responsible for reviewing the compensation
and benefits of the Company's executive officers, making recommendations to the
Board of Directors concerning compensation and benefits for such executive
officers, reviewing overall company-wide compensation plans and administering
the Company's stock option plans. Messrs. Hecht, Zaphiropoulos and Chadha
currently serve on the Compensation Committee.

DIRECTOR COMPENSATION

Each director who is not an employee of the Company or its subsidiaries
receives $1,000 for each Board of Directors or committee meeting attended.
Directors who serve as the chairman of a committee receive an additional $500
for each committee meeting attended. All directors are reimbursed for expenses
incurred in attending Board of Directors and committee meetings. The 1997
Directors Stock Option Plan provides for an automatic grant on the date an
individual joins the Board of Directors of an option to purchase 11,667 shares
of common stock and an automatic grant on the day following the Company's Annual
Meeting of an option to purchase 8,333 shares to each individual who is elected
to the Board of Directors at such meeting. The price of the options is the fair
market price of the Company's common stock on the date the option is granted.
Each option becomes exercisable ratably over the 12 months following the grant
date. Directors who are employees of the Company or its subsidiaries receive no
additional compensation or options for serving on the Board of Directors or any
committee.

SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of September 30,
1999, regarding the ownership of the Common Stock by (i) each Director of the
Company; (ii) each of the executive officers named in the Summary Compensation
Table, following; (iii) each person known to the Company to beneficially own 5%
or more of Common Stock; and (iv) all Directors and executive officers of the
Company as a group. Except as indicated, all persons named as beneficial owners
of Common Stock have sole voting and investment power with respect to the shares
indicated as beneficially owned by them.

<PAGE>

<TABLE>
<CAPTION>
COMMON STOCK
------------------------------
NUMBER OF PERCENTAGE OF
NAME OF BENEFICIAL OWNER(A) SHARES OUTSTANDING(J)
--------------------------- ------ --------------
<S> <C> <C>
Par Chadha .............................................. 563,535(B) 5.7%
2800 28th Street, Suite 100
Santa Monica, CA 90405
Leonard Hecht ........................................... 110,000(C) 1.1%
2800 28th Street, Suite 100
Santa Monica, CA 90405
Humbert B. Powell III ................................... 115,050(D) 1.2%
2800 28th Street, Suite 100
Santa Monica, CA 90405
Xin Cheng ............................................... 350,735(E) 3.5%
2800 28th Street, Suite 100
Santa Monica, CA 90405
Christopher E. Sue ...................................... 18,932(F) *
2800 28th Street, Suite 100
Santa Monica, CA 90405
Arthur Trakas ........................................... 35,319(G) *
2800 28th Street, Suite 100
Santa Monica, CA 90405
Renn Zaphiropoulos ...................................... 47,501(H) *
2800 28th Street, Suite 100
Santa Monica, CA 90405
All Directors and executive officers as a group.......... 1,241,072(I) 11.3%
</TABLE>

- ------------

* Less than 1%

(A) All information with respect to beneficial ownership of the shares is based
upon filings made by the respective beneficial owners with the Securities
and Exchange Commission or information provided by such beneficial owners
to the Company.

(B) Includes shares and options held in the name of R II Partners, Inc. and
Rand Research Corporation and exercisable options to acquire 228,499 shares
of common stock. Mr. Chadha owns, directly and indirectly, 100% of the
outstanding capital stock of R II Partners, Inc. Does not include 89,097
shares and exercisable options to acquire 350,001 shares held by his wife,
their two children and RT Investments, Inc., in which shares and options
Mr. Chadha disclaims beneficial ownership. Mr. Chadha has neither
investment nor voting power with respect to such shares and options.

(C) Includes shares and options held in the name of Chrysalis Capital Group and
exercisable options to acquire 81,669 shares of common stock. Mr. Hecht
owns, directly and indirectly, 100% of the outstanding capital stock of
Chrysalis Capital Group.

(D) Includes shares, options and warrants held in the name of HMS Advisors,
LLC. and exercisable options to acquire 83,335 shares of common stock. Mr.
Powell owns, directly and indirectly, 50% of the outstanding capital stock
of HMS Advisors, LLC.

(E) Includes exercisable options held by Dr. Cheng to acquire 251,508 shares of
common and exercisable options to acquire 51,493 shares of common stock
held as custodian or trustee for minor children, as to which beneficial
ownership is disclaimed.

(F) Includes exercisable options held by Mr. Sue to acquire 18,612 shares of
common stock.

(G) Includes exercisable options held by Mr. Trakas to acquire 30,557 shares of
common stock.
(footnotes continued on next page)

<PAGE>

(footnotes continued from previous page)

(H) Includes exercisable options held by Mr. Zaphiropoulos to acquire 32,501
shares of common stock.

(I) Includes exercisable options to acquire 805,674 shares of common stock.

(J) For each beneficial owner, the 'Percentage of Outstanding' equals each
owner's actual holdings of shares plus shares represented by unexercised
options and warrants held, divided by total shares outstanding of the
Company at September 30, 1999, of 9,705,391 plus the unexercised options
and warrants detailed above of the referenced holder only. In other words,
individual percentages of the listed holders will not add to the group
total because the calculations are made separately for each holder.

CERTAIN TRANSACTIONS

During fiscal 1998, the Company made 8% demand loans totaling $165,000 to
Chrysalis Capital Group; 20,408 shares of the Company's common stock
collateralized the loans. There was no accrued and unpaid interest at January
31, 1999. During fiscal 1999, the Company paid $25,000 in fees for assistance in
obtaining the amended loan and security agreement for a subsidiary to Chrysalis
Capital Group with such amount applied to the accrued interest and principal due
the Company. The loans including accrued interest were paid in full during
April 1999. Leonard Hecht, Director, owns directly and indirectly 100% of the
outstanding capital stock of Chrysalis Capital Group.

