-----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, BxRF5vRvmluSoXukBMJG8ONqynlMwXZcsuddinaoANOn/1id7OPvijig1f9eG8EN 5LWhCg9P11KCRbar2V4DMA== 0000813621-96-000010.txt : 19960329 0000813621-96-000010.hdr.sgml : 19960329 ACCESSION NUMBER: 0000813621-96-000010 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960328 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMCOL INTERNATIONAL CORP CENTRAL INDEX KEY: 0000813621 STANDARD INDUSTRIAL CLASSIFICATION: MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400] IRS NUMBER: 360724340 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15661 FILM NUMBER: 96540382 BUSINESS ADDRESS: STREET 1: 1500 W SHURE DR SUITE 500 STREET 2: 1500 W SHURE DR CITY: ARLINGTON HEIGHTS STATE: IL ZIP: 60004-7803 BUSINESS PHONE: 7083924600 MAIL ADDRESS: STREET 1: ONE N ARLINGTON 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-K 1 FORM 10-K ================================================================================ ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 10-K (Mark one) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the Fiscal Year Ended December 31, 1995 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
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) (I.R.S. Employer Identification No.) One North Arlington, 1500 West Shure Drive, Suite 500 Arlington Heights, Illinois 60004-7803 (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (847) 394-8730 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: $.01 par value Common Stock (Title of Class) 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 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 by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K. [ ] The aggregate market value of the $.01 par value Common Stock, held by non-affiliates of the registrant on March 15, 1996, based upon the closing sale price on that date as reported in The Wall Street Journal was approximately $275,821,000. Registrant had 19,177,407 shares of $.01 par value Common Stock, outstanding as of March 15, 1996. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Proxy Statement to be dated on or about April 8, 1996, are incorporated by reference into Part III hereof. ================================================================================ ================================================================================ PART I Item 1. Business INTRODUCTION AMCOL International Corporation was originally incorporated in South Dakota in 1924 as the Bentonite Mining & Manufacturing Co. Its name was changed to American Colloid Company in 1927, and in 1959, the Company was reincorporated in Delaware. In 1995, its name was changed to AMCOL International Corporation. Except as otherwise noted, or indicated by context, the term "Company" refers to AMCOL International Corporation and its subsidiaries. The Company may be generally divided into three principal categories of operations; minerals, absorbent polymers and environmental. The Company also operates a transportation business primarily for delivery of its own products. In general, the Company's products are used for their liquid-absorption properties. The Company is a leading producer of bentonite products, which have a variety of applications, including use as a bonding agent to form sand molds for metal castings, as a cat litter, as a moisture barrier in commercial construction and landfills, and in a variety of other industrial, commercial and agricultural applications. The Company also manufactures absorbent polymers, predominantly superabsorbent polymers, for use in disposable baby diapers and other personal care items, such as adult incontinence and feminine hygiene products. The following table sets forth the percentage contributions to net sales of the Company attributable to its mineral, absorbent polymer, environmental and transportation segments for the last five calendar years.
Percentage of Sales ------------------- 1995 1994 1993 1992 1991 ---- ---- ---- ---- ---- Minerals ............................... 44.5% 58.2% 59.3% 63.3% 66.4% Absorbent polymers ...................... 34.7 22.1 23.6 17.1 12.9 Environmental ........................... 14.5 11.6 9.2 10.4 11.3 Transportation........................... 6.3 8.1 7.9 9.2 9.4 ------ ------ ------ ------ ------ 100.0% 100.0% 100.0% 100.0% 100.0% ====== ====== ====== ====== ======
Net revenues, operating profit and identifiable assets attributable to each of the Company's business segments are set forth in Note 2 of the Company's Notes to Consolidated Financial Statements included elsewhere herein, which Note is incorporated herein by reference. MINERALS The Company's mineral business is principally conducted through American Colloid Company in the United States and Volclay Limited in the United Kingdom. Commercially produced bentonite is a type of montmorillonite clay found in beds ranging in thickness from two to ten feet under overburden of up to 120 feet. There are two basic types of bentonite, each having different chemical and physical properties. These are commonly known as sodium (western) bentonite and calcium (southern) bentonite. A third type of clay, a less pure variety of calcium montmorillonite called fuller's earth, is used as a form of cat litter and as a carrier for agri-chemicals in addition to other minor applications. The Company's principal bentonite products are marketed under various internationally registered trade names, including VOLCLAY and PANTHER CREEK. The Company's cat litter is sold under various trade names and private labels. Principal Markets and Products Durable Goods Metalcasting. In the formation of sand molds for metal castings, sand is bonded with bentonite and various other additives to yield the desired casting form and surface finish. The Company produces blended mineral binders containing sodium and calcium bentonites, sold under the trade name ADDITROL. In addition, several high-performance specialty products are sold to foundries and companies that service foundries. Iron Ore Pelletizing. The Company