SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14() of
the Securities Exchange Act of 1934
Filed by the Registrant \x\
Filed by a Party other than the Registrant \ \
Check the appropriate box:
\ \ Preliminary Proxy Statement
\x\ Definitive Proxy Statement
\ \ Definitive Additional Materials
\ \ Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.142-12
Ameron, Inc.
- -----------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
JOAN HAGUE
- -----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
\x\ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2)
\ \ $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3)
\ \ Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction
applies:
- -----------------------------------------------------------------
2) Aggregate number of securities to which transaction
applies:
- -----------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:*
- -----------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- -----------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and
state how it was determined.
\ \ Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously Paid:
- -----------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
- ----------------------------------------------------------------
3) Filing Party:
- -----------------------------------------------------------------
4) Date Filed:
- -----------------------------------------------------------------
<PAGE>
AMERON, INC.
Corporate Offices: 245 South Los Robles Ave.,
Pasadena, California 91101
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To The Stockholders:
The Annual Meeting of Stockholders of Ameron, Inc. a Delaware corporation
(the "Company") will be held at The Pasadena Hilton Hotel, 150 South Los
Robles Ave., Pasadena, California, on Monday, March 25, 1996 at 10:00
a.m. for the following purposes:
1. To elect two directors to hold office for a term of three years,
and one director to hold office for a term of two years, or
until their successors are elected and qualified.
2. To ratify the appointment of Arthur Andersen LLP as independent
public accountants of the Company for fiscal year 1996.
3. To approve an amendment of the Certificate of Incorporation to
change the Company's corporate name to Ameron International
Corporation.
4. If properly presented, to consider and act upon the stockholders'
proposals set forth on pages 5 through 7, which proposals are opposed
by the Board of Directors.
5. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed February 9, 1996 as the record date
for the determination of Stockholders entitled to vote at this meeting
and any adjournments thereof.
YOUR VOTE IS IMPORTANT
Holders of a majority of the outstanding voting shares of the Company
must be present either in person or by proxy in order for the meeting to
be held. Whether or not you expect to attend the Annual Meeting, your
proxy vote is important.
PLEASE SIGN AND RETURN YOUR PROXY PROMPTLY. A return envelope, requiring
no postage if mailed in the United States, is enclosed for your convenience
in replying.
Javier Solis
Secretary
February 20, 1996
<PAGE>
AMERON, INC.
Corporate Offices: 245 South Los Robles Ave.,
Pasadena, California 91101
FEBRUARY 20, 1996
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies for use at the Annual Meeting of Stockholders of Ameron, Inc.
(the "Company") to be held at the time and place and for the purposes set
forth in the foregoing Notice of Annual Meeting of Stockholders. This
proxy statement and the proxy card included herewith were first sent to
Stockholders on or about February 20, 1996. The solicitation is made on
behalf of the Company by its Board of Directors and the cost of
solicitation will be borne by the Company.
You are requested to sign, date and return the enclosed proxy card to
ensure that your shares are voted. The proxy may be revoked at any time
prior to exercise thereof but if not revoked will be voted. A proxy can
be revoked by filing with the Secretary either an instrument revoking
the proxy or a duly executed proxy bearing a later date, or by attending
the Annual Meeting and voting in person. Each proxy will be voted as
instructed, and if no instruction is given will be voted FOR the
election of the 3 nominees for directors named below; FOR the ratification
of the appointment of Arthur Andersen LLP as independent auditors; FOR the
approval of the amendment of the Certificate of Incorporation to change
the Company name to Ameron International Corporation; and AGAINST the two
stockholder proposals described below. The named proxies may vote in their
discretion upon such other matters as may properly come before the meeting.
The record date for the determination of Stockholders entitled to vote
at the Annual Meeting is February 9, 1996. On such date, there were
issued, outstanding and entitled to vote at the Annual Meeting, 3,956,497
shares of Common Stock of the Company (the "Common Stock"). Every
Stockholder is entitled to one vote for each share of Common Stock
registered in his or her name at the close of business on the record
date, except that Stockholders may cumulate their votes in the election
of Directors. See "Election of Directors." Common Stock is the only
class of voting stock outstanding.
Assuming a quorum is present in person or by proxy at the meeting, with
respect to the election of directors, the three nominees receiving the
greatest number of votes cast will be elected directors. The affirmative
vote of the holders of a majority of the shares of Common Stock
represented at the Annual Meeting is necessary for the ratification of
the appointment of Arthur Andersen LLP as independent public
accountants of the Company for fiscal year 1996 and for the approval of
the stockholder proposals. The affirmative vote of the holders of a
majority of the outstanding shares of the Company's Common Stock is
necessary for the adoption of the proposed amendment to the Company's
Certificate of Incorporation.
For purposes of determining whether a matter has received a majority
vote, abstentions will be included in the vote totals, with the result
that an abstention has the same effect as a negative vote. In
instances where brokers are prohibited from exercising discretionary
authority for beneficial owners who have not returned a proxy (so-called
"broker nonvotes"), those shares will not be included in the vote totals
and therefore will have no effect on the vote.
ELECTION OF DIRECTORS
(Proxy Item 1)
As of the date of this Proxy Statement, the Bylaws of the Company provide
for a Board of Directors composed of ten (10) directors. However, as a
consequence of the retirements of Directors Albrecht and Atkins as of the
date of the Annual Meeting (refer to "The Board and Its Committees"
below), the Board of Directors has taken action to amend the Bylaws
effective immediately prior to the commencement of the Annual Meeting of
Stockholders to provide for a Board of Directors composed of eight (8)
directors, divided into three classes. Three directors are to be elected
at the 1996 Annual Meeting. James S. Marlen was elected to his present
term of office at the Company's 1994 Annual Meeting of Stockholders.
Stephen W. Foss was elected to the Company's Board of Directors effective
April 24, 1995. Both Messrs. Marlen and Foss are Class I directors and
will hold office until the 1999 Annual Meeting of Stockholders or until
their respective successors have been elected and qualified. Alan L.