During May 1997, 279,207 warrants exercisable at $5.638 held by R II
Partners, Inc. and 279,207 warrants exercisable at $5.638 held by Brite Lite
Industries, Inc. were exercised in cashless transactions. Of the $1,877,000
liability representing the difference between the closing price of the Company's
common shares at exercise and the exercise price of $1,567,000 was paid in cash
with the remaining $310,000 balance applied to amounts due the Company under
indemnification agreements. Par Chadha, Chairman and Chief Executive Officer,
owns directly and indirectly 100% of the outstanding capital stock of R II
Partners, Inc. Barry Witz, a former director of the Company, owns directly and
indirectly 100% of the outstanding capital stock of Brite Lite Industries, Inc.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following tables set forth the annual compensation for both individuals
who served as the Company's Chief Executive Officer ('CEO') for the fiscal year
ended January 31, 1999, and for the four most highly compensated executive
officers of the Company, other than the CEO, who were serving as executive
officers at the end of our fiscal year whose salary and bonus exceeded $100,000.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------------- -----------------------------------
OTHER RESTRICTED SECURITIES LONG-TERM ALL
ANNUAL STOCK UNDERLYING INCENTIVE OTHER
SALARY BONUS COMPENSATION AWARD(S) OPTIONS PLAN COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) PAYOUTS ($)
--------------------------- ---- -------- -------- ------------ ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Par Chadha, Chairman, 1999 147,500 0 0 0 349,164 0 0
Chief Executive Officer.... 1998 60,000 0 0 0 16,667 0 0
1997 0 0 0 0 16,667 0 0
Xin Cheng, President, 1999 125,031 51,066 0 0 196,183 0 0
Director................... 1998 90,248 0 0 0 16,667 0 0
1997 84,110 0 0 0 16,667 0 0
Christopher E. Sue, VP 1999 103,077 0 0 0 66,665 0 0
Finance, Secretary......... 1998 95,000 0 0 0 0 0 0
1997 76,297 0 0 0 8,334 0 0
Arthur Trakas, Executive VP 1999 152,420 0 0 0 51,666 0 0
Worldwide Sales............ 1998 154,146 0 0 0 0 0 0
</TABLE>

<PAGE>

LONG-TERM INCENTIVE PLANS

The Company has no long-terms incentive plans other than the 1988 and 1997
Stock Option Plans and the 1997 Directors Stock Option Plan.

OPTION GRANTS -- YEAR ENDED JANUARY 31, 1998

The following table summarizes all grants of stock options made during the
year ended January 31, 1999 to each of the Named Executive Officers.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------
MARKET POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL EXERCISE PRICE ON ASSUMED RATES OF STOCK PRICE
SECURITIES OPTIONS OR BASE DATE APPRECIATION FOR OPTION TERM
UNDERLYING GRANTED TO PRICE GRANTED (A)
OPTIONS EMPLOYEES IN ($/SH) ($/SH) EXPIRATION ------------------------------
NAME GRANTED(#) FISCAL YEAR (A) (A) DATE 0% ($) 5% ($) 10% ($)
---- ---------- ------------ -------- -------- ---------- ------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Par Chadha........................ 8,334 0.57% $13.50 $12.38 9-26-2007 0 55,552 155,100
340,830 23.24% $ 7.03 $ 7.03 11-2-2008 0 1,507,111 3,819,314
Xin Cheng......................... 66,667 4.55% $ 4.78 $12.38 8-3-2008 0 200,459 508,003
129,516 8.83% $ 7.03 $ 7.03 11-2-2008 0 572,705 1,451,346
Christopher E. Sue................ 5,000 0.34% $ 4.78 $ 4.78 8-3-2008 0 15,034 38,100
5,000 0.34% $18.00 $ 4.78 5-3-1999 0 0 0
5,000 0.34% $30.00 $ 4.78 5-3-1999 0 0 0
5,000 0.34% $45.00 $ 4.78 5-3-1999 0 0 0
46,665 3.18% $ 7.03 $ 7.03 11-2-2008 0 206,347 522,924
Arthur Trakas..................... 8,334 0.57% $ 4.78 $ 4.78 8-3-2008 0 25,059 63,505
8,334 0.57% $18.00 $ 4.78 5-3-1999 0 0 0
8,334 0.57% $30.00 $ 4.78 5-3-1999 0 0 0
8,334 0.57% $45.00 $ 4.78 5-3-1999 0 0 0
18,330 1.25% $ 7.03 $ 7.03 11-2-2008 0 81,053 205,405
</TABLE>

(A) In accordance with Securities and Exchange Commission rules, these columns
show gains that might exist for the respective options, assuming that the
market price of the Company's common stock appreciates from the date of the
grant over the term of the option at rates of 5% and 10%, respectively.

AGGREGATED OPTION EXERCISES IN 1999 AND JANUARY 31, 1999 OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF
SHARES SECURITIES UNDERLYING VALUE OF UNEXERCISED
ACQUIRED UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ON VALUE AT FISCAL YEAR-END (#) AT FY-END ($)(A)
EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Par Chadha................... -- -- 192,503 340,830 886,525 3,099,423
Xin Cheng.................... -- -- 53,818 196,183 125,292 1,934,040
Christopher E. Sue........... -- -- 8,334 46,665 0 424,360
Arthur Trakas................ -- -- 23,335 51,666 37,502 261,227
</TABLE>

- ------------

(A) Options are 'in-the-money' if, on January 31, 1999, the market price of the
Common Stock ($16.125) exceeded the exercise price of such options. The
value of such options is calculated by determining the difference between
the aggregate market price of the Common Stock covered by such options on
January 31, 1999, and the aggregate exercise price of such options.

