AMX CORP, DEF 14A, 1999-03-10

AMX CORP
DEF 14A, 1999-03-10
ELECTRONIC COMPONENTS & ACCESSORIES

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<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 Section240.14a-11(c) or
Section240.14a-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/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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<PAGE>
AMX CORPORATION
11995 FORESTGATE DRIVE
DALLAS, TEXAS 75243

March 11, 1999

To Our Shareholders:

We are pleased to invite you to attend a Special Meeting of the Shareholders
of AMX Corporation, which will be held at 1445 Ross Avenue, 38th Floor, Dallas,
Texas at 10:00 a.m. on April 5, 1999. 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,
JOHN F. MCHALE
CHAIRMAN OF THE BOARD
<PAGE>
AMX CORPORATION

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

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
APRIL 5, 1999

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

To the Shareholders of AMX Corporation:

NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of AMX
Corporation, a Texas corporation (the "Company"), will be held on April 5, 1999,
at 10:00 a.m. at 1445 Ross Avenue, 38th Floor, Dallas, Texas for the following
purposes:

1. To adopt and approve the AMX Corporation 1999 Equity Incentive Plan; and

2. To transact such other business incident to the conduct of the meeting
as may properly come before the meeting or any adjournments thereof and
for such other items which the persons making the solicitation did not
know of a reasonable time before the solicitation.

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 March 4, 1999 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
L.L.C., Overpeck Centre, 85 Challenger Road, Ridgefield Park, New Jersey, 07660
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

DAVID E. CHISUM
SECRETARY

Dallas, Texas
March 11, 1999
<PAGE>
AMX CORPORATION
11995 FORESTGATE DRIVE
DALLAS, TEXAS 75243

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

PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
APRIL 5, 1999

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

INFORMATION CONCERNING SOLICITATION AND VOTING

GENERAL

The enclosed proxy is solicited on behalf of AMX Corporation (the "Company"
or "AMX") for the Special Meeting of Shareholders (the "Meeting" or "Special
Meeting") to be held on April 5, 1999, at 10:00 a.m. at 1445 Ross Avenue, 38th
Floor, Dallas, Texas, or any adjournment or adjournments thereof, for the
purposes set forth herein and in the accompanying Notice of Special Meeting.

This proxy statement and the enclosed proxy card are first being sent
beginning approximately March 11, 1999, to all shareholders entitled to vote at
the Meeting.

RECORD DATE; OUTSTANDING SHARES

Only shareholders of record at the close of business on March 4, 1999 (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
8,958,112 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 "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. The
proposal to adopt and approve the AMX Corporation 1999 Equity Incentive Plan
(the "Equity Incentive Plan") will require the affirmative vote of a majority of
the shares of Common Stock issued and outstanding on the Record Date.

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 soliciting materials 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.

1
<PAGE>
QUORUM; ABSTENTIONS; BROKER NON-VOTES

The required quorum for the transaction of business at the Special Meeting
is a majority of the shares of Common Stock issued and outstanding on the Record
Date. Shares that are voted "FOR" or "AGAINST," or to "ABSTAIN" 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 Special
Meeting (the "Votes Cast") with respect to such matter.

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 1999 Annual Meeting must have been
received by the Company, addressed to David E. Chisum, Secretary, AMX
Corporation, 11995 Forestgate Drive, Dallas, Texas 75243, no later than March 8,
1999 for inclusion 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 (including Rule 14a-8) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act").

Pursuant to Rule 14a-4 of the Exchange Act, the Company may exercise
discretionary voting authority at the 1999 Annual Meeting under proxies it
solicits to vote on a proposal made by a shareholder that the shareholder does
not seek to include in the Company's proxy statement pursuant to Rule 14a-8,
unless the Company is notified about the proposal no later than May 24, 1999
(assuming that the Company's 1999 Annual Meeting of Shareholders is held on a
date that is within 30 days from the date on which the 1998 Annual Meeting was
held), and the shareholder satisfies the other requirements of Rule 14a-4(c).

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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of February 28, 1999, 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
"Compensation of Directors and Executive Officers--Executive
Compensation--Summary Compensation Table," and (iv) all directors and executive
officers as a group. 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)...................................................................... 496,476 5.5%
600 Atlantic Avenue
Suite 2800
Boston, Massachusetts 02210-2227
InterWest Partners (3)................................................................... 1,036,900 11.6%
13355 Noel Road
Suite 1375, LB #65
Dallas, Texas 75240
Thomas S. Roberts (2).................................................................... 508,976 5.7%
c/o Summit Partners
600 Atlantic Avenue
Suite 2800
Boston, Massachusetts 02210-2227
Harvey B. Cash (3)....................................................................... 1,049,400 11.7%
c/o InterWest Partners
13355 Noel Road
Suite 1375, LB #65
Dallas, Texas 75240
J. Otis Winters (4)...................................................................... 10,000 *
5956 Sherry Lane Suite 2001
Dallas, Texas 75225
John F. McHale (5)....................................................................... 613,020 7.0%
111 Congress Avenue
Suite 3000
Austin, Texas 78701
Scott D. Miller.......................................................................... 1,363,900 15.2%
Peter D. York (6)........................................................................ 647,984 7.1%
Joe Hardt (7)............................................................................ 547,266 5.9%
David E. Chisum (8)...................................................................... 27,500 *
Tom Hite (9)............................................................................. 25,000 *
All directors and executive officers as a group (nine persons)(2)(3)(10)................. 4,811,046 50.3%
</TABLE>

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

* Less than 1%

(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

3
<PAGE>
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 February 28, 1999 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 is as
follows: c/o AMX Corporation, 11995 Forestgate Drive, Dallas, Texas 75243.

(2) Consists of 417,037, 69,509 and 9,930 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 496,476 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 subject to vested options that were granted to
Mr. Roberts under the Company's Nonemployee Director Plan upon his election
to the Board of Directors and 2,500 shares of Common Stock subject to vested
options that were granted immediately following each of the Company's 1996,
1997 and 1998 Annual Meeting of Shareholders.

(3) Consists of 1,030,428 and 6,472 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 1,036,900 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 subject to vested
options that were granted to Mr. Cash under the Company's Nonemployee
Director Plan upon his election to the Board of Directors and 2,500 shares
of Common Stock subject to vested options that were granted immediately
following each of the Company's 1996, 1997 and 1998 Annual Meeting of
Shareholders.

(4) Represents 5,000 shares of Common Stock issuable upon exercise of
outstanding options, which are presently exercisable, that were granted to
Mr. Winters under the Company's 1995 Nonemployee Director Plan upon his
election to the Board of Directors and 2,500 shares of Common Stock subject
to vested options that were granted immediately following each of the
Company's 1997 and 1998 Annual Meeting of Shareholders.

(5) Includes 7,500 shares of Common Stock issuable upon exercise of outstanding
options, which are presently exercisable, 5,000 of which were granted to Mr.
McHale under the Company's Nonemployee Director Plan upon his election to
the Board of Directors and 2,500 shares of Common Stock subject to vested
options that were granted immediately following the Company's 1998 Annual
Meeting of Shareholders.

(6) Includes 164,864 shares of Common Stock issuable upon exercise of
outstanding options that are presently exercisable or are exercisable within
60 days after February 28, 1999.

(7) Includes 372,266 shares of Common Stock issuable upon exercise of
outstanding options that are presently exercisable or are exercisable within
60 days after February 28, 1999.

4
<PAGE>
(8) Includes 10,000 shares of Common Stock issuable upon exercise of outstanding
options that are presently exercisable or are exercisable within 60 days
after February 28, 1999.

(9) Represents 25,000 shares of Common Stock issuable upon exercise of
outstanding options that are presently exercisable or are exercisable within
60 days after February 28, 1999.

(10) Includes, in addition to an aggregate of 42,500 options granted to the
outside directors of the Company, an aggregate of 572,130 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 February 28, 1999.

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.

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<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

BOARD COMPENSATION

Currently, the Company's directors, other than Mr. Winters, do not receive
any compensation for 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. Mr. Winters receives a fee of $1,000 per
month, $1,000 per meeting of the Board of Directors and $500 per meeting for any
committee of the Board of Directors on which he serves. All nonemployee
directors participate in the Company's 1995 Director Stock Option Plan and are
expected to receive from time to time non-statutory stock options under the 1995
Director Stock Option Plan.

During the fiscal year ended March 31, 1998, John McHale, who was at that
time a nonemployee director of the Company, was granted options to purchase
5,000 shares of the Common Stock at an exercise price of $6.50 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, which commenced with the Company's Annual
Meeting on August 16, 1996, each nonemployee director will be granted options to
purchase 2,500 shares of Common Stock, which grant will be approved by the
entire Board of Directors. At the Company's 1998 Annual Meeting, which was held
on August 4, 1998, Mr. McHale, Mr. Winters, Mr. Roberts and Mr. Cash all
received grants of options to acquire 2,500 shares of Common Stock at an
exercise price of $7.25 per share.

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, 1998. 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

6
<PAGE>
linked to the general financial performance of the Company as measured by
such items as revenues and income from operations.

BASE SALARIES. The annual base salaries of Scott D. Miller, the Chairman of
the Board, Joe Hardt, the Chief Executive Officer and President, and Peter D.
York, the Vice Chairman 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. Those employment agreements
expired on March 31, 1998. As a result, the Compensation Committee has 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. The Compensation Committee has set new base salaries for
those individuals for fiscal year 1999.

ANNUAL AND OTHER BONUSES. The bonuses available to the executive officers,
which for the 1998 fiscal year included Scott D. Miller, Joe Hardt, Peter D.
York, David E. Chisum, and Tom Hite are based upon the achievement of 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, 1998 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
included the duties of chief executive officer. Effective July 1, 1997, Mr.
Hardt was formally elected the Chief Executive Officer of the Company. 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. In March 1995, Messrs. Miller and
Hardt entered into employment agreements that set their base salary through the
fiscal year ended March 31, 1998. Mr. Hardt received other compensation in the
fiscal year ended March 31, 1998 in the amount of $1,911 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 $8,794 under the
AMX Corporation Profit Sharing Plan (the "Profit Sharing Plan") during the
fiscal year ended March 31, 1998.

7
<PAGE>
Messrs. Miller and Hardt do not participate in the Compensation Committee's
decision regarding their compensation.

COMPENSATION COMMITTEE
(for the fiscal year ended March 31,
1998)

THOMAS S. ROBERTS
J. OTIS WINTERS
JOHN F. MCHALE

The above Report of the Compensation Committee was prepared by the
Compensation Committee for the Company's Proxy Statement for its 1998 Annual
Meeting. At the time such report was prepared, the Compensation Committee
consisted of Messrs. Roberts, Winters and McHale. On January 15, 1999, Mr.
Miller resigned as Chairman of the Board of Directors (although he remains as a
director), and Mr. McHale was elected to such position. In connection therewith,
on January 15, 1999 Mr. McHale resigned as a member of the Compensation
Committee and Harvey B. Cash was appointed by the Board to replace him on the
Compensation Committee. In addition, on January 15, 1999, Mr. Roberts also
resigned as a member of the Compensation Committee. Accordingly, as of the date
of this Proxy Statement, the Compensation Committee consists of Messrs. Winters
and Cash.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. Winters and Cash are the current members of the Compensation
Committee. Messrs. Cash and Roberts served as members of the Compensation
Committee until August 1997 when the Board appointed Mr. Winters to replace Mr.
Cash. Mr. McHale was subsequently appointed to the Compensation Committee in
October of 1997 upon his election to the Company's Board of Directors. Mr.
McHale resigned from the Compensation Committee on January 15, 1999 in
connection with his election as Chairman of the Board, and the Board appointed
Mr. Cash to replace him. In addition, on January 15, 1999, Mr. Roberts also
resigned as a member of 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.

