<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
AMX CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ 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:
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(2) Aggregate number of securities to which transaction applies:
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(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:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
AMX CORPORATION
11995 FORESTGATE DRIVE
DALLAS, TEXAS 75243
July 30, 1999
To Our Shareholders:
We are pleased to invite you to attend AMX Corporation's 1999 Annual
Meeting, which will be held at the offices of Munsch Hardt Kopf & Harr, P.C.,
1445 Ross Ave., 38th Floor, Dallas, Texas at 10:00 a.m. on September 3, 1999.
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 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
SEPTEMBER 3, 1999
---------------------
To the Shareholders of AMX Corporation:
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Shareholders of AMX
Corporation, a Texas corporation (the "Company"), will be held on September 3,
1999, at the offices of Munsch Hardt Kopf & Harr, P.C., 1445 Ross Ave., 38th
Floor, Dallas, Texas at 10:00 a.m. for the following purposes:
1. To elect directors to serve for the following year and until their
successors are duly elected and qualified; and
2. To amend the Articles of Incorporation of the Company to change the name
of the Company from "AMX Corporation" to "Panja Inc.;" and
3. To ratify the appointment of Ernst & Young LLP as independent
accountants of the Company for the fiscal year ending March 31, 2000; and
4. To transact such other business as may properly come before the meeting
or any adjournments thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Shareholders of record at the close of business on July 28, 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
July 30, 1999
<PAGE>
AMX CORPORATION
11995 FORESTGATE DRIVE
DALLAS, TEXAS 75243
------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
SEPTEMBER 3, 1999
---------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of AMX
Corporation (the "Company" or "AMX") for the Annual Meeting of Shareholders (the
"Meeting" or the "Annual Meeting") to be held on September 3, 1999, at 10:00
a.m. at the offices of Munsch Hardt Kopf & Harr, P.C., 1445 Ross Ave., 38th
Floor, Dallas, Texas, or any adjournment or adjournments thereof, for the
purposes set forth herein and in the accompanying Notice of Annual Meeting.
This proxy statement and the enclosed proxy card are being sent beginning
approximately July 30, 1999, to all shareholders entitled to vote at the
meeting. The Company's annual report for the fiscal year ended March 31, 1999 is
being mailed herewith to all shareholders entitled to vote at the Annual
Meeting. The annual report does not constitute a part of the soliciting
materials.
RECORD DATE; OUTSTANDING SHARES
Only shareholders of record at the close of business on July 28, 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 June 30, 1999 consisted of
8,486,553 shares of common stock, par value $.01 per share (the "Common Stock").
The Company has no other class of stock outstanding. For information regarding
holders of more than 5% of the outstanding Common Stock, see "Election of
Directors--Security Ownership of Certain Beneficial Owners and Management."
REVOCABILITY OF PROXIES
The enclosed proxy is revocable at any time before its use by delivering to
the Company a written notice of revocation or a duly executed proxy bearing a
later date. If a person who has executed and returned a proxy is present at the
meeting and wishes to vote in person, he or she may elect to do so and thereby
suspend the power of the proxy holders to vote his or her proxy.
VOTING AND SOLICITATION
Every shareholder of record on the Record Date is entitled, for each share
held, to one vote on each proposal or item that comes before the meeting. With
respect to the election of directors, the director nominees receiving the
highest number of affirmative votes of the shares entitled to be voted shall be
elected to the Board of Directors. The proposal to amend the Articles of
Incorporation of the Company to change the name of the Company from "AMX
Corporation" to "Panja Inc." will require the affirmative vote of a majority of
the shares of Common Stock issued and outstanding on the Record Date. The
affirmative vote of the holders of a majority of the Company's Common Stock
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entitled to vote and represented in person or by proxy at the meeting will be
required to approve and ratify the Board's selection of Ernst & Young LLP as the
Company's independent auditors.
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.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting is
a majority of the shares of Common Stock issued and outstanding on the Record
Date. Shares that are voted "FOR," "AGAINST," or "WITHHELD FROM" a matter are
treated as being present at the Meeting for purposes of establishing a quorum
and are also treated as shares "represented and voting" at the Annual Meeting
(the "Votes Cast") with respect to such matter.
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 2000 Annual Meeting must be received by
the Company, addressed to David E. Chisum, Secretary, AMX Corporation, 11995
Forestgate Drive, Dallas, Texas 75243, no later than April 3, 2000 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 2000 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 June 15, 2000
(assuming that the Company's 2000 Annual Meeting of Shareholders is held on a
date that is within 30 days from the date on which the 1999 Annual Meeting was
held), and the shareholder satisfies the other requirements of Rule 14a-4(c).
With respect to business to be brought before the Annual Meeting to be held
on September 3, 1999, the Company did not receive any notices from shareholders
that the Company was required to include in this Proxy Statement.
ELECTION OF DIRECTORS
(ITEM 1)
The Board of Directors currently consists of seven directors. Six directors
are to be elected at the meeting (Thomas S. Roberts, who is currently a director
of the Company, has declined to stand for re-election to the Board of Directors
at the 1999 Annual Meeting; however, the Board will continue to
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consist of seven directors, and the Company expects to fill such vacancy after
the Annual Meeting). Unless otherwise instructed, the proxy holders will vote
all of the proxies received by them for the Company's six nominees named below.