EMPLOYMENT AGREEMENTS

The Company has a four year employment agreement with Dr. Cheng ending
November 23, 2003 under which the Company is obligated to make payments of
$180,000 per year; additionally, Dr. Cheng is entitled to receive a bonus equal
to two years' base salary at the rate in effect at the end of the contract term
if Dr. Cheng is still employed at the Company. This contract may be terminated
for cause

<PAGE>

and should the Company terminate the contract without cause Dr. Cheng is
entitled to receive two years' base salary at the rate then in effect. The
agreement provides that, without the prior written consent of the Company, Dr.
Cheng will not, directly or indirectly, either as principal, manager, agent,
consultant, officer, stockholder, partner, investor, lender or employee or in
any other capacity, carry on, be engaged in, or have any financial interest in
any business in the United States which is in competition with the business of
the Company or any of its subsidiaries or affiliates and for a period of
12 months after termination without cause he shall not, on his own behalf or on
behalf of any person, firm or company, directly or indirectly, hire or solicit
to hire any person who has been employed by the Company or any of its affiliates
at any time during the 12-month period immediately prior to the termination of
his employment.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 (the 'Exchange Act')
requires the Company's directors and executive officers and person who own more
than ten percent of a registered class of the Company's equity securities to
file reports of beneficial ownership and changes in beneficial ownership with
the Securities and Exchange Commission (the 'Commission'). The rules promulgated
by the Commission under Section 16(a) of the Exchange Act require those persons
to furnish the Company with copies of all reports filed with the Commission
pursuant to Section 16(a).

Based solely upon a review of Forms 3, Forms 4 and Forms 5 and amendments
thereto furnished to the Company pursuant to Rule 16(a)(3)(e) during the year
ended January 31, 1999, and written representations of certain of its directors
and officers that no Forms 5 were required to be filed, the Company believes
that all directors, executive officers and beneficial owners of more than 10% of
the Common Stock have filed with the Commission on a timely basis all reports
required to be filed under Section 16(a) of the Exchange Act.

COMPENSATION COMMITTEE REPORT

The Compensation Committee is comprised of Messrs. Hecht, Zaphiropoulos and
Chadha. The Compensation Committee reviews, recommends and approves changes to
the Company's compensation policies and programs and is responsible for
reviewing and approving the compensation of the Chief Executive Officer and
other senior officers of the Company.

The following report shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.

The Company believes that executive compensation should be based upon value
returned to shareholders. The Company has developed and is developing
compensation programs designed to reflect Company performance and to be
competitive in the marketplace. In designing compensation programs, the Company
attempts to reflect both value created for shareholders while supporting the
company's strategic goals. The Company's compensation programs reflect the
following themes:

Compensation should be meaningfully related to the value created for
shareholders.

Compensation programs should support the Company's short-term and
long-term strategic goal and objectives.

Compensation programs should promote the Company's value and reward
individuals for outstanding contributions to the Company's success.

<PAGE>

Short-term and long-term compensation should be designed to attract
and retain superior executives.

The Company's executive compensation is based upon three components, base
salary, annual incentive bonuses and long-term incentives, which are intended to
serve the overall compensation philosophy.

BASE SALARY

The base salary of each executive officer is determined as a function of
three principal factors: the individual's performance, the relationship of the
individual's salary to similar executives in comparable companies, and increases
in the individual's responsibilities, whether through promotions or otherwise.

ANNUAL INCENTIVE BONUS

The Company's annual incentive bonuses are designed to reflect the
individual officer's contribution to the profitability of the Company and any
special achievements by the respective officers. Each officer's bonus is based
upon the Company's performance in various areas, such as sales, profit margins,
operating expenses and net income, as compared to a pre-determined plan for each
officer for each year.

PERFORMANCE GRAPH

The following graph compares the cumulative five-year shareholder return
(including reinvestment of dividends) on an indexed basis with the Center for
Research in Security Prices ('CRSP') Index for Computer & Data Processing
Services Index and Nasdaq U.S. Index. These indices are included for comparative
purposes only and do not necessarily reflect management's opinion that such
indices are an appropriate measure of the relative performance of the stock
involved, and are not intended to forecast or be indicative of possible future
performance of the Common Stock.

[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
1/31/94 1/31/95 1/31/96 1/31/97 1/30/98 1/29/99
------- ------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Osicom ........... 100.000 30.115 114.776 190.909 100.000 97.727
NASDAQ US Index .. 100.000 95.414 134.859 176.814 208.706 326.546
Nasdaq Computer .. 100.000 112.479 173.594 236.133 285.997 574.676
</TABLE>

This graph shall not be deemed incorporated by reference by any general
statement incorporating by reference this proxy statement into any filing under
the Securities Act of 1933 or under the Securities Exchange Act of 1934, except
to the extent that the Company specifically incorporate this graph by reference,
and shall not otherwise be deemed filed under such Acts.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE TO ELECT THE
AFOREMENTIONED NOMINEES TO SERVE ON THE BOARD OF DIRECTORS.