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.

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<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
AMX NASDAQ - US NASDAQ - ELECTRONIC COMPONENTS
<S> <C> <C> <C>
11/16/95 $100.00 $100.00 $100.00
12/31/95 $100.00 $100.86 $89.94
3/29/96 $101.43 $105.56 $89.38
6/28/96 $90.00 $114.18 $102.11
9/30/96 $74.29 $118.24 $123.76
12/31/96 $67.14 $124.05 $155.54
3/31/97 $80.00 $117.33 $156.76
6/30/97 $65.71 $138.83 $167.55
9/30/97 $91.43 $162.32 $217.59
12/31/97 $65.71 $152.26 $163.09
3/31/98 $100.00 $178.19 $179.37
</TABLE>

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>
NASDAQ NASDAY
AMX US ELECTRONIC COMP.
--------- --------- ----------------
<S> <C> <C> <C>
11/16/95.................................................. $ 100.00 $ 100.00 $ 100.00
12/31/95.................................................. $ 100.00 $ 100.86 $ 89.94
3/29/96................................................... $ 101.43 $ 105.56 $ 89.38
6/28/96................................................... $ 90.00 $ 114.18 $ 102.11
9/30/96................................................... $ 74.29 $ 118.24 $ 123.76
12/31/96.................................................. $ 67.14 $ 124.05 $ 155.54
3/31/97................................................... $ 80.00 $ 117.33 $ 156.76
6/30/97................................................... $ 65.71 $ 138.83 $ 167.55
9/30/97................................................... $ 91.43 $ 162.32 $ 217.59
12/31/97.................................................. $ 65.71 $ 152.26 $ 163.09
3/31/98................................................... $ 100.00 $ 178.19 $ 179.37
</TABLE>

9
<PAGE>
EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE. The following table summarizes information with
respect to the compensation of the Company's President and Chief Executive
Officer and the other most highly compensated executive officers of the Company,
including the Company's Chairman of the Board (the "Executive Group"), whose
total compensation exceeded $100,000 during the fiscal year ended March 31,
1998.

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION --------------------
--------------------- NUMBER OF SECURITIES ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS UNDERLYING OPTIONS COMPENSATION(2)
- --------------------------------------- --------- ---------- --------- -------------------- ----------------
<S> <C> <C> <C> <C> <C>
Scott D. Miller........................ 1998 $ 240,529 -- -- $ 8,794
Former Chairman of the Board (3) 1997 227,133 -- -- 9,515
1996 230,932 -- -- 6,345
Joe Hardt.............................. 1998 $ 193,201 $ 75,000 -- $ 10,705
Chief Executive Officer and President 1997 175,365 -- -- 11,724
1996 168,480 38,667 200,000(4) 8,093
Peter D. York.......................... 1998 $ 188,164 -- -- $ 10,621
Vice Chairman of the Board and Senior 1997 178,872 -- -- 11,797
Vice President 1996 165,127 $ 38,667 100,000(4) 7,428
David E. Chisum........................ 1998 $ 124,802 $ 20,000 15,000 $ 6,983
Chief Financial Officer 1997 89,580(5) -- 25,000(5) 297
1996 -- -- -- --
Tom Hite............................... 1998 $ 133,556 $ 20,000 -- --
Vice President Engineering CEO PHAST 1997 5,000(6) -- 50,000 --
Corporation 1996 -- -- -- --
</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
was $230,500, $175,000 and $182,000, respectively, subject to any increases
determined by the Compensation Committee. See "--Employment Agreements"
below.

(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 1998, the Company (a) made matching
contributions under the 401(k) Plan of $1,911 for Joe Hardt, $1,828 for
Peter York, and $1,200 for David E. Chisum, and (b) allocated $8,794 under
the Profit Sharing Plan to the accounts of each of Messrs. Miller, Hardt,
and York, and $5,783 for Mr. Chisum.

(3) On January 15, 1999, Mr. Miller resigned as Chairman of the Board of
Directors. Mr. Miller continues to serve as a director of the Company.

(4) Messrs. Hardt and York 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.

(5) Represents the portion of Mr. Chisum's $110,000 annual salary for the fiscal
year ended March 31, 1997 since his employment commenced in May 1996. Mr.
Chisum was granted options to acquire 25,000 shares of common stock at an
exercise price of $5.75 per share in July 1996.

(6) Represents the portion of Mr. Hite's $130,000 annual salary for the fiscal
year ended March 31, 1997 since his employment commenced in March 1997. Mr.
Hite was granted options to acquire 50,000 shares of common stock at an
exercise price of $6.50 per share in March 1997.

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<PAGE>
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, 1998.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO PER SHARE FOR OPTION TERM(2)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ---------------------
NAME GRANTED(1) FISCAL YEAR PRICE DATE 5% 10%
- ------------------------------------------ ----------- ------------------- ----------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
David E. Chisum........................... 15,000 5% $ 5.94 8/13/2007 $ 93,391 $ 236,671
</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.

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, 1998, by the Executive Group:

<TABLE>
<CAPTION>
NUMBER OF SHARES UNDERLYING
VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
MARCH 31, 1998 AT MARCH 31, 1998(2)
SHARES ACQUIRED VALUE ---------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE(1) UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------- --------------- ---------- ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Joe Hardt......................... 25,000 $ 124,500 341,016 50,000 $ 2,519,461 $ 343,750
Peter D. York..................... -- -- 139,864 25,000 948,917 171,875
David E. Chisum................... -- -- 6,250 33,750 18,750 98,400
Tom Hite.......................... -- -- 12,500 37,500 28,125 84,375
</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 $8.75 per share as
reported on the Nasdaq National Market on March 31, 1998.

EMPLOYMENT AGREEMENTS

In March 1995, the Company entered into employment agreements, which were
subsequently amended, with Scott D. Miller, Joe Hardt and Peter D. York, all of
which expired on March 31, 1998 and have not been renewed.

In October 1998, the Company entered into employment agreements with each of
Joe Hardt and Tom Hite (the "Employment Agreements"). The following is a summary
of the principal terms of the Employment Agreements. Each Employment Agreement
is for an initial term of three years. In general, the Company may terminate
each of Messrs. Hardt's and Hite's employment for "cause," death or
"disability," or "without cause," and each of Messrs. Hardt and Hite may
terminate employment for "good reason." Pursuant to the Employment Agreements,
Mr. Hardt has agreed to serve as President and Chief Executive Officer of the
Company and Mr. Hite has agreed to serve as Vice President-Engineering of the
Company and as President and Chief Executive Officer of its subsidiary, PHAST
Corporation. Each of Messrs. Hardt and Hite will receive an annual base salary
of $200,000 and $150,000, respectively, subject to review on an annual basis by
the Compensation Committee of the Board of Directors (provided that such base
salary may not be decreased). The Employment Agreements provide that the
employee shall be eligible to participate in such bonus plan as may be approved
by the Compensation Committee of the Board of Directors and permits the employee
to participate in any and all benefit plans and incentive plans

11
<PAGE>
maintained by or on behalf of the Company. In addition, the Employment
Agreements provide for certain payments and benefits in the event that the
employee is terminated without cause or due to death or permanent disability.

The Employment Agreements also generally provide that the employee will keep
confidential certain non-public information regarding the Company and further
provides that, during the employee's employment and for two years following
termination of the Employment Agreements, the employee, will not, subject to
certain exceptions, engage or have a financial interest in any business located
anywhere in the restricted area which competes with the Company or any affiliate
of the Company. The restricted territory under the Employment Agreements is the
entire world. The employee further agrees under the Employment Agreements that
during the restricted period he will not solicit or otherwise contact any of the
Company's or its affiliates' customers, distributors, dealers or
representatives.

12
<PAGE>
PROPOSAL TO ADOPT AND APPROVE THE AMX CORPORATION
1999 EQUITY INCENTIVE PLAN
(ITEM 1)

The Equity Incentive Plan was adopted and approved prior to the date hereof
by the Board of Directors (the "Board"), subject to shareholder approval at the
Meeting. The Board of Directors unanimously approved the adoption of the Equity
Incentive Plan. No options or other awards have been or will be granted under
the Equity Incentive Plan until after it has been approved by the shareholders
of the Company. The following summary description of the Equity Incentive Plan
is qualified in its entirety by reference to the Equity Incentive Plan, a copy
of which is attached hereto as Appendix A and incorporated herein by reference.

The Equity Incentive Plan is intended to provide a means by which selected
employees of and consultants to the Company and its subsidiaries may be given an
opportunity to acquire an equity interest in the Company. The Company, by means
of the Equity Incentive Plan, will seek to retain the services of persons who
are or become employees of or consultants to the Company and its subsidiaries,
and to provide incentives for such persons to exert maximum efforts for the
success of the Company and its subsidiaries.

As of February 15, 1999, there were 115,170 options that remained available
for grant under the Company's 1995 Stock Option Plan. The Company expects that
it will continue to grant available options under the 1995 Stock Option Plan.

ADMINISTRATION

The Equity Incentive Plan is administered by the Company's Compensation
Committee (the "Committee"), which was appointed by the Board and whose members
serve at the pleasure of the Board. The Committee will have two or more members,
each of whom will be an "outside director" within the meaning of Treasury
Regulation Section 1.162-27(e)(3). In addition, such committee members will also
be non-employee directors within the meaning of Rule 16b-3 promulgated under the
Exchange Act. If from time to time no Committee is so designated, then the
Equity Incentive Plan will be administered by the Board. The Committee has full
authority, subject to the provisions of the Equity Incentive Plan, to award (i)
Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, (iv)
Deferred Stock, (v) Stock Reload Options and/or (vi) Other Stock-Based Awards
(collectively, "Awards").

Subject to the provisions of the Equity Incentive Plan, the Committee
determines, among other things, the persons to whom from time to time Awards may
be granted ("Participants"), the specific type of Awards to be granted (e.g.,
Stock Option, Restricted Stock, etc.), the number of shares subject to each
Award, share prices, any restrictions or limitations on such Awards and any
vesting, exchange, deferral, surrender, cancellation, acceleration, termination,
exercise or forfeiture provisions related to such Awards. The interpretation and
construction by the Committee of any provisions of, and the determination of any
questions arising under the Equity Incentive Plan or any rule or regulation
established by the Committee pursuant to the Equity Incentive Plan will be
final, conclusive and binding on all persons interested in the Equity Incentive
Plan.

