-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CanHF5YTkWHFOP+gypVgIGUjJDPBnt++FC8JTdp0gIGklgCUEowGnPWb/izl2XnM a5X9KxVTxntnZ9MXfvO6Yg== /in/edgar/work/0000813621-00-000015/0000813621-00-000015.txt : 20001114 0000813621-00-000015.hdr.sgml : 20001114 ACCESSION NUMBER: 0000813621-00-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMCOL INTERNATIONAL CORP CENTRAL INDEX KEY: 0000813621 STANDARD INDUSTRIAL CLASSIFICATION: [1400 ] IRS NUMBER: 360724340 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-14447 FILM NUMBER: 760208 BUSINESS ADDRESS: STREET 1: 1500 W SHURE DR STREET 2: ONE N ARLINGTON CITY: ARLINGTON HEIGHTS STATE: IL ZIP: 60004-7803 BUSINESS PHONE: 8473948730 MAIL ADDRESS: STREET 1: 1500 W SHURE DR STREET 2: 1500 W SHURE DR SUITE 500 CITY: ARLINGTON HEIGHTS STATE: IL ZIP: 60004-7803 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN COLLOID CO DATE OF NAME CHANGE: 19920703 10-Q 1 0001.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) (x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2000 or ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-15661 AMCOL INTERNATIONAL CORPORATION (Exact name of registrant as specified in its charter) Delaware 36-0724340 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
1500 West Shure Drive, Suite 500, Arlington Heights, Illinois 60004-7803 (Address of principal executive offices) (Zip Code) (847) 394-8730 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at November 8, 2000 (Common stock, $.01 par value) 28,355,889 AMCOL INTERNATIONAL CORPORATION INDEX Part I - Financial Information Item 1 Financial Statements Condensed Consolidated Balance Sheets - September 30, 2000 and December 31, 1999 1 Condensed Consolidated Statements of Operations - nine months and three months ended September 30, 2000 and 1999 2 Condensed Consolidated Statements of Comprehensive Income - nine months and three months ended September 30, 2000 and 1999 3 Condensed Consolidated Statements of Cash Flows - nine months ended September 30, 2000 and 1999 4 Notes to Condensed Consolidated Financial Statements 5 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Item 3 Quantitative and Qualitative Disclosure About Market Risk 14 Part II - Other Information Item 1 Legal Proceedings 14 Item 6 Exhibits and Reports on Form 8-K 14 Part I, Item 1 - FINANCIAL INFORMATION AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
ASSETS September 30, 2000 December 31, (Unaudited) 1999 --------------------- -------------------- Current assets: * Cash $ 5,069 $ 3,954 Cash equivalents 192,084 -- Accounts receivable, net 61,183 52,056 Inventories 31,883 30,965 Prepaid expenses 6,473 6,566 Net current assets of discontinued operations -- 40,147 Current deferred tax asset 6,340 6,347 Total current assets 303,032 140,035 Investment in and advances to joint ventures 10,826 9,111 Property, plant, equipment and mineral reserves 196,013 195,322 Less accumulated depreciation 114,557 106,062 81,456 89,260 Intangible assets, net 485 452 Net long-term assets of discontinued operations -- 80,046 Other long-term assets, net 12,968 5,047 $ 408,767 $ 323,951 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable and current maturities of debt $ 1,042 $ 509 Accounts payable 12,936 10,776 Accrued income taxes 167,620 2,301 Accrued liabilities 27,233 21,394 Total current liabilities 208,831 34,980 Long-term debt 55,306 93,914 Deferred credits and other liabilities 9,667 8,617 Stockholders' equity: Common stock 320 320 Additional paid-in capital 74,904 76,440 Foreign currency translation adjustment (2,822) (2,607) Retained earnings 84,115 142,270 Treasury stock (21,554) (29,983) 134,963 186,440 $ 408,767 $ 323,951
*Condensed from audited financial statements. The accompanying notes are an integral part of these condensed financial statements. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands)
Nine Months Ended Three Months Ended September 30, September 30, Continuing operations 2000 1999 2000 1999 Net sales $ 214,848 $ 227,844 $ 74,284 $ 79,944 Cost of sales 162,026 175,825 56,105 61,602 Gross profit 52,822 52,019 18,179 18,342 General, selling and administrative expenses 39,286 44,977 13,270 14,462 Asset impairment and business realignment expenses 2,440 -- 2,440 -- Operating profit 11,044 7,042 2,469 3,880 Other income (expense): Investment income 6,717 -- 3,633 -- Interest expense, net (2,426) (2,906) (1,009) (954) Other income, net (374) (622) (323) (670) 3,917 (3,528) 2,301 (1,624) Income from continuing operations before income taxes and equity in income of joint ventures 14,961 3,514 4,770 2,256 Income taxes 5,950 1,157 2,021 721 Income from continuing operations before equity in income of joint ventures 9,011 2,357 2,749 1,535 Equity in income of joint ventures 333 268 182 144 Income from continuing operations 9,344 2,625 2,931 1,679 Discontinued operations (Note 6) Income from operations of absorbent polymers segment (net of income taxes) 7,766 20,238 -- 7,696 Gain on sale of absorbent polymers segment (net of income taxes of $207,570) 314,064 -- 193 -- 321,064 20,238 193 7,696 Extraordinary loss on early extinguishment of debt (net of income tax benefit of $238) (443) -- -- -- Net income $ 330,731 $ 22,863 $ 3,124 $ 9,375
The accompanying notes are an integral part of these condensed financial statements. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except number of shares and per share data) (continued)
Nine Months Ended Three Months Ended September 30, September 30, 2000 1999 2000 1999 Weighted average common shares 27,316,498 26,762,283 27,943,373 26,763,593 Weighted average common and common equivalent shares 29,334,941 27,147,789 30,781,245 27,328,232 Basic earnings per share Continuing operations $ .34 $ .10 $ .10 $ .06 Discontinued operations From operations $ .28 $ .76 $ -- $ .29 Gain on sale $ 11.50 $ -- $ .01 $ -- $ 11.78 $ .76 $ .01 $ .29 Extraordinary item $ (.02) $ -- $ -- $ -- Net income $ 12.11 $ .85 $ .11 $ .35 Diluted earnings per share Continuing operations $ .32 $ .10 $ .10 $ .06 Discontinued operations From operations $ .26 $ .75 $ -- $ .28 Gain on sale $ 10.71 $ -- $ .01 $ -- $ 10.97 $ .75 $ .01 $ .28 Extraordinary item $ (.02) $ -- $ -- $ -- Net income $ 11.27 $ .84 $ .10 $ .34
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands)
Nine Months Ended September 30, Three Months Ended September 30, 2000 1999 2000 1999 Net income $ 330,731 $ 22,863 $ 3,124 $9,375 Other comprehensive income: Foreign currency translation adjustment (5,361) (1,177) (452) 139 Reclassification adjustment for foreign currency losses included in net income 5,146 -- -- -- Comprehensive income $ 330,516 $ 21,686 $ 2,672 $9,514
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
Nine Months Ended September 30, 2000 1999 Cash flow from operating activities: Income from continuing operations $ 9,344 $ 2,625 Adjustments to reconcile income from continuing operations to net cash provided by operating activities: Depreciation, depletion, and amortization 15,279 15,420 Other 1,407 1,944 (Increase) decrease in current assets (3,148) 5,625 Increase (decrease) in current liabilities 2,599 (4,618) Net cash provided by operating activities of continuing operations 25,481 20,996 Net cash provided by operating activities of discontinued operations 665 1,319 Cash flow from investing activities: Acquisition of land, mineral reserves, depreciable and intangible assets (10,769) (15,019) Net proceeds from sale of absorbent polymers segment 605,222 -- Other (6,889) (3,415) Net cash provided by (used in) investing activities 587,564 (18,434) Cash flow from financing activities: Net change in outstanding debt (38,075) 2,114 Dividends paid (4,057) (5,350) Partial liquidation distribution (384,829) -- Early extinguishment of debt (443) -- Treasury stock transactions 6,893 (1,377) Net cash used in financing activities (420,511) (4,613) Net increase (decrease) in cash and cash equivalents 193,199 (732) Cash and cash equivalents at beginning of period 3,954 6,206 Cash and cash equivalents at end of period $ 197,153 $ 5,474 Supplemental disclosure of cash flow information Actual cash paid for: Interest $ 4,848 $ 4,333 Income taxes $ 55,818 $13,956
The accompanying notes are an integral part of these condensed financial statements. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands) Note 1: BASIS OF PRESENTATION The financial information included herein, other than the condensed consolidated balance sheet as of December 31, 1999, has been prepared by management without audit by independent certified public accountants pursuant to the rules of the Securities and Exchange Commission for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America. The condensed consolidated balance sheet as of December 31, 1999, has been derived from and does not include all the disclosures contained in the audited consolidated financial statements for the year ended December 31, 1999. The information furnished herein includes all adjustments which are, in the opinion of management, necessary for a fair statement of the financial position and operating results of the interim periods, and all such adjustments are of a normal recurring nature. Management recommends the accompanying condensed consolidated financial information be read in conjunction with the consolidated financial statements and related notes included in the Company's 1999 Form 10-K, which accompanies the 1999 Corporate Report. The results of operations for the nine-month period ended September 30, 2000, are not necessarily indicative of the results to be expected for the full year. Note 2: INVENTORIES Inventories at September 30, 2000 have been valued using the same methods as at December 31, 1999. The composition of inventories at September 30, 2000 and December 31, 1999, was as follows:
September 30, 2000 December 31, 1999 Crude stockpile and in-process inventories $ 18,777 $ 19,099 Other raw material, container and supplies inventories 13,106 11,866 $ 31,883 $ 30,965
Note 3: EARNINGS PER SHARE Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing the net income by the weighted average common shares outstanding after consideration of the dilutive effect of stock options outstanding during each period. The number of options outstanding increased in connection with the partial liquidation associated with the sale of the absorbent polymers segment. The dilutive impact of options was more significant as a result of the increase in outstanding options. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands) (continued) Note 3: EARNINGS PER SHARE (continued)
Nine months ended September 30, Three months ended September 30, 2000 1999 2000 1999 Weighted average common shares outstanding - Basic 27,316,498 26,762,283 27,943,373 26,763,593 Assumed exercise of stock options 2,018,443 385,506 2,837,872 564,639 Weighted average common shares outstanding - Diluted 29,334,941 27,147,789 30,781,245 27,328,232
Note 4: DERIVATIVES From time to time, the Company uses financial derivatives, principally swaps, forward contracts and options in its management of foreign currency and interest rate exposures. These contracts hedge transactions and balances for periods consistent with committed exposures. As of September 30, 2000, derivatives outstanding were related to foreign currency hedging and an interest rate swap with a notional amount of $15 million of the outstanding revolving credit. Note 5: LITIGATION In 1998, the following claims were filed in Chester, England against certain of the Company's subsidiaries: Adams et al. v. AMCOL (Holdings) Limited and Volclay Limited, (AKA Marie Geraldine O'Laughlin et al.), High Court of Justice, QB Division, Chester District 1998 A. No. 206; and Anziani, et al. v. AMCOL (Holdings) Limited and Volclay Limited, High Court of Justice, QB Division, Chester District 1998 A. No. 365. The claims are for property damage, nuisance and personal injury based on the alleged release of dust from Volclay Limited's facility in Wallasey, England. It is the Company's understanding that the claims are being made on behalf of up to 1,600 persons who at some point during the period from 1965 to the present resided in the vicinity of the Wallasey, England facility. The Company has notified its insurance carriers and is currently engaged in the discovery process. One of the Company's insurance carriers is seeking to void its insurance policy. The Company intends to defend these cases vigorously. Based on information received to date, the Company currently anticipates that its liability with respect to these claims will not have a material adverse affect on the Company. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands) (continued) Note 6: DISCONTINUED OPERATIONS In 1999, the Company announced that it had entered into an agreement to sell its absorbent polymers segment to BASF AG, subject to the approval of the Company's shareholders. The Company's shareholders approved the sale transaction at a special meeting held on May 25, 2000, and accordingly, the absorbent polymers segment is reported as a discontinued operation in the accompanying condensed consolidated financial statements. The condensed consolidated financial statements have been reclassified to report separately the net assets and operating results of the absorbent polymers segment for all periods presented. The transaction closed on June 1, 2000, at which time the Company received proceeds of approximately $656.5 million. The sale resulted in a pretax gain of approximately $521.7 million ($314.1 million after income taxes), which was net of estimated costs to be incurred in connection with the sale. The Company is currently negotiating the final settlement of certain working capital items, and expects to resolve these matters during the fourth quarter of 2000. Provisions have been made for estimated working capital adjustments in determining the gain on sale. Substantially all of the after-tax net proceeds from the sale transaction were distributed to the Company's shareholders on June 30, 2000. Summary operating results of the absorbent polymers segment for the nine and three month periods ended September 30, 2000 and 1999 were as follows:
Nine months ended September 30, Three months ended September 30, 2000* 1999 2000 1999 Net sales $ 86,000 $ 186,912 $ -- $ 63,587 Operating profit 12,436 34,330 -- 12,830 Income taxes 3,920 11,552 -- 4,469 Net income 7,766 20,238 -- 7,696 *The 2000 information is for five months.
Item 2 - AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is management's discussion and analysis of the Company's financial position and operating results during the periods included in the accompanying condensed consolidated financial statements. Nine Months Ended September 30, 2000 vs. 1999 Net sales from continuing operations decreased by $13.0 million, or 5.7%, while gross profit increased by $.8 million, or 1.5%, and operating profit increased by $4.0 million, or 56.8%. General, selling and administrative expenses were $3.2 million, or 7.1%, lower than the previous year. General, selling and administrative expenses for 2000 included $2.4 million in special charges: $1.5 million for asset impairments related to the U.K. operation; and $.9 million for costs associated with business realignment activities. Investment income related to the temporary investment of the proceeds from the sale of the absorbent polymers segment amounted to $6.7 million for 2000. Net interest expense decreased by $.5 million, or 16.5%, as a result of lower average debt levels. Income from continuing operations was $9.3 million compared with $2.6 million in the prior year period, an increase of $6.7 million. Earnings from continuing operations were $.32 per diluted share for the 2000 period, compared with $.10 per diluted share for the prior-year period on 8.1% higher weighted average shares outstanding. The investment income, net of taxes, amounted to $.14 per diluted share, or approximately 64% of the improvement. On June 1, 2000, the absorbent polymers segment was sold to BASF AG resulting in a net gain of $314.1 million, or $10.71 per diluted share. The 2000 results were for five months compared to nine months for 1999. The income from operations for the polymer segment prior to disposition amounted to $7.8 million, net of taxes, for the 2000 period compared to $20.2 million, net of taxes, in the prior-year period. This equated to $.26 per diluted share compared with $.75 per diluted share in 1999. An extraordinary net charge of $.4 million, or $.02 per diluted share, was incurred in 2000 for the early extinguishment of long-term debt. A brief discussion by business segment follows:
Nine Months Ended September 30, 2000 1999 2000 vs. 1999 Minerals (Dollars in Thousands) $ Change % Change Net sales $ 119,307 100.0% $ 117,009 100.0% $ 2,298 2.0% Cost of sales 93,799 78.6% 91,359 78.1% Gross profit 25,508 21.4% 25,650 21.9% (142) (0.6%) General, selling and administrative expenses 11,760 9.9% 13,222 11.3% (1,462) (11.1%) Asset impairment 1,500 1.3% -- -- 1,500 NM Operating profit 12,248 10.3% 12,428 10.6% (180) (1.4%)
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Sales increased by $2.3 million, or 2.0%, from the prior-year period. Stronger international sales, with the exception of the U.K. operation, accounted for the majority of the improvement. Gross profit margins decreased by 50 basis points, or 2.3%. The decrease in gross profit margins is primarily related to lower prices on domestic bulk cat litter sold to major branded customers. General, selling and administrative expenses were $1.5 million, or 11.1%, lower than the prior-year period. Reduced general, selling and administrative expenses in the United Kingdom and lower domestic bad debt provisions accounted for much of the change. An asset impairment adjustment of $1.5 million was recorded in the third quarter of 2000 related to the U.K. cat litter operation. The U.K. operation operating losses, in addition to this charge, amounted to $2.3 million in the 2000 period compared with $2.2 million in the 1999 period. The Company has been actively attempting to sell this business.