Ockene was elected to the Company's Board of Directors effective December
28, 1995 and joined J. Michael Hagan and F. H. Fentener van Vlissingen as
a Class III director. Class III directors will serve until the 1998
Annual Meeting of Stockholders or until their respective successors have
been elected and qualified. The persons appointed as proxy holders in
the enclosed form of proxy will, unless authority is withheld, vote FOR
the election of the three nominees proposed by the Board of Directors,
all of whom are presently directors of the Company or, in their discretion
cumulate votes in favor of one or more such nominees. All of the nominees
have consented to being named herein and to serve if elected. In the event
that any of the nominees should become unavailable prior to the Annual
Meeting, proxies in the enclosed form will be voted for a substitute
nominee or nominees designated by the Board of Directors.
Stockholders have cumulative voting rights with respect to the election
of directors. Cumulative voting rights entitle a stockholder to give
one nominee as many votes as is equal to the number of directors to be
elected, multiplied by the number of shares owned by the stockholder,
or to distribute such votes to one or more nominees, as the stockholder
determines. Stockholders who wish to cumulate their votes must so
indicate on the form of Proxy.
The following information with respect to the principal occupation and
other affiliations of each nominee and in regard to past business
experience has been furnished to the Company by the respective nominees
for director.
1996 NOMINEES FOR DIRECTOR
Stephen W. Foss, President, Chairman and Chief Executive Officer, Foss
Manufacturing Company, Inc. Director of Tyco International, Ltd.
Age 53. He has been a director of the Company since April 24, 1995.
James S. Marlen. Chairman of the Board of the Company since January 1995,
President and Chief Executive Officer since June 1993. Formerly Vice
President GenCorp. Inc. and President, GenCorp Polymer Products since 1988.
Director of A. Schulman, Inc. Age 54. He has been a director of the
Company since 1993.
Alan L. Ockene, Retired President and Chief Executive Officer, General
Tire, Inc. and a member of the Executive Board of Directors of Continental
AG of Hanover, Germany, General Tire's parent company, since 1991.
Vice President, Latin America & Caribbean for Goodyear Tire & Rubber
Company 1985 - 1991. Director of A. Schulman, Inc. Age 64. He has been
a director of the Company since December 28, 1995.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THESE
NOMINEES AND THE ENCLOSED PROXY CARD WILL BE SO VOTED UNLESS THE
STOCKHOLDER SPECIFIES OTHERWISE.
<PAGE>
CONTINUING DIRECTORS WHOSE TERMS EXPIRE AT THE
1997 ANNUAL MEETING
A. Frederick Gerstell. Chairman of the Board, President and Chief
Executive Officer of CalMat Co. since 1991, President and Chief Executive
Officer since 1988. Age 58. He has been a director of the Company since 1995.
John F. King. Consultant. Formerly Chairman of the Board and Chief
Executive Officer, World Trade Bank. Director of Glendale Federal Bank.
Age 62. He has been a director of the Company since 1986.
Richard J. Pearson. Retired President and Chief Operating Officer, Avery
Dennison. Director of Ducommun, Inc., M&R Printing Equipment, Seidler
Capital, Fox River Associates and Atol Holdings. Age 70. He has been a
director of the Company since 1981.
CONTINUING DIRECTORS WHOSE TERMS EXPIRE AT THE
1998 ANNUAL MEETING
J. Michael Hagan. Chairman of the Board and Chief Executive Officer of
Furon Company since 1991. From 1990 to 1991 he served as President and
Chief Operating Officer. Age 56. He has been a director of the Company
since 1994.
F. H. Fentener van Vlissingen. President and Executive Director, Flint
Holding N.V., St. Maarten, Netherlands Antilles, a private investment
company. Director of SHV Holdings N.V., St. Maarten Netherlands
Antilles, of which company he was Chief Executive Officer from 1975 to
1984. Also Director of Akzo Nobel N.V., CSM N.V., N.V. Samenwerkende
Elektriciteits-Produktiebedrijven, Draka Holding N.V., Lips United B.V.,
ABN AMRO Holding N.V. and Unilever N.V., all in The Netherlands, and
Unilever PLC in the U.K. Age 62. He has been a director of the Company
since 1972.
THE BOARD AND ITS COMMITTEES
The Board has standing committees, with duties and with 1995 membership
and number of meetings for each as shown below.
Audit Committee Two meetings held during 1995
Members:
John F. King, Chairman
Donald H. Albrecht*
J. Michael Hagan
F. H. Fentener van Vlissingen
Functions of the Audit Committee, all of whose actions are
subject to approval by the Board, are: Approve selection of
independent public accountants; review and approve accounting
principles, policies, and practices; scope of annual audit and
audit arrangements; results of annual audit and the content and
form of financial reports to be included in the Annual Report to
Stockholders; and suggestions for improvements in accounting
procedures and internal controls made by independent public
accountants after completion of the annual audits.
*Mr. Albrecht, who has served as a director since 1982, will retire from
the Board and the Committees on which he served effective with the date of
the 1996 Annual Meeting of Stockholders.
3
Compensation & Stock Option Committee Two meetings held during 1995
Members:
A. Frederick Gerstell, Chairman
Victor K. Atkins*
Richard J. Pearson
Functions of the Compensation & Stock Option Committee, all
of whose actions are subject to approval by the Board, are:
Review and approve salary ranges for top managerial and executive
positions; approve salary rates for corporate officers and
recommend salary rates for the Chief Executive Officer and
President; approve management incentive compensation and long-term
incentive plans and top management awards thereunder and any
contingent compensation plans of the Company; fix total incentive
compensation appropriation annually; administer stock
compensation plans and make stock option grants and awards
thereunder.
Executive Committee No meetings held during 1995
Members:
James S. Marlen, Chairman
Richard J. Pearson
Lawrence R. Tollenaere**
Functions of the Executive Committee, all of whose actions are
subject to approval by the Board, are: Exercise, between
meetings of the Board and while the Board is not in session,
those duties of the Board of Directors in the management of the
business of the Company which may lawfully be delegated to it
by the Board.
Finance Committee One meeting held during 1995
Members:
Victor K. Atkins, Chairman
Donald H. Albrecht
J. Michael Hagan
John F. King
James S. Marlen
Functions of the Finance Committee, all of whose actions are
subject to approval by the Board, are: Review financing policies
and programs and consider their effect on the financial position
of the Company; review policies, plans and performance of
pension fund investments.