SHARES SUBJECT TO THE EQUITY INCENTIVE PLAN, GENERAL TERMS

The Equity Incentive Plan authorizes the granting of Awards which would
allow up to an aggregate of 3,000,000 shares of Common Stock to be acquired by
the Participants and provides that a maximum of 1,500,000 shares of Common Stock
may be issued to any one Participant. In order to prevent the dilution or
enlargement of the rights of Participants under the Equity Incentive Plan, the
number of shares of Common Stock authorized by the Equity Incentive Plan is
subject to adjustment by the Board in the event of any increase or decrease in
the number of shares of outstanding Common Stock resulting from a stock
dividend, stock split, reverse stock split, merger, reorganization,
consolidation, recapitalization or other

13
<PAGE>
change in corporate structure affecting the Common Stock. If any shares granted
under the Equity Incentive Plan are forfeited or terminated, such shares will
again be available for distribution in connection with Awards subsequently
granted under the Equity Incentive Plan.

ELIGIBILITY

Subject to the provisions of the Equity Incentive Plan, Awards may be
granted to key employees, officers, directors, consultants and other persons who
are deemed to have rendered or to be able to render significant services to the
Company or its subsidiaries and are deemed to have contributed or to have the
potential to contribute to the success of the Company. Incentive Stock Options
(as hereinafter defined) may be awarded only to persons who, at the time of such
awards, are employees of the Company or its subsidiaries.

TYPES OF AWARDS

STOCK OPTIONS. Options granted under the Equity Incentive Plan may be
either options that are intended to qualify for treatment as "incentive stock
options" under Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or options that do not so qualify. Options may be granted under the
Equity Incentive Plan to any person who is an officer or other employee
(including an officer or other employee who is also a director) or consultants
of the Company or any of its subsidiaries. The exercise price of Incentive Stock
Options must be at least 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 10% or more of the
Common Stock). The exercise price of Non-qualified Stock Options may be less
than 100% of the fair market value of a share of the Common Stock on the date of
grant.

The term of an option may not exceed 10 years (five years in the case of an
Incentive Stock Option granted to an optionee owning 10% or more of the Common
Stock). However, options may be granted that provide that at any time after the
date of the grant of the option, in the event of (i) any person or group of
persons becoming for the first time the beneficial owner, directly or
indirectly, of more than 50% of the total voting stock of the Company, other
than as a result of a transfer or series of related transfers of voting stock
from a person or group of persons who immediately prior to such transfer or
transfers was the beneficial owner, and who after giving effect to such transfer
or transfers continues to be the beneficial owner, of more than 50% of the
voting stock of the Company; (ii) a merger or consolidation of the Company as a
result of which the holders of all of the voting stock of the Company prior to
such event do not continue to hold either directly or indirectly at least a
majority of the Company voting stock after such event, (iii) a sale of all or
substantially all of the asserts of the Company or (iv) certain changes in the
majority of the Board of Directors of the Company during any 12 consecutive
month period any portion of which is after the date of the grant of the option,
the option may be exercised in whole or in part without regard to any provisions
thereof. The accelerated vesting of outstanding options upon the occurrence of
such a "change in control" transaction could have the effect of delaying,
deferring, or preventing a change in control of the Company.

STOCK APPRECIATION RIGHTS. The Committee may grant Stock Appreciation
Rights ("SARs" or singularly "SAR") in conjunction with all or part of any
Option granted under the Equity Incentive Plan or may grant SARs on a
freestanding basis. In conjunction with Non-qualified Options, SARs may be
granted either at or after the time of the grant of such Non-qualified Options.
In conjunction with Incentive Stock Options, SARs may be granted only at the
time of the grant of such Incentive Stock Options. An SAR entitles the holder
thereof to receive an amount (payable in cash and/or Common Stock, as determined
by the Committee) equal to the fair market value of one share of Common Stock
over the SAR price or the exercise price of the related Option, multiplied by
the number of shares subject to the SAR.

14
<PAGE>
RESTRICTED STOCK AWARDS. The Committee may award shares of restricted stock
("Restricted Stock") either alone or in addition to other Awards granted under
the Equity Incentive Plan. The Committee shall determine the restricted period
during which the shares of stock may be forfeited if, for example, the
Participant's employment is terminated. In order to enforce the forfeiture
provisions, the Equity Incentive Plan requires that all shares of Restricted
Stock awarded to the Participant remain in the physical custody of the Company
until the restrictions on such shares have terminated.

DEFERRED STOCK. The Committee may award shares of deferred stock ("Deferred
Stock") either alone or in addition to other Awards granted under the Equity
Incentive Plan. The Committee shall determine the deferral period during which
time the receipt of the stock is deferred. The Award may specify, for example,
that the Participant must remain employed by the Company during the entire
deferral period in order to be issued the stock.

STOCK RELOAD OPTIONS. The Committee may grant Stock Reload Options in
conjunction with any Option granted under the Equity Incentive Plan. In
conjunction with Incentive Stock Options, Stock Reload Options may be granted
only at the time of the grant of such Incentive Option. In conjunction with
Non-qualified Options, Stock Reload Options may be granted either at or after
the time of the grant of such Non-qualified Options. A stock Reload Option
permits a Participant who exercises an Option by delivering already owned stock
(i.e., the stock-for-stock method) to receive back from the Company a new Option
(at the current market price) for the same number of shares delivered to
exercise the Option, which new Option may not be exercised until one year after
it was granted and expires on the date the original option would have expired
(had it not been previously exercised).

OTHER STOCK-BASED AWARDS. the Committee may grant performance shares and
shares of stock valued with reference to the performance of the Company, either
alone or in addition to or in tandem with Stock Options, Restricted Stock or
Deferred Stock. Subject to the terms of the Equity Incentive Plan, the Committee
has complete discretion to determine the terms and conditions applicable to any
such stock-based awards. Such terms and conditions may require, among other
things, continued employment and/or the attainment of specified performance
objectives.

TERM AND TERMINATION OF THE EQUITY INCENTIVE PLAN

The Equity Incentive Plan became effective upon approval of the plan by the
Board of Directors on February 9, 1999 (the "Effective Date"); provided that the
continuance of the plan is conditioned on receipt of shareholder approval at the
Meeting. Unless terminated by the Board, the Equity Incentive Plan shall
continue to remain effective until such time as no further Awards may be granted
and all Awards granted under the Equity Incentive Plan are no longer
outstanding. Notwithstanding the foregoing, grants of Incentive Stock Options
may only be made during the ten-year period following the Effective Date.

AMENDMENTS TO THE PLAN

The Equity Incentive Plan provides that the Board of Directors may amend or
terminate the Equity Incentive Plan in any respect whatsoever, provided that any
such amendment or termination will not affect Awards previously granted. If
required by Rule 16b-3 under the Exchange Act, or any Code or NASD requirements,
the Board of Directors will not amend or terminate the Equity Incentive Plan
without shareholder approval.

BENEFITS TO EXECUTIVE OFFICERS AND DIRECTORS

As of the date of this Proxy Statement, the benefits that will be paid under
the Equity Incentive Plan were not determinable and no options or other awards
had been granted under the Equity Incentive Plan. Since it will be the Company's
policy to grant options or other awards under the Equity Incentive Plan to
executive officers of the Company from time to time as determined by the Board
of Directors of the

15
<PAGE>
Company, it was not possible, as of February 28, 1999, to indicate the number or
names of executive officers who will receive options or other awards or the
number of shares for which options will be granted under the Equity Incentive
Plan. The Company does not anticipate granting any options or other awards under
the Equity Incentive Plan to non-employee directors of the Company, and expects
to continue to utilize its 1995 Director Option Plan for option grants to
non-employee directors. Upon approval of the Equity Incentive Plan at the
Meeting, the Company expects to file with the Securities and Exchange Commission
a Registration Statement on Form S-8, which will become effective upon filing,
covering the issuance of shares of Common Stock upon exercise of options or
other awards to be granted under the Equity Incentive Plan. See "--Certain
Federal Income Tax Consequences" below for a discussion of the federal income
tax consequences to the Company and optionees of the issuance and exercise of
options or other awards under the Equity Incentive Plan.

FEDERAL INCOME TAX CONSEQUENCES

The following discussion of the principal federal income tax consequences of
participation in the Equity Incentive Plan is based on statutory authority, as
well as judicial and administrative interpretations as of the date of this Proxy
Statement, all of which are subject to change at any time (possibly with
retroactive effect). As the law is technical and complex, the discussion below
necessarily represents only a general summary. The Equity Incentive Plan is not
qualified under Section 401(a) of the Code.

INCENTIVE STOCK OPTIONS.

Incentive Stock Options granted under the Equity Incentive Plan are intended
to meet the definitional requirements of Section 422(b) of the Code for
"incentive stock options."

Any employee who receives an Incentive Stock Option does not recognize any
taxable income upon the grant of such Incentive Stock Option. Similarly, the
exercise of an Incentive Stock Option generally does not give rise to federal
income tax to the employee, provided that (i) the federal "alternative minimum
tax," which depends on the employees' particular tax situation, does not apply
and (ii) the employee is employed by the Company from the date of grant of the
option until 3 months prior to the exercise thereof, except where such
employment terminates by reason of disability (where the 3 month period is
extended to 1 year) or death (where this requirement does not apply). If an
employee exercises an Incentive Stock Option after these requisite periods, the
Incentive Stock Option will be treated as a Non-qualified Stock Option and will
be subject to the rules set forth below under the caption "Non-qualified
Options."

Further, if after exercising an Incentive Stock Option, an employee disposes
of the shares so acquired more than two years form the date of grant and more
than one year from the date of receipt of the shares upon exercise of such
Incentive Stock Option (the "applicable holding period"), the employee will
normally recognize a capital gain or loss equal to the difference, if any,
between the amount received for the shares and the employee's tax basis in such
shares.

If, however, an employee does not hold the shares so acquired for the
applicable holding period, thereby making a "disqualifying disposition," the
employee would realize ordinary income on the excess of the fair market value of
the shares at the time the Incentive Stock Option was exercised over the
exercise price and the balance, if any, would be short-term or long-term capital
gain depending on the length of the employee's holding period and provided that
the employee held such shares as a capital asset at such time. If the sales
price of the stock sold in a disqualifying disposition is less than its fair
market value on the exercise date, the ordinary income is limited to the amount
of the gain (if any) realized on the sale. If the sales price of the stock sold
in a disqualifying disposition is less than the exercise price, the employee
will recognize a capital loss.

An employee who exercises an Incentive Stock Option by delivering shares
previously acquired pursuant to the exercise of an Incentive Stock Option is
treated as making a "disqualifying disposition" of

16
<PAGE>
his or her shares if the employee delivers them before the expiration of their
applicable holding period. Upon the exercise of an Incentive Stock Option with
previously-acquired shares as to which no disqualifying disposition occurs,
despite some uncertainty, it appears that the employee would not recognize gain
or loss with respect to such previously-acquired shares.

NON-QUALIFIED OPTIONS.

Non-qualified Stock Options granted under the Equity Incentive Plan are
options that do not qualify as Incentive Stock Options. An individual who
receives a Non-qualified Stock Option generally will not recognize any taxable
income upon the grant of such Non-qualified Stock Option. However, the
individual generally will recognize ordinary income upon exercise of a
Non-qualified Stock Option in an amount equal to the excess of (i) the fair
market value of the shares at the time of exercise over (ii) the exercise price.

