AMERON, INC.
1994 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
Section 1. PURPOSE OF PLAN
The purpose of this 1994 Nonemployee Director Stock Option Plan
(this"Plan") of Ameron Inc., a Delaware corporation (the
"Company"), is to enhance the Company's ability to attract and
retain well qualified nonemployee directors and to encourage the
acquisition, by such directors, of common stock of the Company.
Section 2. PERSONS ELIGIBLE UNDER PLAN
Any director of the Company who is not an Employee (a
"Nonemployee Director") of the Company or one of its subsidiaries
shall automatically receive Nonemployee Director Options (as
hereinafter defined) pursuant to Section 3 hereof.
Section 3. GRANT OF NONEMPLOYEE DIRECTOR OPTIONS
(a) Each year, on the first business day following the date
of the annual meeting of stockholders of the Company, or any
adjournment thereof, at which directors of the Company are
elected, each Nonemployee Director shall automatically be granted
an option (a "Nonemployee Director Option") to purchase 1,000
shares of Class A Common Stock, par value $2.50 per share,of the
Company ("Common Shares").
(b) If, on any date upon which Nonemployee Director Options
are to be automatically granted pursuant to this Section 3 (a
"Date of Grant"), the number of Common Shares remaining available
for option under this Plan is insufficient for the grant to each
Nonemployee Director of a Nonemployee Director Option to purchase
the entire number of Common Shares specified in this Section 3,
then a Nonemployee Director Option to purchase a proportionate
amount of such available number of Common Shares (rounded to the
nearest whole share) shall be granted to each Nonemployee
Director on such date.
(c) Subject to Section 3(i) hereof, each Nonemployee Director
Option granted under this Plan may not be exercised until the
first anniversary of the Date of Grant of such Nonemployee
Director Option and thereafter may be exercised to purchase up to
(i) 25% of the Common Shares subject thereto from and
after the first anniversary of the Date of Grant
of such Nonemployee Director Option;
(ii) 50% of such Common Shares from and after the
second anniversary of such Date of Grant;
(iii) 75% of such Common Shares from and after the third
anniversary of such Date of Grant; and
(iv) 100% of such Common Shares from and after the
fourth anniversary of such Date of Grant;
provided, however, that (1) if the optionee shall cease to be a
Nonemployee Director as a result of death or permanent
disability, such Nonemployee Director Option may be exercised to
purchase 100% of the Common Shares then subject hereto as of the
date that such optionee ceases to be a Nonemployee Director, and
(2) if the optionee shall cease to be a Nonemployee Director as a
result of not standing for re-election because of the policies of
the Board of Directors ("Board") relating to age ("Normal
Retirement"), such Nonemployee Director Option may be exercised
to purchase 100% of the Common Shares, in each case whether or
not then exercisable as to such shares in accordance with the
preceding clauses (i) - (iv).
(d) Each Nonemployee Director Option granted under this Plan
shall expire upon the first to occur of the following:
(i) One year after the date upon which the optionee
shall cease to be a Nonemployee Director as a
result of death or permanent disability;
(ii) Ninety days after the date upon which the optionee
shall cease to be a Nonemployee Director for any
reason other than death, permanent disability, or
Normal Retirement; or
(iii) The tenth anniversary of the Date of Grant of such
Nonemployee Director Option.
(e) Notwithstanding anything to the contrary in this Plan, if
the optionee shall die at any time after the date on which he or
she ceases to be a Nonemployee Director and prior to the date on
which the
Nonemployee Director Option expires pursuant to Section 3(d),
that portion of the Nonemployee Director Option which is then
exercisable shall expire on the earlier of the tenth anniversary
of the Date of
Grant of such Nonemployee Director Option or the first
anniversary of the date of such death.
(f) Each Nonemployee Director Option shall have an exercise
price per share equal to the Fair Market Value (as hereinafter
defined) on the Date of Grant of such option of the Common
Shares.
(g) Payment of the exercise price of any Nonemployee Director
Option granted under this Plan and the optionee's tax withholding
obligation, if any, with respect to such Nonemployee Stock Option
shall be made in full in cash concurrently with the exercise of
such Nonemployee Director Option; provided, however, that the
payment of such exercise price and/or tax withholding may instead
be made, in
whole or in part, by any one or more of the following:
(i) the delivery of previously owned shares of capital
stock of the Company (including the delivery of
shares purchased upon exercise of the Nonemployee
Director Option to be used, in a series of
simultaneous transactions, to pay the exercise
price for additional shares) or other property,
provided that the Company is not then prohibited
from purchasing or acquiring shares of its capital
stock or such other property;
(ii) a reduction in the amount of Common Shares or
other property otherwise issuable pursuant to such
Nonemployee Director Option; or
(iii) the delivery, concurrently with such exercise and
in accordance with Section 220.3(e)(4) of
Regulation T promulgated under the Exchange Act,
of a properly executed exercise notice for such
Nonemployee Director Option and irrevocable
instructions to a broker promptly to deliver to
the Company a specified dollar amount of the
proceeds of a sale of the Common Shares issuable
upon exercise of such Nonemployee Director Option.