Nine Months Ended September 30, 2000 1999 2000 vs. 1999 Environmental (Dollars in Thousands) $ Change % Change Net sales $ 70,177 100.0% $ 84,745 100.0% $(14,568) (17.2%) Cost of sales 45,568 64.9% 61,258 72.3% Gross profit 24,609 35.1% 23,487 27.7% 1,122 4.8% General, selling and administrative expenses 14,271 20.3% 19,292 22.8% (5,021) (26.0%) Operating profit 10,338 14.8% 4,195 4.9% 6,143 146.4%
Sales decreased by $14.6 million, or 17.2%. Approximately 78% of the sales decrease was related to businesses divested in 1999. Weakness in sales from the U.K. operation accounted for the balance of the sales decrease. Sales for the U.S. operations were higher in all sectors, with the exception of geosynthetic clay liners and exports. Gross profit margins improved by 740 basis points, or 26.7%, primarily as a result of the divestitures of businesses in 1999. General, selling and administrative expenses decreased by $5.0 million, or 26.0%, reflecting the results of the divestitures and cost reduction initiatives instituted in 1999.
Nine Months Ended September 30, 2000 1999 2000 vs. 1999 Transportation (Dollars in Thousands) $ Change % Change Net sales $ 25,364 100.0% $ 26,090 100.0% $ (726) (2.8%) Cost of sales 22,659 89.3% 23,208 89.0% Gross profit 2,705 10.7% 2,882 11.0% (177) (6.1%) General, selling and administrative expenses 1,580 6.2% 1,607 6.2% (27) (1.7%) Operating profit 1,125 4.4% 1,275 4.8% (150) (11.8%)
Revenues decreased $.7 million, or 2.8%. Gross profit margins declined by 30 basis points, or 2.7%, primarily as a result of higher fuel costs. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Nine Months Ended September 30, 2000 1999 2000 vs. 1999 Corporate (Dollars in Thousands) $ Change % Change General, selling and administrative expenses $ 11,727 $ 10,856 $ 871 8.0% Business realignment expenses 940 -- 940 NM Operating loss (12,667) (10,856) (1,811) 16.7%
Corporate costs include management information systems, human resources, investor relations and corporate communications, corporate finance and corporate governance. The nanocomposite business is also included in the corporate costs. The $.9 million, or 8.0%, increase in costs is attributable to increased investments in nanocomposite business development. In addition, the Company incurred $.9 million in business realignment expenses in 2000 related to its exploration of alternatives to enhance shareholder value. Three Months Ended September 30, 2000 vs. 1999 Net sales from continuing operations decreased by $5.7 million, or 7.1%, gross profit decreased by $.2 million, or .9%, and operating profit decreased by $1.4 million, or 36.4%. General, selling and administrative expenses increased by $1.2 million, or 8.6%, as a result of $2.4 million in special charges: $1.5 million for asset impairments related to the U.K. operation; and $.9 million for costs associated with business realignment activities. Investment income in the 2000 period related to the proceeds from the sale of the absorbent polymers segment amounted to $3.6 million. Income from continuing operations amounted to $2.9 million in 2000 compared to $1.7 million in 1999. Earnings from continuing operations were $.10 per diluted share for the 2000 quarter, compared with $.06 per diluted share for the prior-year quarter on 12.6% higher weighted average shares outstanding. The investment income, net of taxes, increased earnings by $.07 per diluted share, while the special charges, net of taxes, reduced diluted earnings per share by $.04 in the 2000 quarter. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) A brief discussion by business segment follows:
Three Months Ended September 30, 2000 1999 2000 vs. 1999 Minerals (Dollars in Thousands) $ Change % Change Net sales $ 38,177 100.0% $ 39,319 100.0% $ (1,142) (2.9%) Cost of sales 30,546 80.0% 30,380 77.3% Gross profit 7,631 20.0% 8,939 22.7% (1,308) (14.6%) General, selling and administrative expenses 4,029 10.6% 4,197 10.7% (168) (4.0%) Asset impairment 1,500 3.9% 1,500 NM Operating profit 2,102 5.5% 4,742 12.0% (2,640) (55.7%)
Sales decreased by $1.1 million, or 2.9%, from the prior-year period. The decrease in sales was attributable to lower domestic sales to the cat litter markets and lower sales in the United Kingdom. Gross profit margins decreased by 270 basis points, or 7.0%, due to lower selling prices for domestic bulk cat litter sold to major branded customers, as well as lower sales volume in the United Kingdom. General, selling and administrative expenses, before an asset impairment charge, decreased by $.2 million, or 4.0%. An adjustment of $1.5 million to reflect the impact of an asset impairment associated with the U.K. cat litter assets was made during the 2000 quarter. In addition to the asset impairment charge, the UK operation reported an operating loss of $1.2 million for the quarter. Three Months Ended September 30, 2000 1999 2000 vs. 1999 Environmental (Dollars in Thousands) $ Change % Change Net sales $ 27,275 100.0% $ 30,866 100.0% $ (3,591) (11.6%) Cost of sales 17,666 64.8% 22,518 73.0% Gross profit 9,609 35.2% 8,348 27.0% 1,261 15.1% General, selling and administrative expenses 4,637 17.0% 6,268 20.3% (1,631) (26.0%) Operating profit 4,972 18.2% 2,080 6.7% 2,892 139.0%
Sales decreased by $3.6 million, or 11.6%. Virtually all of the sales decrease was related to businesses divested in 1999. Sales for the U.S. operations were higher in all sectors, with the exception of geosynthetic clay liners and exports. Sales for the European operations were lower in the 2000 period. Gross profit margins improved by 820 basis points, or 30.4%, primarily as a result of the divestitures of businesses in 1999. General, selling and administrative expenses decreased by $1.6 million, or 26.0%, reflecting the results of the divestitures and cost reduction initiatives instituted in 1999. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Three Months Ended September 30, 2000 1999 2000 vs. 1999 Transportation (Dollars in Thousands) $ Change % Change Net sales $ 8,832 100.0% $ 9,761 100.0% $ (929) (9.5%) Cost of sales 7,893 89.4% 8,706 89.2% Gross profit 939 10.6% 1,055 10.8% (116) (11.0%) General, selling and administrative expenses 543 6.1% 555 5.7% (12) (2.2%) Operating profit 396 4.5% 500 5.1% (104) (20.8%)
Revenues decreased 9.5% as a result of reduced demand from certain large customers. Gross margins declined by 20 basis points, or 1.9%, as a result of lower sales volume and higher fuel costs.
Three Months Ended September 30, 2000 1999 2000 vs. 1999 Corporate (Dollars in Thousands) $ Change % Change General, selling and administrative expenses $ 4,061 $ 3,442 $ 619 18.0% Business realignment expenses 940 940 NM Operating loss (5,001) (3,442) 1,559 45.3%
Higher expenditures for nanocomposite business development accounted for the 18.0% increase in corporate costs. In addition, the Company incurred $.9 million in professional fees in 2000 related to its exploration of alternatives to enhance shareholder value. Liquidity and Capital Resources At September 30, 2000, the Company had outstanding debt of $56.3 million (including both long- and short-term debt), cash of $5.1 million and cash equivalents of $192.1 million, compared with $94.4 million in debt and $4.0 million in cash at December 31, 1999. The cash equivalents of $192.1 million primarily relate to the proceeds from the sale of the absorbent polymers segment. Accrued income taxes related to the transaction totaled $167.6 million. The Company currently intends to use the difference of $24.5 million to reduce debt. On a proforma basis, net debt would be $26.8 million. The long-term debt (on a proforma basis) would thus represent 16.2% of total capitalization at September 30, 2000, compared with 33.5% at December 31, 1999. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) The Company had a current ratio of 1.45-to-1 at September 30, 2000, with approximately $94.2 million in working capital, compared with 2.64-to-1 and $101.8 million, respectively, at December 31, 1999. The proforma current ratio at September 30, 2000, excluding cash equivalents and accrued income taxes related to the sale of the absorbent polymers segment, was 2.69-to-1, with working capital of $69.7 million. During the first nine months of 2000, the Company generated $25.5 million in cash from continuing operations, compared with $21.0 million for the previous year nine-month period. The Company paid dividends of $4.1 million and acquired property, plant and equipment and intangible assets totaling $10.8 million. The Company distributed $384.8 in net proceeds from the sale of the absorbent polymers segment to its shareholders and repaid debt totaling approximately $38.1 million. The Company had approximately $80.1 million in unused, committed credit lines at September 30, 2000. These credit facilities, in conjunction with funds generated from operations, are adequate to fund the capital expenditure program approved by the board of directors at this time. Forward-Looking Statements Certain statements made from time-to-time by the Company, including statements in the Management's Discussion and Analysis section above, constitute "forward-looking statements" made in reliance upon the safe harbor contained in Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include statements relating to the Company or its operations that are preceded by terms such as "expects," "believes," "anticipates," "intends" and similar expressions, and statements relating to anticipated growth, levels of capital expenditures, future dividends, expansion into global markets and the development of new products. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The Company's actual results, performance or achievements could differ materially from the results, performance or achievements expressed in, or implied by, these forward-looking statements as a result of various factors, including, but not limited to the actual growth in AMCOL's various markets, utilization of AMCOL's plants, competition in the minerals segments, operating costs, raw material prices, weather, currency exchange rates, currency devaluations, delays in development, production and marketing of new products, integration of acquired businesses, and other factors detailed from time-to-time in AMCOL's annual report and other reports filed with the Securities and Exchange Commission. Item 3: Quantitative and Qualitative Disclosure About Market Risk The information required by this item is provided in Footnote 4 "Derivative Financial Instruments and Market Risks" under Item I. Part II - OTHER INFORMATION Item 1: Legal Proceedings The information required by this item is provided in Footnote 5 "Litigation" under Item I. Item 6: Exhibits and Reports on Form 8-K (a) See Index to Exhibits immediately following the signature page. (b) No reports on Form 8-K have been filed during the quarter ended September 30, 2000. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMCOL INTERNATIONAL CORPORATION Date: November 13, 2000 /s/ Lawrence E. Washow Lawrence E. Washow President and Chief Executive Officer Date: November 13, 2000 /s/ Paul G. Shelton Paul G. Shelton Senior Vice President and Chief Financial Officer INDEX TO EXHIBITS Exhibit Number 3.1 Restated Certificate of Incorporation of the Company (5), as amended (10), as amended (16) 3.2 Bylaws of the Company (10) 4 Article Four of the Company's Restated Certificate of Incorporation (5), as amended (16) 10.1 AMCOL International Corporation 1983 Incentive Stock Option Plan (1); as amended (3) 10.3 Lease Agreement for office space dated September 29, 1986, between the Company and American National Bank and Trust Company of Chicago; (1) First Amendment dated June 2, 1994 (8); Second Amendment dated June 2, 1997 (13) 10.4 AMCOL International Corporation 1987 Non-Qualified Stock Option Plan (2); as amended (6) 10.7 Change in Control Agreement dated September 20, 2000, by and between Registrant and Lawrence E. Washow 10.8 Change in Control Agreement dated September 22, 2000, by and between Registrant and Peter L. Maul 10.9 AMCOL International Corporation Dividend Reinvestment and Stock Purchase Plan (4); as amended (6) 10.10AMCOL International Corporation 1993 Stock Plan, as amended and restated (10) 10.11Credit Agreement by and among AMCOL International Corporation and Harris Trust and Savings Bank, individually and as agent, NBD Bank, LaSalle National Bank and the Northern Trust Company dated October 4, 1994, (7); as amended, First Amendment to Credit Agreement dated September 25, 1995 (9), as amended, Second Amendment to Credit Agreement dated March 28, 1996, Third Amendment to Credit Agreement dated September 12, 1996 (11), Fourth Amendment to Credit Agreement dated December 15, 1998 (18) and Fifth Amendment to Credit Agreement dated May 26, 2000 (20) 10.15 AMCOL International Corporation 1998 Long-Term Incentive Plan (15) 10.16Change in Control Agreement dated September 21, 2000, by and between Registrant and Ryan F. McKendrick 10.17Asset and Stock Purchase Agreement dated November 22, 1999 by and between the Registrant and BASF Aktiengesellschaft (19) 10.18Change in Control Agreement dated September 28, 2000, by and between Registrant and Frank B. Wright, Jr. 10.19Change in Control Agreement dated September 20, 2000, by and between Registrant and Paul G. Shelton 10.20Change in Control Agreement dated September 22, 2000, by and between Registrant and Gary D. Morrison 10.21Special Retention Agreement dated September 18, 2000, by and between Registrant and Frank B. Wright, Jr. * 10.22Special Retention Agreement dated September 18, 2000, by and between Registrant and Ryan F. McKendrick * 10.23Special Retention Agreement dated September 18, 2000, by and between Registrant and Gary D. Morrison * 10.24Special Retention Agreement dated September 18, 2000, by and between Registrant and Peter L. Maul * 27 Financial Data Schedule * Portions of these exhibits have been omitted pursuant to a request for confidential treatment (1) Exhibit is incorporated by reference to the Registrant's Form 10 filed with the Securities and Exchange Commission on July 27, 1987. (2) Exhibit is incorporated by reference to the Registrant's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1988. (3) Exhibit is incorporated by reference to the Registrant's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1993. (4) Exhibit is incorporated by reference to the Registrant's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1992. (5) Exhibit is incorporated by reference to the Registrant's Form S-3 filed with the Securities and Exchange Commission on September 15, 1993. (6) Exhibit is incorporated by reference to the Registrant's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1993. (7) Exhibit is incorporated by reference to the Registrant's Form 10-Q filed with the Securities and Exchange Commission for the quarter ended September 30, 1994. (8) Exhibit is incorporated by reference to the Registrant's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1994. (9) Exhibit is incorporated by reference to the Registrant's Form 10-Q filed with the Securities and Exchange Commission for the quarter ended September 30, 1995. (10) Exhibit is incorporated by reference to the Registrant's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1995. (11) Exhibit is incorporated by reference to the Registrant's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1996. (13) Exhibit is incorporated by reference to the Registrant's Form 10-Q filed with the Securities and Exchange Commission for the quarter ended June 30, 1997. (15) Exhibit is incorporated by reference to the Registrant's Form S-8 (File 333-56017) filed with the Securities and Exchange Commission on June 4, 1998. (16) Exhibit is incorporated by reference to the Registrant's Form 10-Q filed with the Securities and Exchange Commission for the quarter ended June 30, 1998. (18) Exhibit is incorporated by reference to the Registrant's Form 10-Q filed with the Securities and Exchange Commission for the quarter ended September 30, 1999. (19) Exhibit is incorporated by reference to the Registrant's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1999. (20) Exhibit is incorporated by reference to the Registrant's Form 10-Q filed with the Securities and Exchange Commission for the quarter ended June 30, 2000. EX-10.7 2 0002.txt MATERIAL CONTRACTS Exhibit 10.7 AGREEMENT WHEREAS, AMCOL International Corporation (the "Company") considers it essential and in the best interests of the Company and its shareholders to foster the continued employment of its key management personnel; WHEREAS, Lawrence Washow ("Employee") is considered a key management employee, currently serving as President and Chief Executive Officer of AMCOL International Corporation. WHEREAS, the Company desires to assure the future continuity of Employee's services in the event of any actual or threatened "Change in Control" (as defined in Section 6 below) of the Company. IT IS THEREFORE AGREED AS FOLLOWS: 1. Effect of Agreement. This Agreement shall be effective and binding immediately upon its execution. However, except as specifically provided herein, this Agreement shall not alter materially Employee's duties and obligations to the Company and the remuneration and benefits which Employee may reasonably expect to receive from the Company in the absence of a Change in Control. 2. Employment On and After Change in Control. Provided that the employee is an employee of the Company immediately prior to a Change in Control, the Company shall employ Employee, and Employee shall accept such employment, effective upon such Change in Control for a period of thirty-six (36) months after said Change in Control subject to the terms and conditions stated herein. For purposes of this paragraph only, employment by a current or former subsidiary of the Company, is the same as employment by the Company on or after a Change in Control. 3. Duties After Change in Control. Employee agrees that during the term of his employment with the Company after a Change in Control, he shall perform the duties described herein and such other duties for the Company and its subsidiaries consistent with his experience and training as the Board of Directors of the Company (the "Board") or the Board's representatives shall determine from time to time, which duties shall be at least substantially equal in status, dignity and character to his duties at the date hereof. He shall also have the title of President and Chief Executive Officer of the Company. Employee further agrees to devote his entire working time and attention to the business of the Company and/or its current or former subsidiaries and use his best efforts to promote such business. 4. Compensation Prior to a Change in Control. Prior to a Change in Control the Company agrees to pay Employee compensation for his services in an amount, and to provide him with life insurance, disability, health and other benefits, as agreed between Employee and the Company from time to time. For the purpose of this Section, compensation does not include any bonus or other incentive compensation plan or stock purchase plan, which may vary from year to year at the discretion of the Company. 5. Termination of Employment Prior to a Change in Control. Employee shall be entitled to terminate his employment prior to a Change in Control at any time upon sixty (60) days' prior written notice. The Company shall be entitled to terminate Employee's employment at any time prior to a Change in Control with or without cause upon sixty (60) days' prior written notice (or the payment of salary in lieu thereof). This Section shall not be construed to reduce any accrued benefits payable in connection with any termination of Employee's employment prior to a Change in Control. Nothing expressed or implied in this Agreement shall create any right or duty on the part of the Company or Employee to have Employee remain in the employment of the Company prior to a Change in Control. 