The ordinary income recognized with respect to the receipt of shares upon
exercise of a Non-qualified Stock Option will be subject to both wage
withholding and employment taxes.

As a result of Section 16(b) of the Exchange Act, any individual who is an
officer or director of the Company or a beneficial owner of more than ten
percent (10%) of any class of equity securities of the Company should consult
with his or her tax advisor as to whether the timing of income recognition is
deferred for any period following the exercise of a Non-qualified Stock Option
(i.e., the "Deferral Period"). Absent an election pursuant to Section 83(b) of
the Code filed with the Internal Revenue Service within 30 days after the date
of transfer of such shares pursuant to the option (the "Section 83(b)
election"), recognition of income by such an individual will be deferred until
the expiration of the Deferral Period, if any.

An individuals' tax basis in the shares received on exercise of a
Non-qualified Stock Option will be equal to the amount of any cash paid on
exercise, plus the amount of ordinary income recognized by such individual as a
result of the receipt of such shares. The holding period for such shares would
begin just after the transfer of the shares or, in the case of an officer,
director or beneficial owner of more than 10% of any class of equity securities
of the Company who does not make a Section 83(b) election, just after the
expiration of the Deferral Period, if any.

If an individual exercises a Non-qualified Stock Option by delivering shares
to the Company, other than shares previously acquired pursuant to the exercise
of an Incentive Stock Option which is treated as a "disqualifying disposition"
as described above, the individual will not recognize gain or loss with respect
to the exchange of such shares, even if their then fair market value is
different from the individual's tax basis. The individual, however, will be
taxed as described above with respect to the exercise of the Non-qualified Stock
Option as if he or she had paid the exercise price in cash. So long as the
individual receives a separate identifiable stock certificate therefor, the tax
basis and the holding period for that number of shares received on such exercise
that is equal to the number of shares surrendered on such exercise will be equal
to the tax basis and include the holding period of those shares surrendered. The
individual's tax basis and holding period for the additional shares received on
exercise of a Non-qualified Stock Option paid for, in whole or in part, with
shares will be the same as if the individual had exercised the Non-qualified
Stock Option solely for cash.

Upon a change of control of the Company, some or all of the then-outstanding
stock options may immediately become exercisable. In general, if the total
amount of payments to an individual that are contingent upon a "change of
control" of the Company (as defined in Section 280G of the Code), including
payments under the Equity Incentive Plan that vest upon a change of control,
equals or exceeds three times the individual's "base amount" (generally, such
individual's average annual compensation for the five complete years preceding
the "change of control"), then, subject to certain exceptions, the payments may
be treated as "parachute payments" under the Code, in which case the individual
would be subject to a 20% excise tax on a portion of such payments.

17
<PAGE>
STOCK APPRECIATION RIGHTS.

Recipients of SARs do not recognize income upon the grant of such rights.
When a participant elects to receive payment of an SAR, the participant
recognizes ordinary income in an amount equal to the cash and fair market value
of the stock received.

RESTRICTED STOCK AWARDS.

In the absence of a Section 83(b) election, grantees of Restricted Stock do
not recognize income at the time of the grant of such stock. When shares of
Restricted Stock are no longer subject to a substantial risk of forfeiture,
grantees recognize ordinary income in an amount equal to the fair market value
of the stock less the amount paid, if any, for the stock. Alternatively, the
recipient may elect under Section 83(b) to report the fair market value of the
Restricted Stock as income on the date the stock is transferred to the
recipient.

DEFERRED STOCK.

A recipient of an award of Deferred Stock under the Equity Incentive Plan
will be taxed at ordinary income rates on the fair market value of the award at
the later of the time when the Deferred Stock is transferred to the recipient or
when the recipient's rights in such Deferred Stock become vested.

STOCK RELOAD OPTIONS.

A recipient who receives Stock Reload Options under the Equity Incentive
Plan will be taxed on such Options in the manner described above under the
heading "Incentive Stock Options" or "Nonqualified Options," as appropriate. The
recipient will not be taxed on the grant of the Stock Reload Options, but will
be taxed upon their exercise or on a later sale of the underlying Stock,
depending on the nature of the Options.

OTHER STOCK-BASED AWARDS.

The tax consequences arising from the issuance of Other Stock-Based Awards
will depend on the specific terms of the Award, but in most cases the recipient
will be taxed at ordinary income rates on the fair market value of the Award at
the later of the time when cash or stock is transferred to the recipient
pursuant to the Award or when the recipient's rights in the subject of the Award
become vested.

VOTE REQUIRED.

The affirmative vote of the holders of a majority of the Company's Common
Stock issued and outstanding of the Record Date will be required to adopt and
approve the Equity Incentive Plan. The Board of Directors recommends voting
"FOR" the adoption and approval of the Equity Incentive Plan.

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.

By Order Of The Board of Directors
DAVID E. CHISUM

SECRETARY

18
<PAGE>
APPENDIX A
AMX CORPORATION
1999 EQUITY INCENTIVE PLAN
<PAGE>
AMX CORPORATION
1999 EQUITY INCENTIVE PLAN
Adopted February 9, 1999

1. PURPOSE OF THE PLAN.

The purpose of the Plan is to provide a means by which selected Employees of
and Consultants to the Company and its Affiliates may be given an opportunity to
acquire a proprietary interest in the Company. Under the Plan, the Company may
provide various types of long-term incentive awards, including Stock Options,
Stock Appreciation Rights, Restricted Stock, Deferred Stock, Stock Reload
Options and Other Stock-Based Awards, in order to retain the services of persons
who are now Employees of or Consultants to the Company and its Affiliates, to
secure and retain 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. Stock Options granted under the Plan may be
Incentive Stock Options or Nonqualified Stock Options, as determined by the
Committee at the time of grant of an Option and subject to the applicable
provisions of Section 422 of the Code and the regulations promulgated
thereunder.

2. DEFINITIONS.

As used herein, the following definitions shall apply:

(a) "Affiliate" means, with respect to any Person, any Parent or Subsidiary
of such Person, whether such Parent or Subsidiary is now or hereafter existing.

(b) "Agreement" means the agreement between the Company and the Holder
setting forth the terms and conditions of an Award under the Plan.

(c) "Applicable Laws" means the legal requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code and the applicable laws of any
foreign country or jurisdiction where Options are, or will be, granted under the
Plan.

(d) "Award" means an award of Options, Stock Appreciation Rights, Restricted
Stock, Deferred Stock, Stock Reload Options or Other Stock-Based Awards under
the Plan.

(e) "Beneficial Owner" means a "beneficial owner" as defined in Rule 13d-3
of the Exchange Act.

(f) "Board" means the Board of Directors of the Company.

(g) "Code" means the Internal Revenue Code of 1986, as amended.

(h) "Change of Control" means the occurrence of (i) any Person or Group of
Persons becoming for the first time the Beneficial Owner, directly or
indirectly, of more than fifty percent (50%) of the total combined voting power
of all classes of capital stock of the Company normally entitled to vote for the
election of directors of the Company ("Voting Stock"), other than as a result of
a transfer or series of related transfers of Voting Stock from a Person or Group
of Persons who immediately prior to such transfer or transfers was the
Beneficial Owner, and who after giving effect to such transfer or transfers
continues to be the Beneficial Owner, of more than fifty percent (50%) of the
Voting Stock of the Company; (ii) a merger or consolidation of the Company with
or into another Person or the merger of another Person into the Company as a
consequence of which those Persons who held all of the Voting Stock of the
Company immediately prior to such merger or consolidation do not hold either
directly or indirectly a majority of the Voting Stock of the Company (or, if
applicable, the surviving company of such merger or consolidation) after the
consummation of such merger or consolidation; (iii) the sale of all or
substantially all of the assets of the Company to any Person or Group of Persons
(other than to an entity which owns a majority or more of the Common Stock of
the Company, a Subsidiary of the Company, or to an entity whose equity interests
are owned directly or indirectly by the Company or by an entity which owns
directly or indirectly a majority or more of the Common Stock of the Company);
or (iv) any event or series of events (which event or series of events must
include a proxy fight or proxy solicitation with respect to the election of
directors of the Company made in opposition to the nominees recommended by the
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Directors) during any period of 12 consecutive months, as a result of which a
majority of the Board of Directors of the Company consists of individuals other
than Continuing Directors.

(i) "Committee" means the Compensation Committee of the Board of Directors.

(j) "Common Stock" means the Common Stock, par value $.01 per share, of the
Company.

(k) "Company" means AMX Corporation.

(l) "Consultant" means (i) any person who is engaged by the Company or any
Parent or Subsidiary to render consulting or advisory services and is
compensated for such services and (ii) any Director of the Company, whether such
Director is compensated for such services or not.

(m) "Continuous Status as an Employee or Consultant" means that the
employment or consulting relationship with the Company or any Affiliate is not
interrupted or terminated. Continuous Status as an Employee or Consultant shall
not be considered interrupted in the case of (i) any leave of absence approved
by the Company or (ii) transfers between locations of the Company or between the
Company or any Affiliate or any successor. A leave of absence approved by the
Company shall include sick leave, military leave, or any other personal leave
approved by an authorized representative of the Company. For purposes of
Incentive Stock Options, no such leave may exceed 90 days, unless reemployment
upon expiration of such leave is guaranteed by statute or contract. If
reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, on the 91st day of such leave any Incentive Stock Option held
by the Holder shall cease to be treated for tax purposes as an Incentive Stock
Option and shall be treated for tax purposes as a Nonqualified Stock Option.

(n) "Deferred Stock" means Stock to be received at the end of a specified
deferral period under an Award made pursuant to Section 10 below.

(o) "Director" means a member of the Board of Directors of the Company.

(p) "Employee" means any person, including Officers and Directors, employed
by the Company or any Affiliate of the Company. The payment of a Director's fee
by the Company shall not be sufficient to constitute "employment" by the
Company.

(q) "Exchange Act" means the Securities Exchange Act of 1934, as amended.

(r) "Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:

(i) If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq National
Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair
Market Value shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such exchange or system for the
last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Committee deems
reliable;

(ii) If the Common Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value shall be
the mean between the high bid and low asked prices for the Common Stock on
the last market trading day prior to the day of determination; or

(iii) In the absence of an established market for the Common Stock, the
Fair Market Value thereof shall be determined in good faith by the
Committee.

(s) "Group" means a "group" as such term is used in Section 13(d)(3) of the
Exchange Act.

(t) "Holder" means a person who has received an Award under the Plan.

(u) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.

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(v) "Nonqualified Stock Option" means an Option not intended to qualify as
an Incentive Stock Option.

(w) "Officer" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

(x) "Option" means a Stock Option granted pursuant to the Plan.

(y) "Option Agreement" shall mean the written option agreement,
substantially in the form attached hereto as Exhibit A (or such other form as
may be approved by the Committee for use under the Plan pursuant to Section
3(b)(v) hereof), between the Company and Holder evidencing the grant of an
Option.

(z) "Optioned Stock" means the Common Stock subject to an Option.

(aa) "Other Stock-Based Awards" means awards (other than Stock Options,
Stock Appreciation Rights, Restricted Stock, Deferred Stock and Stock Reload
Options) denominated or payable in, valued in whole or in part by reference to,
or otherwise based on, or related to shares of Common Stock.

