AMX CORP, DEF 14A, 1996-07-26

AMX CORP
DEF 14A, 1996-07-26
ELECTRONIC COMPONENTS & ACCESSORIES

Previous: PIPER FUNDS INC II, N14AE24, 1996-07-26

Next: PHYSICIANS RESOURCE GROUP INC, 424B3, 1996-07-26

<PAGE>
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

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

AMX CORPORATION
- --------------------------------------------------------------------------------
(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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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>
AMX CORPORATION
11995 FORESTGATE DRIVE
DALLAS, TEXAS 75243

July 25, 1996

To Our Shareholders:

We are pleased to invite you to attend AMX Corporation's Annual Meeting,
which will be held at the Sheraton Park Central Hotel, LBJ Freeway and Coit
Road, 12720 Merit Drive, Dallas, Texas 75251 at 10:00 a.m. on August 16, 1996.
The doors will open at 9:00 a.m.

The matters to be acted on at the meeting are described in the Proxy
Statement. We hope that you will be able to attend the meeting. However, whether
or not you attend, it is important that you vote. Please mark, date, sign and
return the enclosed proxy card to ensure that your shares will be represented at
the meeting.

The Board of Directors and the management team look forward to seeing you at
the meeting.

Sincerely,

[SIGNATURE OF SCOTT D. MILLER APPEARS
HERE]

SCOTT D. MILLER
CHAIRMAN OF THE BOARD
<PAGE>
AMX CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JULY 25, 1996

To the Shareholders of AMX Corporation:

NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Shareholders of AMX
Corporation, a Texas corporation (the "Company"), will be held on August 16,
1996, at 10:00 a.m. at the Sheraton Park Central Hotel, LBJ Freeway and Coit
Road, 12720 Merit Drive, Dallas, Texas 75251 for the following purposes:

1. To elect directors to serve for the following year and until their
successors are duly elected and qualified;

2. To ratify the appointment of Ernst & Young LLP as independent
accountants of the Company for the fiscal year ending March 31, 1997; and

3. To transact such other business as may properly come before the meeting
or any adjournments thereof.

The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.

Shareholders of record at the close of business on July 16, 1996 are
entitled to notice of and to vote at the meeting. Only holders of record of the
Company's common stock on that date are entitled to vote on matters coming
before the meeting and any adjournment or postponement thereof. A complete list
of shareholders entitled to vote at the meeting will be maintained in the
Company's offices at 11995 Forestgate, Dallas, Texas 75243 for ten days prior to
the meeting and will be open to the examination of any shareholder during
ordinary business hours of the Company.

Please advise the Company's Transfer Agent, ChaseMellon Shareholder
Services, 2323 Bryan Street, Suite 2300, Dallas, Texas 75201 of any change in
your address.

All shareholders are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed Proxy as soon as possible in the envelope
enclosed for that purpose. Any shareholder attending the meeting may vote in
person even if he or she previously returned a Proxy.

By Order of the Board of Directors

[SIGNATURE OF PETER D. YORK APPEARS
HERE]

PETER D. YORK
SECRETARY

Dallas, Texas
July 25, 1996
<PAGE>
AMX CORPORATION
11995 FORESTGATE DRIVE
DALLAS, TEXAS 75243

PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 16, 1996

INFORMATION CONCERNING SOLICITATION AND VOTING

GENERAL

The enclosed proxy is solicited on behalf of the Board of Directors of AMX
Corporation (the "Company" or "AMX") for the Annual Meeting of Shareholders to
be held on August 16, 1996, at 10:00 a.m. at the Sheraton Park Central Hotel,
LBJ Freeway and Coit Road, 12720 Merit Drive, Dallas, Texas 75251, or any
adjournment or adjournments thereof, for the purposes set forth herein and in
the accompanying Notice of Annual Meeting.

This proxy statement and the enclosed proxy card are being sent beginning
approximately July 26, 1996, to all shareholders entitled to vote at the
meeting. The Company's annual report for the fiscal year ended March 31, 1996 is
being mailed herewith to all shareholders entitled to vote at the Annual
Meeting. The annual report does not constitute a part of the soliciting
materials.

RECORD DATE; OUTSTANDING SHARES

Only shareholders of record at the close of business on July 16, 1996 (the
"Record Date") are entitled to receive notice of and to vote at the meeting. The
outstanding voting securities of the Company as of such date consisted of
7,794,730 shares of common stock, par value $.01 per share (the "Common Stock").
The Company has no other class of stock outstanding. For information regarding
holders of more than 5% of the outstanding Common Stock, see "Election of
Directors -- Security Ownership of Certain Beneficial Owners and Management."

REVOCABILITY OF PROXIES

The enclosed proxy is revocable at any time before its use by delivering to
the Company a written notice of revocation or a duly executed proxy bearing a
later date. If a person who has executed and returned a proxy is present at the
meeting and wishes to vote in person, he or she may elect to do so and thereby
suspend the power of the proxy holders to vote his or her proxy.

VOTING AND SOLICITATION

Every shareholder of record on the Record Date is entitled, for each share
held, to one vote on each proposal or item that comes before the meeting. Each
shareholder will be entitled to vote for seven nominees in the election of
directors, and the seven nominees with the greatest number of votes will be
elected. There are no cumulative voting rights.

The cost of this solicitation will be borne by the Company. The Company may
reimburse expenses incurred by brokerage firms and other persons representing
beneficial owners of shares in forwarding solicitation material to beneficial
owners. Proxies may be solicited by certain of the Company's directors, officers
and regular employees, without additional compensation, personally, by
telephone, by facsimile or by telegram.

QUORUM; ABSTENTIONS; BROKER NON-VOTES

The required quorum for the transaction of business at the Annual Meeting is
a majority of the shares of Common Stock issued and outstanding on the Record
Date. Shares that are voted "FOR," "AGAINST" or "WITHHELD FROM" a matter are
treated as being present at the meeting for purposes of establishing a quorum
and are also treated as shares "represented and voting" at the Annual Meeting
(the "Votes Cast") with respect to such matter.
<PAGE>
While there is no definitive statutory or case law authority in Texas as to
the proper treatment of abstentions, the Company believes that abstentions
should be counted for purposes of determining both (i) the presence or absence
of the quorum for the transaction of business, and (ii) the total number of
Votes Cast with respect to a proposal. In the absence of controlling precedent
to the contrary, the Company intends to treat abstentions in this manner.
Accordingly, abstentions will have the same effect as a vote against a proposal.

Broker non-votes will be counted for purposes of determining the presence or
absence of a quorum for the transaction of business, but will not be counted for
purposes of determining the number of Votes Cast with respect to a proposal.

DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS

Proposals of shareholders of the Company that are intended to be presented
by such shareholders at the Company's 1997 Annual Meeting must be received by
the Company, addressed to Peter D. York, Secretary, AMX Corporation, 11995
Forestgate Drive, Dallas, Texas 75243, no later than March 28, 1997 so that they
may be included in the proxy statement and form of proxy relating to that
meeting. Such proposals must comply with the Bylaws of the Company and the
requirements of Regulation 14A of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").

With respect to business to be brought before the Annual Meeting to be held
on August 16, 1996, the Company has not received any notices from shareholders
that the Company is required to include in this Proxy Statement.

ELECTION OF DIRECTORS
(ITEM 1)

A Board of seven directors is to be elected at the meeting. Unless otherwise
instructed, the proxy holders will vote all of the proxies received by them for
the Company's seven nominees named below. In the event that additional persons
are nominated for election as directors, the proxy holders intend to vote all
proxies received by them in such a manner as will ensure the election of as many
of the nominees listed below as possible and, in such event, the specific
nominees to be voted for will be determined by the proxy holders. In the event
that any of the nominees shall become unavailable, the proxy holders will vote
in their discretion for a substitute nominee. It is not expected that any
nominee will be unavailable. The term of office of each person elected as a
director will continue until the next Annual Meeting of Shareholders and until
his successor has been elected and qualified.

VOTE REQUIRED

The seven nominees receiving the highest number of affirmative votes of the
shares entitled to be voted shall be elected to the Board of Directors. Votes
withheld from any director are counted for purposes of determining the presence
or absence of a quorum and for purposes of determining the total number of votes
cast for such director, but have no other legal effect under Texas law.

Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the Company's seven nominees named below, all of whom are
presently directors of the Company. If any nominee of the Company is unable or
declines to serve as a director at the time of the meeting, the proxies will be
voted for any nominee who is designated by the present Board of Directors to
fill the vacancy. It is not expected that any nominee will be unable or will
decline to serve as a director.

2
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE NOMINEES
LISTED BELOW.

The names and certain information about the nominees for directors are set
forth below:

<TABLE>
<CAPTION>
NAME OF NOMINEE AGE POSITIONS/PRINCIPAL OCCUPATION DIRECTOR SINCE
- --------------------------- --- ------------------------------------------ ---------------
<S> <C> <C> <C>
Scott D. Miller 43 Chairman of the Board and 1982
Director
Joe Hardt 41 President and Director 1995
Peter D. York 53 Senior Vice President, Secretary 1995
and Director
Thomas S. Roberts (1) 33 General Partner in Venture 1995
Capital Fund
Harvey B. Cash (1) 56 General Partner in Venture 1995
Capital Fund
S. Wayne Bazzle (2) 60 Chairman and Chief Executive 1996
Officer HealthCor, Inc.
F.H. (Dick) Moeller (2) 51 Chairman and Chief Exective 1996
Officer VTEL Corporation
</TABLE>

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

(1) Members of the Compensation Committee.

(2) Members of the Audit Committee.

Except as set forth below, each of the nominees has been engaged in the
principal occupation described above during the past five years. There is no
family relationship between any director or executive officer of the Company.