6. Termination of Employment On or After a Change in Control. (a) For purposes of this Agreement the term "Change in Control" means the change in the legal or beneficial ownership of fifty-one percent (51%) of the shares of the Company's common stock within a six-month period other than by death or operation of law, or the sale of ninety percent (90%) or more of the Company's aggregate assets within a six-month period. Sale of the Company's stock in a subsidiary or a subsidiary's assets shall not be considered a Change in Control. (b) Employee's employment on and after a Change in Control may be terminated with just cause by the Company at any time upon not less than ten (10) days' prior written notice. Prior to termination for just cause on and after a Change in Control, the Board of Directors shall by majority vote have declared that Employee's termination is for just cause specifically stating the basis for such determination. In the event such a termination occurs, the provisions of Section 9(a) shall apply. Employee's employment may be terminated on or after a Change in Control without just cause pursuant to the constructive termination procedures described in the next paragraph or by the Company giving Employee not less than thirty (30) days' prior written notice. In the event Employee's employment is terminated pursuant to the preceding sentence: (i) the provisions of Section 9(b) below shall apply; and (ii) although Employee's employment term shall be deemed terminated at the end of such notice period (or, in the case of a constructive termination described in the next paragraph, as of the date Employee notifies the Company of such termination), such termination shall in no way affect the term of this Agreement or Employee's duties or other obligations. For purposes of this Section 6(b), Employee shall be considered as having been terminated by the Company on or after a Change in Control for other than just cause provided that he has notified the Company of any of the following within thirty (30) days of the occurrence thereof: (i) the assignment to Employee of any duties of lesser status, dignity and character than his duties immediately prior to the effective date of the Change in Control or a substantial reduction in the nature or status of his responsibilities from those in effect immediately prior to the effective date of the Change in Control; (ii) a post-Change in Control reduction by the Company in Employee's annual base salary or bonus or incentive plan (as in effect immediately prior to the effective date of the Change in Control); (iii)relocation of Employee's office to a location which is more than 50 miles from the location in which Employee principally works for the Company immediately prior to the effective date of the Change in Control; the relocation of the appropriate principal executive office of the Company or the Company's operating division or subsidiary for which Employee performed the majority of his services for the Company during the year prior to the effective date of the Change in Control to a location which is more than 50 miles from the location of such office immediately prior to such date; or his being required by the Company, in order to perform duties of substantially equal status, dignity and character to those duties he performed immediately prior to the effective date of the Change in Control, to travel on the Company's business to a substantially greater extent than is consistent with his business travel obligations as of such date; or (iv) the failure of the Company to continue to provide Employee with benefits substantially equivalent to those enjoyed by him under any of the Company's life insurance, medical, health and accident or disability plans in which he was participating immediately prior to the effective date of the Change in Control, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive him of any material fringe benefit enjoyed by him immediately prior to effective date of the Change in Control, or the failure of the Company to provide him with at least the number of paid vacation days to which he is entitled on the basis of years of service under the Company's normal vacation policy in effect immediately prior to the effective date of the Change in Control. (v) the elimination of the title of Vice-President of the Company alone does not constitute a termination for those individuals that remain presidents of subsidiaries. (c) In the event Employee's employment is terminated on or after a Change in Control in any manner not described in Section 6(b) above: (i) the provisions of Section 9(b) shall not apply and Employee shall instead receive the sums and benefits described in Section 9(a); and (ii) such termination shall in no way affect the term of this Agreement or Employee's duties or other obligations. (d) Any termination of employment of Employee following the commencement of any discussions by a shareholder or group of shareholders owning legally or beneficially more than 20% of the common stock or an officially designated representative of the Board of Directors with a third party that results within 180 days in a Change in Control shall (unless such termination is for just cause or wholly unrelated to such discussions) be deemed to be a termination of Employee on and after a Change in Control for purposes of this Agreement. 7. Notice of Termination. Any termination by the Company or assertion of termination by Employee shall be communicated by written notice of termination to the other party at the following address: AMCOL International Corporation One North Arlington 1500 West Shure Drive Arlington Heights, IL 60004 Attn: Chief Executive Officer 8. Disability. If as a result of Employee's incapacity due to physical or mental illness, he shall have been absent from his duties with the Company for one hundred eighty (180) days within any twelve-(l2)-consecutive-month period and within thirty (30) days after written notice of the Company's intention to terminate his employment is given, Employee shall not have returned to the performance of his duties with the Company substantially on a full-time basis, the Company may terminate his employment for disability. This shall not constitute a termination for the purposes of obtaining benefits pursuant to Section 9. 9. Benefits Upon Termination And Leave Of Employment On or After Change in the Control. (a) If Employee is terminated for just cause on or after a Change in Control, he shall only receive the accrued sums and benefits payable to him through the date he is terminated; the provisions of Section 9(b) below shall not be applicable in such case and Employee shall not receive (or shall cease receiving) the payments and benefits described in Section 9(b). (b) Subject to Employee's compliance with the provisions of this Agreement, if Employee is terminated during the thirty-six (36) month period beginning on and continuing after a Change in Control other than for just cause (either at the discretion of the Company's management or constructively by the operation of Section 6), he shall receive the following payments and benefits in lieu of any other sums or benefits otherwise, including severance or severance benefit payments payable to him by the Company. Any payments in accordance with any special retention or non-competition agreements, if any, shall be made in accordance with their terms. (i) all then accrued pay, benefits, executive compensation and fringe benefits, including (but not limited to) pro rata bonus and incentive plan earnings; (ii) medical, health and disability benefits which are substantially similar to the benefits the Company is providing him as of the date his employment is terminated for a period of thirty-six (36) months thereafter; and (iii) one dollar less than three (3) times his base period compensation. The foregoing payments and benefits shall be deemed compensation payable for the duties to be performed by Employee pursuant to this Agreement. For purposes of this Agreement, (A) Employee's "base period compensation" is the average annual "compensation" (as defined below) which was includable in his gross income for his base period (i.e., his most recent five taxable years ending before the date of the Change in Control); and (B) if Employee's base period includes a short taxable year or less than all of a taxable year, compensation for such short or incomplete taxable year shall be annualized before determining his average annual compensation for the base period. (In annualizing compensation, the frequency with which payments are expected to be made over an annual period shall be taken into account. Thus, any amount of compensation for such a short or incomplete taxable year that represents a payment that would not be made more than once per year shall not be annualized). For purposes of Section 9(iii) and the definitions pertaining to said Section, Employee's "compensation" is the compensation which was payable to him by the Company or a related entity determined without regard to the following Sections of the Internal Revenue Code of 1986, as amended (the "Code"): 125 (cafeteria plans), 402(a)(8) (cash or deferred arrangements), and in the case of employer contributions made pursuant to a salary reduction agreement, 403(b) (tax sheltered annuities). Except for the benefits described in Section 9(b)(ii) above, the sums due pursuant to this Section 9(b) shall be paid in up to three (3) annual installments commencing thirty (30) days after the sums become due. If on or after the date any payment becomes due hereunder the Company at any time has a funded debt-to-total capitalization ratio which equals or exceeds 1.1, the Company shall secure its payment of the remaining annual installments with a letter of credit or other security instrument as shall be reasonably acceptable to Employee. Such letter of credit or other security instruments shall provide Employee with the ability to receive the remaining installment(s) only if his payment is delinquent. All sums due shall be subject to appropriate withholding and statutory requirements. Employee shall not be required to mitigate the amount of any payment provided for in this Section 9(b) by seeking other employment or otherwise. Notwithstanding anything stated in this Section 9(b) to the contrary, the Company shall not be required to provide medical, health and/or disability benefits to the extent such benefits would duplicate benefits received by Employee in connection with his employment with any new employer. Notwithstanding anything stated in this Agreement to the contrary, if the amounts which are payable and the benefits which are provided to Employee under this Agreement, either alone or together with other payments which Employee has a right to receive from the Company or any of its affiliates, would constitute a "parachute payment" (as defined in Code Section 280G), such amounts and benefits shall be reduced, as necessary, to the largest amount as will result in no portion of said amounts and benefits being either not deductible as a result of Code Section 280G or subject to the excise tax imposed by Code Section 4999. The determination of any reduction in said amounts and benefits pursuant to the foregoing proviso shall be made by the Company in good faith, and such determination shall be conclusive and binding on Employee. The amounts provided to Employee under this Agreement in connection with a Change in Control, if any, shall be deemed allocated to such amounts and/or benefits to be paid and/or provided as the Company's Board of Directors in its sole discretion shall determine. 10. Special Situations. The parties recognize that under certain circumstances a Change in Control may occur under conditions which make it inappropriate for Employee to receive the termination benefits or protection set forth in this Agreement. Therefore, in the event that a Change in Control occurs for any one of the following reasons, the provisions of Sections 2, 6 and 9 shall not apply: (a) the purchase of more than fifty percent (50%) of the stock of the Company by an employee stock ownership plan or similar employee benefit plan of which Employee is a participant; (b) the purchase of more than fifty percent (50%) of the stock or ninety percent (90%) of the assets of the Company by a group of individuals or entities including Employee as a member or participant, including but not limited to those transactions commonly known as a leveraged or other forms of management buy-outs; or (c) A transaction or series of transactions involving the Company, whether by way of a merger, exchange, sale or other method, where the party ultimately acquiring the Company's bentonite business offers to the Company's shareholders the opportunity to buy shares of its capital stock as part of the transaction. 11. Dispute. Any dispute arising under this Agreement shall be promptly submitted to arbitration under the Rules of the American Arbitration Association. An arbitrator is to be mutually agreed upon by the parties or upon failure of agreement, designated by the American Arbitration Association. 12. Other Agreements. Except to the extent expressly set forth herein, this Agreement shall not modify or lessen any benefit or compensation to which Employee is entitled under any agreement between Employee and the Company or under any plan maintained by the Company in which he participates or participated. Benefits or compensation shall be payable thereunder, if at all, according to the terms of the applicable plan(s) or agreement(s). The terms of this Agreement shall supersede any existing agreement between Employee and the Company executed prior to the date hereof to the extent any such Agreement is inconsistent with the terms hereof. Payments pursuant to this Agreement are in lieu of any severance payments. 13. Successors; Binding Agreement. The Company will require any successor (whether direct or indirect by purchase, merger, consolidation or otherwise, to all or substantially all of the business and/or assets of the Company) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. This Agreement shall inure to the benefit of and be enforceable by Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 14. Miscellaneous. This Agreement may not be modified or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Employee and such officers of the Company as may be specifically designated by its Board for that purpose. Except for any failure to give the thirty (30) day notice described in Section 6(b) above, the failure of either party to this Agreement to object to any breach by the other party or the non-breaching party's conduct or conduct forbearance shall not constitute a waiver of that party's rights to enforce this Agreement. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of any subsequent breach by such other party or any similar or dissimilar provisions or conditions at the same or any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Illinois. 15. Survival. The obligations of the parties under this Agreement shall survive the term of this Agreement. 16. Term of Agreement. The term of this Agreement shall commence on September 18, 2000 and end on September 17, 2003; provided, however, that in the event Employee's employment is terminated while this Agreement is in force, this Agreement shall terminate when the Company has made all payments to Employee required by Section 9 hereof and Employee has complied with the duties and obligations described herein. Date: September 20, 2000 EMPLOYEE AMCOL INTERNATIONAL CORPORATION /s/ Lawrence Washow By /s/ Paul G. Shelton Lawrence Washow Its: Senior Vice President EX-10.8 3 0003.txt MATERIAL CONTRACTS EXHIBIT 10.8 AGREEMENT WHEREAS, AMCOL International Corporation (the "Company") considers it essential and in the best interests of the Company and its shareholders to foster the continued employment of its key management personnel; WHEREAS, Peter L. Maul ("Employee") is considered a key management employee, currently serving as Vice President of AMCOL International Corporation and President of Nanocor, Inc. WHEREAS, the Company desires to assure the future continuity of Employee's services in the event of any actual or threatened "Change in Control" (as defined in Section 6 below) of the Company. IT IS THEREFORE AGREED AS FOLLOWS: 1. Effect of Agreement. This Agreement shall be effective and binding immediately upon its execution. However, except as specifically provided herein, this Agreement shall not alter materially Employee's duties and obligations to the Company and the remuneration and benefits which Employee may reasonably expect to receive from the Company in the absence of a Change in Control. 2. Employment On and After Change in Control. Provided that the employee is an employee of the Company immediately prior to a Change in Control, the Company shall employ Employee, and Employee shall accept such employment, effective upon such Change in Control for a period of twenty-four (24) months after said Change in Control subject to the terms and conditions stated herein. For purposes of this paragraph only, employment by a current or former subsidiary of the Company, is the same as employment by the Company on or after a Change in Control. 3. Duties After Change in Control. Employee agrees that during the term of his employment with the Company after a Change in Control, he shall perform the duties described herein and such other duties for the Company and its subsidiaries consistent with his experience and training as the Board of Directors of the Company (the "Board") or the Board's representatives shall determine from time to time, which duties shall be at least substantially equal in status, dignity and character to his duties at the date hereof. He shall also have the title of Vice President of AMCOL International Corporation and President of Nanocor, Inc. Employee further agrees to devote his entire working time and attention to the business of the Company and/or its current or former subsidiaries and use his best efforts to promote such business. 4. Compensation Prior to a Change in Control. Prior to a Change in Control the Company agrees to pay Employee compensation for his services in an amount, and to provide him with life insurance, disability, health and other benefits, as agreed between Employee and the Company from time to time. For the purpose of this Section, compensation does not include any bonus or other incentive compensation plan or stock purchase plan, which may vary from year to year at the discretion of the Company. 5. Termination of Employment Prior to a Change in Control. Employee shall be entitled to terminate his employment prior to a Change in Control at any time upon sixty (60) days' prior written notice. The Company shall be entitled to terminate Employee's employment at any time prior to a Change in Control with or without cause upon sixty (60) days' prior written notice (or the payment of salary in lieu thereof). This Section shall not be construed to reduce any accrued benefits payable in connection with any termination of Employee's employment prior to a Change in Control. Nothing expressed or implied in this Agreement shall create any right or duty on the part of the Company or Employee to have Employee remain in the employment of the Company prior to a Change in Control. 