Nominating Committee Three Meetings held during 1995
Members:
Richard J. Pearson, Chairman
John F. King
James S. Marlen
Functions of the Nominating Committee, all of whose actions are
subject to approval by the Board, are: Recommend total size of
Board, personal qualifications for membership, and tenure of
directorship; review qualifications of candidates for
directorship; obtain, review, and recommend candidates to fill
vacancies. The Committee will consider nominees recommended by
stockholders whose communications can be addressed to the
Nominating Committee, c/o the Secretary of the Company.
The Board of Directors met a total of 6 times in 1995 and all directors,
except F. H. Fentener van Vlissingen, attended at least 75% of the
aggregate number of meetings of the Board and Board Committees
on which they served for the period in which they served.
*Mr. Atkins, who has served as a director since 1965, will retire from the
Board and the Committees on which he served effective with the date of the
1996 Annual Meeting of Stockholders.
**Mr. Tollenaere retired from the Board and the Committee on which he
served on January 20, 1996.
4
Compensation of Directors and Retirement Policies
Directors who were not officers or employees of the Company received
an annual retainer of $19,000 plus $1,400 for each Board meeting attended.
Directors are available for consultation at any time by Management
and normally receive no additional compensation for such consultation.
For meetings of committees of the Board of Directors, a fee of $650 per
meeting was paid. The fee was paid to each director who attended and
actively participated. Chairmen of committees received an additional
$50 fee for committee meetings chaired. Directors may, by special
arrangement, receive an additional fee for special assignments involving
unusual demands on their time. Such fees are normally determined in
advance by mutual agreement with Management as appropriate in the
circumstances. No such special assignments were in effect during 1995.
Pursuant to the 1994 Nonemployee Director Stock Option Plan approved by
stockholders at the 1994 Annual Meeting, nonemployee directors are granted
an option to purchase 1,000 shares, exercisable at the fair market value
on the date of grant, following the date of the annual meeting of
stockholders each year.
The Board of Directors has a policy establishing the mandatory
retirement date of each member of the Board as of the date of the Annual
Meeting of Stockholders of the Company next following his or her 72nd
birthday.
PROPOSAL FOR RATIFICATION OF APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS
(Proxy Item 2)
The Board of Directors, upon recommendation of its Audit Committee, has
appointed the firm of Arthur Andersen LLP, as independent public
accountants to examine the Company's financial statements for its fiscal
year ending November 30, 1996. This firm has served as independent public
accountants for the Company for many years. It has no financial interest
of any kind in the Company or its subsidiaries. The firm has had no
connection with the Company or its subsidiaries in the capacity of
promoter, underwriter, voting trustee, director, officer or employee. A
member of the firm of Arthur Andersen LLP is expected to be present at
the Annual Meeting to answer questions and to make a statement if he or
she desires to do so.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF THE FIRM OF ARTHUR ANDERSEN LLP AS INDEPENDENT PUBLIC
ACCOUNTANTS OF THE COMPANY FOR 1996 AND THE ENCLOSED PROXY CARD WILL BE
SO VOTED UNLESS THE STOCKHOLDER SPECIFIES OTHERWISE.
If the appointment is not ratified by a majority of the shares of Common
Stock represented at the meeting on this proposal, the adverse vote
will be considered as a directive to the Board of Directors to select
other independent public accountants for the following year. However,
because of the difficulty and expense of making any substitution so
long after the beginning of the current year, it is contemplated that
the appointment for the fiscal year ending November 30, 1996 will be
permitted to stand unless the Board finds other good reason for making a
change.
PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
(Proxy Item 3)
The Board of Directors has unanimously adopted a resolution declaring the
advisability of amending Article First of the Company's Certificate of
Incorporation to change the Company's corporate name to Ameron
International Corporation.
This enhancement of the Company's corporate name is believed by the Board
of Directors to be desirable and in the best interests of the Company in
order to better reflect its expanded, global focus and to underscore
its commitment to worldwide growth; yet to retain the historical name of Ameron.
The name change will not affect the validity or transferability of stock
certificates presently outstanding or the listing of any of its securities
on the New York Stock Exchange. The Company's stockholders will not be
required to surrender for exchange any stock certificates presently held
by them.
If the proposed amendment to the Company's Certificate of Incorporation is
approved by the stockholders at the Annual Meeting, such amendment will
become effective when a Certificate of Amendment of the Company's
Certificate of Incorporation is filed of record with the Secretary of
State of the State of Delaware.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSAL TO
AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION AS DESCRIBED ABOVE AND
THE ENCLOSED PROXY CARD WILL BE SO VOTED UNLESS THE STOCKHOLDER
SPECIFIES OTHERWISE.
STOCKHOLDERS' PROPOSALS
(Proxy Item 4)
The following stockholder proposals have been submitted for a vote of the
stockholders at the Annual Meeting. The proposals and proponents'
statements in support thereof are set forth on the following pages along
with the Company's reasons for recommending a vote AGAINST each proposal.
To be adopted, each proposal must be approved by the affirmative vote of
the majority of shares present in person or represented by proxy at the
Annual Meeting.
Item 4A on Proxy Card
Management has been advised that Kenneth Steiner, Great Neck, New York,
holder of a market value of at least $1,000 in Ameron stock, intends to
submit the following proposal at the meeting:
"RESOLVED, that the shareholders recommend that the board
of directors take the necessary steps to ensure that from
here forward all non-employee directors should receive a
minimum of fifty percent of their total compensation in the
form of company stock which cannot be sold for three years.
Board of Directors' Statement on Shareholder Proposal No. 1
Members of the Board own, in the aggregate, 255,486 shares of the
Company's Common Stock, or 6.46% of the total outstanding. Their
interests are already aligned with those of all shareholders.
The Board believes that the current market price of the Company's stock
does not fully reflect the underlying value of the Company's business
and assets.
It therefore believes that shareholder interests are best served by
minimizing further dilution. While director compensation in the form of
stock is desirable and appropriate in some circumstances, no rigid rule
prescribing the proportion of stock and cash can accurately reflect
changing conditions.