Set forth below is certain information with respect to each of the nominees
for director and each other executive officer of the Company:

NOMINEES

SCOTT D. MILLER, Chairman of the Board and a co-founder of the Company,
served as President, Chief Executive Officer and a director of the Company since
its inception in 1982 until September 1995, when he relinquished his positions
as President and Chief Executive Officer. Prior to joining the Company, Mr.
Miller served as Regional Services Manager of Linear Corporation and National
Sales Manager of Pavco Electronics. Mr. Miller also served in the U.S. Air
Force.

JOE HARDT, President, served as Chief Operating Officer of the Company from
1993 to September 1995, and has been a director since March 1995. In September
1995, Mr. Hardt was elected President of the Company, a position which includes
the duties of chief executive officer. Prior to joining the Company, Mr. Hardt
was an attorney in private practice in Dallas, Texas from 1980 to 1993. In 1986,
he was one of the founding shareholders of Munsch Hardt Kopf Harr & Dinan, P.C.
where he was a practicing attorney until 1993, and he served as the firm's
President from April 1986 to April 1989. Mr. Hardt holds a B.A. in English from
Centenary College of Louisiana and a J.D. from the University of Texas School of
Law.

PETER D. YORK, Senior Vice President, has served in that capacity for the
Company since 1992, has served as Secretary since August 1, 1995, and has been a
director since March 1995. Mr. York joined the Company in 1991 upon the
acquisition by the Company of York Controls, Inc. Mr. York founded York
Controls, Inc. in 1978 and served as its President and Chief Executive Officer
until its acquisition by the Company.

THOMAS S. ROBERTS has served as a director of the Company since March 1995.
Mr. Roberts currently serves as general partner in various venture capital funds
affiliated with Summit Partners,

3
<PAGE>
a venture capital firm, where he has been employed since 1989. He currently
serves on the Board of Directors of Catalyst International, Inc., a software
company, and PowerCerv Corporation, a software company. Mr. Roberts also serves
on the Board of Directors of several privately-held companies that are involved
in software development and related industries. Mr. Roberts holds a B.A. in
Economics from Princeton University and an M.B.A. from Harvard University.

HARVEY B. CASH has served as a director of the Company since March 1995. Mr.
Cash has served as general or limited partner in various venture capital funds
affiliated with InterWest Partners, a venture capital firm, since 1985. He is
Chairman of the Board of Cyrix Corporation, a microprocessor company and
currently serves on the Board of Directors of ProNet, Inc., a paging company;
Aurora Electronics, Inc., a distributor of recycled integrated circuit boards
and computer components; BenchMarq Microelectronics, Inc., a developer of chips
and chipsets for portable electronic devices; Heritage Media Corporation, an
owner and operator of radio and television stations; and i2 Technologies, Inc.,
a provider of supply chain management software. Mr. Cash holds a B.S. in
Electrical Engineering from Texas A&M University and an M.B.A. from Western
Michigan University.

S. WAYNE BAZZLE has served as a director of the Company since January 19,
1996. Mr. Bazzle has served as Chief Executive Officer and Chairman of the Board
of HealthCor Holdings, Inc. (or predecessors), a home health services provider,
since 1984. Mr. Bazzle served as President and Chief Executive Officer of Drum
Financial Corporation, a financial services company, from 1976 to 1981. Mr.
Bazzle holds a B.A. from the University of Virginia and a Masters Degree from
the University of Richmond.

F.H. (DICK) MOELLER has served as a director of the Company since January
19, 1996. Mr. Moeller has served as Chief Executive Officer, President and
director of VTEL Corporation ("VTEL"), a designer, manufacturer and marketer of
multi-media conferencing systems, since October 1989 and became Chairman of the
Board of VTEL in March 1992. From May 1982 to October 1989, he served as the
founder and President of Profit Master Computer Systems, Inc., a computer
software firm specializing in real-time financial management systems for
point-of-sale applications. Prior to founding such firm, Mr. Moeller spent 12
years with Texas Instruments Incorporated during which he held a variety of
management positions, most recently serving as Advanced Systems Manager of its
Computer Systems Division. Mr. Moeller is also a director of Accord
Telecommunications, Ltd. (Israel).

OTHER EXECUTIVE OFFICER

DAVID E. CHISUM, 40, has served as the Chief Financial Officer and Treasurer
of the Company since May 31, 1996. Billie I. Williamson, the former Chief
Financial Officer of the Company since 1993, resigned from her position as Chief
Financial Officer effective as of May 31, 1996. Prior to joining the Company,
Mr. Chisum served as Chief Financial Officer for Superior Air Parts, Inc., a
manufacturer and distributor of replacement parts for piston-based aircraft,
from January 1996 to May 1996, and he served as Vice President -- Planning &
Business Development for Connectware, Inc., a wholly-owned subsidiary of AMP,
Incorporated, a manufacturer of hardware and software products for the multi-
media market, from January 1995 to January 1996. From 1984 to 1995, he served as
Chief Financial Officer of Piper Industries of Texas, Inc., a manufacturer of
plastic transport containers. Mr. Chisum holds a B.B.A. from Baylor University
and was granted a CPA certificate by the State of Texas in 1978.

The current directors (except for Messrs. Bazzle and Moeller) were elected
pursuant to a Shareholders' Agreement (the "Shareholders' Agreement") entered
into among the Company, several members of management and several venture
capital funds in connection with an investment in the Company by the venture
capital funds. The parties to the Shareholders' Agreement agreed to vote all
shares owned by them for election of directors designated in accordance with the
Shareholders' Agreement. Such arrangement terminated upon the consummation of
the Company's initial public offering in November 1995.

4
<PAGE>
Each director serves until the next annual meeting of shareholders and until
his successor is duly elected and qualified. The Company's Board of Directors is
currently composed of seven directors and the officers serve at the discretion
of the Board of Directors.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of June 1, 1996, certain information with
respect to the beneficial ownership of the Company's Common Stock by (i) each
person known by the Company to own beneficially more than five percent (5%) of
the outstanding shares of Common Stock, (ii) each current director of the
Company, (iii) the executive officers of the Company named in the table under
"Executive Compensation -- Summary Compensation Table," and (iv) all directors
and executive officers as a group. Except as otherwise described above in "Vote
Required," the Company does not know of any agreements among its shareholders
that relate to voting or investment power of its shares of Common Stock.

<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED(1)
------------------------
PERCENTAGE
5% BENEFICIAL OWNERS, DIRECTORS AND EXECUTIVE OFFICERS NUMBER OWNERSHIP
- ----------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
Summit Partners(2)........................................................... 1,169,076 15.1%
600 Atlantic Avenue
Suite 2800
Boston, Massachusetts 02210-2227
InterWest Partners(3)........................................................ 1,066,900 13.7%
13355 Noel Road
Suite 1375, LB #65
Dallas, Texas 75240
TA Associates(4)............................................................. 1,056,926 13.6%
125 High Street
Boston, Massachusetts 02110
Essex Investment Management Company(5)....................................... 600,550 7.7%
125 High Street
Boston, Massachusetts 02110
Thomas S. Roberts(2)......................................................... 1,174,076 15.1%
c/o Summit Partners
600 Atlantic Avenue
Suite 2800
Boston, Massachusetts 02210-2227
Harvey B. Cash(3)............................................................ 1,071,900 13.8%
c/o InterWest Partners
13355 Noel Road
Suite 1375, LB #65
Dallas, Texas 75240
S. Wayne Bazzle(6)........................................................... 5,000 *
F.H. (Dick) Moeller(7)....................................................... 5,000 *
Scott D. Miller.............................................................. 1,108,000 14.3%
Peter D. York(8)............................................................. 572,984 7.3%
Joe Hardt(9)................................................................. 391,016 4.8%
All directors and executive officers as a group
(seven persons)(2)(3)(10)................................................... 4,327,976 52.9%
</TABLE>

- ------------------------
* Less than 1%

5
<PAGE>
(1) The information contained in this table with respect to beneficial ownership
reflects "beneficial ownership" as defined in Rule 13d-3 under the Exchange
Act. All information with respect to the beneficial ownership of any
principal shareholder was supplied in a Schedule 13D or 13G filed with the
Securities and Exchange Commission (the "SEC") by or on behalf of such
principal shareholder under the Exchange Act and/or was furnished by such
principal shareholder to the Company and, except as otherwise indicated or
pursuant to community property laws, each shareholder has sole voting and
investment power with respect to shares listed as beneficially owned by such
shareholder. Shares subject to options exercisable within 60 days of June 1,
1996 are deemed outstanding for computing the percentage of the person
holding such options, but are not deemed outstanding for computing the
percentage of any other person. The address of each executive officer of the
Company who owns beneficially more than five percent (5%) of the outstanding
shares of Common Stock is as follows: c/o AMX Corporation, 11995 Forestgate
Drive, Dallas, Texas 75243.

(2) Consists of 982,020, 163,674 and 23,382 shares of Common Stock held of
record by Summit Ventures III, L.P., Summit Subordinated Debt Fund, L.P.,
and Summit Investors II, L.P., respectively, all of which are part of an
affiliated group of investment partnerships referred to, collectively, as
Summit Partners. Summit Partners SD, L.P. is a general partner of Summit
Subordinated Debt Fund, L.P. Summit Partners III, L.P. is a General Partner
of Summit Ventures III, L.P. Stamps Woodsum & Co. III is a general partner
of Summit Partners III, L.P. and Summit Partners SD, L.P. Thomas S. Roberts
is a director of the Company and is a general partner of Stamps Woodsum &
Co. III and a general partner of Summit Investors II, L.P. Except to the
extent of his pecuniary interest in the funds, he disclaims beneficial
ownership of the 1,169,076 shares of Common Stock owned by Summit Partners.
The shares listed as being beneficially owned by Mr. Roberts also include
5,000 shares of Common Stock issuable upon exercise of outstanding options,
which are presently exercisable, that were granted to Mr. Roberts under the
Company's 1995 Nonemployee Director Plan upon his election to the Board of
Directors. See "Compensation Plans -- 1995 Director Stock Option Plan."