6. Termination of Employment On or After a Change in Control. (a) For purposes of this Agreement the term "Change in Control" means the change in the legal or beneficial ownership of fifty-one percent (51%) of the shares of the Company's common stock within a six-month period other than by death or operation of law, or the sale of ninety percent (90%) or more of the Company's aggregate assets within a six-month period. Sale of the Company's stock in a subsidiary or a subsidiary's assets shall not be considered a Change in Control. (b) Employee's employment on and after a Change in Control may be terminated with just cause by the Company at any time upon not less than ten (10) days' prior written notice. Prior to termination for just cause on and after a Change in Control, the Board of Directors shall by majority vote have declared that Employee's termination is for just cause specifically stating the basis for such determination. In the event such a termination occurs, the provisions of Section 9(a) shall apply. Employee's employment may be terminated on or after a Change in Control without just cause pursuant to the constructive termination procedures described in the next paragraph or by the Company giving Employee not less than thirty (30) days' prior written notice. In the event Employee's employment is terminated pursuant to the preceding sentence: (i) the provisions of Section 9(b) below shall apply; and (ii) although Employee's employment term shall be deemed terminated at the end of such notice period (or, in the case of a constructive termination described in the next paragraph, as of the date Employee notifies the Company of such termination), such termination shall in no way affect the term of this Agreement or Employee's duties or other obligations. For purposes of this Section 6(b), Employee shall be considered as having been terminated by the Company on or after a Change in Control for other than just cause provided that he has notified the Company of any of the following within thirty (30) days of the occurrence thereof: (i) the assignment to Employee of any duties of lesser status, dignity and character than his duties immediately prior to the effective date of the Change in Control or a substantial reduction in the nature or status of his responsibilities from those in effect immediately prior to the effective date of the Change in Control; (ii) a post-Change in Control reduction by the Company in Employee's annual base salary or bonus or incentive plan (as in effect immediately prior to the effective date of the Change in Control); (iii) relocation of Employee's office to a location which is more than 50 miles from the location in which Employee principally works for the Company immediately prior to the effective date of the Change in Control; the relocation of the appropriate principal executive office of the Company or the Company's operating division or subsidiary for which Employee performed the majority of his services for the Company during the year prior to the effective date of the Change in Control to a location which is more than 50 miles from the location of such office immediately prior to such date; or his being required by the Company, in order to perform duties of substantially equal status, dignity and character to those duties he performed immediately prior to the effective date of the Change in Control, to travel on the Company's business to a substantially greater extent than is consistent with his business travel obligations as of such date; or (iv) the failure of the Company to continue to provide Employee with benefits substantially equivalent to those enjoyed by him under any of the Company's life insurance, medical, health and accident or disability plans in which he was participating immediately prior to the effective date of the Change in Control, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive him of any material fringe benefit enjoyed by him immediately prior to effective date of the Change in Control, or the failure of the Company to provide him with at least the number of paid vacation days to which he is entitled on the basis of years of service under the Company's normal vacation policy in effect immediately prior to the effective date of the Change in Control. (v) the elimination of the title of Vice-President of the Company alone does not constitute a termination for those individuals that remain presidents of subsidiaries. (c) In the event Employee's employment is terminated on or after a Change in Control in any manner not described in Section 6(b) above: (i) the provisions of Section 9(b) shall not apply and Employee shall instead receive the sums and benefits described in Section 9(a); and (ii) such termination shall in no way affect the term of this Agreement or Employee's duties or other obligations. (d) Any termination of employment of Employee following the commencement of any discussions by a shareholder or group of shareholders owning legally or beneficially more than 20% of the common stock or an officially designated representative of the Board of Directors with a third party that results within 180 days in a Change in Control shall (unless such termination is for just cause or wholly unrelated to such discussions) be deemed to be a termination of Employee on and after a Change in Control for purposes of this Agreement. 7. Notice of Termination. Any termination by the Company or assertion of termination by Employee shall be communicated by written notice of termination to the other party at the following address: AMCOL International Corporation One North Arlington 1500 West Shure Drive Arlington Heights, IL 60004 Attn: Chief Executive Officer 8. Disability. If as a result of Employee's incapacity due to physical or mental illness, he shall have been absent from his duties with the Company for one hundred eighty (180) days within any twelve-(l2)-consecutive-month period and within thirty (30) days after written notice of the Company's intention to terminate his employment is given, Employee shall not have returned to the performance of his duties with the Company substantially on a full-time basis, the Company may terminate his employment for disability. This shall not constitute a termination for the purposes of obtaining benefits pursuant to Section 9. 9. Benefits Upon Termination And Leave Of Employment On or After Change in the Control. (a) If Employee is terminated for just cause on or after a Change in Control, he shall only receive the accrued sums and benefits payable to him through the date he is terminated; the provisions of Section 9(b) below shall not be applicable in such case and Employee shall not receive (or shall cease receiving) the payments and benefits described in Section 9(b). (b) Subject to Employee's compliance with the provisions of this Agreement, if Employee is terminated during the twenty-four (24) month period beginning on and continuing after a Change in Control other than for just cause (either at the discretion of the Company's management or constructively by the operation of Section 6), he shall receive the following payments and benefits in lieu of any other sums or benefits otherwise, including severance or severance benefit payments payable to him by the Company. Any payments in accordance with any special retention or non-competition agreements, if any, shall be made in accordance with their terms. (i) all then accrued pay, benefits, executive compensation and fringe benefits, including (but not limited to) pro rata bonus and incentive plan earnings; (ii) medical, health and disability benefits which are substantially similar to the benefits the Company is providing him as of the date his employment is terminated for a period of twenty-four (24) months thereafter; and (iii) one dollar less than two (2) times his base period compensation. The foregoing payments and benefits shall be deemed compensation payable for the duties to be performed by Employee pursuant to this Agreement. For purposes of this Agreement, (A) Employee's "base period compensation" is the average annual "compensation" (as defined below) which was includable in his gross income for his base period (i.e., his most recent five taxable years ending before the date of the Change in Control); and (B) if Employee's base period includes a short taxable year or less than all of a taxable year, compensation for such short or incomplete taxable year shall be annualized before determining his average annual compensation for the base period. (In annualizing compensation, the frequency with which payments are expected to be made over an annual period shall be taken into account. Thus, any amount of compensation for such a short or incomplete taxable year that represents a payment that would not be made more than once per year shall not be annualized). For purposes of Section 9(iii) and the definitions pertaining to said Section, Employee's "compensation" is the compensation which was payable to him by the Company or a related entity determined without regard to the following Sections of the Internal Revenue Code of 1986, as amended (the "Code"): 125 (cafeteria plans), 402(a)(8) (cash or deferred arrangements), and in the case of employer contributions made pursuant to a salary reduction agreement, 403(b) (tax sheltered annuities). Except for the benefits described in Section 9(b)(ii) above, the sums due pursuant to this Section 9(b) shall be paid in up to 2 annual installments commencing thirty (30) days after the sums become due. If on or after the date any payment becomes due hereunder the Company at any time has a funded debt-to-total capitalization ratio which equals or exceeds 1.1, the Company shall secure its payment of the remaining annual installments with a letter of credit or other security instrument as shall be reasonably acceptable to Employee. Such letter of credit or other security instruments shall provide Employee with the ability to receive the remaining installment(s) only if his payment is delinquent. All sums due shall be subject to appropriate withholding and statutory requirements. Employee shall not be required to mitigate the amount of any payment provided for in this Section 9(b) by seeking other employment or otherwise. Notwithstanding anything stated in this Section 9(b) to the contrary, the Company shall not be required to provide medical, health and/or disability benefits to the extent such benefits would duplicate benefits received by Employee in connection with his employment with any new employer. Any payment received by Employee pursuant to the special retention agreement dated September 18, 2000 shall be credited against payments due under this Agreement. Notwithstanding anything stated in this Agreement to the contrary, if the amounts which are payable and the benefits which are provided to Employee under this Agreement, either alone or together with other payments which Employee has a right to receive from the Company or any of its affiliates, would constitute a "parachute payment" (as defined in Code Section 280G), such amounts and benefits shall be reduced, as necessary, to the largest amount as will result in no portion of said amounts and benefits being either not deductible as a result of Code Section 280G or subject to the excise tax imposed by Code Section 4999. The determination of any reduction in said amounts and benefits pursuant to the foregoing proviso shall be made by the Company in good faith, and such determination shall be conclusive and binding on Employee. The amounts provided to Employee under this Agreement in connection with a Change in Control, if any, shall be deemed allocated to such amounts and/or benefits to be paid and/or provided as the Company's Board of Directors in its sole discretion shall determine. 10. Special Situations. The parties recognize that under certain circumstances a Change in Control may occur under conditions which make it inappropriate for Employee to receive the termination benefits or protection set forth in this Agreement. Therefore, in the event that a Change in Control occurs for any one of the following reasons, the provisions of Sections 2, 6 and 9 shall not apply: (a) the purchase of more than fifty percent (50%) of the stock of the Company by an employee stock ownership plan or similar employee benefit plan of which Employee is a participant; (b) the purchase of more than fifty percent (50%) of the stock or ninety percent (90%) of the assets of the Company by a group of individuals or entities including Employee as a member or participant, including but not limited to those transactions commonly known as a leveraged or other forms of management buy-outs; or (c) A transaction or series of transactions involving the Company, whether by way of a merger, exchange, sale or other method, where the party ultimately acquiring the Company's bentonite business offers to the Company's shareholders the opportunity to buy shares of its capital stock as part of the transaction. 11. Dispute. Any dispute arising under this Agreement shall be promptly submitted to arbitration under the Rules of the American Arbitration Association. An arbitrator is to be mutually agreed upon by the parties or upon failure of agreement, designated by the American Arbitration Association. 12. Other Agreements. Except to the extent expressly set forth herein, this Agreement shall not modify or lessen any benefit or compensation to which Employee is entitled under any agreement between Employee and the Company or under any plan maintained by the Company in which he participates or participated. Benefits or compensation shall be payable thereunder, if at all, according to the terms of the applicable plan(s) or agreement(s). The terms of this Agreement shall supersede any existing agreement between Employee and the Company executed prior to the date hereof to the extent any such Agreement is inconsistent with the terms hereof. Payments pursuant to this Agreement are in lieu of any severance payments. 13. Successors; Binding Agreement. The Company will require any successor (whether direct or indirect by purchase, merger, consolidation or otherwise, to all or substantially all of the business and/or assets of the Company) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. This Agreement shall inure to the benefit of and be enforceable by Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 14. Miscellaneous. This Agreement may not be modified or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Employee and such officers of the Company as may be specifically designated by its Board for that purpose. Except for any failure to give the thirty (30) day notice described in Section 6(b) above, the failure of either party to this Agreement to object to any breach by the other party or the non-breaching party's conduct or conduct forbearance shall not constitute a waiver of that party's rights to enforce this Agreement. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of any subsequent breach by such other party or any similar or dissimilar provisions or conditions at the same or any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Illinois. 15. Survival. The obligations of the parties under this Agreement shall survive the term of this Agreement. 16. Term of Agreement. The term of this Agreement shall commence on September 18, 2000 and end on September 17, 2002; provided, however, that in the event Employee's employment is terminated while this Agreement is in force, this Agreement shall terminate when the Company has made all payments to Employee required by Section 9 hereof and Employee has complied with the duties and obligations described herein. Date: September 22, 2000 EMPLOYEE AMCOL INTERNATIONAL CORPORATION /s/ Peter L. Maul By /s/ Larry Washow Peter L. Maul Its: President EX-10.16 4 0004.txt MATERIAL CONTRACTS EXHIBIT 10.16 AGREEMENT WHEREAS, AMCOL International Corporation (the "Company") considers it essential and in the best interests of the Company and its shareholders to foster the continued employment of its key management personnel; WHEREAS, Ryan F. McKendrick ("Employee") is considered a key management employee, currently serving as Vice President of AMCOL International Corporation, and President of Colloid Environmental Technologies Company ("CETCO"). WHEREAS, the Company desires to assure the future continuity of Employee's services in the event of any actual or threatened "Change in Control" (as defined in Section 6 below) of the Company. IT IS THEREFORE AGREED AS FOLLOWS: 1. Effect of Agreement. This Agreement shall be effective and binding immediately upon its execution. However, except as specifically provided herein, this Agreement shall not alter materially Employee's duties and obligations to the Company and the remuneration and benefits which Employee may reasonably expect to receive from the Company in the absence of a Change in Control. 2. Employment On and After Change in Control. Provided that the employee is an employee of the Company immediately prior to a Change in Control, the Company shall employ Employee, and Employee shall accept such employment, effective upon such Change in Control for a period of twenty-four (24) months after said Change in Control subject to the terms and conditions stated herein. For purposes of this paragraph only, employment by a current or former subsidiary of the Company, is the same as employment by the Company on or after a Change in Control. 3. Duties After Change in Control. Employee agrees that during the term of his employment with the Company after a Change in Control, he shall perform the duties described herein and such other duties for the Company and its subsidiaries consistent with his experience and training as the Board of Directors of the Company (the "Board") or the Board's representatives shall determine from time to time, which duties shall be at least substantially equal in status, dignity and character to his duties at the date hereof. He shall also have the title of Vice President of AMCOL International Corporation, and President of Colloid Environmental Technologies Company. Employee further agrees to devote his entire working time and attention to the business of the Company and/or its current or former subsidiaries and use his best efforts to promote such business. 4. Compensation Prior to a Change in Control. Prior to a Change in Control the Company agrees to pay Employee compensation for his services in an amount, and to provide him with life insurance, disability, health and other benefits, as agreed between Employee and the Company from time to time. For the purpose of this Section, compensation does not include any bonus or other incentive compensation plan or stock purchase plan, which may vary from year to year at the discretion of the Company. 5. Termination of Employment Prior to a Change in Control. Employee shall be entitled to terminate his employment prior to a Change in Control at any time upon sixty (60) days' prior written notice. The Company shall be entitled to terminate Employee's employment at any time prior to a Change in Control with or without cause upon sixty (60) days' prior written notice (or the payment of salary in lieu thereof). This Section shall not be construed to reduce any accrued benefits payable in connection with any termination of Employee's employment prior to a Change in Control. Nothing expressed or implied in this Agreement shall create any right or duty on the part of the Company or Employee to have Employee remain in the employment of the Company prior to a Change in Control. 