In the event that additional persons are nominated for election as directors,
the proxy holders intend to vote all proxies received by them in such a manner
as will ensure the election of as many of the nominees listed below as possible
and, in such event, the specific nominees to be voted for will be determined by
the proxy holders. In the event that any of the nominees shall become
unavailable, the proxy holders will vote in their discretion for a substitute
nominee. It is not expected that any nominee will be unavailable. The term of
office of each person elected as a director will continue until the next Annual
Meeting of Shareholders and until his successor has been elected and qualified.
VOTE REQUIRED
The six nominees receiving the highest number of affirmative votes of the
shares entitled to be voted shall be elected to the Board of Directors. Votes
withheld from any director are counted for purposes of determining the presence
or absence of a quorum and for purposes of determining the total number of votes
cast for such director, but have no other legal effect under Texas law. After
the 1999 Annual Meeting, there will be a vacancy on the Board. The Company has
not, as of the date of this Proxy Statement, identified a candidate to fill such
vacancy. However, the Company intends to continue searching for suitable
candidates and expects to fill such vacancy prior to its 2000 Annual Meeting.
Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the Company's six nominees named below, all of whom are
presently directors of the Company. If any nominee of the Company is unable or
declines to serve as a director at the time of the meeting, the proxies will be
voted for any nominee who is designated by the present Board of Directors to
fill the vacancy. It is not expected that any nominee will be unable or will
decline to serve as a director. The proxies will not be voted for more than six
nominees.
The Board of Directors recommends that shareholders vote FOR the nominees
listed below.
The names and certain information about the nominees for directors are set
forth below:
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE POSITIONS/PRINCIPAL OCCUPATION SINCE
- -------------------------- ----- ------------------------------------------------------------------ -------------
<S> <C> <C> <C>
John F. McHale............ 43 Chairman of the Board, Director of Engineering, Cisco Systems 1997
Scott D. Miller........... 46 Director 1982
Joe Hardt................. 44 Chief Executive Officer, President and Director 1995
Peter D. York............. 56 Vice Chairman of the Board and Director 1995
Harvey B. Cash(1)......... 60 General Partner in Venture Capital Fund 1995
J. Otis Winters(1)(2)..... 66 Chairman of Pate, Winters & Stone, Inc. 1997
</TABLE>
- ------------------------
(1) Current member of the Compensation Committee.
(2) Current member of the Audit Committee (Thomas S. Roberts, the other current
member of the Audit Committee, has declined to stand for re-election at the
Annual Meeting).
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Except as set forth below, each of the nominees has been engaged in the
principal occupation described above during the past five years. There is no
family relationship between any director or executive officer of the Company.
Set forth below is certain information with respect to each of the nominees
for director and each other executive officer of the Company:
NOMINEES
JOHN F. MCHALE has served as a director of the Company since October 22,
1997 and was elected on January 15, 1999, and is now serving as Chairman of the
Board. Mr. McHale currently is a consultant to Broadband Edge Products, a
division of Cisco Systems, Inc. Mr. McHale was a founder of NetSpeed, Inc. and
served as its president, chief executive officer, and chairman of the Board from
1996 until its acquisition by Cisco Systems, Inc. in 1998. Before founding
NetSpeed, Mr. McHale was a founder, chief executive officer, and chairman of the
Board of Networth, Inc. from 1985 until its acquisition by Compaq Computer
Corporation in 1995. Mr. McHale graduated from the University of Dayton in 1978
with a bachelor's degree in electrical engineering.
SCOTT D. MILLER, co-founder of the Company, served as President, Chief
Executive Officer and a director of the Company since its inception in 1982
until September 1995, when he relinquished his positions as President and Chief
Executive Officer. Prior to joining the Company, Mr. Miller served as Regional
Services Manager of Linear Corporation and National Sales Manager of Pavco
Electronics. Mr. Miller also served in the U.S. Air Force.
JOE HARDT, Chief Executive Officer and President, served as Chief Operating
Officer of the Company from 1993 to September 1995, and has been Chief Executive
Officer and a director since March 1995. 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. Prior to joining the Company, Mr. Hardt
was an attorney in private practice in Dallas, Texas from 1980 to 1993. In 1986,
he was one of the founding shareholders of Munsch Hardt Kopf Harr & Dinan, P.C.
where he was a practicing attorney until 1993, and he served as the firm's
President from April 1986 to April 1989. Mr. Hardt holds a B.A. in English from
Centenary College of Louisiana and a J.D. from the University of Texas School of
Law.
PETER D. YORK, Vice Chairman of the Board, served as Senior Vice President
for the Company 1992 until 1997, and has been a director since March 1995, and
has served as Vice Chairman of the Board of Directors since July 2, 1997. Mr.
York joined the Company in 1991 upon the acquisition by the Company of York
Controls, Inc. Mr. York founded York Controls, Inc. in 1978 and served as its
President and Chief Executive Officer until its acquisition by the Company. Mr.
York attended Stanford University.
HARVEY B. CASH has served as a director of the Company since March 1995. Mr.
Cash has served as general or limited partner in various venture capital funds
affiliated with InterWest Partners, a venture capital firm, since 1985. He is
Chairman of the Board of Cyrix Corporation, a microprocessor company and
currently serves on the Board of Directors of ProNet, Inc., a paging company;
Aurora Electronics, Inc., a distributor of recycled integrated circuit boards
and computer components; BenchMarq Microelectronics, Inc., a developer of chips
and chipsets for portable electronic devices; CIENA Corporation, a manufacturer
of telecommunications equipment, Heritage Media Corporation, an owner and
operator of radio and television stations; and i2 Technologies, Inc., a provider
of supply chain management software. Mr. Cash holds a B.S. in Electrical
Engineering from Texas A&M University and an M.B.A. from Western Michigan
University. Mr. Cash also serves on the Board of Directors of several privately
held companies that are involved in software development and supply related
industries.