(3) Consists of 1,060,242 and 6,658 shares of Common Stock held of record by
InterWest Partners V, L.P. and InterWest Investors V, respectively, both of
which are part of an affiliated group of investment partnerships referred
to, collectively, as InterWest Partners. InterWest Management Partners V,
L.P. is the general partner of InterWest Partners V, L.P. and Harvey B. Cash
is a general partner of InterWest Investors V and is a limited partner of
InterWest Management Partners V, L.P. Harvey B. Cash is a director of the
Company. Except to the extent of his pecuniary interest in the funds, Mr.
Cash disclaims beneficial ownership of the 1,066,900 shares of Common Stock
owned by InterWest Partners. The shares listed as being beneficially owned
by Mr. Cash also include 5,000 shares of Common Stock issuable upon exercise
of outstanding options, which are presently exercisable, that were granted
to Mr. Cash under the Company's 1995 Nonemployee Director Plan upon his
election to the Board of Directors. See "Compensation Plans -- 1995 Director
Stock Option Plan."

(4) Consists of 720,308, 186,536, 72,030, 67,248 and 10,804 shares of Common
Stock held of record by Advent VII L.P., Advent Atlantic and Pacific II
L.P., Advent New York L.P., Advent Industrial II L.P. and TA Venture
Investors Limited Partnership, respectively, all of which are part of an
affiliated group of investment partnerships referred to, collectively, as TA
Associates. TA Associates VII L.P. is the general partner of Advent VII
L.P., and TA Associates AAP II Partners is the general partner of Advent
Atlantic and Pacific II L.P. TA Associates VI L.P. is the general partner of
Advent New York L.P. and of Advent Industrial II L.P. TA Associates, Inc. is
the general partner of TA Associates VII L.P., TA Associates AAP II Partners
and TA Associates VI L.P. In such capacity, TA Associates, Inc. exercises
voting and investment power with respect to all of the shares of record held
by affiliates of TA Associates, with the exception of those shares held by
TA Venture Investors Limited Partnership. Several of the general partners of
TA Venture Investors Limited Partnership are officers and directors of TA
Associates, Inc.

6
<PAGE>
(5) Consists of 470,100 shares of Common Stock over which Essex Investment
Management Company has sole dispositive and sole voting power and an
additional 130,450 shares of Common Stock over which Essex Investment
Management Company has sole dispositive power.

(6) Represents 5,000 shares of Common Stock issuable upon exercise of
outstanding options, which are presently exercisable, that were granted to
Mr. Bazzle under the Company's 1995 Nonemployee Director Plan upon his
election to the Board of Directors. See "Compensation Plans -- 1995 Director
Stock Option Plan."

(7) Represents 5,000 shares of Common Stock issuable upon exercise of
outstanding options, which are presently exercisable, that were granted to
Mr. Moeller under the Company's Nonemployee Director Plan upon his election
to the Board of Directors. See "Compensation Plans -- 1995 Director Stock
Option Plan."

(8) Includes 89,864 shares of Common Stock issuable upon exercise of outstanding
options that are presently exercisable or are exercisable within 60 days
after June 1, 1996.

(9) Includes 316,016 shares of Common Stock issuable upon exercise of
outstanding options that are presently exercisable or are exercisable within
60 days after June 1, 1996.

(10) Includes, in addition to an aggregate of 20,000 options granted to the
outside directors of the Company, an aggregate of 405,880 shares of Common
Stock issuable upon exercise of outstanding options granted to the executive
officers of the Company that are presently exercisable or are exercisable
within 60 days after June 1, 1996. Does not include 119,792 shares of Common
Stock held by Billie I. Williamson, who resigned as Chief Financial Officer
of the Company effective May 31, 1996.

The Shareholders' Agreement entered into in connection with an investment in
the Company by several venture capital funds terminated by its own terms upon
consummation of the Company's initial public offering; provided, however, that
each shareholder who is a party to the Shareholders' Agreement continues to have
the right to participate in any sales of Common Stock of the Company made by the
other parties to the Shareholders' Agreement at the same price per share and on
the same terms and conditions, other than sales of shares made pursuant to a
registration statement or any sales made pursuant to Rule 144 or Rule 701
promulgated under the Securities Act of 1933, as amended (the "Securities Act").
The co-sale right described above, the exercise of which may result in a change
of control of the Company, will terminate on the earlier of (i) March 30, 2005
or (ii) at such time as such venture capital funds own less than 30% of the
Common Stock originally acquired by them.

BOARD MEETINGS AND COMMITTEES

The Board of Directors of the Company held a total of two meetings during
the fiscal year ended March 31, 1996. In addition, the Board of Directors acted
seven times by unanimous consent during the fiscal year ended March 31, 1996.
During the fiscal year ended March 31, 1996, each director attended at least 75%
of the meetings of the Board of Directors (held during the period for which he
was a director).

The Audit Committee, currently consisting of directors S. Wayne Bazzle and
F.H. (Dick) Moeller, was appointed in January 1996 and, as a result, did not
meet during the last fiscal year. This Committee recommends engagement of the
Company's independent auditors and reviews with management and the independent
auditors the Company's financial statements, basic accounting and financial
policies and practices, audit scope and competency of control personnel.

The Compensation Committee, currently consisting of directors Thomas S.
Roberts and Harvey B. Cash, was appointed in November 1995 and, as a result, did
not meet during the last fiscal year; however, Messrs. Roberts and Cash held a
meeting of the Compensation Committee on April 30, 1996. This Committee reviews
and recommends to the Board of Directors the compensation of executive officers
of the Company and administers and makes awards and takes all other action as is
provided

7
<PAGE>
under the employee benefit plans of the Company, including, but not limited to,
the 1993 Stock Option Plan, the 1995 Stock Option Plan and the 1996 Employee
Stock Purchase Plan, excluding, however, the 1995 Director Stock Option Plan.
See "Compensation Plans" below.

BOARD COMPENSATION

Currently, the Company's directors do not receive any compensation from
serving on the Board of Directors or any Committees but are reimbursed by the
Company for expenses incurred in attending meetings of the Board of Directors or
any Committees. However, all nonemployee directors participate in the Company's
1995 Nonemployee Director Plan (as defined below) and will receive non-statutory
stock options under the 1995 Nonemployee Director Plan.

On November 21, 1995, Thomas S. Roberts and Harvey B. Cash, who are both
nonemployee directors of the Company, were each granted options to purchase
5,000 shares of Common Stock exercisable at an exercise price of $8.75 per share
of Common Stock. In addition, on January 19, 1996, S. Wayne Bazzle and F.H.
(Dick) Moeller, who are both nonemployee directors of the Company, were each
granted options to purchase 5,000 shares of Common Stock at an exercise price of
$8.25 per share of Common Stock. Options to purchase 5,000 shares of Common
Stock will be granted to each new nonemployee director at the time such person
is first elected or appointed to the Board. In addition, immediately following
the Company's annual meeting of shareholders each year, commencing with the
Company's Annual Meeting on August 16, 1996, each nonemployee director will
automatically be granted options to purchase 2,500 shares of Common Stock. See
"Compensation Plans -- 1995 Director Stock Option Plan" below.

REPORT OF THE COMPENSATION COMMITTEE

The following is the Report of the Compensation Committee of the Company,
describing the compensation policies and rationale applicable to the Company's
officers with respect to the compensation paid to the officers for the fiscal
year ended March 31, 1996. The information contained in the Report of the
Compensation Committee shall not be deemed to be "soliciting material" or to be
"filed" with the SEC, nor shall such information be incorporated by reference
into any future filing under the Securities Act or the Exchange Act except to
the extent that the Company specifically incorporates it by reference into such
filing.

TO THE BOARD OF DIRECTORS:

As members of the Compensation Committee, it is our duty to administer the
executive compensation program for the Company. The Compensation Committee is
responsible for establishing appropriate compensation goals for the executive
officers of the Company and evaluating the performance of such executive
officers in meeting such goals. The elements of the executive compensation
program described below are implemented and periodically reviewed and adjusted
by the Compensation Committee.

The goals of the Compensation Committee in establishing the Company's
executive compensation program are as follows:

(1) To fairly compensate the executive officers of the Company for their
contributions to the Company's short-term and long-term performance. The
elements of the Company's compensation program are (i) annual base salaries,
(ii) annual cash bonuses and (iii) equity incentives.

(2) To allow the Company to attract, motivate and retain the management
personnel necessary to the Company's success by providing an executive
compensation program comparable to that offered by similar companies.

(3) To provide an executive compensation program with incentives linked to
the financial performance of the Company. Under such program, incentive
compensation for executive officers is linked to the general financial
performance of the Company as measured by such items as revenues and income from
operations.

8
<PAGE>
BASE SALARIES. The annual base salaries of the Chairman of the Board, the
Chief Executive Officer and the other executive officers of the Company were
predetermined pursuant to employment agreements that were entered into by the
Company and such individuals prior to the appointment of the Compensation
Committee and were negotiated as part of the venture capital investment in the
Company that occurred in March 1995 prior to the Company's initial public
offering. The Compensation Committee has, however, reviewed such base salaries
in light of corporate performance, individual performance, experience and a
comparison with salary ranges and midpoints reflecting similar positions, duties
and levels of responsibility of other companies in similar industries and with
comparable revenues and has found them to be reasonable. Each executive
officer's base salary is reviewed annually by the Compensation Committee and is
subject to upward adjustment on the basis of individual and corporate
performance.