is a major supplier of sodium bentonite for use as a pelletizing aid in the production of taconite pellets in North America. Well Drilling. Sodium bentonite and leonardite are ingredients of drilling mud, which allow rock cuttings to be suspended and brought to the surface in oil and gas well drilling. Drilling mud lubricates the drilling bit and coats the underground formations to prevent hole collapse and drill bit seizing. The Company's primary trademark for this application is PREMIUM GEL. Other Industrial. The Company is a supplier of fuller's earth products for use as an oil and grease absorbent in industrial applications. It also produces bentonite and bentonite blends for the construction industry, which are used as a plasticizing agent in cement, plaster and bricks, and as an emulsifier in asphalt. Consumable Goods Cat Litter. The Company produces two types of cat litter products, a fuller's earth-based (traditional) product and a sodium bentonite-based scoopable (clumping) litter. The Company's scoopable products' clump-forming capability traps urine, allowing for easy removal of the odor-producing elements from the litter box. Scoopable litter has grown to 42% of the U.S. grocery market for cat litter in 1995 from 0.4% in 1989. Both types of products are sold primarily to private label grocery and mass merchandisers, though the Company also sells its own brands to the grocery, pet store and mass markets. The Company's products are marketed under various trade names. Fine Chemicals. Purified grades of sodium bentonite are marketed to the pharmaceutical and cosmetics industries. Small amounts of purified bentonite act as a binding agent for pharmaceutical tablets, and bentonite's expansion quality also aids in tablet disintegration. Bentonite also acts as a suspension agent and thickener in lotions and has a variety of other specialized uses as a flow control additive. Calcium bentonite is used as a catalyst or as a clarifying agent for edible oils, fats, dimer acids and petroleum products. Agricultural. Sodium bentonite, calcium bentonite and fuller's earth are sold as pelletizing aids in livestock feed and as anticaking agents for feeds during storage or in transit. Fuller's earth and sodium bentonite are used as carriers for agri-chemicals. Fuller's earth is also used as a drying agent in blending liquid and dry fertilizers prior to application. Sales and Distribution In 1995, the top two customers accounted for approximately 9% of the Company's mineral sales, and the top five customers accounted for approximately 16% of such sales. Products are sold domestically and internationally to approximately 3,700 customers. The Company has established industry-specialized sales groups staffed with technically-oriented salespersons serving each of the Company's major markets. Certain groups have networks of distributors and representatives, including companies that warehouse at strategic locations. Most of its customers in the metalcasting industry are served on a direct basis by teams of Company sales, technical and manufacturing personnel. The Company also provides training courses and laboratory testing for customers who use the Company's products in the metalcasting process. Sales to the oil well drilling industry are primarily made directly to oil well drilling mud service companies, both under the Company's tradename and under private label. Because bentonite is a major component of drilling muds, two service companies have captive bentonite operations. The Company's potential market is, therefore, generally limited to those oil well service organizations which are not vertically integrated, or do not have long-term supply arrangements with other producers. Sales to the cat litter market are made on a direct basis and through industry brokers. All sales to the iron ore pelletizing industry are made directly to the end user. Sales to the Company's remaining markets are made primarily through independent distributors and representatives. Competition Bentonite. The Company is one of the largest producers of bentonite products in the United States. There are at least four other major domestic producers of sodium bentonite and at least one other major domestic producer of calcium bentonite. Two of the domestic producers are companies primarily in other lines of business and have substantially greater financial resources than the Company. There also is substantial global competition. The Company's bentonite processing plants in the United Kingdom and Australia compete with a total of six U.K. and Australian processors. Competition in both the Company's domestic and international markets is essentially a matter of product quality, price, delivery, service and technical support, and it historically has been very vigorous. Fuller's Earth. There are approximately ten major competitors in the United States, some of which are larger and have substantially greater financial resources than the Company. Price, service, product quality and geographical proximity to the market are the principal methods of competition in the Company's markets for fuller's earth. Seasonality Although business activities in certain of the industries in which the Company's mineral products are sold (such as well drilling) are subject to factors such as weather conditions, the Company does not consider its mineral business as a whole to be seasonal. ENVIRONMENTAL Principal Products and Markets Through its wholly owned subsidiary, Colloid Environmental Technologies Company (CETCO), the Company sells sodium bentonite, products containing sodium bentonite and various other products and equipment for use in environmental and construction applications. CETCO sells bentonite, and its geosynthetic clay liner products under the BENTOMAT and CLAYMAX trade names, for lining and capping landfills and for containment in tank farms, leach pads, waste stabilization lagoons and decorative ponds. The Company's VOLCLAY Waterproofing System is sold to the non-residential construction industry. This line includes