4
<PAGE>
J. OTIS WINTERS has served as a director of the Company since January 7,
1997. Mr. Winters was co-founder of Pate, Winters & Stone, Inc., a consulting
firm in 1984. Since 1989 he has served as Chairman of that company. Mr. Winters
also serves on the Board of Directors of NGC Corporation, an energy company,
Walden Residential Properties, Inc., an apartment real estate investment trust,
and Liberty Bancorp, Inc. a bank holding company, and serves as a director for a
private retail company. A registered professional engineer, Mr. Winters holds an
M.B.A. from the Harvard Business School and a B.S. and M.S. in petroleum
engineering from Stanford University.
OTHER EXECUTIVE OFFICERS
DAVID E. CHISUM, 43, has served as the Chief Financial Officer, Secretary,
and Treasurer of the Company since May 31, 1996. Prior to joining the Company,
Mr. Chisum served as Chief Financial Officer for Superior Air Parts, Inc., a
manufacturer and distributor of replacement parts for piston-based aircraft,
from January 1996 to May 1996, and he served as Vice President Planning &
Business Development for Connectware, Inc., a wholly-owned subsidiary of AMP,
Incorporated, a manufacturer of hardware and software products for the
multi-media market, from January 1995 to January 1996. From 1984 to 1995, he
served as Chief Financial Officer of Piper Industries of Texas, Inc., a
manufacturer of plastic transport containers. Mr. Chisum holds a B.B.A. from
Baylor University and was granted a CPA certificate by the State of Texas in
1978.
TOM HITE, 37, has served as Vice President of Engineering and General
Manager of the Consumer Division of the Company since March 10, 1997. Prior to
joining the Company Mr. Hite served as Vice President, Chief Technology Officer
of AnswerSoft, Inc. a global provider of business process automation solutions,
from 1994 to 1997. From 1991 until 1994 Mr. Hite served as Manager of Software
Development for Micrografx, Inc., a designer and developer of graphics software.
Mr. Hite holds a B.S. and a Master of Science in Mechanical Engineering from the
University of Iowa.
RANDY RIEBE, 44, has served as Vice President and General Manager of the
Enterprise Systems Division of the Company since May 1997. Prior to joining the
Company, Mr. Riebe served as Vice President, Systems Integration Group of
Fairview/AFX Incorporated from 1994 through 1997. From 1992 to 1994 Mr. Riebe
served as Business Development Manager of Sound Advance Systems, a commercial
loudspeaker manufacturer, and as Vice President of Sales for Ford Audio Video
from 1983 through 1992. Mr. Riebe holds an education degree from the University
of Central Oklahoma.
The current directors, except for Mr. Winters and Mr. McHale, were initially
elected pursuant to a Shareholders' Agreement (the "Shareholders' Agreement")
entered into among the Company, several members of management and several
venture capital funds in connection with an investment in the Company by the
venture capital funds. The parties to the Shareholders' Agreement agreed to vote
all shares owned by them for election of directors designated in accordance with
the Shareholders' Agreement. Such arrangement terminated upon the consummation
of the Company's initial public offering in November 1995.
Each director serves until the next annual meeting of shareholders and until
his successor is duly elected and qualified. The Company's Board of Directors
has seven seats with six directors to be elected at the annual meeting and one
vacancy expected to be filled by the Board thereafter. The officers of the
Company serve at the discretion of the Board of Directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of June 30, 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
"Executive Compensation--Summary Compensation Table," and (iv) all directors and
executive officers as a
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group. Except as otherwise described above in "Vote Required," the Company does
not know of any agreements among its shareholders that relate to voting or
investment power of its shares of Common Stock.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED(1)
-----------------------------
PERCENTAGE
5% BENEFICIAL OWNERS, DIRECTORS AND EXECUTIVE OFFICERS NUMBER OWNERSHIP
- ------------------------------------------------------------------------------------ ---------- -----------------
<S> <C> <C>
InterWest Partners(2) .............................................................. 1,036,900 12.2%
13355 Noel Road
Suite 1375, LB #65
Dallas, Texas 75240
Harvey B. Cash(2) .................................................................. 1,049,400 12.4%
c/o InterWest Partners
13355 Noel Road
Suite 1375, LB #65
Dallas, Texas 75240
J. Otis Winters(3) ................................................................. 10,000 *
5956 Sherry Lane Suite 2001
Dallas, Tx 75225
John F. McHale(4) .................................................................. 631,020 7.4%
111 Congress Avenue, Suite 3000
Austin, Tx 78701
Scott D. Miller .................................................................... 1,363,900 16.1%
Peter D. York(5) ................................................................... 647,984 7.6%
Joe Hardt(6) ....................................................................... 547,266 6.5%
David E. Chisum(7) ................................................................. 37,500 *
Tom Hite(8) ........................................................................ 25,000 *
R. Randal Riebe(9) ................................................................. 6,250 *
Thomas S. Roberts(10) .............................................................. 12,500 *
c/o Summit Partners
600 Atlantic Avenue, Suite 2800
Boston, Massachusetts 02210-2227
All directors and executive officers as a group (ten persons)(2)(11)................ 4,330,820 50.9%
</TABLE>
- ------------------------
* Less than 1%
(1) The information contained in this table with respect to beneficial
ownership reflects "beneficial ownership" as of June 30, 1999 defined in
Rule 13d-3 under the Exchange Act. All information with respect to the
beneficial ownership of any principal shareholder was supplied in a
Schedule 13D or 13G filed with the Securities and Exchange Commission (the
"SEC") by or on behalf of such principal shareholder under the Exchange Act
and/or was furnished by such principal shareholder to the Company and,
except as otherwise indicated or pursuant to community property laws, each
shareholder has sole voting and investment power with respect to shares
listed as beneficially owned by such shareholder. Shares subject to options
exercisable within 60 days of June 30, 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
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address of Scott D. Miller and of each executive officer of the Company is
as follows: c/o AMX Corporation, 11995 Forestgate Drive, Dallas, Texas
75243.