<PAGE>

PROPOSAL 2
AMENDED AND RESTATED 1997 INCENTIVE AND
NON-QUALIFIED STOCK OPTION PLAN

On November 5, 1999, the Board of Directors unanimously adopted a
resolution to amend and restate the Company's 1997 Incentive and Non-Qualified
Stock Option Plan ('1997 Plan') which includes an amendment to increase the
number of shares of Common Stock of the Company reserved under the 1997 Plan
from 1,000,000 shares to 1,500,000 shares. The Board directed that the proposed
Amended and Restated 1997 Plan be submitted to a vote of the holders of all of
the Company's outstanding stock. If the amended plan is approved by the holders
of a majority of the Company's shares represented in person or by proxy at the
Meeting, the Company's 1997 Plan will be amended and restated accordingly. A
copy of the Amended and Restated Plan is attached hereto as Exhibit A.

The proposed amendment to increase the number of shares reserved under the
1997 Plan will permit the Company to meet the outstanding commitments made to
various employees with respect to the granting of incentive options under the
1997 Plan and to permit the Company to grant any additional options under the
1997 Plan in the future.

A vote in favor of the Amended and Restated 1997 Plan by the holders of a
majority of the outstanding shares of Common Stock represented at the Meeting,
in person or by proxy, is necessary for the adoption of this proposal. If the
proposed amendment is adopted by the shareholders, it will become effective on
the date of the Shareholders' Meeting. The Company's financial statements,
included in its 1999 Annual Report furnished to shareholders in connection with
the distribution of this Proxy Statement, are incorporated in this Proxy
Statement by reference.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO ADOPT THE
AMENDED AND RESTATED 1997 INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN TO
INCREASE THE NUMBER OF SHARES OF COMMON STOCK OF THE COMPANY RESERVED FOR
ISSUANCE THEREUNDER. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS SHAREHOLDERS SPECIFY A DIFFERENT CHOICE.

PROPOSAL 3
RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS

The selection of independent auditors to examine the financial statements
of the Company for the fiscal year ending January 31, 2000 to be transmitted or
made available to shareholders and filed with the Securities and Exchange
Commission is to be submitted to the meeting for ratification. BDO Seidman, LLP
has been selected by the Company's Board of Directors to examine such financial
statements. Although ratification by the shareholders is not required by law,
the Board of Directors believes that shareholders should be given this
opportunity to express their views on the subject. While not binding on the
Board of Directors, the failure of the shareholders to ratify the appointment of
BDO Seidman, LLP as the Company's independent auditors would be considered by
the Board in determining whether to continue the engagement of BDO Seidman, LLP.
A member of BDO Seidman, LLP will be present at the Annual Meeting and will be
available to respond to appropriate questions and will have the opportunity to
make a statement.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
RATIFICATION OF BDO SEIDMAN, LLP AS THE COMPANY'S INDEPENDENT AUDITORS.

ANNUAL REPORT

The Company's 1999 Annual Report on Form 10-K, including financial
statements for the year ended January 31, 1999 is being distributed to all
shareholders of the Company together with this Proxy Statement, in satisfaction
of the requirements of the Commission. Additional copies of such report are

<PAGE>

available upon request. To obtain additional copies of such Annual Report,
please contact the Company's Corporate Secretary at (310) 581-4030.

EXPENSES OF SOLICITATION OF PROXIES

The Company will pay the costs of soliciting proxies. In addition to
solicitation by mail, solicitations may also be made by telephone, telecopy or
in person. Arrangements will be made with brokerage houses and other custodians,
nominees and fiduciaries to send proxies and proxy material to their principals,
and the Company will reimburse them for their expenses in so doing. Officers and
other employees of the Company, as yet undesignated, may also request the return
of proxies by telephone, telecopy or in person.

OTHER BUSINESS

It is not anticipated that any other matters will be brought before the
Annual Meeting for action. If any such other matters shall properly come before
the Annual Meeting, however, it is intended that the persons authorized under
the proxies may, in the absence of instructions to the contrary, vote or act
thereon in accordance with their best judgment.

SHAREHOLDER PROPOSALS

Pursuant to Rule 14a-8 under the Exchange Act, shareholders of the Company
may present proper proposals for inclusion in the Company's proxy statement and
for consideration at the next annual meeting by submitting their proposals to
the Company in a timely manner. Any shareholder of the Company who wishes to
present a proposal for the inclusion in the proxy statement for action at the
2000 Annual Meeting of Shareholders must comply with the Company's By-Laws and
the rules and regulations of the Commission then in effect. To be considered for
inclusion in next year's proxy statement, such a proposal must be mailed to the
Company at its principal executive offices at 2800 28th Street, Suite 100, Santa
Monica, California 90405, Attention: Corporate Secretary, and must be received
by the Company before January 31, 2000.

IMPORTANT

TO ASSURE YOUR REPRESENTATION AND A QUORUM FOR THE TRANSACTION OF BUSINESS
AT THE ANNUAL MEETING, THE COMPANY URGES YOU TO PLEASE COMPLETE, SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD PROMPTLY.

By Order of the Board of Directors
OSICOM TECHNOLOGIES, INC.

/s/ CHRISTOPHER E. SUE
CHRISTOPHER E. SUE
Santa Monica, California Secretary
December 1, 1999

<PAGE>

EXHIBIT A

AMENDED AND RESTATED
OSICOM TECHNOLOGIES, INC.
1997 INCENTIVE AND
NON-QUALIFIED STOCK OPTION PLAN

1. PURPOSES OF PLAN. The purpose of the Osicom Technologies, Inc. 1997
Incentive and Non-Qualified Stock Option Plan, as amended and restated,
(hereinafter referred to as the 'Plan') is to provide to employees and
consultants of Osicom Technologies. Inc. (hereinafter referred to as the
'Corporation'), as well as employees and consultants of Subsidiary or Parent
Corporations which may currently exist or be formed or acquired in the future,
an opportunity for investment in the Corporation's common stock (hereinafter
referred to as the 'Shares'), as an inducement for such individuals to remain
with the Corporation and to encourage them to increase their efforts to make the
Corporation's business more successful.