a product sold under the registered trade name VOLCLAY PANELS consisting of biodegradable cardboard panels filled with sodium bentonite installed to prevent leakage through underground foundation walls. A waterproofing liner product with the trade name VOLTEX, a joint sealant product with the trade name WATERSTOP-RX and a waterproofing membrane for concrete split slabs and plaza areas sold under the trade name VOLCLAY SWELLTITE, round out the principal components of the product line. CETCO sells elastomeric urethane coatings for use in vehicular traffic decks, roofs, balconies and pedestrian walkways. The products, sold under the trade name ACCOGUARD, are among the more environmentally friendly primers and coatings available to the construction industry. CETCO's drilling products are used to install monitoring wells and water wells, rehabilitate existing water wells and seal abandoned exploration drill holes. VOLCLAY GROUT, BENTOGROUT and VOLCLAY Tablets are among the trade names for products used in these applications. Bentonite-based flocculents and customized equipment are used to remove emulsified oils and heavy metals from wastewater. Bentonite-based products are formulated to solidify liquid waste for proper disposal in landfills. These products are sold primarily under the SYSTEM-AC, RM10 and SORBOND trade names. CETCO also specializes in providing absorption equipment and services to the environmental remediation industry, water treatment systems employing dissolved air flotation technology and activated carbon purification systems for the beverage and municipal water treatment industries. Its operations include a fully equipped engineering and fabrication facility for producing pressure vessels used in filtration applications. In addition, a network of regional service centers provides services and distribution to support markets such as remediation of petroleum-contaminated groundwater. The Company acquired a carbon regeneration facility during 1995, allowing for the regeneration and reuse of spent carbon obtained from its service centers. Competition CETCO has four principal competitors in the geosynthetic clay liner market. The construction and wastewater treatment product lines are niche businesses which compete primarily with alternative technologies. The service center remediation business has three major competitors, one of which is substantially larger and with greater resources. The groundwater monitoring, well drilling and sealants products compete with the Company's traditional rivals in the sodium bentonite business. Competition is based on product quality, service, price, technical support and availability of product. Historically, the competition has been very vigorous. Sales and Distribution In 1995, no customer accounted for more than 5% of environmental sales. CETCO products are sold domestically and internationally. CETCO sells most of its products through independent distributors and commissioned representatives. Contract remediation work is done on a direct basis working with consulting engineers engaged by the customers. CETCO employs technically oriented marketing personnel to support its network of distributors and representatives. In the service center business, salespersons develop business in the regional markets to supplement contract remediation work performed for national accounts. Seasonality Much of the business in the environmental sector is impacted by weather and soil conditions. Many of the products cannot be applied in harsh weather conditions and, as such, sales and profits tend to be stronger April through October. As a result, the Company considers this segment to be seasonal. Research and Development The minerals and environmental segments share research and laboratory facilities. Both CETCO and the U.K. minerals operation have independent research capabilities. Technological developments are shared between the companies, subject to license agreements where appropriate. Mineral Reserves Both the mineral and environmental segments have sodium bentonite reserves and processing plants. The discussion of mineral reserves which follows applies to both units. MINERALS/ENVIRONMENTAL COMMON OPERATIONAL FUNCTIONS Mineral Reserves The Company has reserves of sodium and calcium bentonite at various locations in Wyoming, South Dakota, Montana, Nevada and Alabama, and reserves of fuller's earth in Tennessee and Illinois. At 1995 consumption rates, based on internal estimates, the Company believes that its proven reserves of commercially usable sodium bentonite will be adequate for approximately 30 years (although reserves for certain specialty uses differ significantly from this 30-year period) and that its proven reserves of calcium bentonite and fuller's earth will be adequate for approximately 20 years and in excess of 40 years, respectively. While the Company, based upon its experience, believes that its reserve estimates are reasonable and its title and mining rights to its reserves are valid, the Company has not obtained any independent verification of such reserve estimates or such title or mining rights. The Company owns or controls the properties on which its reserves are located through long-term leases, royalty agreements and patented and unpatented mining claims. A majority of the Company's bentonite reserves are owned. All of the properties on which the Company's reserves are located are either physically accessible for the purposes of mining and hauling, or the cost of obtaining physical access would not be material. Of the total reserves, approximately 20% are located on unpatented mining claims owned or leased by the Company, on which the Company has the right to undertake regular mining activity. To retain possessory rights, a fee of $100 per year for each unpatented mining claim is required. The validity of title to unpatented mining claims is dependent upon numerous factual matters. The Company believes that the unpatented mining claims which it owns have been located in compliance with all applicable