To further encourage share ownership by the Company's directors, a portion
of the total compensation to nonemployee directors consists of options to
purchase Common Stock of the Company. Pursuant to the 1994 Nonemployee
Director Stock Option Plan approved by stockholders at the 1994 Annual
Meeting, nonemployee directors are granted an option to purchase 1,000
shares, exercisable at the fair market value on the date of grant,
following the date of the annual meeting of stockholders each year.
In addition, the Board of Directors has adopted a voluntary plan, the
Nonemployee Directors' Stock Purchase Plan, whereby nonemployee directors
may voluntarily elect to apply cash compensation earned as directors to
the purchase of Company Common Stock. Purchases are made for the account
of electing directors on the open market from time to time.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL AND THE
ENCLOSED PROXY CARD WILL BE SO VOTED UNLESS THE STOCKHOLDER SPECIFIES
OTHERWISE.
6
<PAGE>
Statement of Proposing Stockholder
A significant equity ownership by outside directors is
probably the best motivator for facilitating identification
with shareholders.
Traditionally, outside directors, usually selected by
management, were routinely compensated with a fixed fee,
regardless of corporate performance. In today's competitive
global economy, outside directors must exercise a critical
oversight of management's performance in furthering
corporate profitability. All too often, outside directors'
oversight has been marked by complacency, cronyism, and
inertia.
Corporate America has too many examples of management
squandering company assets on an extended series of
strategic errors. Meanwhile, Boards of Directors stood by
and passively allowed the ineptitude to continue, well
after disaster struck. They fiddled while Rome was burning.
When compensation is in company stock, there is a greater
likelihood that outside directors will be more vigilant
in protecting their own, as well as corporate, and
shareholder interests.
What is being recommended in this proposal is neither
novel nor untried. A number of corporations have already
established versions of such practices, namely, Scott Paper,
The Travelers, and Hartford Steam Boiler.
Robert B. Stobough, Professor of Business Administration
at the Harvard Business School, did a series of studies
comparing highly successful to poorly performing companies.
He found that outside directors in the better performing
companies had significantly larger holdings of company
stock than outside directors in the mediocre performing
companies.
It can be argued that awarding stock options to outside
directors accomplishes the same purpose of insuring
director's allegiance to a company's profitability, as
paying them exclusively in stock. However, it is our
contention that stock options are rewarding on the upside,
but offer no penalties on the downside, where shareholders
bare the full downside risks. There are a few strategies
that are more likely to cement outside directors with
shareholder interests and company profitability than one
which results in their sharing the same bottom line."
Item 4b on Proxy Card
Management has been advised that William Steiner, Great Neck, New York,
holder of a market value of at least $1,000 in Ameron stock, intends to
submit the following proposal at the meeting:
"RESOLVED, that the stockholders of the Company request
that the Board of Directors take the necessary steps, in
accordance with state law, to declassify the Board of Directors
so that all directors are elected annually, such declassification
to be effected in a manner that does not affect the unexpired
terms of directors previously elected.
The Board of Directors' Statement on Shareholder Proposal No. 2
The Company's Certificate of Incorporation, requiring a classified
board of directors and three-year terms, was approved by a majority of the
shareholders when the Company reincorporated in Delaware in 1986. Under
the Company's charter and Delaware law, a charter amendment to provide for
annual election of all directors would require an 80% vote of the
outstanding shares.
The Company's directors are beneficial owners of a total of 255,486
shares, or 6.46% of the total outstanding. Only one director is an
officer or employee of the Company. Their interests in maximizing
share values are the same as all shareholders. A classified Board of
Directors facilitates continuity of leadership and policy, since only
one-third of the directors are elected each year and all directors serve
three-year terms. Since the Company's business depends to a significant
degree on customer confidence in management and the Company's ability
to deliver sustained performance over the life of long-term contracts,
such continuity is especially important to the Company's competitive
position. The overwhelming majority of independent directors on the
Ameron Board assures management accountability.
Classified Boards are found in many of America's most outstanding
companies. Fully one-half of the ten companies rated by Fortune Magazine
(1) as American's most admired companies have such provisions.
A classified Board of Directors, an overwhelming majority of which are
non-management directors, has a further benefit. Such a Board can bargain
effectively in the shareholders' interest in the event of a takeover
proposal. Absent the protection of a classified Board, any would-be
acquiror can seriously undermine the Board's leverage in negotiations
by threatening a proxy contest to replace the directors.
A vote in favor of this shareholder proposal is only an advisory
recommendation to the Board of Directors that it take steps to initiate
an amendment to the Company's Certificate of Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL AND
THE ENCLOSED PROXY CARD WILL BE SO VOTED UNLESS THE STOCKHOLDER
SPECIFIES OTHERWISE.
Statement of Proposing Stockholder
The election of directors is the primary avenue for
stockholders to influence corporate governance policies
and to hold management accountable for its implementation
of those policies. I believe that the classification of
the Board of Directors, which results in only a portion of
the Board being elected annually, is not in the best
interest of the Company and its stockholders.
The Board of Directors of the Company is divided into three
classes serving staggered three-year terms. I believe that
the Company's classified Board of Directors maintains the
incumbency of the current Board and therefore of current
management, which in turn limits management's accountability
to stockholders.
The elimination of the Company's classified Board would
require each new director to stand for election annually
and allow stockholders an opportunity to register their
views on the performance of the Board collectively and each
(1) March 6, 1995
director individually. I believe this is one of the best
methods available to stockholders to insure that the
Company will be managed in a manner that is in the best
interests of the stockholders.
I am a founding member of the Investors Rights Association
of America and I believe that concerns expressed by
companies with classified boards that the annual election
of all directors could leave companies without experienced
directors in the event that all incumbents are voted
out by stockholders, are unfounded. In my view, in the
unlikely event that stockholders vote to replace all
directors, this decision would express stockholder
dissatisfaction with the incumbent directors and reflect
the need for change.
I urge your support, vote for this resolution."