(bb) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

(cc) "Person" means an individual or entity.

(dd) "Plan" means this 1999 Equity Incentive Plan.

(ee) "Restricted Stock" means Stock, received under an Award made pursuant
to Section 9 below, that is subject to restrictions under said Section 9.

(ff) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act or any
successor rule thereto.

(gg) "Section 16(b)" means Section 16(b) of the Exchange Act.

(hh) "SAR Value" means the excess of the Fair Market Value of one share of
Common Stock over the exercise price per share specified in a related Stock
Option in the case of a Stock Appreciation Right granted in tandem with a Stock
Option and the Stock Appreciation Right price per share in the case of a Stock
Appreciation Right awarded on a free standing basis, in each case multiplied by
the number of shares in respect of which the Stock Appreciation Right shall be
exercised, on the date of exercise.

(ii) "Share" means a share of the Common Stock of the Company.

(jj) "Stock" means the Common Stock of the Company.

(kk) "Stock Appreciation Right' means the right, pursuant to an Award
granted under Section 8 hereof, to recover an amount equal to the SAR Value.

(ll) "Stock Option" means any Option to purchase shares of Stock which is
granted pursuant to the Plan.

(mm) "Stock Reload Option" means any option granted under Section 7(e) as a
result of the payment of the exercise price of a Stock Option and/or the
withholding tax related thereto in the form of Stock owned by the Holder or the
withholding of Stock by the Company.

(nn) "Subsidiary" "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code, including
without limitation, in the case of the Company, PHAST Corporation, Axcess
Technology, Ltd., and AMX Control Systems, Ltd. Pte.

(oo) "Tandem Stock Appreciation Right" means a Stock Appreciation Right
granted in tandem with all or part of any Stock Option granted under the Plan.

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3. ADMINISTRATION OF THE PLAN.

(a) PLAN ADMINISTRATION. The Plan at all times shall be administered by the
Committee, which shall be comprised solely of not less than two members who
shall be (i) "Non-Employee Directors" within the meaning of Rule 16b-3 and (ii)
unless otherwise determined by the Board of Directors, "outside directors"
within the meaning of Treasury Regulation Section 1.162-27(e)(3) under Section
162(m) of the Code.

(b) POWERS OF THE COMMITTEE. Subject to the provisions of the Plan and
subject to the approval of any relevant authorities, including the approval, if
required, of any stock exchange upon which the Common Stock is listed, the
Committee shall have the full authority to award: (i) Stock Options, (ii) Stock
Appreciation Rights, (iii) Restricted Stock, (iv) Deferred Stock, (v) Stock
Reload Options and/or (vi) Other Stock-Based Awards. For purposes of
illustration and not of limitation, the Committee shall have the authority
(subject to the express provisions of the Plan):

(i) to determine the Fair Market Value of the Common Stock;

(ii) to select the Consultants and Employees to whom Awards may from
time to time be granted hereunder;

(iii) to determine whether and to what extent Awards or any combination
thereof are granted hereunder;

(iv) to determine the number of Shares to be covered by each such Award
granted hereunder;

(v) to approve forms of agreement for use under the Plan;

(vi) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price of an Option; any
specified performance goals or other criteria which must be attained for the
vesting of an Award; any restrictions or limitations; and any vesting,
exchange, surrender, cancellation, acceleration, termination, exercise or
forfeiture provisions; and

(vii) to construe and interpret the terms of the Plan and Awards granted
pursuant to the Plan.

(c) EFFECT OF COMMITTEE'S DECISION. All decisions, determinations and
interpretations of the Committee shall be final and binding on all Holders of
any Awards. No member of the Board or any Committee administering the Plan shall
be liable for any action taken or determination made in good faith with respect
to the Plan or any Option granted hereunder.

4. STOCK SUBJECT TO THE PLAN.

The maximum aggregate number of Shares that may be acquired by Holders of
any Awards granted under the Plan is 3,000,000 Shares and the maximum number of
Shares that may be acquired by an individual Holder under the Plan shall not
exceed 1,500,000 (in each case subject to adjustment as provided in Section 12
of the Plan). The Shares may be authorized but unissued or reacquired Common
Stock.

If any shares of Stock that have been granted pursuant to a Stock Option
cease to be subject to a Stock Option, or if any shares of Stock that are
subject to any Stock Appreciation Right, Restricted Stock, Deferred Stock award,
Reload Stock Option or Other Stock-Based Award granted hereunder are forfeited
or any such award otherwise terminates without a payment being made to the
Holder in the form of Stock, such shares shall again be available for
distribution in connection with future grants and awards under the Plan. Only
net shares issued upon a stock-for-stock exercise (including stock used for
withholding taxes) shall be counted against the number of shares available under
the Plan.

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5. ELIGIBILITY.

(a) Awards may be made or granted to key employees, officers, directors and
consultants of the Company who are deemed to have rendered or to be able to
render significant services to the Company or its Subsidiaries and who are
deemed to have contributed or to have the potential to contribute to the success
of the Company. No Incentive Stock Option shall be granted to any person who is
not an employee of the Company or a Subsidiary at the time of grant.

(b) Each Option shall be designated in the Option Agreement as either an
Incentive Stock Option or a Nonqualified Stock Option. However, notwithstanding
such designation, to the extent that the aggregate Fair Market Value of the
Shares with respect to which Incentive Stock Options are exercisable for the
first time by the Optionee during any calendar year (under all plans of the
Company or any Affiliate) exceeds $100,000, such Options shall be treated for
tax purposes as Nonqualified Stock Options. For purposes of this Section 5(b),
Incentive Stock Options shall be taken into account in the order in which they
were granted. For purposes of this Section 5(b), the Fair Market Value of the
Shares shall be determined as of the time the Option with respect to such Shares
is granted.

(c) Neither the Plan nor any Award shall confer upon any Holder any right
with respect to continuation of his or her employment or consulting relationship
with the Company or any Affiliate, nor shall it interfere in any way with his or
her right or the Company's right to terminate his or her employment or
consulting relationship at any time, with or without cause.

6. OPTION EXERCISE PRICE AND CONSIDERATION.

(a) The per Share exercise price for the Shares to be issued upon exercise
of an Option shall be such price as is determined by the Committee, but in the
case of an Incentive Stock Option:

(i) granted to an Employee who, at the time of grant of such Option,
owns stock representing more than ten percent (10%) of the voting power of
all classes of stock of the Company or any Affiliate, the per Share exercise
price shall not be less than 110% of the Fair Market Value per Share on the
date of grant; and

(ii) granted to any other Employee, the per Share exercise price shall
not be less than 100% of the Fair Market Value per Share on the date of
grant.

(b) The consideration to be paid for the Shares to be issued upon exercise
of an Option, including the method of payment, shall be determined by the
Committee (and, in the case of an Incentive Stock Option, shall be determined at
the time of grant). Such consideration shall be paid, to the extent permitted by
applicable statutes and regulations at the time the Option is exercised, either
(i) in cash or check, or (ii) at the discretion of the Committee, in one or a
combination of the following ways (which may be in combination with or in lieu
of payment by cash or check): (A) by delivery to the Company of other Shares of
Common Stock of the Company to be valued at their Fair Market Value on the
exercise date, (B) according to a deferred payment or other arrangement with the
Person to whom the Option is granted or to whom the Option is transferred
pursuant to Section 15, (C) withholding of Shares that would otherwise be issued
upon the exercise of the Option, valued at their Fair Market Value on the
exercise date, or (D) in any other form of legal consideration that may be
acceptable to the Committee. In making its determination as to the type of
consideration to accept, the Committee shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company. In addition,
such consideration shall be accompanied by the delivery by the Optionee of a
properly executed exercise notice together with such other documentation as the
Committee and a broker, if applicable, shall require to effect an exercise of
the Option and delivery to the Company of the sale or loan proceeds required to
pay the exercise price.

7. EXERCISE OF OPTION.

(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option granted
hereunder shall be exercisable at such times and under such conditions as
determined by the Committee, including performance criteria

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with respect to the Company and/or the Optionee, and as shall be permissible
under the terms of the Plan. The total number of Shares subject to an Option
may, but need not, be allotted in periodic installments (which may, but need
not, be equal). The Option Agreement may provide that from time to time during
each of such installment periods, the Option may become exercisable with respect
to some or all of the Shares allotted to that period and may be exercised with
respect to some or all of the Shares allotted to such period and/or any prior
period as to which the Option became vested but was not fully exercised.

An Option may not be exercised for a fraction of a Share. Exercise of an
Option in any manner shall result in a decrease in the number of Shares that
thereafter may be available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.

Subject to Section 18, an Option shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance with
the terms of the Option Agreement by the Person entitled to exercise the Option
and full payment for the Shares with respect to which the Option is exercised
has been received by the Company. To the extent required by applicable federal,
state, local or foreign law, an Optionee shall make arrangements satisfactory to
the Company for the satisfaction of any withholding tax obligations that arise
by reason of an Option exercise or any sale of Shares, which obligations may, as
authorized by the Committee, consist of any consideration and method of payment
allowable under Section 6(b) hereof. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote, receive dividends or any other rights as a shareholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such stock certificate promptly upon
exercise of the Option. No adjustment shall be made for a dividend or other
right for which the record date is prior to the date the stock certificate is
issued, except as provided in Section 12 hereof.

(b) TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP. Subject to
paragraph (c) below, in the event of termination of an Optionee's Continuous
Status as an Employee or Consultant, such Optionee may exercise his or her
Option to the extent that the Optionee was entitled to exercise it at the date
of such termination; provided, however, that such Option may be exercised only
within such period of time as is determined by the Committee at the date of
grant. Such time period shall not, in the case of an Incentive Stock Option,
exceed three (3) months after the date of such termination and shall not, in any
case, be later than the expiration date of the term of such Option as set forth
in the Option Agreement. To the extent that the Optionee was not entitled to
exercise the Option at the date of such termination, or if the Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan. An Optionee's Continuous Status as an Employee or Consultant shall
not be terminated in the event of Optionee's change of status from an Employee
to a Consultant or from a Consultant to an Employee; provided, however, that in
the event of an Optionee's change of status from an Employee to a Consultant,
any Incentive Stock Option granted to such Employee shall automatically cease to
be treated for tax purposes as an Incentive Stock Option and shall be treated
for tax purposes as a Nonqualified Stock Option on the day three months and one
day following such change of status.