ANNUAL AND OTHER BONUSES. The bonuses available to the executive officers,
which for the 1996 fiscal year included Scott D. Miller, Joe Hardt, Billie I.
Williamson (who resigned effective May 31, 1996) and Peter D. York, are based
upon the subjective evaluation of the performance of each individual and are not
contingent on the achievement of any specific performance targets. Such bonuses
are designed to maximize the shareholder value.

EQUITY INCENTIVES. Equity incentives, including grants of stock options,
are determined based on the Compensation Committee's assessment of the ability
of such officers to positively impact the Company's future performance and
enhance shareholder value as determined by their individual performances. Stock
option grants and other equity incentives are not awarded annually but as the
individual performance and experience of each executive officer warrants. Option
awards generally vest in cumulative installments of 25% per year. The amount and
vesting of stock options are not contingent on achievement of any specific
performance targets. All options granted will benefit the executive only to the
extent that there is appreciation in the market price of the Common Stock during
the option period.

Equity and cash incentives are not limited to executive officers. Grants of
stock options are made to employees upon joining the Company in amounts
determined by the Compensation Committee and are also made to selected employees
as performance related awards and as awards for certain promotions. The amounts
of such grants are determined based on the individual employee's position with
the Company and his or her potential ability to beneficially impact the
performance of the Company. By giving all employees a stake in the financial
performance of the Company, the Compensation Committee's goal is to provide
incentives to all employees of the Company to enhance the financial performance
of the Company and, thus, shareholder value.

CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER COMPENSATION. The
compensation for the fiscal year ended March 31, 1996 of the Chairman and Chief
Executive Officer of the Company principally consisted of a base salary and an
annual bonus. Mr. Miller relinquished his positions as President and Chief
Executive Officer in connection with Company's initial public offering and, in
September 1995, Mr. Hardt was elected President of the Company, a position which
includes the duties of chief executive officer. Messrs. Miller's and Hardt's
base salary was established by contract prior to the Company's initial public
offering on November 15, 1995, and therefore prior to the formation of the
Compensation Committee. On March 31, 1995, Messrs. Miller and Hardt entered into
employment agreements that set their base salary for the balance of the fiscal
year ended March 31, 1996. Mr. Hardt received other compensation in the fiscal
year ended March 31, 1996 in the amount of $1,748 consisting of the Company's
matching contributions under the Company's Retirement and Savings Plan (the
"401(k) Plan"). Mr. Miller does not participate in the Company's 401(k) Plan. In
addition, Messrs. Miller and Hardt each were allocated $6,345 under the AMX
Corporation Profit

9
<PAGE>
Sharing Plan (the "Profit Sharing Plan") during the fiscal year ended March 31,
1996. Messrs. Miller and Hardt do not participate in the Compensation
Committee's decision regarding their compensation.

COMPENSATION COMMITTEE

Thomas S. Roberts
Harvey B. Cash

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Prior to the consummation of the Company's initial public offering on
November 21, 1995, the Company did not have a Compensation Committee (or other
committee of the Board of Directors performing similar functions) and,
accordingly, the Board of Directors determined the compensation for the
executive officers and other related matters. Prior to the consummation of the
Company's initial public offering, Messrs. Miller and Hardt and Ms. Williamson
participated in such deliberations of the Board of Directors concerning
executive officer compensation. Effective upon consummation of the Company's
initial public offering, the Company formed a Compensation Committee, of which
Messrs. Roberts and Cash were the initial (and current) members. The Company may
appoint one or more of the outside directors to the Compensation Committee.

During the last fiscal year, no executive officer of the Company served as a
member of the board of directors or compensation committee of any entity that
has one or more executive officers serving as a member of the Company's Board of
Directors or Compensation Committee.

TA Associates, InterWest Partners and Summit Partners through one or more of
their respective investment funds purchased 45,000 shares of Common Stock,
50,000 shares of Common Stock and 55,000 shares of Common Stock, respectively,
in the Company's initial public offering at a price of $8.37 per share (the
$9.00 public offering price net of underwriting discounts and commissions).
Thomas S. Roberts and Harvey B. Cash, who are directors of the Company, are each
general partners of funds affiliated with Summit Partners and InterWest
Partners, respectively.

XTG, Inc., one of the Company's dealers, is wholly owned by Scott D. Miller,
the Company's Chairman of the Board. During the fiscal year ended March 31,
1996, XTG, Inc. purchased approximately $62,741 of products from the Company at
the same prices charged to other dealers for similar items in similar
quantities.

On March 31, 1995, Mr. Miller executed a promissory note in the original
principal amount of $96,321 payable to the Company (the "Miller Note") as
consideration for the assignment by the Company to Mr. Miller of a promissory
note dated December 29, 1993 (the "XTG Revolving Note") evidencing a revolving
line of credit up to a maximum of $750,000 payable by XTG, Inc. to the Company.
At the time of transfer on March 31, 1995, the Company had approximately
$546,000 due under the XTG Revolving Note, for which a reserve of $450,000 had
been established, however, the XTG Revolving Note had a book value at the time
of transfer of $96,321 due to the anticipated uncollectibility of the XTG
Revolving Note. The XTG Revolving Note bears interest at a rate of 6% per annum,
payable monthly, and is due in one lump sum on demand. All principal and accrued
but unpaid interest, which accrued at 8% per annum, under the Miller Note were
repaid in full by Mr. Miller on March 31, 1996.

On May 1, 1995, Joe Hardt, President and a director of the Company,
exercised an option to acquire 50,000 shares of Common Stock for an aggregate
purchase price of $44,750 with $250 paid in cash and $44,500 paid to the Company
by delivery of his promissory note in the original principal amount of $44,500
bearing interest at the rate of 7.5% per annum with all principal and interest
due on May 1, 1998. As of June 1, 1996, principal in the amount of $20,581,
together with interest thereon of $108, remained outstanding.

10
<PAGE>
On June 15, 1995, Peter D. York, Senior Vice President, Secretary and a
director of the Company, executed a promissory note to the Company in the
original principal amount of $77,298, bearing interest at 7.5% per annum with
all principal and interest due on June 15, 1996. As of June 1, 1996, principal
in the amount of $55,092, together with interest thereon of $313, remained
outstanding.

In August 1995, the Company, together with several individual shareholders
(including two former employees of the Company), organized PHAST Corporation
("PHAST"). PHAST has its principal place of business in Salt Lake City, Utah and
has been organized to design, manufacture, market, and distribute automation
control systems and products for the residential market. The Company owns 51% of
the outstanding capital stock of PHAST and has a commitment to loan up to
$1,115,000 to PHAST for the 12-15 month period beginning August 1, 1995, for the
development of home automation hardware and software products, of which $585,000
has been advanced at March 31, 1996.

On August 15, 1995, Billie I. Williamson, then the Chief Financial Officer
of the Company, exercised an option to acquire 100,000 shares of Common Stock by
delivery of an aggregate purchase price of $105,000 with (i) $52,750 paid in
cash and (ii) $52,250 paid by the delivery of a promissory note to the Company
bearing interest at the rate of 7.5% per annum with all principal and interest
due on August 15, 1998. As of June 1, 1996, principal in the amount of $2,623,
together with interest thereon of $156, remained outstanding.

In addition, on March 29, 1996, Ms. Williamson exercised an option to
acquire 25,000 shares of Common Stock for an aggregate price of $46,875, which
amount Ms. Williamson paid by delivering to the Company 5,208 shares of Common
Stock having an aggregate fair market value of $46,875.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

F.H. (Dick) Moeller, a director of the Company, is the Chairman of the Board
and Chief Executive Officer of VTEL. During the fiscal year ended March 31,
1996, VTEL purchased approximately $548,860 of products from the Company at the
same prices charged to other OEM dealers for similar items in similar
quantities. See "Compensation Committee Interlocks and Insider Participation"
above.

11
<PAGE>
PERFORMANCE GRAPH

The following graph compares the cumulative total shareholder return on an
investment of $100 on November 16, 1995 (the date of the Company's initial
public offering) in (i) the Company's Common Stock, (ii) the CRSP Total Return
Index for the Nasdaq Stock Market (U.S. Companies) Index (the "Nasdaq Composite
Index"), and (iii) the Total Return Index of the Nasdaq Stock Market --
Electronic Components. The values with each investment as of the date of the
Company's initial public offering are based on share price appreciation and the
reinvestment of dividends.

The information contained in the Performance Graph shall not be deemed to be
"soliciting material" or to be "filed" with the SEC, nor shall such information
be incorporated by reference into any future filing under the Securities Act or
the Exchange Act except to the extent that the Company specifically incorporates
it by reference into such filing.

[PERFORMANCE GRAPH APPEARS HERE]

The graph above assumes $100 invested on November 16, 1995 (the date of the
Company's initial public offering), and was plotted using the following data:

<TABLE>
<CAPTION>
11/16/95 11/30/95 12/29/95 1/31/96 2/29/96 3/29/96
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
AMX $ 100.00 $ 94.30 $ 100.00 $ 102.90 $ 102.90 $ 101.40
Nasdaq -- US $ 100.00 $ 101.50 $ 100.90 $ 101.40 $ 105.30 $ 105.60
Nasdaq -- Electronic Components $ 100.00 $ 99.10 $ 89.90 $ 89.90 $ 93.80 $ 89.40
</TABLE>

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE. The following table summarizes information with
respect to the compensation of the Company's Chairman of the Board, who served
as the Company's Chief Executive Officer during the fiscal year ended March 31,
1996 prior to relinquishing such duties in September 1995, and the other most
highly compensated executive officers of the Company (the "Executive Group")
whose total compensation exceeded $100,000 during the fiscal year ended March
31, 1996.