6. Termination of Employment On or After a Change in Control. (a) For purposes of this Agreement the term "Change in Control" means the change in the legal or beneficial ownership of fifty-one percent (51%) of the shares of the Company's common stock within a six-month period other than by death or operation of law, or the sale of ninety percent (90%) or more of the Company's aggregate assets within a six-month period. Sale of the Company's stock in a subsidiary or a subsidiary's assets shall not be considered a Change in Control. (b) Employee's employment on and after a Change in Control may be terminated with just cause by the Company at any time upon not less than ten (10) days' prior written notice. Prior to termination for just cause on and after a Change in Control, the Board of Directors shall by majority vote have declared that Employee's termination is for just cause specifically stating the basis for such determination. In the event such a termination occurs, the provisions of Section 9(a) shall apply. Employee's employment may be terminated on or after a Change in Control without just cause pursuant to the constructive termination procedures described in the next paragraph or by the Company giving Employee not less than thirty (30) days' prior written notice. In the event Employee's employment is terminated pursuant to the preceding sentence: (i) the provisions of Section 9(b) below shall apply; and (ii) although Employee's employment term shall be deemed terminated at the end of such notice period (or, in the case of a constructive termination described in the next paragraph, as of the date Employee notifies the Company of such termination), such termination shall in no way affect the term of this Agreement or Employee's duties or other obligations. For purposes of this Section 6(b), Employee shall be considered as having been terminated by the Company on or after a Change in Control for other than just cause provided that he has notified the Company of any of the following within thirty (30) days of the occurrence thereof: (i) the assignment to Employee of any duties of lesser status, dignity and character than his duties immediately prior to the effective date of the Change in Control or a substantial reduction in the nature or status of his responsibilities from those in effect immediately prior to the effective date of the Change in Control; (ii) a post-Change in Control reduction by the Company in Employee's annual base salary or bonus or incentive plan (as in effect immediately prior to the effective date of the Change in Control); (iii) relocation of Employee's office to a location which is more than 50 miles from the location in which Employee principally works for the Company immediately prior to the effective date of the Change in Control; the relocation of the appropriate principal executive office of the Company or the Company's operating division or subsidiary for which Employee performed the majority of his services for the Company during the year prior to the effective date of the Change in Control to a location which is more than 50 miles from the location of such office immediately prior to such date; or his being required by the Company, in order to perform duties of substantially equal status, dignity and character to those duties he performed immediately prior to the effective date of the Change in Control, to travel on the Company's business to a substantially greater extent than is consistent with his business travel obligations as of such date; or (iv) the failure of the Company to continue to provide Employee with benefits substantially equivalent to those enjoyed by him under any of the Company's life insurance, medical, health and accident or disability plans in which he was participating immediately prior to the effective date of the Change in Control, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive him of any material fringe benefit enjoyed by him immediately prior to effective date of the Change in Control, or the failure of the Company to provide him with at least the number of paid vacation days to which he is entitled on the basis of years of service under the Company's normal vacation policy in effect immediately prior to the effective date of the Change in Control. (v) the elimination of the title of Vice-President of the Company alone does not constitute a termination for those individuals that remain presidents of subsidiaries. (c) In the event Employee's employment is terminated on or after a Change in Control in any manner not described in Section 6(b) above: (i) the provisions of Section 9(b) shall not apply and Employee shall instead receive the sums and benefits described in Section 9(a); and (ii) such termination shall in no way affect the term of this Agreement or Employee's duties or other obligations. (d) Any termination of employment of Employee following the commencement of any discussions by a shareholder or group of shareholders owning legally or beneficially more than 20% of the common stock or an officially designated representative of the Board of Directors with a third party that results within 180 days in a Change in Control shall (unless such termination is for just cause or wholly unrelated to such discussions) be deemed to be a termination of Employee on and after a Change in Control for purposes of this Agreement. 7. Notice of Termination. Any termination by the Company or assertion of termination by Employee shall be communicated by written notice of termination to the other party at the following address: AMCOL International Corporation One North Arlington 1500 West Shure Drive Arlington Heights, IL 60004 Attn: Chief Executive Officer 8. Disability. If as a result of Employee's incapacity due to physical or mental illness, he shall have been absent from his duties with the Company for one hundred eighty (180) days within any twelve-(l2)-consecutive-month period and within thirty (30) days after written notice of the Company's intention to terminate his employment is given, Employee shall not have returned to the performance of his duties with the Company substantially on a full-time basis, the Company may terminate his employment for disability. This shall not constitute a termination for the purposes of obtaining benefits pursuant to Section 9. 9. Benefits Upon Termination And Leave Of Employment On or After Change in the Control. (a) If Employee is terminated for just cause on or after a Change in Control, he shall only receive the accrued sums and benefits payable to him through the date he is terminated; the provisions of Section 9(b) below shall not be applicable in such case and Employee shall not receive (or shall cease receiving) the payments and benefits described in Section 9(b). (b) Subject to Employee's compliance with the provisions of this Agreement, if Employee is terminated during the twenty-four (24) month period beginning on and continuing after a Change in Control other than for just cause (either at the discretion of the Company's management or constructively by the operation of Section 6), he shall receive the following payments and benefits in lieu of any other sums or benefits otherwise, including severance or severance benefit payments payable to him by the Company. Any payments in accordance with any special retention or non-competition agreements, if any, shall be made in accordance with their terms. (i) all then accrued pay, benefits, executive compensation and fringe benefits, including (but not limited to) pro rata bonus and incentive plan earnings; (ii) medical, health and disability benefits which are substantially similar to the benefits the Company is providing him as of the date his employment is terminated for a period of twenty-four (24) months thereafter; and (iii) one dollar less than two (2) times his base period compensation. The foregoing payments and benefits shall be deemed compensation payable for the duties to be performed by Employee pursuant to this Agreement. For purposes of this Agreement, (A) Employee's "base period compensation" is the average annual "compensation" (as defined below) which was includable in his gross income for his base period (i.e., his most recent five taxable years ending before the date of the Change in Control); and (B) if Employee's base period includes a short taxable year or less than all of a taxable year, compensation for such short or incomplete taxable year shall be annualized before determining his average annual compensation for the base period. (In annualizing compensation, the frequency with which payments are expected to be made over an annual period shall be taken into account. Thus, any amount of compensation for such a short or incomplete taxable year that represents a payment that would not be made more than once per year shall not be annualized). For purposes of Section 9(iii) and the definitions pertaining to said Section, Employee's "compensation" is the compensation which was payable to him by the Company or a related entity determined without regard to the following Sections of the Internal Revenue Code of 1986, as amended (the "Code"): 125 (cafeteria plans), 402(a)(8) (cash or deferred arrangements), and in the case of employer contributions made pursuant to a salary reduction agreement, 403(b) (tax sheltered annuities). Except for the benefits described in Section 9(b)(ii) above, the sums due pursuant to this Section 9(b) shall be paid in up to 2 annual installments commencing thirty (30) days after the sums become due. If on or after the date any payment becomes due hereunder the Company at any time has a funded debt-to-total capitalization ratio which equals or exceeds 1.1, the Company shall secure its payment of the remaining annual installments with a letter of credit or other security instrument as shall be reasonably acceptable to Employee. Such letter of credit or other security instruments shall provide Employee with the ability to receive the remaining installment(s) only if his payment is delinquent. All sums due shall be subject to appropriate withholding and statutory requirements. Employee shall not be required to mitigate the amount of any payment provided for in this Section 9(b) by seeking other employment or otherwise. Notwithstanding anything stated in this Section 9(b) to the contrary, the Company shall not be required to provide medical, health and/or disability benefits to the extent such benefits would duplicate benefits received by Employee in connection with his employment with any new employer. Any payment received by Employee pursuant to the special retention agreement dated September 18, 2000 shall be credited against payments due under this Agreement. Notwithstanding anything stated in this Agreement to the contrary, if the amounts which are payable and the benefits which are provided to Employee under this Agreement, either alone or together with other payments which Employee has a right to receive from the Company or any of its affiliates, would constitute a "parachute payment" (as defined in Code Section 280G), such amounts and benefits shall be reduced, as necessary, to the largest amount as will result in no portion of said amounts and benefits being either not deductible as a result of Code Section 280G or subject to the excise tax imposed by Code Section 4999. The determination of any reduction in said amounts and benefits pursuant to the foregoing proviso shall be made by the Company in good faith, and such determination shall be conclusive and binding on Employee. The amounts provided to Employee under this Agreement in connection with a Change in Control, if any, shall be deemed allocated to such amounts and/or benefits to be paid and/or provided as the Company's Board of Directors in its sole discretion shall determine. 10. Special Situations. The parties recognize that under certain circumstances a Change in Control may occur under conditions which make it inappropriate for Employee to receive the termination benefits or protection set forth in this Agreement. Therefore, in the event that a Change in Control occurs for any one of the following reasons, the provisions of Sections 2, 6 and 9 shall not apply: (a) the purchase of more than fifty percent (50%) of the stock of the Company by an employee stock ownership plan or similar employee benefit plan of which Employee is a participant; (b) the purchase of more than fifty percent (50%) of the stock or ninety percent (90%) of the assets of the Company by a group of individuals or entities including Employee as a member or participant, including but not limited to those transactions commonly known as a leveraged or other forms of management buy-outs; or (c) A transaction or series of transactions involving the Company, whether by way of a merger, exchange, sale or other method, where the party ultimately acquiring the Company's bentonite business offers to the Company's shareholders the opportunity to buy shares of its capital stock as part of the transaction. 11. Dispute. Any dispute arising under this Agreement shall be promptly submitted to arbitration under the Rules of the American Arbitration Association. An arbitrator is to be mutually agreed upon by the parties or upon failure of agreement, designated by the American Arbitration Association. 12. Other Agreements. Except to the extent expressly set forth herein, this Agreement shall not modify or lessen any benefit or compensation to which Employee is entitled under any agreement between Employee and the Company or under any plan maintained by the Company in which he participates or participated. Benefits or compensation shall be payable thereunder, if at all, according to the terms of the applicable plan(s) or agreement(s). The terms of this Agreement shall supersede any existing agreement between Employee and the Company executed prior to the date hereof to the extent any such Agreement is inconsistent with the terms hereof. Payments pursuant to this Agreement are in lieu of any severance payments. 13. Successors; Binding Agreement. The Company will require any successor (whether direct or indirect by purchase, merger, consolidation or otherwise, to all or substantially all of the business and/or assets of the Company) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. This Agreement shall inure to the benefit of and be enforceable by Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 14. Miscellaneous. This Agreement may not be modified or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Employee and such officers of the Company as may be specifically designated by its Board for that purpose. Except for any failure to give the thirty (30) day notice described in Section 6(b) above, the failure of either party to this Agreement to object to any breach by the other party or the non-breaching party's conduct or conduct forbearance shall not constitute a waiver of that party's rights to enforce this Agreement. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of any subsequent breach by such other party or any similar or dissimilar provisions or conditions at the same or any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Illinois. 15. Survival. The obligations of the parties under this Agreement shall survive the term of this Agreement. 16. Term of Agreement. The term of this Agreement shall commence on September 18, 2000 and end on September 17, 2002; provided, however, that in the event Employee's employment is terminated while this Agreement is in force, this Agreement shall terminate when the Company has made all payments to Employee required by Section 9 hereof and Employee has complied with the duties and obligations described herein. Date: September 21, 2000 EMPLOYEE AMCOL INTERNATIONAL CORPORATION /s/ Ryan F. McKendrick By /s/ Larry Washow Ryan F. McKendrick Its: President EX-10.18 5 0005.txt MATERIAL CONTRACTS Exhibit 10.18 AGREEMENT WHEREAS, AMCOL International Corporation (the "Company") considers it essential and in the best interests of the Company and its shareholders to foster the continued employment of its key management personnel; WHEREAS, Frank B. Wright, Jr. ("Employee") is considered a key management employee, currently serving as Vice President of AMCOL International Corporation and President of Volclay International, Inc. WHEREAS, the Company desires to assure the future continuity of Employee's services in the event of any actual or threatened "Change in Control" (as defined in Section 6 below) of the Company. IT IS THEREFORE AGREED AS FOLLOWS: 1. Effect of Agreement. This Agreement shall be effective and binding immediately upon its execution. However, except as specifically provided herein, this Agreement shall not alter materially Employee's duties and obligations to the Company and the remuneration and benefits which Employee may reasonably expect to receive from the Company in the absence of a Change in Control. 2. Employment On and After Change in Control. Provided that the employee is an employee of the Company immediately prior to a Change in Control, the Company shall employ Employee, and Employee shall accept such employment, effective upon such Change in Control for a period of twenty-four (24) months after said Change in Control subject to the terms and conditions stated herein. For purposes of this paragraph only, employment by a current or former subsidiary of the Company, is the same as employment by the Company on or after a Change in Control. 3. Duties After Change in Control. Employee agrees that during the term of his employment with the Company after a Change in Control, he shall perform the duties described herein and such other duties for the Company and its subsidiaries consistent with his experience and training as the Board of Directors of the Company (the "Board") or the Board's representatives shall determine from time to time, which duties shall be at least substantially equal in status, dignity and character to his duties at the date hereof. He shall also have the title of Vice President of AMCOL International Corporation and President of Volclay International, Inc. Employee further agrees to devote his entire working time and attention to the business of the Company and/or its current or former subsidiaries and use his best efforts to promote such business. 4. Compensation Prior to a Change in Control. Prior to a Change in Control the Company agrees to pay Employee compensation for his services in an amount, and to provide him with life insurance, disability, health and other benefits, as agreed between Employee and the Company from time to time. For the purpose of this Section, compensation does not include any bonus or other incentive compensation plan or stock purchase plan, which may vary from year to year at the discretion of the Company. 5. Termination of Employment Prior to a Change in Control. Employee shall be entitled to terminate his employment prior to a Change in Control at any time upon sixty (60) days' prior written notice. The Company shall be entitled to terminate Employee's employment at any time prior to a Change in Control with or without cause upon sixty (60) days' prior written notice (or the payment of salary in lieu thereof). This Section shall not be construed to reduce any accrued benefits payable in connection with any termination of Employee's employment prior to a Change in Control. Nothing expressed or implied in this Agreement shall create any right or duty on the part of the Company or Employee to have Employee remain in the employment of the Company prior to a Change in Control. 6. Termination of Employment On or After a Change in Control. (a) For purposes of this Agreement the term "Change in Control" means the change in the legal or beneficial ownership of fifty-one percent (51%) of the shares of the Company's common stock within a six-month period other than by death or operation of law, or the sale of ninety percent (90%) or more of the Company's aggregate assets within a six-month period. Sale of the Company's stock in a subsidiary or a subsidiary's assets shall not be considered a Change in Control. (b) Employee's employment on and after a Change in Control may be terminated with just cause by the Company at any time upon not less than ten (10) days' prior written notice. Prior to termination for just cause on and after a Change in Control, the Board of Directors shall by majority vote have declared that Employee's termination is for just cause specifically stating the basis for such determination. In the event such a termination occurs, the provisions of Section 9(a) shall apply. Employee's employment may be terminated on or after a Change in Control without just cause pursuant to the constructive termination procedures described in the next paragraph or by the Company giving Employee not less than thirty (30) days' prior written notice. In the event Employee's employment is terminated pursuant to the preceding sentence: (i) the provisions of Section 9(b) below shall apply; and (ii) although Employee's employment term shall be deemed terminated at the end of such notice period (or, in the case of a constructive termination described in the next paragraph, as of the date Employee notifies the Company of such termination), such termination shall in no way affect the term of this Agreement or Employee's duties or other obligations. For purposes of this Section 6(b), Employee shall be considered as having been terminated by the Company on or after a Change in Control for other than just cause provided that he has notified the Company of any of the following within thirty (30) days of the occurrence thereof: (i) the assignment to Employee of any duties of lesser status, dignity and character than his duties immediately prior to the effective date of the Change in Control or a substantial reduction in the nature or status of his responsibilities from those in effect immediately prior to the effective date of the Change in Control; (ii) a post-Change in Control reduction by the Company in Employee's annual base salary or bonus or incentive plan (as in effect immediately prior to the effective date of the Change in Control); (iii) relocation of Employee's office to a location which is more than 50 miles from the location in which Employee principally works for the Company immediately prior to the effective date of the Change in Control; the relocation of the appropriate principal executive office of the Company or the Company's operating division or subsidiary for which Employee performed the majority of his services for the Company during the year prior to the effective date of the Change in Control to a location which is more than 50 miles from the location of such office immediately prior to such date; or his being required by the Company, in order to perform duties of substantially equal status, dignity and character to those duties he performed immediately prior to the effective date of the Change in Control, to travel on the Company's business to a substantially greater extent than is consistent with his business travel obligations as of such date; or (iv) the failure of the Company to continue to provide Employee with benefits substantially equivalent to those enjoyed by him under any of the Company's life insurance, medical, health and accident or disability plans in which he was participating immediately prior to the effective date of the Change in Control, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive him of any material fringe benefit enjoyed by him immediately prior to effective date of the Change in Control, or the failure of the Company to provide him with at least the number of paid vacation days to which he is entitled on the basis of years of service under the Company's normal vacation policy in effect immediately prior to the effective date of the Change in Control. (v) the elimination of the title of Vice-President of the Company alone does not constitute a termination for those individuals that remain presidents of subsidiaries. (c) In the event Employee's employment is terminated on or after a Change in Control in any manner not described in Section 6(b) above: (i) the provisions of Section 9(b) shall not apply and Employee shall instead receive the sums and benefits described in Section 9(a); and (ii) such termination shall in no way affect the term of this Agreement or Employee's duties or other obligations. (d) Any termination of employment of Employee following the commencement of any discussions by a shareholder or group of shareholders owning legally or beneficially more than 20% of the common stock or an officially designated representative of the Board of Directors with a third party that results within 180 days in a Change in Control shall (unless such termination is for just cause or wholly unrelated to such discussions) be deemed to be a termination of Employee on and after a Change in Control for purposes of this Agreement. 