(c) DISABILITY OF OPTIONEE. In the event of termination of an Optionee's
Continuous Status as an Employee or Consultant as a result of his or her
disability, the Optionee may, but only within twelve (12) months from the date
of such termination (and in no event later than the expiration date of the term
of such Option as set forth in the Option Agreement), exercise the Option to the
extent he or she otherwise was entitled to exercise it at the date of such
termination. If such disability is not a "disability" as such term is defined in
Section 22(e)(3) of the Code, then in the case of an Incentive Stock Option such
Incentive Stock Option shall automatically cease to be treated for tax purposes
as an Incentive Stock Option and shall be treated for tax purposes as a
Nonqualified Stock Option on the day three months and one day following such
termination. To the extent that the Optionee was not entitled to exercise the
Option at the date of termination, or if the Optionee does not exercise such
Option to the extent so entitled within

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the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

(d) DEATH OF OPTIONEE. In the event of the death of an Optionee, the Option
may be exercised at any time within twelve (12) months following the date of
death (but in no event later than the expiration date of the term of such Option
as set forth in the Option Agreement) by the Optionee's estate or by any Person
who acquired the right to exercise the Option by bequest or inheritance (the
"Option Beneficiary"), but only to the extent that the Optionee was entitled to
exercise the Option on the date of death. To the extent that, at the time of
death, the Optionee was not entitled to exercise the Option, or if the Option
Beneficiary does not exercise the Option within the time specified herein, the
Option shall terminate and the Shares covered by such Option shall revert to the
Plan.

(e) STOCK RELOAD OPTION. The Committee may also grant to the Holder
(concurrently with the grant of an Incentive Stock Option and at or after the
time of grant in the case of a Non-Qualified Stock Option) a Stock Reload Option
up to the amount of shares of Stock held by the Holder for at least six months
and used to pay all or part of the exercise price of an Option and, if any,
withheld by the Company as payment for withholding taxes. Such Stock Reload
Option shall have an exercise price of the Fair Market Value as of the date of
the Stock Reload Option grant. Unless the Committee determines otherwise, a
Stock Reload Option may be exercised commencing one year after it is granted and
shall expire on the date of expiration of the Option to which the Stock Reload
Option is related.

8. STOCK APPRECIATION RIGHTS.

(a) GRANT AND EXERCISE. Stock Appreciation Rights may be granted in tandem
with (i.e., Tandem Stock Appreciation Right) or in conjunction with all or part
of any Stock Option granted under the Plan or may be granted on a free-standing
basis. In the case of a Non-Qualified Stock Option, a Tandem Stock Appreciation
Right may be granted either at or after the time of the grant of such
Non-Qualified Stock Option. In the case of an Incentive Stock Option, a Tandem
Stock Appreciation Right may be granted only at the time of the grant of such
Incentive Stock Option.

(b) TERMS AND CONDITIONS. Stock Appreciation Rights shall be subject to the
following terms and conditions:

(i) EXERCISABILITY. Tandem Stock Appreciation Rights shall be
exercisable only at such time or times and to the extent that the Stock
Options to which they relate shall be exercisable in accordance with the
provisions of Section 7 hereof and this Section 8 and may be subject to the
Code with respect to related Incentive Stock Options and such additional
limitations on exercisability as shall be determined by the Committee and
set forth in the Agreement. Other Stock Appreciation Rights shall be
exercisable at such time or times and subject to such terms and conditions
as shall be determined by the Committee and set forth in the Agreement.

(ii) TERMINATION. A Tandem Stock Appreciation Right shall terminate and
shall no longer be exercisable upon the termination or exercise of the
related Stock Option, except that, unless otherwise determined by the
Committee at the time of grant, a Tandem Stock Appreciation Right granted
with respect to less than the full number of shares covered by a related
Stock Option shall not be reduced until after the number of shares remaining
under the related Stock Option equals the number of shares covered by the
Tandem Stock Appreciation Right.

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(iii) METHOD OF EXERCISE. A Tandem Stock Appreciation Right may be
exercised by a Holder by surrendering the applicable portion of the related
Stock Option. Upon such exercise and surrender, the Holder shall be entitled
to receive such amount in the form determined pursuant to Section 8(b)(iv)
below. Stock Options which have been so surrendered, in whole or in part,
shall no longer be exercisable to the extent the related Tandem Stock
Appreciation Rights have been exercised.

(iv) RECEIPT OF SAR VALUE. Upon the exercise of a Stock Appreciation
Right, a Holder shall be entitled to receive up to, but not more than, an
amount in cash and/or shares of Stock equal to the SAR Value with the
Committee having the right to determine the form of payment.

(v) SHARES AFFECTED UPON PLAN. Upon the exercise of a Tandem Stock
Appreciation Right, the Stock Option or part thereof to which such Tandem
Stock Appreciation Right is related shall be deemed to have been exercised
for the purpose of the limitation set forth in Section 4 hereof on the
number of shares of Common Stock to be issued under the Plan, but only to
the extent of the number of shares, if any, issued under the Tandem Stock
Appreciation Right at the time of exercise based upon the SAR Value.

9. RESTRICTED STOCK.

(a) GRANT. Shares of Restricted Stock may be awarded either alone or in
addition to other Awards granted under the Plan. The Committee shall determine
the eligible persons to whom, and the time or times at which, grants of
Restricted Stock will be awarded, the number of shares to be awarded, the price
(if any) to be paid by the Holder, the time or times within which such Awards
may be subject to forfeiture ("Restriction Period"), the vesting schedule and
rights to acceleration thereof, and all other terms and conditions of the
Awards.

(b) TERMS AND CONDITIONS. Each Restricted Stock Award shall be subject to
the following terms and conditions:

(i) CERTIFICATES. Restricted Stock, when issued, will be represented by
a stock certificate or certificates registered in the name of the Holder to
whom such Restricted Stock shall have been awarded. During the Restriction
Period, certificates representing the Restricted Stock and any securities
constituting Retained Distributions (as defined below) shall bear a legend
to the effect that ownership of the Restricted Stock (and such Retained
Distributions), and the enjoyment of all rights appurtenant thereto, are
subject to the restrictions, terms and conditions provided in the Plan and
the Agreement. Such certificates shall be deposited by the Holder with the
Company, together with stock powers or other instruments of assignment, each
endorsed in blank, which will permit transfer to the Company of all or any
portion of the Restricted Stock and any securities constituting Retained
Distributions that shall be forfeited or that shall not become vested in
accordance with the Plan and the Agreement.

(ii) RIGHTS OF HOLDER. Restricted Stock shall constitute issued and
outstanding shares of Common Stock for all corporate purposes. The Holder
will have the right to vote such Restricted Stock, to receive and retain all
regular cash dividends and other cash equivalent distributions as the Board
may in its sole discretion designate, pay or distribute on such Restricted
Stock and to exercise all other rights, powers and privileges of a holder of
Common Stock with respect to such Restricted Stock, with the exceptions that
(A) the Holder will not be entitled to delivery of the stock certificate or
certificates representing such Restricted Stock until the Restriction Period
shall have expired and unless all other vesting requirements with respect
thereto shall have been fulfilled; (B) the Company will retain custody of
the stock certificate or certificates representing the Restricted Stock
during the Restriction Period; (C) other than regular cash dividends and
other cash equivalent distributions as the Board may in its sole discretion
designate, pay or distribute, the Company will retain custody of all
distributions ("Retained Distributions") made or declared with respect to
the Restricted Stock (and

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such Retained Distributions will be subject to the same restrictions, terms
and conditions as are applicable to the Restricted Stock) until such time,
if ever, as the Restricted Stock with respect to which such Retained
Distributions shall have been made, paid or declared shall have become
vested and with respect to which the Restriction Period shall have expired;
(D) a breach of any of the restrictions, terms or conditions contained in
this Plan or the Agreement or otherwise established by the Committee with
respect to any Restricted Stock or Retained Distributions will cause a
forfeiture of such Restricted Stock and any Retained Distributions with
respect thereto.

(iii) VESTING: FORFEITURE. Upon the expiration of the Restriction Period
with respect to each Award of Restricted Stock and the satisfaction of any
other applicable restrictions, terms and conditions (A) all or part of such
Restricted Stock shall become vested in accordance with the terms of the
Agreement, and (B) any Retained Distributions with respect to such
Restricted Stock shall become vested to the extent that the Restricted Stock
related thereto shall have become vested. Any such Restricted Stock and
Retained Distributions that do not vest shall be forfeited to the Company
and the Holder shall not thereafter have any rights with respect to such
Restricted Stock and Retained Distributions that shall have been so
forfeited.

10. DEFERRED STOCK.

(a) GRANT. Shares of Deferred Stock may be awarded either alone or in
addition to other Awards granted under the Plan. The Committee shall determine
the eligible persons to whom and the time or times at which grants of Deferred
Stock shall be awarded, the number of shares of Deferred Stock to be awarded to
any person, the duration of the period ("Deferral Period") during which, and the
conditions under which receipt of the shares will be deferred, and all the other
terms and conditions of the Awards.

(b) TERMS AND CONDITIONS. Each Deferred Stock Award shall be subject to the
following terms and conditions:

(i) CERTIFICATES. At the expiration of the Deferral Period (or the
Additional Deferral Period referred to in Section 10(b)(iii) below, where
applicable), share certificates shall be delivered to the Holder, or his
legal representative, representing the number equal to the shares covered by
the Deferred Stock Award.

(ii) VESTING; FORFEITURE. Upon the expiration of the Deferral Period (or
the Additional Deferral Period, where applicable) with respect to each Award
of Deferred Stock and the satisfaction of any other applicable limitations,
terms or conditions, such Deferred Stock shall become vested in accordance
with the terms of the Agreement. Any Deferred Stock that does not vest shall
be forfeited to the Company and the Holder shall not thereafter have any
rights with respect to such Deferred Stock that has been so forfeited.

(iii) ADDITIONAL DEFERRAL PERIOD. A Holder may request to, and the
Committee may at any time, defer the receipt of an Award (or an installment
of an Award) for an additional specified period or until a specified event
("Additional Deferral Period"). Subject to any exceptions adopted by the
Committee, such request must generally be made at least one year prior to
expiration of the Deferral Period for such Deferred Stock Award (or such
installment).

11. OTHER STOCK-BASED AWARDS.

(a) GRANT AND EXERCISE. Other Stock-Based Awards may be awarded, subject to
limitations under applicable law, that are denominated or payable in, valued in
whole or in part by reference to, or otherwise based on, or related to, shares
of Common Stock, as deemed by the Committee to be consistent with the purposes
of the Plan, including, without limitation, purchase rights, shares of Common
Stock awarded which are not subject to any restrictions or conditions,
convertible or exchangeable debentures, or other rights convertible into shares
of Common Stock and Awards valued by reference to the value of securities

9
<PAGE>
of or the performance of specified Subsidiaries. Other Stock-Based Awards may be
awarded either alone or in addition to or in tandem with any other Awards under
this Plan or any other plan of the Company.

(b) ELIGIBILITY FOR OTHER STOCK-BASED AWARDS. The Committee shall determine
the eligible persons to whom and the time or times at which grants of such Other
Stock-Based Awards shall be made, the number of shares of Common Stock to be
awarded pursuant to such Awards, and all other terms and conditions of the
Awards.

(c) TERMS AND CONDITIONS. Each Other Stock-Based Award shall be subject to
such terms and conditions as may be determined by the Committee.

12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.

(a) CHANGES IN CAPITALIZATION. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Award, and the number of shares of Common Stock which have been
authorized for issuance under the Plan but as to which no Awards have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Award, as well as the price per share of Common Stock covered by each such
outstanding Award, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company.
The conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such adjustment shall
be made by the Committee, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible or
exchangeable into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or exercise price of
shares of Common Stock subject to an Award.