(2) 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 12,500 shares of Common Stock issuable upon
exercise of outstanding options, which are presently exercisable, that were
granted to Mr. Cash under the Company's 1995 Director Stock Option Plan.
After June 30, 1999 but prior to the date of the mailing of this Proxy
Statement, InterWest Partners V, L.P., among other filers, notified the
Company that it had filed a Schedule 13D/A to report the fact that as of
the date of such filing InterWest Partners V and the other Reporting
Persons set forth therein have ceased to be the beneficial owners of more
than five percent of the Common Stock of the Company.
(3) Represents 10,000 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 Director Stock Option Plan.
(4) Includes 7,500 shares of Common Stock issuable upon exercise of outstanding
options, which are presently exercisable, that were granted to Mr. McHale
under the Company's 1995 Director Stock Option Plan.
(5) Includes 164,864 shares of Common Stock issuable upon exercise of
outstanding options that are presently exercisable or are exercisable
within 60 days after June 30, 1999.
(6) Includes 372,266 shares of Common Stock issuable upon exercise of
outstanding options that are presently exercisable or are exercisable
within 60 days after June 30, 1999.
(7) Includes 10,000 shares of Common Stock issuable upon exercise of
outstanding options that are presently exercisable or are exercisable
within 60 days after June 30, 1999.
(8) Includes 25,000 shares of Common Stock issuable upon exercise of
outstanding options that are presently exercisable or are exercisable
within 60 days after June 30, 1999.
(9) Includes 6,250 shares of Common Stock issuable upon exercise of outstanding
options that are presently exercisable or are exercisable within 60 days
after June 30, 1999.
(10) Represents 12,500 shares of Common Stock issuable upon exercise of
outstanding options, which are presently exercisable, that were granted to
Mr. Roberts under the Company's 1995 Director Stock Option Plan. Mr.
Roberts, who is a current director of the Company, has declined to stand
for re-election to Board of Directors at the 1999 Annual Meeting.
(11) Includes, in addition to an aggregate of 35,000 options granted to the
outside directors of the Company, an aggregate of 585,880 shares of Common
Stock issuable upon exercise of outstanding options granted to the current
employee directors and executive officers of the Company that are
presently exercisable or are exercisable within 60 days after June 30,
1999.
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The Shareholders' Agreement entered into in connection with an investment in
the Company by several venture capital funds terminated by its own terms upon
consummation of the Company's initial public offering; provided, however, that
each shareholder who is a party to the Shareholders' Agreement continues to have
the right to participate in any sales of Common Stock of the Company made by the
other parties to the Shareholders' Agreement at the same price per share and on
the same terms and conditions, other than sales of shares made pursuant to a
registration statement or any sales made pursuant to Rule 144 or Rule 701
promulgated under the Securities Act of 1933, as amended (the "Securities Act").
The co-sale right described above, the exercise of which may result in a change
of control of the Company, will terminate on the earlier of (i) March 30, 2005
or (ii) at such time as such venture capital funds own less than 30% of the
Common Stock originally acquired by them.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of seven meetings during
the fiscal year ended March 31, 1999. In addition, the Board of Directors acted
one time by telephonic meeting during the fiscal year ended March 31, 1999.
During the fiscal year ended March 31, 1999, each director attended at least 75%
of the meetings of the Board of Directors held during the period for which he
was a director.
The Audit Committee, currently consisting of directors J. Otis Winters and
Thomas S. Roberts, met four times during the last fiscal year. John F. McHale
and Harvey B. Cash were each members of the Audit Committee until they resigned
from such committee as of January 15, 1999. This Committee recommends engagement
of the Company's independent auditors and reviews with management and the
independent auditors the Company's financial statements, basic accounting and
financial policies and practices, audit scope and competency of control
personnel.
The Compensation Committee, currently consisting of directors J. Otis
Winters and Harvey B. Cash, met twice during the last fiscal year. Thomas S.
Roberts and John F. McHale were each members of the Compensation Committee until
they resigned from such committee as of January 15, 1999. This Committee reviews
and recommends to the Board of Directors the compensation of executive officers
of the Company and administers and makes awards and takes all other action as is
provided under the employee benefit plans of the Company, including, but not
limited to, the 1993 Stock Option Plan, the 1995 Stock Option Plan, the 1996
Employee Stock Purchase Plan and the 1999 Equity Incentive Plan, excluding,
however, the 1995 Director Stock Option Plan.
BOARD COMPENSATION
Currently, the Company's directors 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. Generally, non-employee directors receive a fee of $1,000 per
meeting of the Board of Directors.
Generally, 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.
During the fiscal year ended March 31, 1999, Mr. McHale, Mr. Winters and Mr.
Miller received options to purchase 20,000 shares, 15,000 shares and 10,000
shares respectively, of the Common Stock. Such option grants represented both
options ordinarily granted to directors under the 1995 Director Stock Option
Plan, and options granted to directors in lieu of Board or Committee fees.