7. Notice of Termination. Any termination by the Company or assertion of termination by Employee shall be communicated by written notice of termination to the other party at the following address: AMCOL International Corporation One North Arlington 1500 West Shure Drive Arlington Heights, IL 60004 Attn: Chief Executive Officer 8. Disability. If as a result of Employee's incapacity due to physical or mental illness, he shall have been absent from his duties with the Company for one hundred eighty (180) days within any twelve-(l2)-consecutive-month period and within thirty (30) days after written notice of the Company's intention to terminate his employment is given, Employee shall not have returned to the performance of his duties with the Company substantially on a full-time basis, the Company may terminate his employment for disability. This shall not constitute a termination for the purposes of obtaining benefits pursuant to Section 9. 9. Benefits Upon Termination And Leave Of Employment On or After Change in the Control. (a) If Employee is terminated for just cause on or after a Change in Control, he shall only receive the accrued sums and benefits payable to him through the date he is terminated; the provisions of Section 9(b) below shall not be applicable in such case and Employee shall not receive (or shall cease receiving) the payments and benefits described in Section 9(b). (b) Subject to Employee's compliance with the provisions of this Agreement, if Employee is terminated during the twenty-four (24) month period beginning on and continuing after a Change in Control other than for just cause (either at the discretion of the Company's management or constructively by the operation of Section 6), he shall receive the following payments and benefits in lieu of any other sums or benefits otherwise, including severance or severance benefit payments payable to him by the Company. Any payments in accordance with any special retention or non-competition agreements, if any, shall be made in accordance with their terms. (i) all then accrued pay, benefits, executive compensation and fringe benefits, including (but not limited to) pro rata bonus and incentive plan earnings; (ii) medical, health and disability benefits which are substantially similar to the benefits the Company is providing him as of the date his employment is terminated for a period of twenty-four (24) months thereafter; and (iii) one dollar less than two (2) times his base period compensation. The foregoing payments and benefits shall be deemed compensation payable for the duties to be performed by Employee pursuant to this Agreement. For purposes of this Agreement, (A) Employee's "base period compensation" is the average annual "compensation" (as defined below) which was includable in his gross income for his base period (i.e., his most recent five taxable years ending before the date of the Change in Control); and (B) if Employee's base period includes a short taxable year or less than all of a taxable year, compensation for such short or incomplete taxable year shall be annualized before determining his average annual compensation for the base period. (In annualizing compensation, the frequency with which payments are expected to be made over an annual period shall be taken into account. Thus, any amount of compensation for such a short or incomplete taxable year that represents a payment that would not be made more than once per year shall not be annualized). For purposes of Section 9(iii) and the definitions pertaining to said Section, Employee's "compensation" is the compensation which was payable to him by the Company or a related entity determined without regard to the following Sections of the Internal Revenue Code of 1986, as amended (the "Code"): 125 (cafeteria plans), 402(a)(8) (cash or deferred arrangements), and in the case of employer contributions made pursuant to a salary reduction agreement, 403(b) (tax sheltered annuities). Except for the benefits described in Section 9(b)(ii) above, the sums due pursuant to this Section 9(b) shall be paid in up to 2 annual installments commencing thirty (30) days after the sums become due. If on or after the date any payment becomes due hereunder the Company at any time has a funded debt-to-total capitalization ratio which equals or exceeds 1.1, the Company shall secure its payment of the remaining annual installments with a letter of credit or other security instrument as shall be reasonably acceptable to Employee. Such letter of credit or other security instruments shall provide Employee with the ability to receive the remaining installment(s) only if his payment is delinquent. All sums due shall be subject to appropriate withholding and statutory requirements. Employee shall not be required to mitigate the amount of any payment provided for in this Section 9(b) by seeking other employment or otherwise. Notwithstanding anything stated in this Section 9(b) to the contrary, the Company shall not be required to provide medical, health and/or disability benefits to the extent such benefits would duplicate benefits received by Employee in connection with his employment with any new employer. Any payment received by Employee pursuant to the special retention agreement dated September 18, 2000 shall be credited against payments due under this Agreement. Notwithstanding anything stated in this Agreement to the contrary, if the amounts which are payable and the benefits which are provided to Employee under this Agreement, either alone or together with other payments which Employee has a right to receive from the Company or any of its affiliates, would constitute a "parachute payment" (as defined in Code Section 280G), such amounts and benefits shall be reduced, as necessary, to the largest amount as will result in no portion of said amounts and benefits being either not deductible as a result of Code Section 280G or subject to the excise tax imposed by Code Section 4999. The determination of any reduction in said amounts and benefits pursuant to the foregoing proviso shall be made by the Company in good faith, and such determination shall be conclusive and binding on Employee. The amounts provided to Employee under this Agreement in connection with a Change in Control, if any, shall be deemed allocated to such amounts and/or benefits to be paid and/or provided as the Company's Board of Directors in its sole discretion shall determine. 10. Special Situations. The parties recognize that under certain circumstances a Change in Control may occur under conditions which make it inappropriate for Employee to receive the termination benefits or protection set forth in this Agreement. Therefore, in the event that a Change in Control occurs for any one of the following reasons, the provisions of Sections 2, 6 and 9 shall not apply: (a) the purchase of more than fifty percent (50%) of the stock of the Company by an employee stock ownership plan or similar employee benefit plan of which Employee is a participant; (b) the purchase of more than fifty percent (50%) of the stock or ninety percent (90%) of the assets of the Company by a group of individuals or entities including Employee as a member or participant, including but not limited to those transactions commonly known as a leveraged or other forms of management buy-outs; or (c) A transaction or series of transactions involving the Company, whether by way of a merger, exchange, sale or other method, where the party ultimately acquiring the Company's bentonite business offers to the Company's shareholders the opportunity to buy shares of its capital stock as part of the transaction. 11. Dispute. Any dispute arising under this Agreement shall be promptly submitted to arbitration under the Rules of the American Arbitration Association. An arbitrator is to be mutually agreed upon by the parties or upon failure of agreement, designated by the American Arbitration Association. 12. Other Agreements. Except to the extent expressly set forth herein, this Agreement shall not modify or lessen any benefit or compensation to which Employee is entitled under any agreement between Employee and the Company or under any plan maintained by the Company in which he participates or participated. Benefits or compensation shall be payable thereunder, if at all, according to the terms of the applicable plan(s) or agreement(s). The terms of this Agreement shall supersede any existing agreement between Employee and the Company executed prior to the date hereof to the extent any such Agreement is inconsistent with the terms hereof. Payments pursuant to this Agreement are in lieu of any severance payments. 13. Successors; Binding Agreement. The Company will require any successor (whether direct or indirect by purchase, merger, consolidation or otherwise, to all or substantially all of the business and/or assets of the Company) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. This Agreement shall inure to the benefit of and be enforceable by Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 14. Miscellaneous. This Agreement may not be modified or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Employee and such officers of the Company as may be specifically designated by its Board for that purpose. Except for any failure to give the thirty (30) day notice described in Section 6(b) above, the failure of either party to this Agreement to object to any breach by the other party or the non-breaching party's conduct or conduct forbearance shall not constitute a waiver of that party's rights to enforce this Agreement. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of any subsequent breach by such other party or any similar or dissimilar provisions or conditions at the same or any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Illinois. 15. Survival. The obligations of the parties under this Agreement shall survive the term of this Agreement. 16. Term of Agreement. The term of this Agreement shall commence on September 18, 2000 and end on September 17, 2002; provided, however, that in the event Employee's employment is terminated while this Agreement is in force, this Agreement shall terminate when the Company has made all payments to Employee required by Section 9 hereof and Employee has complied with the duties and obligations described herein. Date: September 22, 2000 EMPLOYEE AMCOL INTERNATIONAL CORPORATION /s/ Frank B. Wright, Jr. By /s/ Larry Washow Frank B. Wright, Jr. Its: President EX-10.19 6 0006.txt MATERIAL CONTRACTS Exhibit 10.19 AGREEMENT WHEREAS, AMCOL International Corporation (the "Company") considers it essential and in the best interests of the Company and its shareholders to foster the continued employment of its key management personnel; WHEREAS, Paul G. Shelton ("Employee") is considered a key management employee, currently serving as Senior Vice President, Chief Financial Officer and Treasurer of AMCOL International Corporation, and President of Ameri-Co Carriers, Inc. and Nationwide Freight, Inc. WHEREAS, the Company desires to assure the future continuity of Employee's services in the event of any actual or threatened "Change in Control" (as defined in Section 6 below) of the Company. IT IS THEREFORE AGREED AS FOLLOWS: 1. Effect of Agreement. This Agreement shall be effective and binding immediately upon its execution. However, except as specifically provided herein, this Agreement shall not alter materially Employee's duties and obligations to the Company and the remuneration and benefits which Employee may reasonably expect to receive from the Company in the absence of a Change in Control. 2. Employment On and After Change in Control. Provided that the employee is an employee of the Company immediately prior to a Change in Control, the Company shall employ Employee, and Employee shall accept such employment, effective upon such Change in Control for a period of thirty-six (36) months after said Change in Control subject to the terms and conditions stated herein. For purposes of this paragraph only, employment by a current or former subsidiary of the Company, is the same as employment by the Company on or after a Change in Control. 3. Duties After Change in Control. Employee agrees that during the term of his employment with the Company after a Change in Control, he shall perform the duties described herein and such other duties for the Company and its subsidiaries consistent with his experience and training as the Board of Directors of the Company (the "Board") or the Board's representatives shall determine from time to time, which duties shall be at least substantially equal in status, dignity and character to his duties at the date hereof. He shall also have the title of Senior Vice President, Chief Financial Officer and Treasurer of AMCOL International Corporation, and President of Americo Carriers, Inc. and Nationwide Freight, Inc. Employee further agrees to devote his entire working time and attention to the business of the Company and/or its current or former subsidiaries and use his best efforts to promote such business. 4. Compensation Prior to a Change in Control. Prior to a Change in Control the Company agrees to pay Employee compensation for his services in an amount, and to provide him with life insurance, disability, health and other benefits, as agreed between Employee and the Company from time to time. For the purpose of this Section, compensation does not include any bonus or other incentive compensation plan or stock purchase plan, which may vary from year to year at the discretion of the Company. 5. Termination of Employment Prior to a Change in Control. Employee shall be entitled to terminate his employment prior to a Change in Control at any time upon sixty (60) days' prior written notice. The Company shall be entitled to terminate Employee's employment at any time prior to a Change in Control with or without cause upon sixty (60) days' prior written notice (or the payment of salary in lieu thereof). This Section shall not be construed to reduce any accrued benefits payable in connection with any termination of Employee's employment prior to a Change in Control. Nothing expressed or implied in this Agreement shall create any right or duty on the part of the Company or Employee to have Employee remain in the employment of the Company prior to a Change in Control. 6. Termination of Employment On or After a Change in Control. (a) For purposes of this Agreement the term "Change in Control" means the change in the legal or beneficial ownership of fifty-one percent (51%) of the shares of the Company's common stock within a six-month period other than by death or operation of law, or the sale of ninety percent (90%) or more of the Company's aggregate assets within a six-month period. Sale of the Company's stock in a subsidiary or a subsidiary's assets shall not be considered a Change in Control. (b) Employee's employment on and after a Change in Control may be terminated with just cause by the Company at any time upon not less than ten (10) days' prior written notice. Prior to termination for just cause on and after a Change in Control, the Board of Directors shall by majority vote have declared that Employee's termination is for just cause specifically stating the basis for such determination. In the event such a termination occurs, the provisions of Section 9(a) shall apply. Employee's employment may be terminated on or after a Change in Control without just cause pursuant to the constructive termination procedures described in the next paragraph or by the Company giving Employee not less than thirty (30) days' prior written notice. In the event Employee's employment is terminated pursuant to the preceding sentence: (i) the provisions of Section 9(b) below shall apply; and (ii) although Employee's employment term shall be deemed terminated at the end of such notice period (or, in the case of a constructive termination described in the next paragraph, as of the date Employee notifies the Company of such termination), such termination shall in no way affect the term of this Agreement or Employee's duties or other obligations. For purposes of this Section 6(b), Employee shall be considered as having been terminated by the Company on or after a Change in Control for other than just cause provided that he has notified the Company of any of the following within thirty (30) days of the occurrence thereof: (i) the assignment to Employee of any duties of lesser status, dignity and character than his duties immediately prior to the effective date of the Change in Control or a substantial reduction in the nature or status of his responsibilities from those in effect immediately prior to the effective date of the Change in Control; (ii) a post-Change in Control reduction by the Company in Employee's annual base salary or bonus or incentive plan (as in effect immediately prior to the effective date of the Change in Control); (iii) relocation of Employee's office to a location which is more than 50 miles from the location in which Employee principally works for the Company immediately prior to the effective date of the Change in Control; the relocation of the appropriate principal executive office of the Company or the Company's operating division or subsidiary for which Employee performed the majority of his services for the Company during the year prior to the effective date of the Change in Control to a location which is more than 50 miles from the location of such office immediately prior to such date; or his being required by the Company, in order to perform duties of substantially equal status, dignity and character to those duties he performed immediately prior to the effective date of the Change in Control, to travel on the Company's business to a substantially greater extent than is consistent with his business travel obligations as of such date; or (iv) the failure of the Company to continue to provide Employee with benefits substantially equivalent to those enjoyed by him under any of the Company's life insurance, medical, health and accident or disability plans in which he was participating immediately prior to the effective date of the Change in Control, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive him of any material fringe benefit enjoyed by him immediately prior to effective date of the Change in Control, or the failure of the Company to provide him with at least the number of paid vacation days to which he is entitled on the basis of years of service under the Company's normal vacation policy in effect immediately prior to the effective date of the Change in Control. (v) the elimination of the title of Sr. Vice-President of the Company alone does not constitute a termination for those individuals that remain presidents of subsidiaries. (c) In the event Employee's employment is terminated on or after a Change in Control in any manner not described in Section 6(b) above: (i) the provisions of Section 9(b) shall not apply and Employee shall instead receive the sums and benefits described in Section 9(a); and (ii) such termination shall in no way affect the term of this Agreement or Employee's duties or other obligations. (d) Any termination of employment of Employee following the commencement of any discussions by a shareholder or group of shareholders owning legally or beneficially more than 20% of the common stock or an officially designated representative of the Board of Directors with a third party that results within 180 days in a Change in Control shall (unless such termination is for just cause or wholly unrelated to such discussions) be deemed to be a termination of Employee on and after a Change in Control for purposes of this Agreement. 