(h) The "Fair Market Value" of a Common Share or other
security on any date (the "Determination Date") shall be equal to
the closing price per Common Share or unit of such other security
on the business day immediately preceding the Determination Date,
as reported in The Wall Street Journal, Western Edition, or, if
no closing price was so reported for such immediately preceding
business day, the closing price for the next preceding business
day for which a closing price was so reported, or, if no closing
price was so reported for any of the 30 business days immediately
preceding the Determination Date, the average of the high bid and
low asked prices per Common Share or unit of such other security
on the business day immediately preceding the Determination Date
in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations
System ("NASDAQ") or such other system then in use, or, if the
Common Shares or such other security were not quoted by any such
organization on such immediately preceding business day, the
average of the closing bid and asked prices on such day as
furnished by a professional market maker making a market in the
Common Shares or such other security selected by the Board.
(i) All outstanding Nonemployee Director Options shall become
exercisable in full on the day following the record date for the
determination of shareholders entitled to vote upon, and shall
expire upon the consummation
of, any of the following events:
(i) the dissolution or liquidation of the Company;
(ii) a reorganization, merger or consolidation of the
Company (other than a reorganization, merger or
consolidation the sole purpose of which is to
change the Company's domicile solely within the
United States) as a result of which the
outstanding securities of the class then subject
to such outstanding Nonemployee Director Options
are exchanged for or converted into cash, property
and/or securities not issued by the Company,
unless the terms of such reorganization, merger
or consolidation shall provide that such
Nonemployee Director Options shall continue in
effect thereafter and shall be exercisable to
acquire the number and type of securities or other
consideration to which the Nonemployee Directors
would have been entitled had they exercised such
Nonemployee Director Options immediately prior to
such reorganization, merger or consolidation; or
(iii) the sale of all or substantially all of the
property and assets of the Company.
(j) Each Nonemployee Director Option shall be nontransferable
by the optionee other than by will or the laws of descent and
distribution, and shall be exercisable during the optionee's
lifetime only by the optionee
or the optionee's guardian or legal representative.
(k) Nonemployee Director Options are not intended to qualify
as incentive stock options under Section 422 of the Internal
Revenue Code.
Section 4. STOCK SUBJECT TO PLAN
(a) The aggregate number of Common Shares issued and issuable
pursuant to all Nonemployee Director Options granted under this
Plan shall not exceed 120,000, subject to adjustment as provided
in Section 7 hereof.
(b) For purposes of Section 4(a) hereof, the aggregate number
of Common Shares issued and issuable pursuant to all Nonemployee
Director Options granted under this Plan shall at any time be
deemed to be equal to the sum of the following:
(i) the number of Common Shares which were issued
prior to such time pursuant to Nonemployee
Director Options granted under this Plan; plus
(ii) the maximum number of Common Shares issuable at or
after such time pursuant to Nonemployee Director
Options granted under this Plan prior to such
time.
Section 5. DURATION OF PLAN
No Nonemployee Director Options shall be granted under this Plan
after June 27, 2004. Although Common Shares may be issued after
June 27, 2004 pursuant to Nonemployee Director Options granted
prior to such date, no Common Shares shall be issued under this
Plan after June 27, 2014.
Section 6. ADMINISTRATION OF PLAN
This Plan shall be administered by the Board, which shall have
and may exercise all the powers and authority granted to it under
the Plan.
Section 7. ADJUSTMENTS
If the outstanding securities of the class then subject to this
Plan are increased, decreased or exchanged for or converted into
cash, property or a different number or kind of securities, or if
cash,
property or securities are distributed in respect of such
outstanding securities, in either case as a result of a
reorganization, merger, consolidation, recapitalization,
restructuring, reclassification,
dividend (other than a regular, quarterly cash dividend) or other
distribution, stock split, reverse stock split or the like, or if
substantially all of the property and assets of the Company are
sold,
then, unless the terms of such transaction shall provide
otherwise, the Board shall make appropriate and proportionate
adjustments in (a) the number and type of shares or other
securities or cash or other
property that may be acquired pursuant to Nonemployee Director
Options theretofore granted under this Plan, and (b) the maximum
number and type of shares or other securities that may be issued
pursuant to
Nonemployee Director Options thereafter granted under this Plan.
Section 8. AMENDMENT AND TERMINATION OF PLAN
(a) Subject to Section 8(b) hereof, the Board may alter,
amend, suspend or terminate the Plan, provided that no such
action shall, without the consent of such optionee, deprive an
optionee of any outstanding Nonemployee Director Options or any
of the rights of such optionee thereunder or with respect
thereto; and provided further that no such action, unless and
until it is approved by the stockholders of
the Company, shall
(i) increase the maximum number of Common Shares that
may be acquired upon the exercise of Nonemployee
Director Options granted under the Plan;
(ii) reduce the exercise price of Nonemployee Director
Options granted under the Plan;
(iii) alter the class of persons eligible for the grant
of Nonemployee Director Options under the Plan;
(iv) extend the duration of the Plan; or
(v) materially increase the benefits accruing to the
optionees of Nonemployee Director Options granted
under the Plan.
(b) Section 3 hereof shall not be amended more than once
every six months, other than to comport with changes in the
Internal Revenue Code, the Employee Retirement Income Security
Act, or the rules thereunder.
Section 9. EFFECTIVE DATE OF PLAN
This Plan shall be effective as of June 27, 1994, the date upon
which it was approved by the Board; provided, however, that no
Common Shares may be issued under this Plan until it has been
approved, directly or indirectly, by the affirmative votes of the
holders of a majority of the securities of the Company present,
or represented, and entitled to vote at a meeting duly held in
accordance with the laws of the State of Delaware.