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Security Ownership of Certain Beneficial Owners
The Company has been informed that as of the dates indicated the
following persons were beneficial owners of more than five percent of
the Company's Common Stock.
<TABLE>
Name and Shares of
Address of Stock
Beneficial Beneficially Owned/
Owner as of Percent
------------------- --------------------- --------
<S> <C> <C>
Taro Iketani 306,396/Dec. 22, 1995 7.74
Funakawara 18, Ichigaya
Shinjuku-ku
Tokyo, Japan
F. H. Fentener van Vlissingen 220,036(1)/Feb. 6, 1966 5.56
Prinsengracht 963
1017 KL Amsterdam,
The Netherlands
</TABLE>
(1) Mr. van Vlissingen holds voting power on and has a beneficial
interest in these shares, all of which are held by Disfood B.V.
9
Security Ownership of Management
As of February 2, 1996, the shares of Common Stock held by all directors,
nominees for director and executive officers named in the Summary
Compensation Table individually and by directors and officers as a group
were:
<TABLE>
SHARES OF STOCK VESTED SHARES RIGHTS TO ACQUIRE
BENEFICIALLY HELD IN TRUST BENEFICIAL
NAME OWNED(1) UNDER 401(K) PLAN OWNERSHIP(2) PERCENT
- ------------ ---------------- ------------------ ---------------- -------
<S> <C> <C> <C> <C>
DIRECTORS AND NOMINEES:
Stephen W. Foss 450 0 0
A. Frederick Gerstell 500 0 250 *
J. Michael Hagan 400 0 250 *
John F. King 300 0 250 *
Alan L. Ockene 200 0 0
Richard J. Pearson 600(3) 0 250 *
F. H. Fentener van
Vlissingen 220,036(4) 0 250 5.56
NAMED EXECUTIVE OFFICERS:
James S. Marlen 33,000 126 15,000 *
Javier Solis 37 809 3,000 *
Gary Wagner 105(5) 587 1,875 *
Gordon G. Robertson 278 591 2,750 *
George J. Fischer 0 551 1,500 *
DIRECTORS AND OFFICERS
AS A GROUP (INCLUDING
THOSE ABOVE) 255,906 2,956 26,375 6.54(6)
</Table/
(1) Direct ownership except as otherwise noted.
(2) Represents shares subject to options which could be exercised by
April 1, 1996 by the named individuals or the group pursuant
to the 1992 Incentive Stock Compensation Plan and the 1994 Non-
employee Director Stock Option Plan.
(3) Shares held in Pearson Family Trust, a living trust.
(4) See Note (1) under Security Ownership of Certain Beneficial Owners.
(5) 100 of these shares are owned jointly with his wife.
(6) If the 26,375 shares subject to exercisable options held by
directors and officers as a group were included in the total
amount of shares outstanding, then the percentage of Common
Stock owned by the group would be 7.16%.
*Percentage owned of less than 1% of total outstanding shares not shown.
Section 16(a) of the Securities and Exchange Act of 1934, as amended
(the "Exchange Act") requires the Company's directors, executive officers
and holders of more than 10% of the Company's Common Stock to file with
the Securities & Exchange Commission initial reports of ownership and
reports of changes in ownership of Common Stock and other equity
securities of the Company. The Company believes that during the fiscal
year ended November 30, 1995, its officers and directors complied with
all Section 16(a) filing requirements.
10
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received by the Company's Chief
Executive Officer and the four remaining most highly paid executive
officers for each of the last three fiscal years ended November 30, 1995.
SUMMARY COMPENSATION TABLE
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
OTHER NUMBER OF
NAME ANNUAL SECURITIES
AND COMPEN- RESTRICTED UNDERLYING ALL OTHER
PRINCIPAL SATION STOCK OPTIONS/ LTIP COMPEN-
POSITION YEAR SALARY($)(1) BONUS($)(1) ($) AWARDS ($) SARS(#) PAYOUTS SATION($)
- -------- ----- ------------ ----------- --------- ---------- ------------ ------- ----------
James S. Marlen, 1995 451,151 355,000 114,767(2) -- 6,325 0 7,114(4)
Chairman, Presi- 1994 416,154 325,000 96,397 -- 55,000 0 9,672
dent, & Chief 1993 187,154 150,758 104,435 (3) 15,000 0 600,000(5)
Executive Officer
Javier Solis 1995 164,916 75,000 0 0 0 0 3,097(4)
Senior Vice 1994 158,538 60,000 0 0 11,842 0 4,398
President of 1993 142,755 35,245 0 0 2,000 0 4,146
Administration,
Secretary and
General Counsel
Gary Wagner 1995 142,288 75,000 0 0 0 0 3,968(4)
Senior Vice 1994 124,808 60,000 0 0 11,842 0 3,565
President & Chief 1993 95,000 30,000 0 0 500 0 2,975
Financial Officer,
Treasurer
Gordon G. Robertson 1995 129,096 52,000 0 0 1,000 0 3,506(4)
Senior Vice 1994 123,269 45,000 0 0 2,000 0 2,732
President, 1993 111,083 25,391 0 0 2,000 0 3,373
Technology
George J. Fischer 1995 129,096 52,000 0 0 1,000 0 3,295(4)
Senior Vice 1994 116,827 45,000 0 0 2,500 0 4,376
President, 1993 98,200 30,000 0 0 0 0 3,656
Human Resources
</TABLE>
(1) Amounts shown include cash and non-cash compensation earned for
services performed and received by the Executive Officers as well
as amounts earned but deferred at the election of those officers
during FY1995.
(2) $65,000 of this amount represents a housing subsidy, (refer to
Employment Agreement Section below) and $32,247 represents club
memberships.
(3) Mr. Marlen held 7,500 shares of restricted stock valued at $272,812
on November 30, 1995
(4) Amounts in this column represent:
(a) Contributions by the Company to the 401(K) Savings Plan for:
James S. Marlen, $4,620; Javier Solis, $3,097; Gary Wagner, $3,968;
Gordon G. Robertson, $3,230; and George J. Fischer, $3,128.
(b) Above-market interest calculated (but not paid or payable) on
deferred compensation: James S. Marlen, $2,494; Gordon G.