7. Notice of Termination. Any termination by the Company or assertion of termination by Employee shall be communicated by written notice of termination to the other party at the following address: AMCOL International Corporation One North Arlington 1500 West Shure Drive Arlington Heights, IL 60004 Attn: Chief Executive Officer 8. Disability. If as a result of Employee's incapacity due to physical or mental illness, he shall have been absent from his duties with the Company for one hundred eighty (180) days within any twelve-(l2)-consecutive-month period and within thirty (30) days after written notice of the Company's intention to terminate his employment is given, Employee shall not have returned to the performance of his duties with the Company substantially on a full-time basis, the Company may terminate his employment for disability. This shall not constitute a termination for the purposes of obtaining benefits pursuant to Section 9. 9. Benefits Upon Termination And Leave Of Employment On or After Change in the Control. (a) If Employee is terminated for just cause on or after a Change in Control, he shall only receive the accrued sums and benefits payable to him through the date he is terminated; the provisions of Section 9(b) below shall not be applicable in such case and Employee shall not receive (or shall cease receiving) the payments and benefits described in Section 9(b). (b) Subject to Employee's compliance with the provisions of this Agreement, if Employee is terminated during the thirty-six (36) month period beginning on and continuing after a Change in Control other than for just cause (either at the discretion of the Company's management or constructively by the operation of Section 6), he shall receive the following payments and benefits in lieu of any other sums or benefits otherwise, including severance or severance benefit payments payable to him by the Company. Any payments in accordance with any special retention or non-competition agreements, if any, shall be made in accordance with their terms. (i) all then accrued pay, benefits, executive compensation and fringe benefits, including (but not limited to) pro rata bonus and incentive plan earnings; (ii) medical, health and disability benefits which are substantially similar to the benefits the Company is providing him as of the date his employment is terminated for a period of thirty-six (36) months thereafter; and (iii) one dollar less than three (3) times his base period compensation. The foregoing payments and benefits shall be deemed compensation payable for the duties to be performed by Employee pursuant to this Agreement. For purposes of this Agreement, (A) Employee's "base period compensation" is the average annual "compensation" (as defined below) which was includable in his gross income for his base period (i.e., his most recent five taxable years ending before the date of the Change in Control); and (B) if Employee's base period includes a short taxable year or less than all of a taxable year, compensation for such short or incomplete taxable year shall be annualized before determining his average annual compensation for the base period. (In annualizing compensation, the frequency with which payments are expected to be made over an annual period shall be taken into account. Thus, any amount of compensation for such a short or incomplete taxable year that represents a payment that would not be made more than once per year shall not be annualized). For purposes of Section 9(iii) and the definitions pertaining to said Section, Employee's "compensation" is the compensation which was payable to him by the Company or a related entity determined without regard to the following Sections of the Internal Revenue Code of 1986, as amended (the "Code"): 125 (cafeteria plans), 402(a)(8) (cash or deferred arrangements), and in the case of employer contributions made pursuant to a salary reduction agreement, 403(b) (tax sheltered annuities). Except for the benefits described in Section 9(b)(ii) above, the sums due pursuant to this Section 9(b) shall be paid in up to three (3) annual installments commencing thirty (30) days after the sums become due. If on or after the date any payment becomes due hereunder the Company at any time has a funded debt-to-total capitalization ratio which equals or exceeds 1.1, the Company shall secure its payment of the remaining annual installments with a letter of credit or other security instrument as shall be reasonably acceptable to Employee. Such letter of credit or other security instruments shall provide Employee with the ability to receive the remaining installment(s) only if his payment is delinquent. All sums due shall be subject to appropriate withholding and statutory requirements. Employee shall not be required to mitigate the amount of any payment provided for in this Section 9(b) by seeking other employment or otherwise. Notwithstanding anything stated in this Section 9(b) to the contrary, the Company shall not be required to provide medical, health and/or disability benefits to the extent such benefits would duplicate benefits received by Employee in connection with his employment with any new employer. Notwithstanding anything stated in this Agreement to the contrary, if the amounts which are payable and the benefits which are provided to Employee under this Agreement, either alone or together with other payments which Employee has a right to receive from the Company or any of its affiliates, would constitute a "parachute payment" (as defined in Code Section 280G), such amounts and benefits shall be reduced, as necessary, to the largest amount as will result in no portion of said amounts and benefits being either not deductible as a result of Code Section 280G or subject to the excise tax imposed by Code Section 4999. The determination of any reduction in said amounts and benefits pursuant to the foregoing proviso shall be made by the Company in good faith, and such determination shall be conclusive and binding on Employee. The amounts provided to Employee under this Agreement in connection with a Change in Control, if any, shall be deemed allocated to such amounts and/or benefits to be paid and/or provided as the Company's Board of Directors in its sole discretion shall determine. 10. Special Situations. The parties recognize that under certain circumstances a Change in Control may occur under conditions which make it inappropriate for Employee to receive the termination benefits or protection set forth in this Agreement. Therefore, in the event that a Change in Control occurs for any one of the following reasons, the provisions of Sections 2, 6 and 9 shall not apply: (a) the purchase of more than fifty percent (50%) of the stock of the Company by an employee stock ownership plan or similar employee benefit plan of which Employee is a participant; (b) the purchase of more than fifty percent (50%) of the stock or ninety percent (90%) of the assets of the Company by a group of individuals or entities including Employee as a member or participant, including but not limited to those transactions commonly known as a leveraged or other forms of management buy-outs; or (c) A transaction or series of transactions involving the Company, whether by way of a merger, exchange, sale or other method, where the party ultimately acquiring the Company's bentonite business offers to the Company's shareholders the opportunity to buy shares of its capital stock as part of the transaction. 11. Dispute. Any dispute arising under this Agreement shall be promptly submitted to arbitration under the Rules of the American Arbitration Association. An arbitrator is to be mutually agreed upon by the parties or upon failure of agreement, designated by the American Arbitration Association. 12. Other Agreements. Except to the extent expressly set forth herein, this Agreement shall not modify or lessen any benefit or compensation to which Employee is entitled under any agreement between Employee and the Company or under any plan maintained by the Company in which he participates or participated. Benefits or compensation shall be payable thereunder, if at all, according to the terms of the applicable plan(s) or agreement(s). The terms of this Agreement shall supersede any existing agreement between Employee and the Company executed prior to the date hereof to the extent any such Agreement is inconsistent with the terms hereof. Payments pursuant to this Agreement are in lieu of any severance payments. 13. Successors; Binding Agreement. The Company will require any successor (whether direct or indirect by purchase, merger, consolidation or otherwise, to all or substantially all of the business and/or assets of the Company) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. This Agreement shall inure to the benefit of and be enforceable by Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 14. Miscellaneous. This Agreement may not be modified or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Employee and such officers of the Company as may be specifically designated by its Board for that purpose. Except for any failure to give the thirty (30) day notice described in Section 6(b) above, the failure of either party to this Agreement to object to any breach by the other party or the non-breaching party's conduct or conduct forbearance shall not constitute a waiver of that party's rights to enforce this Agreement. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of any subsequent breach by such other party or any similar or dissimilar provisions or conditions at the same or any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Illinois. 15. Survival. The obligations of the parties under this Agreement shall survive the term of this Agreement. 16. Term of Agreement. The term of this Agreement shall commence on September 18, 2000 and end on September 17, 2003; provided, however, that in the event Employee's employment is terminated while this Agreement is in force, this Agreement shall terminate when the Company has made all payments to Employee required by Section 9 hereof and Employee has complied with the duties and obligations described herein. Date: September 20, 2000 EMPLOYEE AMCOL INTERNATIONAL CORPORATION /s/ Paul G. Shelton By _/s/ Larry Washow Paul G. Shelton Its: President EX-10.20 7 0007.txt MATERIAL CONTRACTS Exhibit 10.20 AGREEMENT WHEREAS, AMCOL International Corporation (the "Company") considers it essential and in the best interests of the Company and its shareholders to foster the continued employment of its key management personnel; WHEREAS, Gary Morrison ("Employee") is considered a key management employee, currently serving as Vice President of AMCOL and President of American Colloid Company. WHEREAS, the Company desires to assure the future continuity of Employee's services in the event of any actual or threatened "Change in Control" (as defined in Section 6 below) of the Company. IT IS THEREFORE AGREED AS FOLLOWS: 1. Effect of Agreement. This Agreement shall be effective and binding immediately upon its execution. However, except as specifically provided herein, this Agreement shall not alter materially Employee's duties and obligations to the Company and the remuneration and benefits which Employee may reasonably expect to receive from the Company in the absence of a Change in Control. 2. Employment On and After Change in Control. Provided that the employee is an employee of the Company immediately prior to a Change in Control, the Company shall employ Employee, and Employee shall accept such employment, effective upon such Change in Control for a period of twenty-four (24) months after said Change in Control subject to the terms and conditions stated herein. For purposes of this paragraph only, employment by a current or former subsidiary of the Company, is the same as employment by the Company on or after a Change in Control. 3. Duties After Change in Control. Employee agrees that during the term of his employment with the Company after a Change in Control, he shall perform the duties described herein and such other duties for the Company and its subsidiaries consistent with his experience and training as the Board of Directors of the Company (the "Board") or the Board's representatives shall determine from time to time, which duties shall be at least substantially equal in status, dignity and character to his duties at the date hereof. He shall also have the title of Vice President of AMCOL and President of American Colloid Company. Employee further agrees to devote his entire working time and attention to the business of the Company and/or its current or former subsidiaries and use his best efforts to promote such business. 4. Compensation Prior to a Change in Control. Prior to a Change in Control the Company agrees to pay Employee compensation for his services in an amount, and to provide him with life insurance, disability, health and other benefits, as agreed between Employee and the Company from time to time. For the purpose of this Section, compensation does not include any bonus or other incentive compensation plan or stock purchase plan, which may vary from year to year at the discretion of the Company. 5. Termination of Employment Prior to a Change in Control. Employee shall be entitled to terminate his employment prior to a Change in Control at any time upon sixty (60) days' prior written notice. The Company shall be entitled to terminate Employee's employment at any time prior to a Change in Control with or without cause upon sixty (60) days' prior written notice (or the payment of salary in lieu thereof). This Section shall not be construed to reduce any accrued benefits payable in connection with any termination of Employee's employment prior to a Change in Control. Nothing expressed or implied in this Agreement shall create any right or duty on the part of the Company or Employee to have Employee remain in the employment of the Company prior to a Change in Control. 6. Termination of Employment On or After a Change in Control. (a) For purposes of this Agreement the term "Change in Control" means the change in the legal or beneficial ownership of fifty-one percent (51%) of the shares of the Company's common stock within a six-month period other than by death or operation of law, or the sale of ninety percent (90%) or more of the Company's aggregate assets within a six-month period. Sale of the Company's stock in a subsidiary or a subsidiary's assets shall not be considered a Change in Control. (b) Employee's employment on and after a Change in Control may be terminated with just cause by the Company at any time upon not less than ten (10) days' prior written notice. Prior to termination for just cause on and after a Change in Control, the Board of Directors shall by majority vote have declared that Employee's termination is for just cause specifically stating the basis for such determination. In the event such a termination occurs, the provisions of Section 9(a) shall apply. Employee's employment may be terminated on or after a Change in Control without just cause pursuant to the constructive termination procedures described in the next paragraph or by the Company giving Employee not less than thirty (30) days' prior written notice. In the event Employee's employment is terminated pursuant to the preceding sentence: (i) the provisions of Section 9(b) below shall apply; and (ii) although Employee's employment term shall be deemed terminated at the end of such notice period (or, in the case of a constructive termination described in the next paragraph, as of the date Employee notifies the Company of such termination), such termination shall in no way affect the term of this Agreement or Employee's duties or other obligations. For purposes of this Section 6(b), Employee shall be considered as having been terminated by the Company on or after a Change in Control for other than just cause provided that he has notified the Company of any of the following within thirty (30) days of the occurrence thereof: (i) the assignment to Employee of any duties of lesser status, dignity and character than his duties immediately prior to the effective date of the Change in Control or a substantial reduction in the nature or status of his responsibilities from those in effect immediately prior to the effective date of the Change in Control; (ii) a post-Change in Control reduction by the Company in Employee's annual base salary or bonus or incentive plan (as in effect immediately prior to the effective date of the Change in Control); (iii) relocation of Employee's office to a location which is more than 50 miles from the location in which Employee principally works for the Company immediately prior to the effective date of the Change in Control; the relocation of the appropriate principal executive office of the Company or the Company's operating division or subsidiary for which Employee performed the majority of his services for the Company during the year prior to the effective date of the Change in Control to a location which is more than 50 miles from the location of such office immediately prior to such date; or his being required by the Company, in order to perform duties of substantially equal status, dignity and character to those duties he performed immediately prior to the effective date of the Change in Control, to travel on the Company's business to a substantially greater extent than is consistent with his business travel obligations as of such date; or (iv) the failure of the Company to continue to provide Employee with benefits substantially equivalent to those enjoyed by him under any of the Company's life insurance, medical, health and accident or disability plans in which he was participating immediately prior to the effective date of the Change in Control, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive him of any material fringe benefit enjoyed by him immediately prior to effective date of the Change in Control, or the failure of the Company to provide him with at least the number of paid vacation days to which he is entitled on the basis of years of service under the Company's normal vacation policy in effect immediately prior to the effective date of the Change in Control. (v) the elimination of the title of Vice-President of the Company alone does not constitute a termination for those individuals that remain presidents of subsidiaries. (c) In the event Employee's employment is terminated on or after a Change in Control in any manner not described in Section 6(b) above: (i) the provisions of Section 9(b) shall not apply and Employee shall instead receive the sums and benefits described in Section 9(a); and (ii) such termination shall in no way affect the term of this Agreement or Employee's duties or other obligations. (d) Any termination of employment of Employee following the commencement of any discussions by a shareholder or group of shareholders owning legally or beneficially more than 20% of the common stock or an officially designated representative of the Board of Directors with a third party that results within 180 days in a Change in Control shall (unless such termination is for just cause or wholly unrelated to such discussions) be deemed to be a termination of Employee on and after a Change in Control for purposes of this Agreement. 