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
--------------
NUMBER OF
ANNUAL COMPENSATION SECURITIES
------------------------------ UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY (1) BONUS OPTIONS COMPENSATION (2)
- ------------------------------------------ --------- -------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C> <C>
Scott D. Miller........................... 1996 $ 230,932 -- -- $ 6,345
Chairman of the Board 1995 366,735 -- -- 11,725
1994 322,652 -- -- 11,568
Joe Hardt................................. 1996 $ 175,365 $ 38,667 200,000(3) $ 8,093
President 1995 168,480 50,000 56,836 12,175
1994 160,430 -- -- 7,598
Billie I. Williamson...................... 1996 $ 149,654 $ 38,667 100,000(3) $ 7,835
Former Chief Financial Officer 1995 125,000 112,500 -- 12,040
1994 36,085(4) -- -- --
Peter D. York............................. 1996 $ 165,127 $ 38,667 100,000(3) $ 7,428
Senior Vice President 1995 111,300 384,986(5) 64,864(5) 11,725
1994 98,191 228,776 -- 15,185
</TABLE>

- ------------------------
(1) Under the terms of the March 30, 1995 employment agreements, as amended, the
annual base salary for Messrs. Miller, Hardt and York through March 30, 1998
will be $230,500, $175,000 and $182,000, respectively, subject to any
increases determined by the Compensation Committee. See "-- Employment
Agreements" below. Under the terms of the March 30, 1995 employment

12
<PAGE>
agreement for Ms. Williamson, the annual base salary for Ms. Williamson was
$150,000 for the fiscal year ended March 31, 1996. Ms. Williamson's
employment agreement was terminated in connection with her resignation as
Chief Financial Officer of the Company effective as of May 31, 1996.

(2) Represents the amounts of matching contributions and allocations made by the
Company for participating officers under the 401(k) Plan (which was
established in January 1995) and the Profit Sharing Plan (which was
established in 1989). For fiscal 1996, the Company (a) made matching
contributions under the 401(k) Plan of $1,748 for Joe Hardt, $1,490 for
Billie Williamson, and $1,083 for Peter York and (b) allocated $6,345 under
the Profit Sharing Plan to the accounts of each of Messrs. Miller, Hardt,
and York and Ms. Williamson.

(3) Messrs. Hardt and York and Ms. Williamson were granted these options
pursuant to their respective employment agreements at an exercise price of
$1.88 per share, which was in excess of the fair market value per share. See
"-- Employment Agreements" below.

(4) Represents the portion of Ms. Williamson's $125,000 annual salary for the
fiscal year ended March 31, 1994 since her employment commenced in December
1993.

(5) Under the terms of an agreement with Mr. York entered into in 1991, Mr. York
earned a bonus equal to 10% of the Company's pre-tax income for fiscal year
1995. In addition, Mr. York was entitled to receive a bonus for the
Company's fiscal year ended March 31, 1996 equal to 75% of 10% of the
Company's pre-tax income for fiscal year 1996. However, by letter agreement
dated March 1, 1995, the Company and Mr. York agreed to forego the bonus
under the 1991 agreement for fiscal year 1996 in consideration for the grant
by the Company to Mr. York of an option to purchase 64,864 shares of Common
Stock at an exercise price of $2.07 per share.

OPTION GRANTS IN LAST FISCAL YEAR. The following table provides information
on stock options granted to the Executive Group during the fiscal year ended
March 31, 1996.

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
--------------------------------------------------------- ANNUAL RATES OF
NUMBER OF STOCK PRICE
SECURITIES PERCENT OF TOTAL APPRECIATION FOR
UNDERLYING OPTIONS GRANTED PER SHARE OPTION TERM(2)
OPTIONS TO EMPLOYEES IN EXERCISE EXPIRATION --------------------
NAME GRANTED(1) FISCAL YEAR PRICE DATE 5% 10%
- ------------------------------------------- ------------- ----------------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Scott D. Miller............................ -- -- -- -- -- --
Joe Hardt.................................. 200,000(3) 34% $ 1.88 12/31/04 -0- $ 30,098
Billie I. Williamson....................... 100,000(3) 17 1.88 12/31/04 -0- 15,049
Peter D. York.............................. 100,000(3) 17 1.88 12/31/04 -0- 15,049
</TABLE>

- ------------------------
(1) 25% of such options granted are exercisable after the first, second, third,
and fourth anniversaries of the date of grant, respectively.

(2) The dollar amounts under these columns represent the realizable value of
each grant of options assuming that the market price of the Common Stock
appreciates in value from the date of grant at the 5% and 10% assumed annual
rates of compounded stock price appreciation mandated by the rules of the
SEC. Actual gains, if any, on stock option exercises are dependent on many
factors, including the future financial performance of the Company and
overall market conditions, and there can be no assurance provided to the
Executive Group or any other holder of the Company's securities that the
actual stock price will appreciate at the assumed 5% or 10% levels or at any
other defined level.

(3) Messrs. Hardt and York and Ms. Williamson were granted certain stock options
pursuant to their respective employment agreements to purchase 200,000,
100,000 and 100,000 shares of Common Stock, respectively, at an exercise
price of $1.88 per share, which was set at this level by the Board

13
<PAGE>
of Directors by reference to existing option prices, among other factors.
The exercise price per share was in excess of the fair market value per
share at the date of grant, which was $.83 per share based upon an
independent appraisal.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES. The following options were exercised during the fiscal year ended March
31, 1996, by the Executive Group:

<TABLE>
<CAPTION>
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT MARCH IN-THE-MONEY OPTIONS AT
SHARES 31, 1996 MARCH 31, 1996 (2)
ACQUIRED ON VALUE ---------------------------- --------------------------
NAME EXERCISE REALIZED EXERCISABLE(1) UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------- ----------- --------- ------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Scott D. Miller................. -- -- -- -- -- --
Joe Hardt....................... 75,000 $ 221,000 316,016 150,000 $2,460,588 $ 1,050,000
Billie I. Williamson............ 100,000 595,000 25,000(3) 75,000(4) 175,000 525,000
Peter D. York................... -- -- 89,864 75,000 616,400 525,000
</TABLE>

- ------------------------------
(1) 25% of such options are exercisable after the first, second, third, and
fourth anniversaries of the date of grant, respectively.

(2) Based on the fair market value of the Common Stock of $8.875 per share as
reported on the Nasdaq National Market on March 29, 1996.

(3) Ms. Williamson exercised these options on May 29, 1996.

(4) These options were cancelled upon Ms. Williamson's resignation from the
Company on May 31, 1996.

14
<PAGE>
EMPLOYMENT AGREEMENTS

On March 30, 1995, the Company entered into employment agreements, which
have been subsequently amended, with Scott D. Miller, Joe Hardt and Peter D.
York (each an "Employment Agreement" and, collectively, the "Employment
Agreements"). Mr. Miller's Employment Agreement currently provides for his
employment by the Company as Chairman of the Board at an annual base salary of
$230,500; Mr. Hardt's Employment Agreement currently provides for his employment
by the Company as President at an annual base salary of $175,000; and Mr. York's
Employment Agreement currently provides for his employment by the Company as
Senior Vice President at an annual base salary of $182,000. Such amounts are
subject to annual increases as the Board of Directors may approve. In addition,
the Employment Agreements provide that each executive may participate in any
bonus plan as may be approved by the Compensation Committee of the Board of
Directors. Each executive is entitled to participate in all other incentive
compensation plans established for executive officers of the Company, except
that Mr. Miller is not eligible to participate in the Company's stock option
plans.

Each Employment Agreement provides for an initial employment term of three
years from the date of the Employment Agreement. In general, the Company may
terminate the executive's employment for "cause," death or "disability," or
"without cause," and the executive may terminate employment for "good reason."
If any executive's employment is terminated by the Company "without cause" or
the executive terminates employment for "good reason," the Company is required
to pay the executive his or her respective base salary for 12 months if such
termination occurs within 12 months after the date of the Employment Agreement;
and if such termination occurs after 12 months from the date of the Employment
Agreement, the executive's base salary shall continue to be paid for six months
following such termination, and the additional benefits shall terminate at the
time of such termination; provided, however, that the executive shall be
entitled to participate in the Company's medical benefit plans, at the Company's
expense, for 12 months following the date of such termination. If such
termination of Mr. Miller's employment occurs within eighteen months after March
30, 1995, the Company shall transfer a country club membership and airline pass
maintained by the Company for his benefit to Mr. Miller for no additional
consideration and shall pay forty percent of the then current book value of such
assets to Mr. Miller. If such termination occurs more than 18 months after March
30, 1995, such assets shall be transferred to Mr. Miller for no additional
consideration. Should Mr. Miller's employment be terminated within 18 months
after March 30, 1995 with "cause" or should he voluntarily terminate such
employment without "good reason," Mr. Miller is required to purchase such assets
at their then current book value.

On March 30, 1995, the Company also entered into an employment agreement
with Billie I. Williamson that contained terms substantially similar to the
Employment Agreements of Messrs. Hardt and York. Ms. Williamson's employment
agreement provided for her employment by the Company as Chief Financial Officer
at an annual base salary of $150,000; however, Ms. Williamson's employment
agreement was terminated in connection with her resignation from her position as
Chief Financial Officer effective as of May 31, 1996.

INDEBTEDNESS OF MANAGEMENT

See "Certain Relationships and Related Transactions" above.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file reports of ownership on Form 3 and
changes in ownership on Form 4 or Form 5 with the SEC. Such officers, directors
and ten percent stockholders are also required by SEC rules to furnish the
Company with copies of all Section 16(a) forms they file.