2. EFFECTIVE DATE AND TERMINATION OF PLAN. The effective date of the Plan
is September 24, 1997, the date on which the Plan was adopted by the Board of
Directors of the Corporation. The Plan shall terminate on, and no option shall
be granted hereunder, after September 23, 2007; provided, however, that the
Board of Directors, in its discretion, may at any time prior to that date
terminate the Plan; and, provided, further, that any option granted hereunder
prior to the termination of the Plan shall remain exercisable in accordance with
the terms of the option as in effect as of the date of termination of the Plan.

3. ADMINISTRATION OF PLAN. The Plan shall be administered by the Board of
Directors of the Corporation. The Board of Directors may, however, to the extent
permissible under the Corporation's Articles of Organization, By-laws and
applicable law, delegate any of its functions under this Plan to a committee of
the Board of Directors or any other committee. Wherever in this Plan the term
'Board of Directors' is used, it shall be construed to mean such committee to
the extent that the Board of Directors may have delegated any of its functions
to said committee and only to the extent of any such delegation. The acts of a
majority of the members present at any meeting of the Board of Directors at
which a quorum is present, or acts approved in writing by a majority of the
entire Board of Directors, shall be the acts of the Board of Directors for
purposes of the Plan.

4. ELIGIBILITY AND GRANT OF OPTIONS. Subject to the provisions of the Plan,
the Board of Directors shall (i) authorize the granting of incentive stock
options, non-qualified stock options or a combination of incentive stock options
and non-qualified stock options (hereinafter collectively referred to as
'options' unless otherwise stated); (ii) determine and designate from time to
time those employees and consultants (from the group consisting of all employees
and consultants) of the Corporation, its Parent or Subsidiaries to whom options
are to be granted and the number of Shares to be optioned to each employee or
consultant; (iii) determine the number of Shares subject to each option; and
(iv) determine the time or times when and the manner in which each option shall
be exercisable and the duration of the exercise period. In determining the
eligibility of an individual to receive an option, as well as in determining the
number of Shares to be optioned to any individual, the Board of Directors shall
consider the position and responsibilities of the employee or consultant, the
nature and value to the Corporation, Parent or Subsidiary of his or her services
and accomplishments, his or her present and potential contribution to the
success of the Corporation, Parent or Subsidiary, and such other factors as the
Board of Directors may deem relevant. To be eligible to receive an incentive
stock option or non-qualified stock option, an individual must be an employee or
consultant of the Corporation, its Parent or a Subsidiary. A member of the Board
of Directors shall abstain from voting on the grant of any options to himself or
herself, his or her spouse or his or her children, grandchildren or parents. The
grant of each option shall be subject to all the terms of the Plan and shall be
confirmed by a Stock Option Agreement (in the form prescribed by the Board of
Directors) which shall be executed by the Corporation and the optionee as
promptly as practicable after such grant. More than one option may be granted to
an individual.

Incentive stock options shall be those options which satisfy the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended,
and which the Board of Directors has specifically

<PAGE>

identified as incentive stock options in the Stock Option Agreement executed by
the Corporation and the optionee. Incentive stock options may be granted only to
employees of the Corporation, its Parent or a Subsidiary. In the case of
incentive stock options, the aggregate fair market value, determined at the time
incentive stock options are granted, of the stock with respect to which the
incentive stock options are exercisable for the first time by such individual
during any calendar year (under all such plans the Corporation may adopt) shall
not exceed one hundred thousand dollars ($100,000.00). In the event that an
incentive stock option granted pursuant to the terms of this Plan is granted to
an employee who, prior to the grant, holds more than ten percent (10%) of the
total combined voting power of all classes of stock of the Corporation, its
Parent or a Subsidiary ('10% Shareholder'), the option price under such grant
shall be at least one hundred ten percent (110%) of the fair market value, and
such option, by its terms, shall not be exercisable more than five (5) years
from the date of grant.

Nothing in the Plan or in any option granted pursuant to the Plan shall
confer on any individual any right to continue in the employ of the Corporation
or any Parent or Subsidiary or interfere in any way with the right of the
Corporation or any Parent or Subsidiary to terminate his or her employment at
any time.

5. NUMBER OF SHARES SUBJECT TO OPTIONS. The Board of Directors, prior to
the time options under the Plan become exercisable, shall reserve for the
purposes of the Plan a total of one million five hundred thousand (1,500,000)
Shares, which Shares may be either authorized and unissued Shares, or previously
issued Shares held in the treasury of the Corporation, or both. Shares subject
to options granted under the Plan which remain unexercised at the expiration or
termination thereof, and Shares subject to options granted under the Plan which
are cancelled, may be the subject of the grant of further options. Shares
reserved pursuant to this paragraph shall be adjusted to reflect changes in the
Corporation's capital structure as set forth in paragraph 19 hereof.

6. OPTION PRICE. The option price per Share shall be determined in each
case by the Board of Directors and shall be set forth in the Stock Option
Agreement with respect thereto. The option price per Share shall not be less
than one hundred percent (100%) (or one hundred ten percent (110%) in the case
of an incentive stock option granted to a 10% Shareholder) of the fair market
value thereof on the date the option is granted, as determined by the Board of
Directors by any reasonable method using market quotations.

7. PERIOD OF OPTION AND WHEN EXERCISABLE. No option may be granted under
this Plan whose exercise date is later than ten (10) years after the date of
grant or five (5) years after the date of grant in the case of an incentive
stock option granted to a 10% Shareholder. Generally, an option may be exercised
only by the optionee and, subject to the provisions set forth below, only if, at
all times during the period beginning on the date of the granting of such option
and ending with the date of exercise of such option, the optionee is an employee
or consultant of the Corporation, its Parent or a Subsidiary.