7. Notice of Termination. Any termination by the Company or assertion of termination by Employee shall be communicated by written notice of termination to the other party at the following address: AMCOL International Corporation One North Arlington 1500 West Shure Drive Arlington Heights, IL 60004 Attn: Chief Executive Officer 8. Disability. If as a result of Employee's incapacity due to physical or mental illness, he shall have been absent from his duties with the Company for one hundred eighty (180) days within any twelve-(l2)-consecutive-month period and within thirty (30) days after written notice of the Company's intention to terminate his employment is given, Employee shall not have returned to the performance of his duties with the Company substantially on a full-time basis, the Company may terminate his employment for disability. This shall not constitute a termination for the purposes of obtaining benefits pursuant to Section 9. 9. Benefits Upon Termination And Leave Of Employment On or After Change in the Control. (a) If Employee is terminated for just cause on or after a Change in Control, he shall only receive the accrued sums and benefits payable to him through the date he is terminated; the provisions of Section 9(b) below shall not be applicable in such case and Employee shall not receive (or shall cease receiving) the payments and benefits described in Section 9(b). (b) Subject to Employee's compliance with the provisions of this Agreement, if Employee is terminated during the twenty-four (24) month period beginning on and continuing after a Change in Control other than for just cause (either at the discretion of the Company's management or constructively by the operation of Section 6), he shall receive the following payments and benefits in lieu of any other sums or benefits otherwise, including severance or severance benefit payments payable to him by the Company. Any payments in accordance with any special retention or non-competition agreements, if any, shall be made in accordance with their terms. (i) all then accrued pay, benefits, executive compensation and fringe benefits, including (but not limited to) pro rata bonus and incentive plan earnings; (ii) medical, health and disability benefits which are substantially similar to the benefits the Company is providing him as of the date his employment is terminated for a period of twenty-four (24) months thereafter; and (iii) one dollar less than two (2) times his base period compensation. The foregoing payments and benefits shall be deemed compensation payable for the duties to be performed by Employee pursuant to this Agreement. For purposes of this Agreement, (A) Employee's "base period compensation" is the average annual "compensation" (as defined below) which was includable in his gross income for his base period (i.e., his most recent five taxable years ending before the date of the Change in Control); and (B) if Employee's base period includes a short taxable year or less than all of a taxable year, compensation for such short or incomplete taxable year shall be annualized before determining his average annual compensation for the base period. (In annualizing compensation, the frequency with which payments are expected to be made over an annual period shall be taken into account. Thus, any amount of compensation for such a short or incomplete taxable year that represents a payment that would not be made more than once per year shall not be annualized). For purposes of Section 9(iii) and the definitions pertaining to said Section, Employee's "compensation" is the compensation which was payable to him by the Company or a related entity determined without regard to the following Sections of the Internal Revenue Code of 1986, as amended (the "Code"): 125 (cafeteria plans), 402(a)(8) (cash or deferred arrangements), and in the case of employer contributions made pursuant to a salary reduction agreement, 403(b) (tax sheltered annuities). Except for the benefits described in Section 9(b)(ii) above, the sums due pursuant to this Section 9(b) shall be paid in up to 2 annual installments commencing thirty (30) days after the sums become due. If on or after the date any payment becomes due hereunder the Company at any time has a funded debt-to-total capitalization ratio which equals or exceeds 1.1, the Company shall secure its payment of the remaining annual installments with a letter of credit or other security instrument as shall be reasonably acceptable to Employee. Such letter of credit or other security instruments shall provide Employee with the ability to receive the remaining installment(s) only if his payment is delinquent. All sums due shall be subject to appropriate withholding and statutory requirements. Employee shall not be required to mitigate the amount of any payment provided for in this Section 9(b) by seeking other employment or otherwise. Notwithstanding anything stated in this Section 9(b) to the contrary, the Company shall not be required to provide medical, health and/or disability benefits to the extent such benefits would duplicate benefits received by Employee in connection with his employment with any new employer. Any payment received by Employee pursuant to the special retention agreement dated September 18, 2000 shall be credited against payments due under this Agreement. Notwithstanding anything stated in this Agreement to the contrary, if the amounts which are payable and the benefits which are provided to Employee under this Agreement, either alone or together with other payments which Employee has a right to receive from the Company or any of its affiliates, would constitute a "parachute payment" (as defined in Code Section 280G), such amounts and benefits shall be reduced, as necessary, to the largest amount as will result in no portion of said amounts and benefits being either not deductible as a result of Code Section 280G or subject to the excise tax imposed by Code Section 4999. The determination of any reduction in said amounts and benefits pursuant to the foregoing proviso shall be made by the Company in good faith, and such determination shall be conclusive and binding on Employee. The amounts provided to Employee under this Agreement in connection with a Change in Control, if any, shall be deemed allocated to such amounts and/or benefits to be paid and/or provided as the Company's Board of Directors in its sole discretion shall determine. 10. Special Situations. The parties recognize that under certain circumstances a Change in Control may occur under conditions which make it inappropriate for Employee to receive the termination benefits or protection set forth in this Agreement. Therefore, in the event that a Change in Control occurs for any one of the following reasons, the provisions of Sections 2, 6 and 9 shall not apply: (a) the purchase of more than fifty percent (50%) of the stock of the Company by an employee stock ownership plan or similar employee benefit plan of which Employee is a participant; (b) the purchase of more than fifty percent (50%) of the stock or ninety percent (90%) of the assets of the Company by a group of individuals or entities including Employee as a member or participant, including but not limited to those transactions commonly known as a leveraged or other forms of management buy-outs; or (c) A transaction or series of transactions involving the Company, whether by way of a merger, exchange, sale or other method, where the party ultimately acquiring the Company's bentonite business offers to the Company's shareholders the opportunity to buy shares of its capital stock as part of the transaction. 11. Dispute. Any dispute arising under this Agreement shall be promptly submitted to arbitration under the Rules of the American Arbitration Association. An arbitrator is to be mutually agreed upon by the parties or upon failure of agreement, designated by the American Arbitration Association. 12. Other Agreements. Except to the extent expressly set forth herein, this Agreement shall not modify or lessen any benefit or compensation to which Employee is entitled under any agreement between Employee and the Company or under any plan maintained by the Company in which he participates or participated. Benefits or compensation shall be payable thereunder, if at all, according to the terms of the applicable plan(s) or agreement(s). The terms of this Agreement shall supersede any existing agreement between Employee and the Company executed prior to the date hereof to the extent any such Agreement is inconsistent with the terms hereof. Payments pursuant to this Agreement are in lieu of any severance payments. 13. Successors; Binding Agreement. The Company will require any successor (whether direct or indirect by purchase, merger, consolidation or otherwise, to all or substantially all of the business and/or assets of the Company) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. This Agreement shall inure to the benefit of and be enforceable by Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 14. Miscellaneous. This Agreement may not be modified or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Employee and such officers of the Company as may be specifically designated by its Board for that purpose. Except for any failure to give the thirty (30) day notice described in Section 6(b) above, the failure of either party to this Agreement to object to any breach by the other party or the non-breaching party's conduct or conduct forbearance shall not constitute a waiver of that party's rights to enforce this Agreement. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of any subsequent breach by such other party or any similar or dissimilar provisions or conditions at the same or any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Illinois. 15. Survival. The obligations of the parties under this Agreement shall survive the term of this Agreement. 16. Term of Agreement. The term of this Agreement shall commence on September 18, 2000 and end on September 17, 2002; provided, however, that in the event Employee's employment is terminated while this Agreement is in force, this Agreement shall terminate when the Company has made all payments to Employee required by Section 9 hereof and Employee has complied with the duties and obligations described herein. Date: September 22, 2000 EMPLOYEE AMCOL INTERNATIONAL CORPORATION /s/ Gary Morrison By /s/ Larry Washow Gary Morrison Its: President EX-10.21 8 0008.txt MATERIAL CONTRACTS Exhibit 10.21 No. 2 SPECIAL RETENTION AGREEMENT This Agreement is entered into this 18th day of September, 2000 by and between AMCOL International Corporation ("Company") and Frank B. Wright, Jr. ("Employee"). WHEREAS, the Company considers it essential and in the best interest of the Company and its Shareholders to foster the continued employment of key management personnel; WHEREAS, Frank B. Wright, Jr. is presently employed as President of Volclay International, Inc. IT IS THEREFORE AGREED AS FOLLOWS: 1. The Company will pay to Employee the amount of $250,000.00, as consideration for the Employee remaining employed by the Company or its subsidiaries and continuing his or her duties until the completion of *. 2. No payment is due in the event the Employee shall terminate his or her employment, directly or indirectly, prior to a change in control or such change in control does not occur within one year from the date hereof. A change in control is defined as: the change in the legal or beneficial ownership of fifty-one percent (51%) of the shares of the Company's common stock within a six-month period other than by death or operation of law, or the sale of ninety percent (90%) or more of the Company's aggregate assets within a six-month period. Sale of the Company's stock in a subsidiary or a subsidiary's assets shall not be considered a Change in Control. 3. The Company may terminate Employee at any time, with or without cause, although termination without cause by the Company within one (1) month of a change in control shall be considered a termination upon a change in control. * An asterisk represents certain material which has been omitted pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Such omitted material has been filed separately with the SEC. 4. The Employee shall also be considered an employee of the Company if employed by a subsidiary. 5. Any payments received pursuant to this Agreement shall be credited against any payments due under any Change in Control Agreement, the Employee has with the Company. 6. The payment pursuant to this Agreement shall be made upon completion of *. 7. This Agreement shall expire one (1) year from the date hereof. AMCOL INTERNATIONAL CORPORATION By: /s/ Larry Washow Title: President EMPLOYEE: /s/ Frank B. Wright, Jr. Frank B. Wright, Jr. EX-10.22 9 0009.txt MATERIAL CONTRACTS Exhibit 10.22 No. 2 SPECIAL RETENTION AGREEMENT This Agreement is entered into this 18th day of September, 2000 by and between AMCOL International Corporation ("Company") and Ryan F. McKendrick ("Employee"). WHEREAS, the Company considers it essential and in the best interest of the Company and its Shareholders to foster the continued employment of key management personnel; WHEREAS, Ryan F. McKendrick is presently employed as President of Colloid Environmental Technologies Company. IT IS THEREFORE AGREED AS FOLLOWS: 1. The Company will pay to Employee the amount of $230,000.00, as consideration for the Employee remaining employed by the Company or its subsidiaries and continuing his or her duties until the completion of *. 2. No payment is due in the event the Employee shall terminate his or her employment, directly or indirectly, prior to a change in control or such change in control does not occur within one year from the date hereof. A change in control is defined as: the change in the legal or beneficial ownership of fifty-one percent (51%) of the shares of the Company's common stock within a six-month period other than by death or operation of law, or the sale of ninety percent (90%) or more of the Company's aggregate assets within a six-month period. Sale of the Company's stock in a subsidiary or a subsidiary's assets shall not be considered a Change in Control. 3. The Company may terminate Employee at any time, with or without cause, although termination without cause by the Company within one (1) month of a change in control shall be considered a termination upon a change in control. * An asterisk represents certain material which has been omitted pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Such omitted material has been filed separately with the SEC. 4. The Employee shall also be considered an employee of the Company if employed by a subsidiary. 5. Any payments received pursuant to this Agreement shall be credited against any payments due under any Change in Control Agreement, the Employee has with the Company. 6. The payment pursuant to this Agreement shall be made upon completion of *. 7. This Agreement shall expire one (1) year from the date hereof. AMCOL INTERNATIONAL CORPORATION By: /s/ Larry Washow Title: President EMPLOYEE: /s/ Ryan F. McKendrick Ryan F. McKendrick EX-10.23 10 0010.txt MATERIAL CONTRACTS Exhibit 10.23 No. 2 SPECIAL RETENTION AGREEMENT This Agreement is entered into this 18th day of September, 2000 by and between AMCOL International Corporation ("Company") and Gary Morrison ("Employee"). WHEREAS, the Company considers it essential and in the best interest of the Company and its Shareholders to foster the continued employment of key management personnel; WHEREAS, Gary Morrison is presently employed as President of American Colloid Company. IT IS THEREFORE AGREED AS FOLLOWS: 1. The Company will pay to Employee the amount of $250,000.00, as consideration for the Employee remaining employed by the Company or its subsidiaries and continuing his or her duties until the completion of *. 2. No payment is due in the event the Employee shall terminate his or her employment, directly or indirectly, prior to a change in control or such change in control does not occur within one year from the date hereof. A change in control is defined as: the change in the legal or beneficial ownership of fifty-one percent (51%) of the shares of the Company's common stock within a six-month period other than by death or operation of law, or the sale of ninety percent (90%) or more of the Company's aggregate assets within a six-month period. Sale of the Company's stock in a subsidiary or a subsidiary's assets shall not be considered a Change in Control. 3. The Company may terminate Employee at any time, with or without cause, although termination without cause by the Company within one (1) month of a change in control shall be considered a termination upon a change in control. * An asterisk represents certain material which has been omitted pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Such omitted material has been filed separately with the SEC. 4. The Employee shall also be considered an employee of the Company if employed by a subsidiary. 5. Any payments received pursuant to this Agreement shall be credited against any payments due under any Change in Control Agreement, the Employee has with the Company. 6. The payment pursuant to this Agreement shall be made upon completion of *. 7. This Agreement shall expire one (1) year from the date hereof. AMCOL INTERNATIONAL CORPORATION By: /s/ Larry Washow Title: President EMPLOYEE: /s/ Gary D. Morrison Gary Morrison EX-10.24 11 0011.txt MATERIAL CONTRACTS Exhibit 10.24 No. 2 SPECIAL RETENTION AGREEMENT This Agreement is entered into this 18th day of September, 2000 by and between AMCOL International Corporation ("Company") and Peter L. Maul ("Employee"). WHEREAS, the Company considers it essential and in the best interest of the Company and its Shareholders to foster the continued employment of key management personnel; WHEREAS, Peter L. Maul is presently employed as President of Nanocor, Inc. IT IS THEREFORE AGREED AS FOLLOWS: 1. The Company will pay to Employee the amount of $250,000.00, as consideration for the Employee remaining employed by the Company or its subsidiaries and continuing his or her duties until the completion of *. 2. No payment is due in the event the Employee shall terminate his or her employment, directly or indirectly, prior to a change in control or such change in control does not occur within one year from the date hereof. A change in control is defined as: the change in the legal or beneficial ownership of fifty-one percent (51%) of the shares of the Company's common stock within a six-month period other than by death or operation of law, or the sale of ninety percent (90%) or more of the Company's aggregate assets within a six-month period. Sale of the Company's stock in a subsidiary or a subsidiary's assets shall not be considered a Change in Control. 3. The Company may terminate Employee at any time, with or without cause, although termination without cause by the Company within one (1) month of a change in control shall be considered a termination upon a change in control. * An asterisk represents certain material which has been omitted pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Such omitted material has been filed separately with the SEC. 4. The Employee shall also be considered an employee of the Company if employed by a subsidiary. 5. Any payments received pursuant to this Agreement shall be credited against any payments due under any Change in Control Agreement, the Employee has with the Company. 6. The payment pursuant to this Agreement shall be made upon completion of *. 7. This Agreement shall expire one (1) year from the date hereof. AMCOL INTERNATIONAL CORPORATION By: /s/ Larry Washow Title: President EMPLOYEE: /s/ Peter L. Maul Peter L. Maul EX-27 12 0012.txt FDS
5 0000813621 AMCOL International Corporation 1,000 USD 9-MOS DEC-1-2000 JAN-1-2000 SEP-30-2000 1.00 5,069 192,084 63,780 2,597 21,883 303,032 196,013 114,557 408,767 209,059 0 0 0 320 0 408,767 214,848 214,848 162,026 203,804 374 0 2,774 14,961 6,178 9,116 7,766 313,621 0 330,503 12.11 11.27
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