8
<PAGE>
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, 1999. The information contained in the Report of the
Compensation Committee shall not be deemed to be "soliciting material" or to be
"filed" with the SEC, nor shall such information be incorporated by reference
into any future filing under the Securities Act or the Exchange Act except to
the extent that the Company specifically incorporates it by reference into such
filing.
TO THE BOARD OF DIRECTORS:
As members of the Compensation Committee, it is our duty to administer the
executive compensation program for the Company. The Compensation Committee is
responsible for establishing appropriate compensation goals for the executive
officers of the Company and evaluating the performance of such executive
officers in meeting such goals. The elements of the executive compensation
program described below are implemented and periodically reviewed and adjusted
by the Compensation Committee.
The goals of the Compensation Committee in establishing the Company's
executive compensation program are as follows:
(1) To fairly compensate the executive officers of the Company for their
contributions to the Company's short-term and long-term performance. The
elements of the Company's compensation program are (i) annual base
salaries, (ii) annual cash bonuses and (iii) equity incentives.
(2) To allow the Company to attract, motivate and retain the management
personnel necessary to the Company's success by providing an executive
compensation program comparable to that offered by similar companies.
(3) To provide an executive compensation program with incentives linked to
the financial performance of the Company. Under such program, incentive
compensation for executive officers is linked to the general financial
performance of the Company as measured by such items as revenues and
income from operations.
BASE SALARIES. The annual base salaries for Joe Hardt, the Chief Executive
Officer and President, and Tom Hite, Vice President of Engineering and General
Manager of the Consumer Division of the Company, were paid pursuant to
individual employment agreements that were entered into by the Company and such
individuals in October, 1998 and were approved by the Compensation Committee.
The Compensation Committee has reviewed the base salaries for all executive
officers of the Company 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 2000.
ANNUAL AND OTHER BONUSES. As a result of the Company's performance, no
bonuses were available or paid to the executive officers for the 1999 fiscal
year. If paid in the future, such bonuses 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
9
<PAGE>
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.
CHIEF EXECUTIVE OFFICER COMPENSATION. The compensation for the fiscal year
ended March 31, 1999 of the Chief Executive Officer of the Company principally
consisted of a base salary and an annual bonus. Mr. Hardt's base salary was
established by contract in October, 1998 which was approved by the Compensation
Committee 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. As a specific result of the Company's performance last
year, no bonus was paid to Mr. Hardt. Mr. Hardt received other compensation in
the fiscal year ended March 31, 1999 in the amount of $2,009 consisting of the
Company's matching contributions under the Company's Retirement and Savings Plan
(the "401(k) Plan"). In addition, Mr. Hardt was allocated $4,800, under the AMX
Corporation Profit Sharing Plan (the "Profit Sharing Plan"), and was granted
options to purchase 25,000 shares of the Common Stock at $8.75 per share during
the fiscal year ended March 31, 1999.
COMPENSATION COMMITTEE
J. OTIS WINTERS
HARVEY B. CASH
10
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Cash and Winters 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.
On January 15, 1999 Mr. McHale entered into a Subscription Agreement with
the Company for the purchase of 623,520 shares of Common Stock, or approximately
7.4% of the total issued and outstanding voting securities of the Company, at
$8.019 per share, or $5,000,007. The price per share of the Common Stock was
equal to the average closing price of the Common Stock as quoted on The Nasdaq
Stock Market for the last ten trading days, including the date of sale, prior to
the sale of Common Stock to Mr. McHale. Upon consummation of the transaction
contemplated by the Subscription Agreement, Mr. McHale resigned as a member of
the Audit Committee and the Compensation Committee, and was elected by the Board
of Directors as Chairman of the Board.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
XTG, Inc., one of the Company's dealers, is wholly owned by Scott D. Miller,
one of the Company's directors. During the fiscal year ended March 31, 1999,
XTG, Inc. purchased approximately $44,831 of products from the Company at the
same prices charged to other dealers for similar items in similar quantities.
On May 1, 1995, Joe Hardt, Chief Executive Officer, President and a director
of the Company, exercised an option to acquire 50,000 shares of Common Stock for
an aggregate purchase price of $44,750 with $250 paid in cash and $44,500 paid
to the Company by delivery of his promissory note in the original principal
amount of $44,500 bearing interest at the rate of 7.5% per annum with all
principal and interest due on May 1, 1998. As of June 1, 1998, the note and all
accrued interest thereon had been paid in full.
On July 2, 1996, Joe Hardt, Chief Executive Officer, President and a
director of the Company, exercised an option to acquire 25,000 shares of Common
Stock for an aggregate purchase price of $22,375 with $250 paid in cash and
$22,125 paid to the Company by delivery of his promissory note in the original
principal amount of $22,125 bearing interest at the rate of 7.5% per annum with
all principal and interest due on July 2, 1999. As of March 31, 1999, principal
in the amount of $22,125, together with interest thereon of $4,563, remained
outstanding.
On January 2, 1997, Joe Hardt, Chief Executive Officer, President and a
director of the Company, exercised an option to acquire 25,000 shares of Common
Stock for an aggregate purchase price of $22,375 with $250 paid in cash and
$22,125 paid to the Company by delivery of his promissory note in the original
principal amount of $22,125 bearing interest at the rate of 7.5% per annum with
all principal and interest due on January 2, 2000. As of March 31, 1999,
principal in the amount of $22,125, together with interest thereon of $4,010,
remained outstanding.