Based solely on its review of the copies of such forms received by it, the
Company believes that, during the fiscal year ended March 31, 1996, the
Company's officers, directors and ten percent shareholders complied with all
applicable Section 16(a) filing requirements.

15
<PAGE>
COMPENSATION PLANS

1993 Stock Option Plan. Adopted in April 1993, the AMX Corporation 1993
Stock Option Plan (the "1993 Stock Option Plan") is intended to advance the
interests of the Company and its shareholders by encouraging and enabling
selected officers, directors and employees, upon whose judgment, initiative and
effort the Company is largely dependent for the successful conduct of its
business, to acquire and retain a proprietary interest in the Company by
ownership of its stock. A total of 1,452,544 shares of Common Stock have been
authorized for issuance upon the exercise of options granted under the 1993
Stock Option Plan. As of June 1, 1996, options to purchase a total of 252,000
shares of Common Stock had been exercised, options to purchase a total of
829,580 shares at a weighted average exercise price of $2.62 per share were
outstanding, and 370,964 shares remained available for future option grants. In
establishing option prices, the Board of Directors has given consideration to a
number of factors which have included, among other things, the financial
condition of the Company, historical earnings, future estimated results of
operating, shares outstanding on a fully diluted basis, number of options to be
issued, and option prices for currently outstanding options. The Board of
Directors has on certain occasions priced options at levels above what the Board
of Directors determined to be the fair market value of the Company's Common
Stock. In those instances the Board of Directors had considered, among other
factors, existing option prices. The Company does not intend to grant any more
options under the 1993 Stock Option Plan due to the adoption of the 1995 Stock
Option Plan. The 1993 Stock Option Plan has terms substantially similar to the
1995 Stock Option Plan described below.

As of June 1, 1996, the stock option awards reflected in the following table
had been received by the individuals and groups referred to below pursuant to
the 1993 Stock Option Plan.

<TABLE>
<CAPTION>
DOLLAR VALUE ($)
AT FAIR MARKET
NAME AND POSITION STOCK OPTIONS VALUE(1)
- ----------------------------------------------------------------- ------------- ----------------------
<S> <C> <C>
Scott D. Miller.................................................. -0- -0-
Chairman of the Board
Joe Hardt (2)(3)................................................. 541,016 $ 3,906,344
President
Peter D. York (3)(4)............................................. 164,864 1,203,224
Senior Vice President
Billie I. Williamson (5)......................................... 125,000 773,125
Former Chief Financial Officer
Current executive officers, as a group (includes three persons)
(6)............................................................. 705,880 5,109,568
Non-Executive Director Group (7)................................. -0- -0-
Non-Executive Officer Employee Group (8)(9)...................... 250,700 1,026,588
</TABLE>

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

(1) Calculated on the basis of the closing price of $9.25 per share of the
Company's Common Stock on May 31, 1996, less the exercise price payable for
shares upon exercise of such options; however, the fair market value for
options exercised prior to May 31, 1996 was calculated on the basis of the
per share closing price of the Company's Common Stock on the date of
exercise, less the exercise price payable for shares upon exercise of such
options.

(2) Mr. Hardt received more than 5% of the total options granted under the 1993
Stock Option Plan. Mr. Hardt has exercised 75,000 of these options, all of
which had an exercise price of $.895 per share. Of the remaining options
granted to Mr. Hardt, Mr. Hardt holds 209,180 options that have an exercise
price of $.895 per share and expire on December 31, 2002, all of which are
presently

16
<PAGE>
exercisable; 56,836 options that have an exercise price of $1.11 per share
and expire on December 31, 2004, all of which are presently exercisable; and
200,000 options that have an exercise price of $1.88 per share and expire on
December 31, 2004, of which 50,000 options are presently exercisable.

(3) Messrs. Hardt and York are director nominees.

(4) Mr. York received more than 5% of the total options granted under the 1993
Stock Option Plan. Mr. York holds 64,864 options that have an exercise price
of $2.07 per share and expire on December 31, 2004, all of which are
presently exercisable; and 100,000 options that have an exercise price of
$1.88 per share and expire on December 31, 2004, of which 25,000 options are
presently exercisable.

(5) Ms. Williamson received more than 5% of the total options granted under the
1993 Stock Option Plan. Ms. Williamson has exercised the 125,000 options
listed in the table, of which 100,000 options had an exercise price of $1.05
per share and 25,000 options had an exercise price of $1.88 per share. The
number of options listed in the table does not include an additional 75,000
unvested options granted to Ms. Williamson, which were cancelled upon her
resignation from the Company effective May 31, 1996.

(6) Does not include options granted to Billie I. Williamson, the Company's
former Chief Financial Officer.

(7) This information is provided for all current directors who are not executive
officers as a group.

(8) This information is provided for all employees, including all current
officers who are not executive officers, as a group.

(9) Of the 250,700 options granted to the Non-Executive Officer Employee Group,
52,000 options have been exercised and 198,700 options remain outstanding at
a weighted average exercise price of $6.17 per share, of which 31,000
options are presently exercisable. The outstanding options have expiration
dates ranging from December 31, 2002 to July 31, 2005. The number of options
listed in the table does not include 21,300 options granted to various
employees that were cancelled upon such employees' respective termination of
employment with the Company.

1995 STOCK OPTION PLAN. Adopted in September 1995 by the Board of Directors
and approved by the shareholders in September 1995, the AMX Corporation 1995
Stock Option Plan (the "1995 Stock Option Plan") is intended to provide a means
by which selected employees and consultants of the Company and any affiliates
thereof may be given an opportunity to purchase stock of the Company. The
Company estimates that the number of persons currently eligible to participate
under the 1995 Stock Option Plan is approximately 185. The Company by means of
the 1995 Stock Option Plan seeks to retain the services of persons who are now
employees of or consultants to the Company and its affiliates, to secure and
obtain the services of new employees and consultants and to provide incentives
for such persons to exert maximum efforts for the success of the Company and its
affiliates.

Options granted under the 1995 Stock Option Plan may be either options which
qualify or options which do not qualify for treatment as "incentive stock
options" (the "Incentive Stock Options") under Section 422 of the Internal
Revenue Code of 1986, as amended, and applicable regulations and rulings
promulgated thereunder (collectively, the "Code"). Incentive Stock Options may
be granted under the 1995 Stock Option Plan to any person who is an officer or
other employee (including officers and employees who are also directors) of the
Company or any of its subsidiaries. The exercise price of Incentive Stock
Options must be not less than the fair market value of a share of the Common
Stock on the date of grant (and not less than 110% of the fair market value in
the case of an Incentive Stock Option granted to an optionee owning more than
10% of the Company's Common Stock). 1,000,000 shares of Common Stock have been
reserved for issuance upon the exercise of options granted under the 1995 Stock
Option Plan.

17
<PAGE>
The 1995 Stock Option Plan is administered by the Company's Board of
Directors or a committee of the Board of Directors (the "Administrators"). The
members of the Compensation Committee of the Board of Directors, who are
disinterested persons as such term is used in Rule 16b-3 promulgated under the
Exchange Act will administer the 1995 Stock Option Plan. The Administrators have
full and final authority in their discretion, subject to the 1995 Stock Option
Plan's provisions, (a) to determine the individuals to whom, and the time or
times at which, options shall be granted and the number of shares of Common
Stock covered by each option, (b) to construe and interpret the 1995 Stock
Option Plan, and (c) to make all other determinations and take all other actions
deemed necessary or advisable for the proper administration of the 1995 Stock
Option Plan. The 1995 Stock Option Plan and any option granted thereunder may be
amended or discontinued by the Administrators at any time without the approval
of the shareholders of the Company, subject to certain exceptions.

Generally, the options granted under the 1995 Stock Option Plan are
exercisable at any time, and from time to time, throughout a period commencing
on or after the date of grant in cumulative installments of 25% per each year,
or as otherwise specified by the Administrators, and ending upon the earliest of
the expiration, cancellation, surrender or termination of the option as provided
in the 1995 Stock Option Plan. The term of an option may not exceed ten years.
However, in the event of (i) a dissolution or liquidation of the Company, (ii) a
sale of all or substantially all of the assets of the Company, or (iii) upon
certain mergers where the shareholders of the Company receive cash or securities
of another issuer, upon determination by the Administrators, the options may be
exercised in whole or in part without regard to the installment provisions set
forth above. In the event of a sale or merger noted in (ii) and (iii), each
outstanding option will be assumed or an equivalent option will be substituted
by the successor entity absent the Administrators' determination to accelerate
vesting. The Company currently contemplates that options granted under the 1995
Stock Option Plan will also become vested upon a change of control of a majority
of the Company's then outstanding Common Stock.

The benefits that will be paid under the 1995 Stock Option Plan presently
are not determinable. Since it is the Company's policy to grant options to
selected employees and consultants from time to time as determined by the
Compensation Committee in its discretion, it is not possible at this time to
indicate the number, names or positions of employees or consultants who will
receive options or the number of shares for which options will be granted to any
employee or consultant under the 1995 Stock Option Plan.

As of July 2, 1996, the stock option awards reflected in the following table
had been received by the individuals and groups referred to below pursuant to
the 1995 Stock Option Plan.

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

(1) Calculated on the basis of the closing price of $5.75 per share of the
Company's Common Stock on July 2, 1996, less the exercise price payable for
shares upon exercise of such options.

(2) The 25,000 options granted to David E. Chisum have an exercise price of
$5.75 per share and expire on July 2, 2006. As of the date of this Proxy
Statement, none of the other current executive officers have been granted
options under the 1995 Stock Option Plan and, accordingly, Mr. Chisum has
received more than 5% of the total options granted under the 1995 Stock
Option Plan.