(i) Except as otherwise provided herein, in the case of an employee
or consultant who terminates employment with the Corporation, its
Parent or Subsidiaries, options which are vested but unexercised
as of the date of termination of said employment must be
exercised within three (3) months of termination. In the case of
an employee or consultant who is discharged for cause, as
determined in the sole discretion of the Board of Directors, all
previously vested but unexercised options shall be forfeited
immediately.

(ii) In the case of an employee or consultant who dies during the
three (3) month period set forth in (i) above, options which are
vested but unexercised as of the date of termination of
employment must be exercised within twelve (12) months of death.

(iii) Options which are vested but unexercised as of the date of
termination of employment with the Corporation, its Parent or
Subsidiaries due to death, must be exercised within twelve
(12) months after the death of the optionee.

(iv) In the event that an employee becomes disabled as defined in
Section 22(e) (3) of the Internal Revenue Code of 1986, as
amended, options which are vested but unexercised as of the date
of termination of employment with the Corporation, its Parent or
Subsidiaries due to disability must be exercised within twelve
(12) months following the date of termination of the optionee's
said employment.

<PAGE>

(v) In the event an optionee's employment with the Corporation, its
Parent or Subsidiaries is terminated for any reason (including,
but not limited to, voluntary or involuntary termination or
termination resulting from the death or disability of the
optionee), all unvested options shall be immediately forfeited.

Notwithstanding the foregoing, options may not be exercised after the
original five (5) or ten (10) year term. Options may be exercised on behalf
of the estate of a former employee by the person or persons entitled to do
so under the optionee's will or, if the optionee shall have failed to make
testamentary disposition of such option or shall have died intestate, by
the optionee's legal representative or representatives. Such person,
persons, representative, or representatives are hereinafter referred to as
the 'Successors of an Optionee.'

8. VESTING. Options granted under this Plan shall be exercisable in
accordance with the terms of the applicable Stock Option Agreement, as
determined by the Board of Directors in its discretion at the time of grant.

9. EXERCISE OF OPTIONS. Subject to Plan restrictions and vesting, an option
may be exercised, and payment in full of the option price made, by an optionee
only by written notice (in the form prescribed by the Board of Directors) to the
Corporation specifying the number of Shares to be so purchased. Such notice
shall state that the option price will be paid in full in cash (which, in the
discretion of the Board of Directors, may be obtained through a loan from the
Corporation or from a third party and guaranteed by the Corporation) or other
property, in the discretion of the Corporation. If the Corporation accepts a
request to pay in stock of the Corporation in satisfaction of the exercise
price, the fair market value of said stock shall at least equal the option
price, and, in the case of incentive stock options, prior to such acceptance the
Corporation must be furnished with evidence that the acquisition of said stock
and its transfer in payment of the option price satisfies the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended, and other
applicable law. As soon as practicable after receipt by the Corporation of such
notice and of payment in full of the option price of all the Shares with respect
to which an option has been exercised, a certificate or certificates
representing such Shares shall be registered (subject to the provisions of
paragraph 16 hereof) in the name of the optionee or the Successors of an
Optionee and delivered to the optionee or to the Successors of an Optionee.

10. SALE OF THE CORPORATION. In the case of a Sale of the Corporation, as
herein defined, and in the discretion of the Board of Directors, options granted
but unexercised shall become fully vested (100%) and exercisable for a period of
twenty (20) days from the date notice of such Sale is given to the optionees.
Upon the expiration of the twenty (20) day period, all then unexercised options
shall be permanently cancelled. For purposes of this paragraph, a Sale of the
Corporation shall be deemed to occur upon the happening of any one of the
following:

(i) A sale of all or substantially all of the Corporation's assets
outside the ordinary course of business;

(ii) An offer to purchase at least a majority of the Corporation's
issued and outstanding common stock or an offer to the
Corporation's shareholders to tender for sale at least a
majority of the Corporation's issued and outstanding common
stock, which offer is accepted or tender made with respect to at
least a majority of the Corporation's issued and outstanding
shares of common stock;

(iii) The merger or consolidation of the Corporation with another
corporation or entity; or

(iv) A dissolution or liquidation of the Corporation.

11. EMPLOYER WITHHOLDING. In the case of non-qualified stock options, the
Corporation shall be required to withhold additional income taxes attributable
to that amount which is considered compensation includible in the optionee's
gross income by reason of the exercise of such options. The Corporation, in its
discretion, shall determine the method and amount of withholding.

12. EXERCISE BY SUCCESSORS AND PAYMENT IN FULL. An option may be exercised,
and payment in full of the option price made, by the Successors of an Optionee
only by written notice (in the form prescribed by the Board of Directors) to the
Corporation specifying the number of Shares to be purchased. Such notice shall
state that the option price will be paid in full in cash (which, in the

<PAGE>

discretion of the Board of Directors, may be obtained through a loan from the
Corporation or from a third party and guaranteed by the Corporation), property
or stock of the Corporation, as provided for in paragraph 9 hereof. As soon as
practicable after receipt by the Corporation of such notice and of payment in
full of the option price of all the Shares with respect to which an option has
been exercised, a certificate or certificates representing such Shares shall be
registered (subject to the provisions of paragraph 16 hereof) in the name or
names of such Successors of an Optionee and shall be delivered to such
Successors.