On January 2, 1998, Joe Hardt, Chief Executive Officer, President and a
director of the Company, exercised an option to acquire 25,000 shares of Common
Stock for an aggregate purchase price of $22,375 with $250 paid in cash and
$22,125 paid to the Company by delivery of his promissory note in the original
principal amount of $22,125 bearing interest at the rate of 7.5% per annum with
all
11
<PAGE>
principal and interest due on January 2, 2000. As of March 31, 1999, principal
in the amount of $22,125, together with interest thereon of $2,074, remained
outstanding.
On September 1, 1998, Joe Hardt, Chief Executive Officer, President and a
director of the Company, exercised an option to acquire 25,000 shares of Common
Stock for an aggregate purchase price of $22,375 with $250 paid in cash and
$22,125 paid to the Company by delivery of his promissory note in the original
principal amount of $22,125 bearing interest at the rate of 8.25% per annum with
all principal and interest due on January 2, 2000. As of March 31, 1999,
principal in the amount of $22,125, together with interest thereon of $1,065,
remained outstanding.
On January 14, 1999, David Chisum, Chief Financial Officer, Secretary and
Treasurer of the Company, exercised an option to acquire 12,500 shares of Common
Stock for an aggregate purchase price of $71,875 with $125 paid in cash and
$71,750 paid to the Company by delivery of a promissory note to the Company in
the original principal amount of $71,750, bearing interest at 8.25% per annum
with all principal and interest due on January 14, 2002. As of March 31, 1999,
principal in the amount of $71,750, together with interest thereon of $1,233,
remained outstanding.
On June 15, 1995, Peter D. York, Vice Chairman of the Board, Senior Vice
President, Secretary and a director of the Company, executed a promissory note
to the Company in the original principal amount of $77,298, bearing interest at
7.5% per annum with all principal and interest due on June 15, 1997. As of June
1, 1998, the note and all accrued interest thereon had been paid in full.
In August 1995, the Company, together with several individual shareholders
(including two former employees of the Company), organized PHAST Corporation
("PHAST"). PHAST has its principal place of business in Salt Lake City, Utah and
has been organized to design, manufacture, market, and distribute automation
control systems and products for the residential market. At time of formation,
the Company owned 51% of the outstanding capital stock of PHAST. In August 1996,
Scott D. Miller, one of the Company's directors, acquired 14,750 shares of
preferred stock of PHAST for an aggregate purchase price of $1,475,000 (all of
which was paid to PHAST on or before December 31, 1996) and acquired 7,322
shares of the common stock of PHAST (representing 29% of the outstanding common
shares) for an aggregate purchase price of $25,000. In connection therewith, in
March 1997, Mr. Miller granted an option to the Company, commencing on April 1,
1997, and expiring on March 31, 1998, to acquire all of Mr. Miller's preferred
and common stock in PHAST for an aggregate price of $2.5 million, subject to an
independent appraisal of at least an equal value. Subsequently, on July 7, 1997,
Mr. Miller and the Company entered into separate agreement pursuant to which the
Company purchased Mr. Miller's 7,322 shares of common stock in PHAST. The
aggregate purchase price was $25,000 in cash. The Company also granted Mr.
Miller the right to require the Company to purchase his 14,750 shares of
preferred stock in PHAST for a per share purchase price of $100 (which is the
liquidation preference of the preferred stock), or an aggregate purchase price
of $1,475,000, plus accrued but unpaid dividends, at any time from April 1, 1998
through March 31, 1999. In connection therewith, the option granted to the
Company in March 1997 to purchase such preferred stock from Mr. Miller was
terminated. On May 12, 1998, the Company secured a $1.5 million loan from a
financial institution, the proceeds of which were used to pay Mr. Miller
$1,475,000 to redeem the outstanding preferred stock of PHAST Corporation held
by Mr. Miller. The Company acquired 20% of the issued and outstanding shares of
common stock of PHAST from the shareholders of PHAST (which did not include Mr.
Miller) for $1,978,664, consisting of 350,814 shares of its common stock and a
de minimis amount of cash, on October 14, 1998.
On January 15, 1999 John F. McHale, the Company's Chairman of the Board,
entered into a Subscription Agreement with the Company for the purchase of
623,520 shares of Common Stock, or approximately 7.4% of the total issued and
outstanding voting securities of the Company, at $8.019 per share, or
$5,000,007. The price per share of the Common Stock was equal to the average
closing price of the Common Stock as quoted on The Nasdaq Stock Market for the
last ten trading days, including
12
<PAGE>
the date of sale, prior to the sale of Common Stock to Mr. McHale. Upon
consummation of the transaction contemplated by the Subscription Agreement, Mr.
McHale resigned as a member of the Audit Committee and the Compensation
Committee, and was elected by the Board of Directors as Chairman of the Board.
On March 30, 1999 the Company entered into a Stock Purchase Agreement with
Summit Ventures III, L.P., Summit Subordinated Debt Fund, L.P., and Summit
Investors II, L.P. (collectively the "Summit Partners") for the purchase by the
Company of a total of 496,476 shares of Common Stock from the Summit Partners.
The purchase price for the Common Stock purchased by the Company was $9.00 per
share payable at closing. The agreement provided, however, that the purchase
price would increase if certain conditions were met prior to June 30, 1999. No
condition or event accrued prior to or on June 30, 1999 which required the
payment of any additional purchase price to the Summit Partners.
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.
[Graph]
13
<PAGE>
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
ELECTRONIC
AMX NASDAQ US COMP.