Robertson, $276. and George J. Fischer, $167.
(5) Refer to Employment Agreement section below.
11
Employment Agreement
In connection with Mr. Marlen's employment as Chairman, President and
Chief Executive Officer, the Company entered into a three-year employment
agreement with him commencing in June 1993. Under that agreement, Mr.
Marlen is entitled to an annual base salary of not less than $400,000
with an opportunity for future merit increases based on annual reviews
by the Board of Directors, with participation in the Company's Management
Incentive Compensation Plan ("MICP") and other executive compensation
and benefit plans. The agreement also provided for the grant of 15,000
shares of restricted stock and an additional 15,000 shares of the
Company's Common Stock in the form of a stock option with a five-year
vesting schedule when he joined the Company. He was paid a lump sum cash
amount of $600,000 to compensate him for stock and bonuses left behind
from his previous employment and as an incentive for him to join the
Company. He is entitled to a housing subsidy of $5,000 per month
until February, 1997 to offset the increased costs of Southern California
housing. Mr. Marlen is entitled to pension benefits that he left behind
at his previous employment. In addition he is entitled to separate
pension benefits under the Company's pension plans with vesting to
coincide with commencement of his employment with the Company in June
1993. In the event that Mr. Marlen is terminated without cause, or in
the event of nonrenewal of his employment agreement, Mr. Marlen would be
entitled to a severance benefit equal to his then current base salary
plus the highest bonus received during the contract period times a factor
of three. In the event of his death or long-term disability
while employed, or termination for reasons other than cause, including
change of control, all stock awards will become fully vested and he will
become entitled to vested pension benefits plus three years of additional
service credit. In the event that he is terminated without cause Mr.
Marlen will also be entitled to continue health and medical benefits
coverage at the same cost he is paying at the time of termination.
12<PAGE>
<TABLE>
Option/SAR Grants in Last Fiscal Year
Potential Realizable
Value At
Assumed Annual Rates
of Stock Price
Appreciation for
Option Term (1)
_______________________________________________________________________________________________
(a) (b) (c) (d) (e) (f) (g)
Percent of
Total
Options/
SARS
Granted
Options/ To Exercise
SARS Employees or Base
Granted To In Fiscal Price Expiration
Name (#) Year ($/sh(2) Date 5%($) 10%($)
- ------------------- ------------ ----------- ---------- ------------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
James S. Marlen 6,325 2.2 31.625 2-1-05(3) 125,796 318,793
Gordon G. Robertson 1,000 0.3 31.625 2-1-05(4) 19,889 50,402
George J. Fischer 1,000 0.3 31.625 2-1-05(4) 19,889 50,402
(1) Calculated based upon a 10-year option term, compounded appreciation
at 5% and 10% rates.
(2) Market value of shares on the date of grant.
(3) Options become exercisable in full on December 1, 1996.
(4) Options are exercisable commencing 12 months after the grant date,
with 25% of the shares covered thereby becoming exercisable at that time
and with an additional 25% becoming exercisable on each successive
anniversary date, with full vesting occurring on the fourth
anniversary date.
</TABLE>
13
<TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
(a) (b) (c) (d) (e)
Number of
Number of Unexercised
Unexercised In-The-Money
Number of Options/SARs Options/SARS
Securities at FY-End (#) at FY-End($)
Underlying -------------- --------------
Options/SARs Value Realized Exercisable/ Exercisable/
Name Exercised ($) Unexercisable Unexercisable
- ------------------- ------------ --------------- -------------- --------------
<S> <C> <C> <C> <C>
James S. Marlen -0- -0- 7,500/7,500 $27,188/27,188(1)
3,750/11,250 0/0(2)
0/40,000 0/0(3)
0/6,325 0/30,044(4)
Javier Solis -0- -0- 1,000/1,000 3,875/3,875(5)
750/2,250 0/0(2)
0/8,842 0/0(3)
Gary Wagner -0- -0- 2,500/0 0/0(6)
250/250 969/969(5)
750/2,250 0/0(2)
0/8,842 0/0(3)
Gordon G. Robertson -0- -0- 1,000/1,000 3,875/3,875(5)
500/1,500 0/0(2)
0/1,000 0/4,750(4)
George J. Fischer -0- -0- 625/1,875 0/0(2)
0/1,000 0/4,750(4)
(1) Value based upon exercise price of $32.75 and fiscal year-end 1995
market price of $36.375.
(2) Zero value based upon exercise price of $42.00 and fiscal year-end 1995
market price of $36.375.
(3) Zero value based upon exercise price of $37.00 and fiscal year-end 1995
market price of $36.375.
(4) Value based upon exercise price of $31.625 and fiscal year-end 1995
market price of $36.375.
(5) Value based upon exercise price of $32.50 and fiscal year-end 1995
market price of $36.375.
(6) Zero value based upon exercise price of $37.375 and fiscal year-end 1995
market price of $36.375.
</TABLE>
PENSION PLANS
The following schedule shows the estimated annual benefit payable under
the combined Ameron Pension Plan (Salaried Section) and Ameron
Supplemental Executive Retirement Plan for employees at varying pay
levels and years of service. The schedule assumes retirement at age 65.
YEARS OF SERVICE
FINAL AVG. ANNUAL
COMPENSATION 15 20 25 30
- ------------------ --------- --------- --------- ---------
125,000 34,080 45,440 56,800 68,160
150,000 41,400 55,200 69,000 82,800
200,000 56,025 74,700 93,375 112,050
250,000 70,650 94,200 117,750 141,300
300,000 85,275 113,700 142,125 170,550
400,000 114,525 152,700 190,875 229,050
500,000 143,775 191,700 239,625 287,550
600,000 173,025 230,700 288,375 346,050
700,000 202,275 269,700 337,125 404,550
(1) Calculated based upon highest consecutive 60 of last 120 months
of earnings prior to retirement
Benefits shown above are computed as straight life annuity amounts.
They are not subject to deduction for Social Security or other offset
amounts.