13. NON-TRANSFERABILITY OF OPTION. Each option granted under the Plan
shall, by its terms, be nontransferable by the optionee except by will or the
laws of descent and distribution of the state wherein the optionee is domiciled
at the time of his or her death; provided, however, that the Board of Directors
may determine, in its discretion, to make an Option transferable, in which case
such Option shall contain such additional terms and conditions as the Board of
Directors deems appropriate.

14. OTHER TERMS OF OPTION. Options granted pursuant to the Plan shall
contain such other terms, provisions, and conditions not inconsistent herewith
as shall be determined by the Board of Directors.

15. REGISTRATION OF CERTIFICATES. Certificates representing Shares may be
registered either in the name of the Optionee or in the name or names of the
Successors of an Optionee. Designation of the appropriate form of registration
of certificates shall be made in the written notice given to the Corporation
upon exercise of an option.

16. LISTING AND REGISTRATION OF SHARES. If at any time the Board of
Directors shall determine, in its discretion, that the listing, registration, or
qualification of any of the Shares subject to options under the Plan upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of options or the purchase or
issue of Shares thereunder, no further options may be granted and outstanding
options may not be exercised, in whole or in part, unless and until such
listing, registration, qualification, consent, or approval shall have been
effected or obtained, free of any conditions not acceptable to the Board of
Directors. The Board of Directors shall have the authority to cause the
Corporation, at its expense, to take any action related to the Plan which may be
required in connection with such listing, registration, qualification, consent,
or approval. The Board of Directors may require that any person exercising an
option hereunder shall make such representations and agreements and furnish such
information as the Board of Directors deems appropriate to assure compliance
with the foregoing or any other applicable legal requirement.

17. INTERPRETATION AND AMENDMENTS. The Board of Directors may make such
rules and regulations and establish such procedures for the administration of
the Plan as the Board of Directors deems appropriate. The Board of Directors
shall have discretionary power to construe and interpret this Plan and to
determine all questions that shall arise hereunder. In the event of any dispute
or disagreement as to the interpretation of this Plan or of any rule,
regulation, or procedure, or as to any question, right or obligation arising
from or related to the Plan, the decision of the Board of Directors shall be
final and binding upon all persons. The Board of Directors may amend this Plan,
or any option outstanding under the Plan, as it shall deem advisable, provided,
however, that in no event shall any such amendment adversely affect the rights
of an optionee under any existing Stock Option Agreement without the consent of
such optionee.

18. INDEMNIFICATION AND EXCULPATION.

(a) Each person who is or shall have been a member of the Board of
Directors shall be indemnified and held harmless by the Corporation against and
from any and all loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be or become a party
or in which he or she may be or become involved by reason of any action taken or
failure to act under the Plan and against and from any and all amounts paid by
him or her in settlement thereof (with the Corporation's written approval) or
paid by him or her in satisfaction of a judgment in any such action, suit, or
proceeding, except a judgment in favor of the Corporation based upon a finding
of his or her lack of good faith; subject, however, to the condition that upon
the institution of any such claim, action, suit, or proceeding against him or
her , he or she shall in writing give the Corporation an opportunity, at its own
expense, to

<PAGE>

handle and defend the same before he or she undertakes to handle and defend it
on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other right to which such person may be entitled as a matter of
law or otherwise, or any power that the Corporation may have to indemnify him or
her or hold him or her harmless.

(b) Each member of the Board of Directors, and each officer, employee, and
consultant of the Corporation, shall be fully justified in relying or acting in
good faith upon any information furnished in connection with the administration
of the Plan by any other appropriate person or persons. In no event shall any
person who is or shall have been a member of the Board of Directors, or an
officer or employee of the Corporation, be held liable for any determination
made or other action taken, or any omission to act, in reliance upon any such
information, or for any action (including the furnishing of information) taken,
or any failure to act, if in good faith.

19. CHANGES IN CAPITAL STRUCTURE. In the event that a dividend shall be
declared upon the Shares payable in Shares, the number of Shares then subject to
any option outstanding under the Plan, and the number of Shares reserved for the
grant of options pursuant to the Plan but not yet subject to option, shall be
adjusted by adding to each such Share the number of Shares which would be
distributable in respect thereof if such Shares had been outstanding on the date
fixed for determining the shareholders of the Corporation entitled to receive
such Share dividend. In the event that the outstanding Shares shall be changed
into or exchanged for a different number of Shares or other securities of the
Corporation or of another corporation, whether through reorganization,
recapitalization, split-up, combination of shares, merger, or consolidation,
then there shall be substituted for each Share subject to any such option, and
for each Share reserved for the grant of options pursuant to the Plan but not
yet subject to option, the number and kind of Shares or other securities into
which each outstanding Share shall have been so changed or for which each such
Share shall have been exchanged. In the event there shall be any change, other
than as specified above in this paragraph, in the number or kind of outstanding
Shares or of any shares or other securities into which such Shares shall have
been changed or for which they shall have been exchanged, then, if the Board of
Directors shall, in its sole discretion, determine that such change equitably
requires an adjustment in the number or kind of Shares theretofore reserved for
the grant of options pursuant to the Plan but not yet subject to option, and of
the Shares then subject to an option or options, such adjustments shall be made
by the Board of Directors and shall be effective and binding for all purposes of
the Plan and of each option outstanding hereunder. In the case of any such
substitution or adjustment as provided for in this paragraph, the aggregate
option exercise price set forth for all outstanding options for all Shares
covered thereby prior to such substitution or adjustment will be the option
exercise price for all shares or other securities which shall have been adjusted
pursuant to this paragraph. No adjustment or substitution provided for in this
paragraph shall require the Corporation to sell a fractional Share, and the
total substitution or adjustment with respect to each outstanding option shall
be limited accordingly. Upon any adjustment made pursuant to this paragraph, the
Corporation will, upon request, deliver to the optionee or to the Successors of
an Optionee a certificate setting forth the option price thereafter in effect
and the number and kind of shares or other securities thereafter purchasable on
the exercise of the option.