--------- ----------- --------------
<S> <C> <C> <C>
11/16/95................................................ $ 100.00 $ 100.00 $ 100.00
12/31/95................................................ $ 100.00 $ 100.86 $ 89.94
03/29/96................................................ $ 101.43 $ 105.56 $ 89.38
06/28/96................................................ $ 90.00 $ 114.18 $ 102.11
09/30/96................................................ $ 74.29 $ 118.24 $ 123.76
12/31/96................................................ $ 67.14 $ 124.05 $ 155.54
03/31/97................................................ $ 80.00 $ 117.33 $ 156.76
06/30/97................................................ $ 65.71 $ 138.83 $ 167.55
09/30/97................................................ $ 91.43 $ 162.32 $ 217.59
12/31/97................................................ $ 65.71 $ 152.26 $ 163.09
03/31/98................................................ $ 100.00 $ 178.19 $ 179.37
06/30/98................................................ $ 86.43 $ 182.67 $ 166.81
09/30/98................................................ $ 71.43 $ 165.01 $ 173.36
12/31/98................................................ $ 85.71 $ 214.11 $ 252.09
03/31/99................................................ $ 105.71 $ 239.33 $ 262.56
06/30/99................................................ $ 160.72 $ 261.63 $ 299.19
</TABLE>
14
<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
(the "Executive Group"), whose total compensation exceeded $100,000 during the
fiscal year ended March 31, 1999.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
-----------------
ANNUAL COMPENSATION NUMBER OF
SECURITIES
---------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS OPTIONS COMPENSATION(2)
- ----------------------------------------- ----------- ----------- --------- ----------------- -------------------
<S> <C> <C> <C> <C> <C>
Joe Hardt................................ 1999 $ 194,350 $ -- 25,000 $ 6,809
Chief Executive Officer 1998 193,201 75,000 -- 10,705
and President 1997 175,365 -- -- 11,724
Peter D. York............................ 1999 $ 180,900 $ -- -- $ 6,629
Vice Chairman of the Board 1998 188,164 -- -- 10,621
1997 178,872 -- -- 11,797
David E. Chisum.......................... 1999 $ 125,520 $ -- 25,000 $ 5,635
Chief Financial Officer 1998 124,802 20,000 15,000 6,983
1997 89,580(3) -- 25,000(3) 297
Tom Hite................................. 1999 $ 130,433 $ -- -- $ 580
Vice President--Engineering 1998 133,556 20,000 -- --
General Manager of the 1997 5,000(4) -- 50,000 --
Consumer Division
CEO--PHAST Corporation
R. Randal Riebe.......................... 1999 $ 120,650 $ -- -- --
Vice President and General 1998 84,776 12,500 -- --
Manager of the Enterprise
Systems Division
</TABLE>
- ------------------------
(1) Base salaries determined under the terms of the October, 1998 employment
agreements, as amended, for Messrs. Hardt and Hite. 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 1999, the Company (a) made matching
contributions under the 401(k) Plan of $2,009 for Joe Hardt, $1,829 for
Peter York, $1,259 for David Chisum, and $580 for Tom Hite, and (b)
allocated $4,800 under the Profit Sharing Plan to the accounts of each of
Messrs. Hardt, Hite and York, and $4,376 for Mr. Chisum.
(3) 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.
(4) 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.
15
<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, 1999.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
-------------------------------------------------------------- ANNUAL RATES OF
NUMBER OF STOCK PRICE
SECURITIES PERCENT OF TOTAL APPRECIATION FOR
UNDERLYING OPTIONS GRANTED TO PER SHARE OPTION TERM(2)
OPTIONS EMPLOYEES IN FISCAL EXERCISE EXPIRATION --------------------
NAME: GRANTED(1) YEAR PRICE DATE 5% 10%
- ----------------------------- ------------- ------------------- ------------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Joe Hardt.................... 25,000 5% $ 8.75 4/01/2008 $ 137,571 $ 348,631
David E. Chisum.............. 25,000 5% $ 8.75 4/01/2008 $ 137,571 $ 348,631
</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, 1999, by the Executive Group:
<TABLE>
<CAPTION>
NUMBER OF SHARES UNDERLYING
UNEXERCISED OPTIONS AT MARCH
SHARES 31, 1999
ACQUIRED ON VALUE ------------------------------
NAME: EXERCISE REALIZED EXERCISABLE(1) UNEXERCISABLE
- ----------------------------------------------- ----------- -------- -------------- -------------
<S> <C> <C> <C> <C>
Joe Hardt...................................... 25,000 $118,250 372,266 18,750
Peter D. York.................................. -- -- 164,864 --
David E. Chisum................................ 12,500 32,813 10,000 42,500
Tom Hite....................................... -- -- 25,000 25,000
R. Randal Riebe................................ -- -- 6,250 18,750
<CAPTION>
VALUE OF UNEXERCISED IN-
THE-MONEY OPTIONS AT MARCH
31, 1999(2)
---------------------------
NAME: EXERCISABLE UNEXERCISABLE
- ----------------------------------------------- ----------- -------------
<S> <C> <C>
Joe Hardt...................................... $2,852,969 9,375
Peter D. York.................................. 1,203,224 --
David E. Chisum................................ 15,538 90,363
Tom Hite....................................... 68,750 68,750
R. Randal Riebe................................ 17,188 51,563
</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 $9.25 per share as
reported on the Nasdaq National Market on March 31, 1999.
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
16
<PAGE>
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 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.