For purposes of the Ameron Pension Plan, compensation is base monthly
salary, exclusive of overtime, severance, bonuses, commissions or amounts
deferred under the Executive Deferral Plan. The Internal Revenue Code
limits the amount per year on which benefits are based and limits the
aggregate amount of the annual pension which may be paid by an employer
from a plan which is qualified under the Code for federal income tax
purposes. The Supplemental Executive Retirement Plan provides for
supplemental payments to be made to certain eligible executives of the
Company in amounts sufficient to maintain total benefits upon retirement
had there been no such Code limitations and expands annual compensation
to include bonuses and deferred compensation.
As of February 1, 1996, credited service under both plans for each of
the named individuals in the foregoing Summary Compensation Table are:
Credited Years
of Service(1)
Present At Age 65
------- ---------
James S. Marlen 4-4/12(2) 22-4/12(2)
Javier Solis 14-4/12 30
Gary Wagner 10-10/12 30
Gordon G. Robertson 30-9/12 30
George J. Fischer 30-8/12 30
(1) The maximum credit is 30 years.
(2) Refer to Employment Agreement section on Page 11, above. In order
for the Company to provide Mr. Marlen with pension benefits not
less than those under the pension plan of his former employment,
the credited years of service noted for Mr. Marlen include two
years of credit for each year of service during the first 9-1/2
years of his employment with the Company. In addition, in the
event that Mr. Marlen is terminated for reasons other than for
cause and/or a change of control takes place, he will be
entitled to his vested pension benefits plus three years of
additional credited service. In the event that he obtains new
employment within three years of leaving the Company following
termination, he will be entitled only to his vested pension
benefits (not additional years of service).
15
<PAGE>
The following Report of the Compensation & Stock Option Committee and
the Stock Price Performance Graph included in this proxy statement shall
not be deemed to be incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under
the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent the Company specifically incorporates this Report
or the Performance Graph by reference therein, and shall not be deemed
soliciting material or otherwise deemed filed under either of such acts.
REPORT OF THE COMPENSATION & STOCK OPTION COMMITTEE
The Compensation & Stock Option Committee of the Board of Directors
(the "Committee") is composed entirely of independent outside directors.
No member of the Committee is a former or current officer or employee of
the Company or any of its subsidiaries. The Committee, all of whose
actions are subject to approval by the Board of Directors, is responsible
for the proper administration of the Company's various compensation
programs, including its salary policies, its Management Incentive
Compensation Plan ("MICP") (which comprises its annual bonus plan for
management employees),its Key Executive Long-Term Cash Incentive Plan
("LTIP") and its 1992 Incentive Stock Compensation Plan. On an annual
basis the Committee reviews base salary ranges for the Company's
various levels of management, approves annual salaries of officers,
approves MICP and LTIP awards, administers the 1992 Incentive Stock
Compensation Plan and makes grants thereunder, and reviews with the
Board in detail all aspects of compensation for all officers of the
Company, including the Chief Executive Officer.
The executive compensation policy of the Company, which is endorsed by
the Committee, is that the base compensation of all officers should be
generally comparable to base salaries being paid to other similarly
situated officers of general diversified manufacturing companies with
similar sales and industries in the U.S., and that bonus compensation be
in the form of MICP and LTIP awards and stock option benefits which
are contingent upon the performance of the Company as well as the
individual contributions of each officer. Because of the inherent
cyclical nature of some of the Company's businesses, and because a
significant portion of its businesses are dependent on the timing of
projects over which it has no control, the Committee does not believe
that the base salary portion of compensation of the Company's officers
should be subject to annual fluctuations based solely on such effects.
In determining comparability of officer salaries to those of other
similarly situated officers, members of the Committee review the
results of compensation surveys provided by various compensation
consulting firms of national reputation. The Committee has reviewed
the compensation for each of the five highest paid officers for 1995
and has determined that in its opinion, the compensation of all
officers is reasonable in view of the Company's consolidated performance
and the contribution of those officers to that performance.
The MICP is based on the following measures: corporate performance,
business unit performance and personal performance. The corporate
performance measure is based on earnings per share and return on sales.
The Committee believes that these factors are the primary determinant
of share price over time. Because of the relatively low volume of
trade of the Company's stock and therefore its susceptibility to
volatility based on extraneous factors, the Committee does not believe
that share price per se is necessarily a measure of corporate performance.
Business unit performance measures are based primarily on return on assets.
Personal performance measures are based on such qualitative factors as
performance against objectives and plans, and organizational and
management development.
The LTIP was approved by the Board of Directors in April 1994. The
purpose of this plan is to reward selected senior executives with
above average total pay for achieving and sustaining above average
long-term financial goals. Participants in the LTIP are eligible to
receive cash incentive awards and grants of stock options based on the
financial performance of the Company and, in some cases, a combination
of the financial performance of the Company and its business units,
after the end of each three-year performance cycle. The determination
of cash payouts, if any, under the LTIP for the 1994-1996 and the
1995-1997 performance cycles will not be made until after the end of the
1996 and 1997 fiscal years, respectively. For those performance cycles,
the Company's financial performance will be measured based on cumulative
earnings per share, and business unit performance will be measured
based on return on assets, with a return on equity threshold. Option
grants pursuant to the LTIP are made under the 1992 Incentive Stock
Compensation Plan.
The current annual base salary of $470,000 for Mr. Marlen was set in June
1995. That base salary was established based on the same executive
compensation policy described above with respect to other officers of the
Company, that is, comparability to base salaries being paid to other
similarly situated officers of general diversified manufacturing companies
with similar sales revenues and industries in the U.S. That base salary
will be reviewed again by the Committee in June 1996. A bonus award of
$355,000 was approved for payment to Mr. Marlen under the MICP with
respect to fiscal 1995 based on the Company's success in meeting various
financial goals established by the Committee, including earnings per
share and return on sales, as well as an assessment by the Committee of
Mr. Marlen's individual performance, including his outstanding leadership
with respect to the continued restructuring of the Company and
reorganization of its management and businesses. Such bonus award is in
line with the average of bonus awards paid to chief executive officers
of general diversified manufacturing companies with similar sales and
industries in the U.S. as reported by various compensation consulting
firms of national reputation. During the 1995 fiscal year the Company
awarded Mr. Marlen one non-qualified stock option grant under the 1992
Incentive Stock Compensation Plan totalling 6,325 shares. In addition
the Company paid Mr. Marlen a housing subsidy of $65,000 under the terms
of his employment agreement entered into when he joined the Company in
June 1993.