18
<PAGE>
(3) The 27,400 options granted to the Non-Executive Officer Employee Group
consist of 25,900 options granted to employees of the Company, which have an
exercise price of $7.75 per share and expire on April 30, 2006, and 1,500
options granted to employees of AudioEase, Inc., one of the Company's
subsidiaries, which have an exercise price of $9.00 per share and expire on
May 16, 2006.

1995 DIRECTOR STOCK OPTION PLAN. The Company's 1995 Director Stock Option
Plan (the "1995 Nonemployee Director Plan") was adopted in September 1995 by the
Board of Directors and approved by the shareholders in September 1995 to
encourage ownership of the Company by eligible nonemployee directors of the
Company whose continued services are considered essential to the Company's
future progress and to provide them with a further incentive to remain as
directors of the Company. The number of persons currently eligible to
participate under the 1995 Director Stock Option Plan is four. All options
granted under the 1995 Nonemployee Director Plan are non-qualified and are not
eligible for treatment as an Incentive Stock Option under Section 422 of the
Code. A total of 250,000 shares of Common Stock have been reserved for issuance
under the 1995 Nonemployee Director Plan.

Under the 1995 Nonemployee Director Plan, directors Thomas S. Roberts,
Harvey B. Cash, S. Wayne Bazzle and F.H. (Dick) Moeller were each automatically
granted upon election to the Board an option to purchase 5,000 shares of Common
Stock exercisable at the fair market value of such shares at the date of grant.
An option to purchase 5,000 shares of Common Stock will be granted to each new
eligible nonemployee director at the time such person is first elected or
appointed to the Board exercisable at the fair market value of such shares at
the date of grant. In addition, immediately following the Company's Annual
Meeting of Shareholders each year commencing with the Company's Annual Meeting
on August 16, 1996, each eligible nonemployee director will automatically be
granted an option to purchase 2,500 shares of Common Stock exercisable at the
fair market value of such shares at the date of grant.

Each option shall become exercisable on the date of grant and expires ten
years therefrom. Outstanding options will expire earlier if an optionee
terminates service as a director before the end of the ten year term. If an
optionee terminates service as a director for any reason including disability or
death, the option will automatically expire 12 months after the date of
termination not to exceed the ten year term. Options are not assignable and may
not be transferred other than by will or the laws of descent and distribution.
Upon a dissolution or liquidation of the Company, each outstanding option will
terminate unless otherwise provided by the Board of Directors. In the event of a
proposed sale of all or substantially all of the assets of the Company or upon
certain mergers where the shareholders of the Company receive cash or securities
of another issuer the options shall be assumed by the successor entity or
substituted for with an equivalent option.

The 1995 Nonemployee Director Plan continues in effect until terminated by
the Board of Directors or by shareholders, but such termination will not affect
the terms of any options outstanding at that time. The Board of Directors may
suspend or discontinue the 1995 Nonemployee Director Plan or review or amend it
in any respect whatsoever; provided, however, that without approval of the
shareholders of the Company no revision or amendment shall materially increase
the benefits accruing to participants under the 1995 Nonemployee Director Plan
or extend the term of the 1995 Nonemployee Director Plan. The 1995 Nonemployee
Director Plan may not be amended more than once in any six-month period, subject
to certain exceptions.

19
<PAGE>
As of June 1, 1996, the stock option awards reflected in the following table
had been received by the individuals referred to below pursuant to the 1995
Nonemployee Director Plan.

<TABLE>
<CAPTION>
DOLLAR VALUE ($)
AT FAIR MARKET
NAME AND POSITION STOCK OPTIONS VALUE(1)
- ------------------------------------------------------- --------------- ----------------------
<S> <C> <C>
Thomas S. Roberts(2)................................... 5,000 $ 2,500
Director
Harvey B. Cash(2)...................................... 5,000 2,500
Director
S. Wayne Bazzle(3)..................................... 5,000 5,000
Director
F.H. (Dick) Moeller(3)................................. 5,000 5,000
Director
</TABLE>

- ------------------------
(1) Calculated on the basis of the closing price of $9.25 per share of the
Company's Common Stock on May 31, 1996, less the exercise price payable for
shares upon exercise of such options.

(2) All of these options are exercisable and have an exercise price of $8.75 per
share.

(3) All of these options are exercisable and have an exercise price of $8.25 per
share.

1996 EMPLOYEE STOCK PURCHASE PLAN. The Company's 1996 Employee Stock
Purchase Plan (the "1996 Purchase Plan") was adopted by the Board of Directors
in September 1995 and approved by the shareholders of the Company in September
1995. The purpose of the 1996 Purchase Plan is to provide eligible employees of
the Company and designated subsidiaries an opportunity to purchase Common Stock
through accumulated payroll deductions. The Company estimates that the number of
persons currently eligible to participate under the 1996 Purchase Plan is
approximately 185. A total of 250,000 shares of Common Stock has been reserved
for issuance under the 1996 Purchase Plan.

The 1996 Purchase Plan, which is intended to qualify under Section 423 of
the Code, has two six-month offering periods each year beginning on the first
trading day on or after January 1 and July 1, respectively. The first offering
period commenced on the first trading day in 1996 and ended on the last trading
day of the period ended June 30, 1996.

The 1996 Purchase Plan permits eligible employees to purchase Common Stock
through payroll deductions of up to 10% of an employee's base compensation,
subject to the further limitation that an employee may not purchase more than
1,000 shares of Common Stock under the 1996 Purchase Plan during each six-month
offering period. The price of Common Stock purchased under the 1996 Purchase
Plan is 85% of the lower of the fair market value of the Common Stock at the
beginning or at the end of each offering period such percentage of the fair
market value used to determine the purchase price may be increased by the Board
of Directors or a committee thereof administering the 1996 Purchase Plan (the
"Plan Administrators").

Rights granted under the 1996 Purchase Plan are not transferable by a
participant other than by will, the laws of descent and distribution, or as
otherwise provided under the 1996 Purchase Plan. In the event of a merger or
consolidation of the Company with or into another entity or a sale of
substantially all of the Company's assets, each right to purchase stock under
the 1996 Purchase Plan will be assumed or an equivalent right substituted by the
successor entity, unless the Plan Administrators shorten the offering period so
that employees' rights to purchase stock under the 1996 Purchase Plan are
exercised prior to the merger or consolidation or sale of assets. Upon a
dissolution or liquidation of the Company, the relevant offering period will
terminate immediately prior to such event unless otherwise provided by the Plan
Administrators. The 1996 Purchase Plan will terminate September 1, 2005 unless
earlier terminated as provided in the 1996 Purchase Plan. The Plan
Administrators have the authority to amend or terminate the 1996 Purchase Plan,
subject to the requirements of Rule 16b-3 promulgated under the Exchange Act,
except that no such action may adversely affect any outstanding rights to
purchase stock under the 1996 Purchase Plan.

20
<PAGE>
As of June 1, 1996, the benefits that will be paid under the 1996 Purchase
Plan were not determinable and no options had been granted under the 1996
Purchase Plan. Since it is the Company's policy to provide eligible employees of
the Company the opportunity to purchase shares of Common Stock through payroll
deductions, it was not possible, as of June 1, 1996, to indicate the number,
names or positions of employees who will exercise any such option or the number
of shares for which options will be granted to any employee under the 1996
Purchase Plan.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

THE FOLLOWING DISCUSSION OF THE FEDERAL INCOME TAX CONSEQUENCES OF
PARTICIPATION IN THE 1993 STOCK OPTION PLAN, THE 1995 STOCK OPTION PLAN, THE
1995 NONEMPLOYEE DIRECTOR PLAN AND THE 1996 PURCHASE PLAN IS ONLY A SUMMARY OF
THE GENERAL RULES APPLICABLE TO THE GRANT AND EXERCISE OF STOCK OPTIONS AND DOES
NOT PURPORT TO GIVE SPECIFIC DETAILS ON EVERY VARIABLE AND DOES NOT COVER, AMONG
OTHER THINGS, STATE, LOCAL AND FOREIGN TAX TREATMENT OF PARTICIPATION IN SUCH
PLANS. THE INFORMATION IS BASED ON PRESENT LAW AND REGULATIONS, WHICH ARE
SUBJECT TO BEING CHANGED PROSPECTIVELY OR RETROACTIVELY. BECAUSE THE FEDERAL
INCOME TAX RULES GOVERNING OPTIONS AND RELATED PAYMENTS ARE COMPLEX AND SUBJECT
TO FREQUENT CHANGE, OPTIONEES ARE ADVISED TO CONSULT THEIR TAX ADVISORS PRIOR TO
THE EXERCISE OF OPTIONS OR DISPOSITIONS OF STOCK ACQUIRED PURSUANT TO OPTION
EXERCISE.

INCENTIVE STOCK OPTIONS. The optionee will recognize no taxable income and
the Company will not qualify for any deduction upon the grant or exercise of an
Incentive Stock Option. If the shares of Common Stock of the Company acquired
upon the exercise of an Incentive Stock Option are not subject to a substantial
risk of forfeiture, the excess, if any, of the fair market value of the shares
on the date of exercise over the exercise price will be treated as an item of
adjustment in computing the alternative minimum tax for a optionee's taxable
year in which the exercise occurs and may result in an alternative minimum tax
liability for the optionee.

If an optionee holds the shares acquired upon the exercise of an Incentive
Stock Option for at least two years from the date of grant and one year after
the issuance of the shares to the optionee, the optionee's gain, if any, upon a
subsequent disposition of such shares is long-term capital gain. The measure of
the gain is the difference between the amount realized on the disposition and
the optionee's basis in the shares (which generally equals the exercise price).