INDEBTEDNESS OF MANAGEMENT
See "Certain Relationships and Related Transactions" above.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file reports of ownership on Form 3 and
changes in ownership on Form 4 or Form 5 with the SEC. Such officers, directors
and ten percent stockholders are also required by SEC rules to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, the
Company believes that, during the fiscal year ended March 31, 1999, the
Company's officers, directors and ten percent shareholders complied with all
applicable Section 16(a) filing requirements.
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION OF THE COMPANY
TO CHANGE THE NAME OF THE COMPANY TO PANJA INC.
(ITEM 2)
The Board of Directors proposes and recommends to the shareholders that they
approve an amendment to the Company's Articles of Incorporation to change the
Company's name from "AMX Corporation" to "Panja Inc." The Board unanimously
approved such an amendment and the submission of such an amendment to the
Company's shareholders.
The proposal to change the name of the Company to Panja Inc. is part of the
Company's strategy to reposition itself as a provider of "Internet
infrastructure" products, specifically hardware and software products intended
to extend the communication and control capabilities of the internet to non-PC
devices such as touchpads and other display devices manufactured by the Company.
If the name change is approved, the Company intends to continue marketing
certain of its products under the "AMX" and "PHAST" names (provided that any
such marketing may be discontinued at any time).
17
<PAGE>
The shareholders' approval of this proposal to amend the Company's Articles
of Incorporation to change the name of the Company includes granting the
officers of the Company and each of them acting alone the authority to take all
such further actions as may be required to effectuate such change, including,
but not limited to, the filing of formal Articles of Amendment to the Articles
of Incorporation on behalf of the Company with the Secretary of State of the
State of Texas.
The affirmative vote of the holders of a majority of the Company's Common
Stock issued and outstanding as of the Record Date will be required to authorize
and approve of the proposal to amend the Company's Articles of Incorporation to
change the Company's name from "AMX Corporation" to "Panja Inc."
The change of name will become effective upon the filing of an amendment to
the Company's Articles of Incorporation which states that, upon the filing of
Articles of Amendment to the Articles of Incorporation of the Company, the name
of the Company will be Panja Inc.
The Board of Directors recommends voting "FOR" this proposal.
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
(ITEM 3)
The Board of Directors has selected Ernst & Young LLP, independent
accountants, to audit the books, records and accounts of the Company for the
fiscal year ending March 31, 2000. Ernst & Young LLP has audited the Company's
financial statements since the fiscal year ended March 31, 1993.
The affirmative vote of the holders of a majority of the Company's Common
Stock entitled to vote and represented in person or by proxy at the meeting will
be required to approve and ratify the Board's selection of Ernst & Young LLP.
The Board of Directors recommends voting "FOR" approval and ratification of such
selection. In the event of a negative vote on such ratification, the Board of
Directors will reconsider its selection.
A representative of Ernst & Young LLP is expected to be available at the
Annual Meeting to make a statement if such representative desires to do so and
to respond to appropriate questions.
OTHER MATTERS
Management does not intend to bring before the meeting any matters other
than those set forth herein, and has no present knowledge that any other matters
will or may be brought before the meeting by others. However, if any other
matters properly come before the meeting, it is the intention of the persons
named in the enclosed form of Proxy to vote the Proxies in accordance with their
judgment.
The Company has borne the cost of preparing, assembling and mailing this
proxy solicitation material. THE COMPANY WILL PROVIDE WITHOUT CHARGE A COPY OF
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED MARCH 31,
1999, INCLUDING THE FINANCIAL STATEMENTS, TO EACH SHAREHOLDER UPON WRITTEN
REQUEST TO DAVID E. CHISUM, AMX CORPORATION, 11995 FORESTGATE DRIVE, DALLAS,
TEXAS 75243.
By Order Of The Board of Directors
David E. Chisum
SECRETARY
18
<PAGE>
AMX CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
1999 ANNUAL MEETING OF SHAREHOLDERS--SEPTEMBER 3, 1999
The undersigned shareholder(s) of AMX Corporation, a Texas corporation,
hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders and
Proxy Statement and hereby appoints 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
Annual Meeting of Shareholders of AMX Corporation to be held at the offices of
Munsch Hardt Kopf & Harr, P.C., 1445 Ross Ave., 38th Floor, Dallas, Texas at
10:00 a.m. on September 3, 1999, 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:
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS: / / FOR all nominees listed / / WITHHOLD AUTHORITY to
below (except as vote for all nominees
indicated) listed below.
(IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE
NOMINEE'S NAME BELOW)
Scott D. Miller, Joe Hardt, Peter D. York,
John F. McHale Harvey B. Cash, J. Otis Winters
2. PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION OF THE COMPANY TO CHANGE THE NAME OF THE
COMPANY TO PANJA INC.
/ / FOR / / AGAINST / / ABSTAIN
3. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT ACCOUNTANTS OF
THE COMPANY FOR THE FISCAL YEAR ENDING MARCH 31, 2000.
/ / FOR / / AGAINST / / ABSTAIN
4. IF YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE CHECK THIS BOX: / /
</TABLE>
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
<PAGE>
THIS BALLOT WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE, FOR THE
PROPOSAL TO CHANGE THE NAME OF THE COMPANY, FOR RATIFICATION OF THE APPOINTMENT
OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS AND AS SAID PROXIES DEEM ADVISABLE
ON SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING.
______________________________________
Signature
Signature (to be signed if shares are
held by joint tenants as Community
Property.)
______________________________________
Title if applicable
Dated: ________________________, 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.