A. F. Gerstell, Chairman
V. K. Atkins
R. J. Pearson
Stock Price Performance Graph
The following line graph compares the yearly changes in the cumulative
total return on the Company's Common Stock against the cumulative total
return of the New York Stock Exchange Market Value Index and the
Peer Group Composite described below for the period of the Company's
five fiscal years commencing 12/1/90 and ended 11/30/95. The comparison
assumes $100 invested in stock on 12/1/90. Total return assumes
reinvestment of dividends. The Company's stock price performance over the
years indicated below does not necessarily track the operating performance
of the Company nor is it necessarily indicative of future stock price
performance.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
12/90 11/91 11/92 11/93 11/94 11/95
Ameron, Inc. $ 100 $ 92.0 $ 94.7 $ 107.8 $ 98.9 $ 114.9
N.Y.S.E. $ 100 $ 120.1 $ 137.8 $ 154.6 $ 157.2 $ 201.1
Peer Group Index $ 100 $ 116.7 $ 156.7 $ 190.6 $ 182.8 $ 238.2
The Peer Group Composite is based 70% on a Building Materials Companies
Component and 30% on a Protective Coatings Companies Component. This
percentage split was arrived at based on the historical sales volumes
during the past five years of the Company's Protective Coatings Business
Segment in comparison to the remainder of the Company's other business
segments which are generically in the building materials category.
17<PAGE>
The Building Materials Companies Component is comprised of the following
companies: Advanced Environmental, American Building Co., American Woodmark
Corp., Ameron, Inc., Armstrong World Industries, Bairnco Corp.,Bird Corp.,
Butler Manufacturing, CalMat Co., Ceradyne Inc., Chemfab Corporation,
Consolidated Stainless, Dravo Corp., Elcor Corp., Facelifters Home
Systems, Griffon Corp., Holopak Technologies Inc., Industrial Acoustics
Inc., Industrial Holdings Inc., Insituform Technologies, Internacional
De Ceiamic, Knape & Vogt Mfg. Co., La-Man Corp., Lafayette Industries
Inc., Manville Corp.,Martin Marietta Material, Miller Building Systems
Inc., National Gypsum Co., NCI Building Systems Inc., Omega Environmental
Inc., Owens Corning Fiberglass, Raytech Corp., Reclaim Inc., Republic
Group Co., Seller Pollution Control, Shaw Group Inc., Southwall
Technologies, Triangle Pacific Corp., U.S. Intec Inc., United Dominion
Industries, USG Corp. and Vulcan Materials Co. The Protective Coatings
Companies Component is comprised of the following companies: Corimon CA
SACA, Desoto Inc., Guardsman Products Inc.,Insilco Corp., Lilly
Industries, PPG Industries, Pratt & Lambert Inc., RPM Inc., Sherwin-
Williams Co. and Valspar Corp.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
It is the Company's understanding that Mr. Taro Iketani is one of the
principal stockholders of Tokyo Steel Manufacturing Co., Ltd., ("Tokyo
Steel"), a Japanese corporation. Tokyo Steel owns 25% of the outstanding
stock of Tamco, a California corporation. The Company owns 50% of Tamco.
Tamco manufactures steel reinforcing bars. In addition, Tamco leases from
the Company, certain land, buildings and improvements used in Tamco's
steelmaking operations at a monthly lease rate of $30,000 payable in
arrears. The lease is a net lease expiring in February, 2002 with a
renewal option available to Tamco. In addition, at the end of the
renewal term, Tamco has the option to purchase the property at the
then current market value.
Mr. J. Michael Hagan, a Director of the Company, is Chairman of the Board
and Chief Executive Officer of Furon Company. During 1995, the Company
purchased materials from Furon Company in transactions totaling $86,550.
Mr. A. Frederick Gerstell, a Director of the Company, is Chairman of the
Board, President and Chief Executive Officer of CalMat Co. During 1995,
the Company purchased materials from CalMat Co. in transactions totaling
$365,076.
The Company believes that the terms of the transactions with both Furon
Company and CalMat Co. were as favorable as could have been negotiated
with unaffiliated parties.
MISCELLANEOUS
Cost of Soliciting Proxies
The cost of soliciting proxies in the accompanying form has been or will
be paid by the Company. In addition to solicitation by mail,
arrangements will be made with brokerage houses and other custodians,
nominees and fiduciaries to send proxy materials to beneficial owners,
and the Company will, upon request, reimburse them for their reasonable
expenses in so doing. Officers, directors and regular employees of the
Company may request the return of proxies personally, by means of
materials prepared for employee-stockholders or by telephone or telegram
to the extent deemed appropriate by the Board of Directors. No additional
compensation will be paid to such individuals for this activity.
The extent to which this solicitation will be necessary will depend upon
how promptly proxies are received; therefore, Stockholders are urged to
return their proxies without delay.
STOCKHOLDER PROPOSALS
Proposals of Stockholders to be considered for inclusion in the proxy
statement and form of proxy relating to the 1997 meeting must be
addressed to the Company, Attention: Corporate Secretary, at the
Company's principal office, and must be received there no later than
October 25, 1996.
18
<PAGE>
The Company's Bylaws provide that for business to be brought before an
annual meeting by a Stockholder, written notice must be received by the
Secretary not less than 60 or more than 120 days prior to the meeting;
provided that in the event the first public disclosure of the date of
the meeting is made less than 65 days prior thereto, the required notice
may be received within ten days following such public disclosure.
The information which must be included in the notice is specified in
the applicable Bylaw, a copy of which may be obtained from the Secretary.
OTHER MATTERS
So far as management knows, there are no matters to come before the
meeting other than those set forth in the Proxy Statement. If any
further business is presented to the Meeting, the persons named in the
proxies will act according to their best judgment on behalf of the
Stockholders they represent.
By Order of the Board of Directors
Javier Solis, Secretary
February 20, 1996
Pasadena, California
19
</TABLE>