(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution or
liquidation of the Company, the Committee shall notify the Holder at least
fifteen (15) days prior to such proposed action. To the extent it has not been
previously exercised, the Award shall terminate immediately prior to the
consummation of such proposed action; provided, however, that the Committee may,
in the exercise of its sole discretion in such instances, declare that any Award
shall terminate as of an earlier date fixed by the Committee and give each
Holder the right to exercise his or her rights as to all or any part of the
Award, including Shares as to which the Award would not otherwise be
exercisable.

(c) MERGER OR ASSET SALE. Subject to Section 12(d), in the event of the
merger of the Company into, or the consolidation of the Company with, another
corporation in which the shareholders of the Company receive cash or securities
of another issuer, or any combination thereof, in exchange for their shares of
Common Stock, or the sale of all or substantially all of the assets of the
Company, each outstanding Award shall be assumed or an equivalent option or
right substituted by the successor corporation or an Affiliate of the successor
corporation. In the event that the successor corporation refuses to assume or
substitute for the Award, the Holder shall fully vest in and have the right to
exercise the Award (provided it has not already terminated), including Shares as
to which it would not otherwise be vested or exercisable. If an Award becomes
fully vested and exercisable in lieu of assumption or substitution in the event
of a merger, consolidation or sale of assets, the Committee shall notify the
Holder that the Award shall be fully exercisable for a period of fifteen (15)
days from the date of such notice, and the Award shall terminate upon the
expiration of such period. For the purposes of this paragraph, the Award shall
be considered assumed if, following the merger, consolidation or sale of assets,
the option substituted for such Award confers the right to purchase or receive,
for each Share of Stock subject to the Award immediately prior to the merger,
consolidation or sale of assets, the per Share consideration (whether stock,
cash, or other securities or property) received in the merger, consolidation or
sale of assets by holders of Common Stock (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a

10
<PAGE>
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger, consolidation or sale of assets is not
solely common stock of the successor corporation or its Parent (if any), the
Committee may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of the Award, for each Share of
Stock subject to the Award, to be solely common stock of the successor
corporation or its Parent (if any) equal in fair market value to the per Share
consideration received by holders of Common Stock in the merger, consolidation
or sale of assets.

(d) CHANGE OF CONTROL. Notwithstanding anything to the contrary, the
Committee may grant Awards which provide for the acceleration of the vesting of
Shares subject to the Award upon a Change of Control. Such provisions shall be
set forth in the Agreement.

(e) FURTHER ADJUSTMENTS. In the event of any change of a type described in
paragraphs (a) or (c) above, the Committee shall make any further adjustment to
the maximum number of Shares which may be acquired under the Plan pursuant to
the exercise of Awards, the maximum number of Shares for which Awards may be
granted to any one Employee and the number of Shares and price per Share subject
to outstanding Awards as shall be equitable to prevent dilution or enlargement
of rights under such Awards, and the determination of the Committee as to these
matters shall be conclusive and binding on the Holder; provided, however, that
(i) each such adjustment with respect to an Incentive Option shall comply with
the rules of Section 424(a) of the Code (or any successor provision) and (ii) in
no event shall any adjustment be made which would render any Incentive Stock
Option granted hereunder other than an "incentive stock option" as defined in
Section 422 of the Code.

(f) NO LIMITATION ON RIGHT TO MERGE, ETC. The grant of Awards pursuant to
the Plan shall not restrict in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge, consolidate, dissolve, liquidate, or sell or
transfer all or any part of its business or assets.

13. TERM OF PLAN.

The Plan shall become effective upon the earlier to occur of its adoption by
the Board of Directors or its approval by the shareholders of the Company, as
described in Section 21 of the Plan. It shall continue in effect for a term of
ten (10) years unless sooner terminated under Section 17 of the Plan.

14. TERM OF OPTIONS.

The term of each Option shall be the term stated in the Option Agreement;
provided, however, that the term shall be no more than ten (10) years from the
date of grant thereof; and provided further that in the case of an Incentive
Stock Option granted to an Optionee who, at the time the Option is granted, owns
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Affiliate, the term of the Option shall
be no more than five (5) years from the date of grant thereof.

15. NON-TRANSFERABILITY OF AWARDS.

An Incentive Stock Option shall not be transferrable except by will or by
the laws of descent and distribution and shall be exercisable during the
lifetime of the Person to whom the Incentive Stock Option is granted only by
such Person. Any other Award, including a Nonqualified Stock Option, shall not
be transferrable except by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order, as defined by the Code or by
Title I of the Employee Retirement Income Security Act of 1974, as amended, or
the rules thereunder (a "QDRO"), and shall be exercisable during the lifetime of
the Person to whom the Option is granted only by such Person or any transferee
pursuant to a QDRO; PROVIDED, HOWEVER, that the Board of Directors or the
Committee, as applicable, in its discretion, may allow for transferability of
Nonqualified Stock Options by a Holder to "Immediate Family Members." For
purposes of the Plan, "Immediate Family Members" means children, grandchildren,
spouse or common law spouse, siblings or parents of the Holder or to bona fide
trusts, partnerships or other entities controlled by and of which the
beneficiaries are Immediate Family Members of the Holder. Any Nonqualified Stock

11
<PAGE>
Option grants that are transferable are further conditioned on the Holder and
Immediate Family Members agreeing to abide by the Company's then current stock
option transfer guidelines.

16. TIME OF GRANTING AWARDS.

The date of grant of an Award shall, for all purposes, be the date on which
the Committee makes the determination granting such Award, or such other date as
is determined by the Committee. Notice of the determination shall be given to
each Employee or Consultant to whom an Award is so granted within a reasonable
time after the date of such grant.

17. AMENDMENT AND TERMINATION OF THE PLAN.

The Board may amend or terminate the Plan in any respect whatsoever,
provided that any such amendment or termination of the Plan shall not affect
Award already granted and such Award shall remain in full force and effect as if
the Plan had not been amended or terminated. In addition, to the extent
necessary and desirable to comply with Rule 16b-3 (or any other applicable law
or regulation, including the requirements of the NASD or an established stock
exchange), the Company shall obtain shareholder approval of any Plan amendment
in such a manner and to such a degree as required.

18. CONDITIONS UPON ISSUANCE OF SHARES.

Shares shall not be issued pursuant to an Award unless the issuance and
delivery of such Shares pursuant thereto shall comply with all relevant
Applicable Laws, including, without limitation, the Securities Act of 1933, as
amended (the "Securities Act"), the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the Shares may then be listed or any automatic quotation system upon which the
Shares may then be quoted, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

The Company may require any Optionee or other Holder, as a condition of
receiving Shares pursuant to an Award, (i) to give written assurances
satisfactory to the Company as to the Holder's knowledge and experience in
financial and business matters and/or to employ a purchaser representative
reasonably satisfactory to the Company who is knowledgeable and experienced in
financial and business matter, and that he or she is capable of evaluating,
alone or together with the purchaser representative, the merits and risks of
exercising the Award; (ii) to give written assurances satisfactory to the
Company stating that such Person is acquiring the Shares subject to the Award
for such Person's own account and not with any present intention of selling or
otherwise distributing such Shares; and (iii) to deliver such other
documentation as may be necessary to comply with federal and state securities
laws. These requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (i) the issuance of the Shares upon the
exercise of the Award has been registered under a then currently effective
registration statement under the Securities Act and all applicable state
securities laws, or (ii) as to any particular requirement, a determination is
made by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. The Company may, upon
advice of counsel to the Company, place legends on stock certificates issued
under the Plan as such counsel deems necessary or appropriate in order to comply
with applicable securities laws, including, but not limited to, legends
restricting the transfer of the Shares, and may enter stop-transfer orders
against the transfer of the Shares issued upon the exercise of an Award.

The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.

19. RESERVATION OF SHARES.

The Company, during the term of the Plan, shall at all times reserve and
keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

12
<PAGE>
20. AGREEMENTS.

Options shall be evidenced by Option Agreements in such form as the
Committee shall approve from time to time. Other Awards shall be evidenced by
similar Agreements.

21. SHAREHOLDER APPROVAL.

Continuance of the Plan shall be subject to approval by the shareholders of
the Company within twelve (12) months before or after the date the Plan is
adopted. Such shareholder approval shall be obtained to the extent and in manner
required under Applicable Laws and the rules of any stock exchange upon which
the Common Stock is listed or any automatic quotation system upon which the
Common Stock is quoted.

22. USE OF PROCEEDS FROM STOCK.

Proceeds from the sale of stock pursuant to Options or other Awards shall
constitute general funds of the Company.

23. MISCELLANEOUS.

(a) ACCELERATION OF VESTING. The Committee shall have the power to
accelerate the time at which an Award may first be exercised or the time during
which an Award or any part thereof will vest, notwithstanding the provisions in
the Award Agreement stating the time at which it may first be exercised or the
time during which it will vest.

(b) RULE 16B-3. With respect to Persons subject to Section 16 of the
Exchange Act, transactions under the Plan are intended to comply with all
applicable conditions of Rule 16b-3 and with respect to such Persons all
transactions shall be subject to such conditions regardless of whether they are
expressly set forth in the Plan or the Award Agreement. To the extent any
provision of the Plan or action by the Committee fails to so comply, it shall
not apply to such Persons or their transactions and shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Committee.

(c) GRANTS EXCEEDING ALLOTTED SHARES. If the number of shares of Stock
subject to an Award granted pursuant to the Plan exceeds, as of the date of
grant, the number of Shares that may be issued under the Plan without additional
shareholder approval, such Award shall be void with respect to such excess
Shares, unless shareholder approval of an amendment sufficiently increasing the
number of Shares subject to the Plan is timely obtained in accordance with
Section 17 of the Plan.

(d) NOTICE. Any written notice to the Company required by any of the
provisions of the Plan shall be addressed to the Secretary of the Company and
shall become effective when it is received. Any written notice to Holders
required by any provisions of the Plan shall be addressed to the Holder at the
address on file with the Company and shall become effective three days after it
is mailed by certified mail, postage prepaid to such address or at the time of
delivery if delivered sooner by messenger or overnight courier.

(e) SAVINGS CLAUSE. Notwithstanding any other provision hereof, the Plan is
intended to qualify as a plan pursuant to which Incentive Stock Options may be
issued under Section 422 of the Code. If the Plan or any provision of the Plan
shall be held to be invalid or to fail to meet the requirements of Section 422
of the Code or the regulations promulgated thereunder, such invalidity or
failure shall not affect the remaining parts of the Plan, but rather it shall be
construed and enforced as if the Plan or the affected provision thereof, as the
case may be, complied in all respects with the requirements of Section 422 of
the Code.

(f) GOVERNING LAW. The Plan and all rights and obligations thereunder shall
be construed in accordance with and governed by the laws of the State of Texas
without regard to its conflict of laws rules.

13
<PAGE>
EXHIBIT A

AMX CORPORATION
1999 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT

Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Option Agreement.