If the shares of Common Stock of the Company acquired upon the exercise of
an Incentive Stock Option are disposed of before expiration of the necessary
holding period of two years from the date of the grant of the option and one
year after the exercise of the option, (i) the optionee will recognize ordinary
compensation income in the taxable year of disposition in an amount equal to the
excess, if any, of (A) the lesser of the fair market value of the shares on the
date of exercise or the amount realized on the disposition of the shares, over
(B) the optionee's basis in the shares (usually the exercise price paid for such
shares); and (ii) the optionee's employer will qualify for a deduction equal to
any such compensation income recognized, subject to the limitation that the
compensation be reasonable. In addition, upon such disqualifying disposition,
the optionee will recognize the excess, if any, of the amount realized over the
fair market value of the shares on the date of exercise, if the shares are
capital assets, as short-term or long-term capital gain, depending on the length
of time that the optionee held the shares, and the optionee's employer will not
qualify for a deduction with respect to such excess. In the case of a
disposition of shares in the same taxable year as the exercise of an Incentive
Stock Option, where the amount realized on the disposition is less than the fair
market value of the shares on the date of exercise, there will be no adjustment
for alternative minimum tax purposes since the amount treated as an item of
adjustment is limited to the excess of the amount realized on such disposition
over the exercise price, which is the same amount included in regular taxable
income.

NONQUALIFIED OPTIONS. With respect to options that are not Incentive Stock
Options ("Nonqualified Options") granted under the 1995 Stock Option Plan and
the 1993 Stock Option Plan, (i) upon grant of the option, the optionee will
recognize no income; (ii) upon exercise of the option (if the shares of Common
Stock of the Company are not subject to a substantial risk of forfeiture), the
optionee will

21
<PAGE>
recognize ordinary compensation income in an amount equal to the excess, if any,
of the fair market value of the shares on the date of exercise over the exercise
price, and the optionee's employer will qualify for a deduction in the same
amount, subject to the requirement that the compensation be reasonable; and
(iii) the optionee's employer will be required to comply with applicable federal
income tax withholding requirements with respect to the amount of ordinary
compensation income recognized by the optionee. On a disposition of the shares,
the optionee will recognize gain or loss equal to the difference between the
amount realized and the sum of the exercise price and the ordinary compensation
income recognized. Such gain or loss will be treated as capital gain or loss if
the shares are capital assets and as short-term or long-term capital gain or
loss, depending upon the length of time that the optionee held the shares.

If the shares acquired upon exercise of a Nonqualified Option are subject to
a substantial risk of forfeiture, the optionee will recognize income at the time
when the substantial risk of forfeiture is removed and the optionee's employer
will qualify for a corresponding deduction at such time.

1995 NONEMPLOYEE DIRECTOR PLAN. The grant of a Nonqualified Option under
the 1995 Nonemployee Director Plan is generally not a taxable event for the
optionee and is not a taxable event for the Company. Upon exercise of the
option, the optionee will generally recognize ordinary income in an amount equal
to the excess, if any, of the fair market value of the shares acquired upon
exercise (determined as of the date of exercise) over the exercise price, and
the Company will be entitled to a deduction equal to such amount.

If the optionee is subject to Section 16 of the Exchange Act, special rules
will apply if the option is exercised during the period of time within six
months of the date it is issued. In such case, the optionee will not recognize
ordinary income and the Company will not be entitled to a deduction until the
expiration of the period following exercise during which the sale of shares
received could subject the optionee to liability under Section 16 of the
Exchange Act. Upon such expiration, the optionee will recognize ordinary income,
and the Company will be entitled to a deduction, equal to the excess of the fair
market value of the stock (determined as of the expiration of such period) over
the exercise price. Such an optionee may elect under Section 83(b) of the Code
to recognize ordinary income on the date of exercise, in which case the Company
would be entitled to a deduction at that time equal to the amount of the
ordinary income recognized.

1996 PURCHASE PLAN. The optionee will recognize no taxable income and the
Company will not qualify for any deduction upon the grant or exercise of an
option to purchase Common Stock under the 1996 Purchase Plan (each, a "Purchase
Option").

If an optionee holds the shares of Common Stock acquired upon the exercise
of a Purchase Option for at least two years from the date of grant of the option
and one year after the issuance of the shares to the optionee, the optionee must
include as compensation in his or her gross income for the taxable year of the
disposition an amount equal to the lesser of (i) the excess of the fair market
value of the shares at the time of disposition over the exercise price paid for
the shares or (ii) the excess of the fair market value of the shares at the time
the option was granted over the amount that would have been the exercise price
on the date the option was granted. This amount of compensation income will be
added to the optionee's adjusted basis in the shares and any gain recognized
upon the disposition will be long-term capital gain. The optionee's employer
will not be entitled to a deduction for this amount of compensation income. If
the fair market value of the shares on the date of disposition is less than the
exercise price, there will be no compensation income and any loss recognized
will be long-term capital loss.

If the shares of Common Stock of the Company acquired upon the exercise of a
Purchase Option are disposed of before expiration of the necessary holding
period of two years from the date of the grant of the option and one year after
the exercise of the option, (i) the optionee will recognize ordinary
compensation income in the taxable year of disposition in an amount equal to the
excess, if any, of (A) the fair market value of the shares on the date of
exercise, over (B) the optionee's basis in the shares (usually the exercise
price paid for such shares); and (ii) the optionee's employer will

22
<PAGE>
qualify for a deduction equal to any such compensation income recognized,
subject to the limitation that the compensation be reasonable. In such
instances, the amount of the ordinary income will be added to the optionee's
basis in the shares, and any additional gain or any loss recognized on the
disposition will be capital gain or loss, if the shares are capital assets. The
gain or loss will be long-term if the stock had been held for more than one
year. The optionee's employer will not qualify for a deduction with respect to
any such additional gain.

If the optionee still owns the shares at the time of death, the lesser of
(i) the excess of the fair market value of the shares at the time of death over
the exercise price paid for the shares or (ii) the excess of the fair market
value of the shares at the time the option was granted over the amount that
would have been the exercise price on the date the option was granted will
constitute compensation income in the taxable year closing with his death.

RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
(ITEM 2)

The Board of Directors has selected Ernst & Young LLP, independent
accountants, to audit the books, records and accounts of the Company for the
fiscal year ending March 31, 1997. Ernst & Young LLP has audited the Company's
financial statements since the fiscal year ended March 31, 1993.

The affirmative vote of the holders of a majority of the Company's Common
Stock represented and voting at the meeting will be required to approve and
ratify the Board's selection of Ernst & Young LLP. The Board of Directors
recommends voting "FOR" approval and ratification of such selection. In the
event of a negative vote on such ratification, the Board of Directors will
reconsider its selection.

A representative of Ernst & Young LLP is expected to be available at the
Annual Meeting to make a statement if such representative desires to do so and
to respond to appropriate questions.

OTHER MATTERS

Management does not intend to bring before the meeting any matters other
than those set forth herein, and has no present knowledge that any other matters
will or may be brought before the meeting by others. However, if any other
matters properly come before the meeting, it is the intention of the persons
named in the enclosed form of Proxy to vote the Proxies in accordance with their
judgment.

The Company has borne the cost of preparing, assembling and mailing this
proxy solicitation material. THE COMPANY WILL PROVIDE WITHOUT CHARGE A COPY OF
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED MARCH 31,
1996, INCLUDING THE FINANCIAL STATEMENTS, TO EACH SHAREHOLDER UPON WRITTEN
REQUEST TO DAVID E. CHISUM, AMX CORPORATION, 11995 FORESTGATE DRIVE, DALLAS,
TEXAS 75243.

By Order Of The Board of Directors

[SIGNATURE OF PETER D. YORK
APPEARS HERE]
PETER D. YORK
SECRETARY

23
<PAGE>
AMX CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
1996 ANNUAL MEETING OF SHAREHOLDERS -- AUGUST 16, 1996

The undersigned shareholder(s) of AMX Corporation, a Texas corporation,
hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders and
Proxy Statement and hereby appoints Scott D. Miller and Joe Hardt, and each of
them, Proxies and Attorneys-in-Fact, with full power to each of substitution, on
behalf and in the name of the undersigned, to represent the undersigned at the
Annual Meeting of Shareholders of AMX Corporation to be held August 16, 1996, at
10:00 a.m. at the Sheraton Park Central Hotel, LBJ Freeway and Coit Road, 12720
Merit Drive, Dallas, Texas 75251, and any adjournments thereof, and to vote all
shares of Common Stock that the undersigned is entitled to vote on the matters
set forth on the reverse side.

(Continued on other side)
<PAGE>
(Continued from reverse side)

<TABLE>
<S> <C> <C> <C>
1. ELECTION OF / / FOR all nominees listed / / WITHHOLD AUTHORITY
DIRECTORS: below (except as indicated). to vote for all nominees listed below.
</TABLE>

(IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME BELOW)
Scott D. Miller, Joe Hardt, Peter D. York, Thomas S. Roberts, Harvey B. Cash, S.
Wayne Bazzle and F.H. (Dick) Moeller.

2. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT
ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDING MARCH 31, 1997.

/ / FOR / / AGAINST / / ABSTAIN

3. IF YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE CHECK THIS BOX: / /

In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

THIS BALLOT WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE, FOR
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS AND
AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THE
MEETING.

-----------------------------------
Signature

-----------------------------------
Signature (To be signed if shares
are held by joint tenants as
community property.)

-----------------------------------
Title, if applicable

Dated: , 1996

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

This proxy should be dated and
signed by the Shareholder(s)
exactly as his or her name appears
thereon and returned promptly in
the enclosed envelope. Persons
signing in a fiduciary capacity
should so indicate. If shares are
held by joint tenants as community
property, both should sign.