20. NOTICES. All notices under the Plan shall be in writing, and if to the
Corporation, shall be delivered. to the Treasurer of the corporation or mailed
to its principal office, addressed to the attention of the Treasurer; and if to
the optionee, shall be delivered personally or mailed to the optionee at the
most recent address appearing in the records of the Corporation. Such addresses
may be changed at any time by written notice to the other party.

21. DEFINITIONS. The following terms as used in this Plan shall have the
meanings set forth below:

(a) 'Parent Corporation' or 'Parent' means any corporation (other than
the Corporation) in an unbroken chain of corporations ending with the
Corporation if each of the corporations other than the Corporation 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. A
corporation that attains the status of a Parent on a date after the
adoption of the Plan shall be considered a Parent commencing as of such
date. A corporation that ceases to maintain the status of a Parent on a
date after the adoption of the Plan shall no longer be considered a Parent
commencing as of such date.

<PAGE>

(b) 'Subsidiary Corporation' or 'Subsidiary' means any corporation
(other than the Corporation) in an unbroken chain of corporations beginning
with the Corporation if each of the corporations other than the last
corporation in the unbroken chain 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. A corporation that attains the status of
a Subsidiary on a date after the adoption of the Plan shall be considered a
Subsidiary commencing as of such date. A corporation that ceases to
maintain the status of a Subsidiary on a date after the adoption of the
Plan shall no longer be considered a Subsidiary commencing as of such date.

<PAGE>

APPENDIX 1
BROKER PROXY CARD

OSICOM TECHNOLOGIES, INC.
2800 28TH STREET, SANTA MONICA, CA 90405
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Christopher E. Sue as Proxy, with the power to
appoint a substitute and hereby authorizes him to represent and to vote, as
designated on the reverse side of this card, all the shares of common stock of
Osicom Technologies, Inc. (the "Company") held of record by the undersigned as
of December 1, 1999, at the annual meeting of shareholders to be held on January
5, 2000 or any adjournment thereof.

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)

<PAGE>

---------------------------------
WHEN PROXY IS OKAYED PLEASE SIGN
& DATE IT ABOVE

Please date, sign and mail your
proxy card back as soon as possible!

Annual Meeting of Shareholders
OSICOM TECHNOLOGIES, INC.

January 5, 2000

Please Detach and Mail in the Envelope Provided

A [X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.

1. To elect a Board [ ] [ ]
of Directors of
four (4) persons
to serve until the
2000 Annual Meeting of Shareholders or until a
successor is duly elected and qualified.
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual nominee, put a
line through that nominee's name at right.)

<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN

<S> <C> <C> <C>
2. Proposal to Approve the Amended and Restated
1997 Incentive and Non-Qualified Stock Option [ ] [ ] [ ]
Plan.

3. Proposal to Ratify the Selection of BDO
Seidman, LLP as the Company's independent [ ] [ ] [ ]
auditors for fiscal year 2000.

4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment or
postponement thereof as to which discretionary authority may be granted.
</TABLE>

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3. THIS PROXY ALSO CONFERS DISCRETIONARY AUTHORITY
WITH RESPECT TO ANY BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT OR POSTPONEMENT THEREOF AS TO WHICH DISCRETIONARY AUTHORITY MAY BE
GRANTED.

PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THE PROXY CARD.

<TABLE>
<S> <C> <C>
Signature _______________________________ _______________________________ Date: ________, 1999
SIGNATURE IF HELD JOINTLY
</TABLE>

Note: Please sign exactly as name appears. When shares are held by joint
tenants, both should sign. When signing as an attorney, as an executor,
as administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
an authorized person.

<PAGE>

APPENDIX 2
INTERNET/PHONE PROXY CARD

ANNUAL MEETING OF SHAREHOLDERS of
OSICOM TECHNOLOGIES, INC.

January 5, 2000

PROXY VOTING INSTRUCTIONS

TO VOTE BY MAIL
- ---------------
Please date, sign and mail your proxy card in the envelope provided as soon as
possible.

TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
- --------------------------------------------
Please call toll-free 1-800-PROXIES and follow the instructions. Have your
control number and the proxy card available when you call.

TO VOTE BY INTERNET
- -------------------
Please access the web page at "www.voteproxy.com" and follow the on-screen
instructions. Have your control number available when you access the web page.

YOUR CONTROL NUMBER IS [ ]

Please Detach and Mail in the Envelope Provided

<PAGE>

A [X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.

<TABLE>
<CAPTION>
FOR all nominees WITHHOLD NOMINEES: Par Chadha
listed at right (except AUTHORITY Xin Cheng
as marked to the to vote for all nominees Leonard N. Hecht
contrary at right) listed at right Renn Zaphiropoulos
<S> <C> <C> <C>
1. To elect a Board [ ] [ ]
of Directors of
four (4) persons
to serve until the
2000 Annual Meeting of Shareholders or until a
successor is duly elected and qualified.
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual nominee, put a
line through that nominee's name at right.)

<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
2. Proposal to Approve the Amended and Restated
1997 Incentive and Non-Qualified Stock Option [ ] [ ] [ ]
Plan.

3. Proposal to Ratify the Selection of BDO
Seidman, LLP as the Company's independent [ ] [ ] [ ]
auditors for fiscal year 2000.

PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THE PROXY CARD.

<TABLE>
<S> <C> <C>
Signature _______________________________ _______________________________ Date: ________, 1999
SIGNATURE IF HELD JOINTLY
</TABLE>