I. NOTICE OF STOCK OPTION GRANT

[Optionee's name and address]

You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of this Option Agreement and the Plan,
including the provisions thereof relating to increases in the number of shares
covered by this Option upon the occurrence of certain specified events, as
follows:

<TABLE>
<S> <C> <C>
Grant Number............................
Date of Grant...........................
Vesting Commencement Date...............
Exercise Price per Share................ $
Total Number of Shares Granted
Total Exercise Price.................... $
Type of Option:......................... Incentive Stock Option
Nonqualified Stock Option
Term/Expiration Date:
(No more than 10 years from date of
grant, 5 years for certain grants)
</TABLE>

VESTING SCHEDULE

This Option may be exercised, in whole or in part, in accordance with the
following schedule. Except only as specifically provided elsewhere herein or in
the Plan, this Option shall be exercisable in the following cumulative
installments:

[NOTE: TO BE COMPLETED UPON GRANT OF OPTIONS]

TERMINATION PERIOD

You may exercise this Option for three months (or such shorter period
provided for elsewhere herein) after your employment or consulting relationship
with the Company terminates, or for such longer period upon your death or
disability as provided in the Plan. If your status changes from Employee to
Consultant or Consultant to Employee, this Option Agreement shall remain in
effect. In no case may you exercise this Option after the Term/Expiration Date
as provided above. Notwithstanding the foregoing, in the event the Company
terminates your employment for Cause (as defined below), this Option will
terminate on the date of the termination of your employment and will not be
exercisable thereafter. For purposes of this Agreement, "Cause" means the
occurrence of any of the following events or reasons:

(a) Optionee's conviction for a felony offense or commission by
Optionee of any act abhorrent to the community that the Company considers
materially damaging to or tending to discredit the reputation of the
Company;

14
<PAGE>
(b) Dishonesty, fraud, willful misconduct, unlawful discrimination or
theft on the part of Optionee;

(c) Optionee's using for his or her own benefit any confidential or
proprietary information of the Company, or willfully or negligently
divulging any such information to third parties without the prior written
consent of the Company;

(d) Optionee's public drunkenness, public use of illegal substances or
drugs or the use, possession, distribution or being under the influence of
alcohol or illegal substances or drugs in the workplace (the only exception
is that Optionee may consume alcohol reasonably and responsibly, if he or
she so chooses, at legitimate business events and functions where alcohol is
legally available); or

(e) the determination by the Company that Optionee has continually
failed or refused to comply, after notice of and a reasonable opportunity to
cure such failure or refusal, with the policies, standards, regulations,
instructions, or directions of the Company as they currently exist or as
they may be modified from time to time.

II. AGREEMENT

1. GRANT OF OPTION. AMX Corporation (the "Company") hereby grants to the
Optionee named in Section I hereof (the "Optionee") an option (the "Option") to
purchase the total number of shares of Common Stock (the "Shares") set forth in
Section I hereof, at the exercise price per share set forth in Section I hereof
(the "Exercise Price") subject to the terms, definitions and provisions of the
1999 Stock Option Plan (the "Plan") adopted by the Company, which is
incorporated herein by reference. Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings in this Option
Agreement.

If designated in Section I hereof as an Incentive Stock Option, this Option
is intended (subject to Section 5(b) of the Plan) to qualify as an Incentive
Stock Option as defined in Section 422 of the Code.

2. EXERCISE OF OPTION.

(a) RIGHT TO EXERCISE. This Option shall be exercisable during its term in
accordance with the Vesting Schedule set out in Section I hereof and with the
applicable provisions of the Plan and this Option Agreement. In the event of
Optionee's death, disability or other termination of the employment or
consulting relationship, this Option shall be exercisable in accordance with the
applicable provisions of the Plan and this Option Agreement.

(b) METHOD OF EXERCISE. This Option shall be exercisable by written notice
(in the form attached hereto as Exhibit A) which shall state the election to
exercise the Option, the number of Shares in respect of which the Option is
being exercised, and such other representations and agreements as to the
holder's investment intent with respect to such shares of Common Stock as may be
required by the Company pursuant to the provisions of the Plan. Such written
notice shall be signed by the Optionee and shall be delivered in person or by
certified mail to the Secretary of the Company. The written notice shall be
accompanied by payment of the Exercise Price. This Option shall be deemed to be
exercised upon receipt by the Company of such written notice accompanied by the
Exercise Price.

The Optionee shall, upon notification of the amount due (if any) as a result
of the exercise of the Option and prior to or concurrent with delivery of the
certificate representing the Shares, pay to the Company as provided in the Plan
amounts necessary to satisfy applicable federal, state and local tax withholding
requirements.

No Shares will be issued pursuant to the exercise of an Option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange upon which the Shares may then be listed
or any automatic quotation system upon which the Shares may then be quoted.

15
<PAGE>
Assuming such compliance, for income tax purposes the Shares shall be considered
transferred to the Optionee on the date on which the Option is exercised with
respect to such Shares.

3. METHOD OF PAYMENT. The purchase price of Optioned Shares acquired
pursuant to the Option shall be paid as set forth in the Plan. THE USE OF SHARES
OF STOCK ACQUIRED OR TO BE ACQUIRED TO PAY FOR EXERCISED SHARES MAY HAVE INCOME
TAX CONSEQUENCES FOR THE OPTIONEE.

4. RESTRICTIONS ON EXERCISE. This Option may not be exercised until such
time as the Plan has been approved by the shareholders of the Company, and may
not be exercised if the issuance of such Shares upon such exercise or the method
of payment of consideration for such shares would constitute a violation of any
applicable federal or state securities or other law or regulation, including any
rule under Part 207 of Title 12 of the Code of Federal Regulations as
promulgated by the Federal Reserve Board.

5. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution or
as otherwise set forth in the Plan and may be exercised during the lifetime of
Optionee only by Optionee or a permitted transferee as set forth in the Plan.
The terms of the Plan and this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

6. TERM OF OPTION. This Option may be exercised only within the term set
out in Section I hereof, and may be exercised during such term only in
accordance with the Plan and the terms of this Option. The limitations set out
in Sections 5 and 6 of the Plan regarding Options designated as Incentive Stock
Options and Options granted to more than ten percent (10%) shareholders shall
apply to this Option.

7. TAX CONSEQUENCES. The grant and/or exercise of the Option will have
federal and state income tax consequences. THE OPTIONEE SHOULD CONSULT A TAX
ADVISER UPON THE GRANT OF THE OPTION AND BEFORE EXERCISING THE OPTION OR
DISPOSING OF THE SHARES ACQUIRED UPON EXERCISE, PARTICULARLY WITH RESPECT TO HIS
OR HER STATE'S TAX LAWS.

8. ENTIRE AGREEMENT; GOVERNING LAW. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and this Option Agreement may not be
amended except by means of a writing signed by the Company and Optionee. This
Option Agreement is governed by Texas law except for that body of law pertaining
to conflict of laws.

9. WARRANTIES, REPRESENTATIONS AND COVENANTS. The undersigned Optionee
warrants and represents that he or she has reviewed the Plan and this Option
Agreement in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option Agreement and fully understands all
provisions of the Plan and Option Agreement. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee
upon any questions relating to the Plan and Option Agreement. Optionee further
agrees to notify the Company upon any change in the residence address indicated
below. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THE OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE
WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS
OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES
THAT NOTHING IN THIS OPTION AGREEMENT, NOR IN THE PLAN, WHICH IS INCORPORATED
HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO
CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE
IN ANY

16
<PAGE>
WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S
EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE.

<TABLE>
<S> <C> <C>
AMX CORPORATION

By:
-----------------------------------------
Name:
-----------------------------------------
TITLE:
-----------------------------------------

OPTIONEE:
---------------------------------------------
Signature
-----------------------------------------------
Print Name
-----------------------------------------------
Residence Address
-----------------------------------------------
Area Code/Telephone Number
</TABLE>

17
<PAGE>
EXHIBIT A
AMX CORPORATION
1999 EQUITY INCENTIVE PLAN
EXERCISE NOTICE

AMX Corporation
11995 Forestgate Drive
Dallas, Texas 75243

Attention: Secretary

1. EXERCISE OF OPTION. Effective as of today, , 199 , the undersigned
("Purchaser") hereby elects to purchase shares (the "Shares") of the
Common Stock of AMX Corporation (the "Company") under and pursuant to the 1999
Stock Option Plan (the "Plan") and the Stock Option Agreement dated ,
199 (the "Option Agreement"). The purchase price for the Shares shall be
$ , as specified in the Option Agreement.

2. DELIVERY OF PAYMENT. Purchaser herewith delivers to the Company the full
purchase price for the Shares of . THE USE OF SHARES OF STOCK
ACQUIRED OR TO BE ACQUIRED FOR EXERCISED SHARES MAY HAVE INCOME TAX CONSEQUENCES
FOR THE OPTIONEE.

3. REPRESENTATIONS OF PURCHASER. Purchaser acknowledges that Purchaser has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.

4. RIGHTS AS SHAREHOLDER. The Purchaser shall not be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any Shares subject
for which such Option is exercised including, but not limited to, rights to vote
or to receive dividends unless and until the Purchaser has satisfied all
requirements for exercise of the Option pursuant to its terms, the certificates
evidencing such Shares have been issued and the Purchaser has become a record
holder of such Shares. A share certificate for the number of Shares so acquired
shall be issued to the Optionee as soon as practicable after exercise of the
Option. No adjustment will be made for a dividend or other right for which the
record date is prior to the date all the conditions set forth above are
satisfied, except as provided in Section 12 of the Plan.

5. TAX CONSULTATION. Purchaser understands that Purchaser may suffer adverse
tax consequences as a result of Purchaser's purchase or disposition of the
Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.

6. ENTIRE AGREEMENT; GOVERNING LAW. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and this Agreement

18
<PAGE>
may not be amended except by means of a writing signed by the Company and
Purchaser. This Agreement is governed by Texas law except for that body of law
pertaining to conflict of laws.

<TABLE>
<S> <C>
Submitted by: Accepted by:

PURCHASER: AMX CORPORATION
- -------------------------------------------- By:
Signature
- -------------------------------------------- Its:
Print Name

Address: Address:
11995 Forestgate Drive
Dallas, Texas 75243
</TABLE>

19
<PAGE>
AMX CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY
SPECIAL MEETING OF SHAREHOLDERS--APRIL 5, 1999

The undersigned shareholder(s) of AMX Corporation, a Texas corporation,
hereby acknowledges receipt of the Notice of Special Meeting of Shareholders and
Proxy Statement and hereby appoints John F. McHale 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
Special Meeting of Shareholders of AMX Corporation to be held April 5, 1999, at
10:00 a.m. at 1445 Ross Avenue, 38th Floor, Dallas, Texas, and any adjournments
thereof, and to vote all shares of Common Stock that the undersigned is entitled
to vote on the matters set forth below:

1. PROPOSAL TO ADOPT AND APPROVE THE AMX CORPORATION 1999 EQUITY INCENTIVE
PLAN.

/ / FOR / / AGAINST / / ABSTAIN

2. 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 incident to the conduct of the meeting as may properly come before the
meeting and for such other items which the persons making the solicitation did
not know of a reasonable time before the solicitation.
<PAGE>
THIS BALLOT WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE PROPOSAL TO ADOPT AND APPROVE THE AMX
CORPORATION 1999 EQUITY INCENTIVE PLAN AND AS SAID PROXIES DEEM ADVISABLE ON
SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING.

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Signature

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

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Title, if applicable
Dated: __________________________, 1999

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.