federal, state and local mining laws, rules and regulations. The Company is not aware of any material conflicts with other parties concerning its claims. From time to time, members of Congress as well as members of the executive branch of the federal government have proposed amendments to existing federal mining laws. The various amendments would have had a prospective effect on mining operations on federal lands and include, among other things, the imposition of royalty fees on the mining of unpatented claims, the elimination or restructuring of the patent system and an increase in fees for the maintenance of unpatented claims. To the extent that future proposals may result in the imposition of royalty fees on unpatented lands, the mining of the Company's unpatented claims may become uneconomic, and royalty rates for privately leased lands may be affected. The Company cannot predict the form that any amendments might ultimately take or whether or when any such amendments might be adopted. The Company's fuller's earth reserves are both owned and leased. The loss of any of the leased reserves could materially decrease the Company's reserves of fuller's earth, but it is believed that alternative economical reserves could be developed. The Company maintains a continuous program of exploration for additional reserves and attempts to acquire reserves sufficient to replenish its consumption each year, but it cannot assure that additional reserves will continue to become available. The Company oversees all of its mining operations, including its exploration activity and the obtaining of necessary state and federal mining permits. The following table shows a summary of minerals sold by the Company for the last five years in short tons:
Tons of Minerals Sold (1) ------------------------- 1995 1994 1993 1992 1991 ---- ---- ---- ---- ---- (In thousands) Sodium Bentonite: Belle Fourche, SD ............................... 133 203 147 124 96 Upton, WY ....................................... 434 424 351 334 344 Colony, WY ...................................... 809 791 701 776 695 Lovell, WY ...................................... 268 299 273 103 85
Tons of Minerals Sold (1) ------------------------- 1995 1994 1993 1992 1991 ---- ---- ---- ---- ---- (In thousands) Calcium Bentonite: Aberdeen, MS .................................... 63 70 61 62 43 Sandy Ridge, AL ................................. 170 174 167 155 142 Fuller's Earth: Mounds, IL ...................................... 203 242 239 225 211 Paris, TN (2) ................................... 54 52 17 -- -- Leonardite: Gascoyne, ND .................................... 19 17 15 13 20 (1) May include minerals of a different type not mined at this location. (2) Acquired in 1992 and commenced operations in 1993.
The Company estimates that available supplies of other materials utilized in its mineral business are sufficient to meet its production requirements for the foreseeable future. Mining and Processing Bentonite. Bentonite is surface mined, generally with large earthmoving scrapers, and then loaded into trucks and off-highway haul wagons for movement to the processing plants. The mining and hauling of the Company's clay is done both by the Company and by independent contractors. Each of the Company's processing plants generally maintain stock piles of unprocessed clay of approximately four to eight months' production requirements. At the processing plants, bentonite is dried, crushed and sent through grinding mills, where it is sized into shipping form, then chemically modified where needed and transferred to silos for automatic bagging or shipment in bulk. Virtually all production is shipped as processed, rather than stored for inventory. Fuller's Earth. Fuller's earth is also surface mined using a combination of scrapers, dozers and loaders. Crude clay is then loaded into dump trucks and hauled to the processing plant where it is dried or calcined, crushed and screened. Inventories of unprocessed clay generally are no more than a two-week supply. Mining is thus performed on a year-round basis. Product Development and Patents The Company works actively with customers in each of its major markets in order to develop commercial applications of specialized grades of bentonite, and it maintains a bentonite research center and laboratory testing facility adjacent to its corporate headquarters as well as one in the United Kingdom When a need for a product which will accomplish a particular goal is perceived, the Company will work to develop the product, research its marketability and study the feasibility of its production. The Company will also continue its practice of co-developing products with customers or others as new needs arise. The Company's development efforts emphasize markets with which it is familiar and products for which it believes there is a viable market. The Company holds a number of U.S. and international patents covering the use of bentonite and products containing bentonite. The Company follows the practice of obtaining patents on new developments whenever feasible. The Company, however, does not consider that any one or more of such patents is material to its Minerals and Environmental businesses as a whole. Regulation and Environmental The Company believes it is in material compliance with applicable regulations now in effect with respect to surface mining. Since reclamation of exhausted mining sites has been a regular part of the Company's surface mining operations for the past 27 years, maintaining compliance with current regulations has not had a material effect on its mining costs. The costs of reclamation are reflected in the prices of the bentonite sold. The grinding and handling of dried clay is part of the production process, and, because it generates dust, the Company's mineral processing plants are subject to applicable clean air standards (including Title V of the Clean Air Act). All of the Company's plants are equipped with dust collection systems. The Company has not had and does not presently anticipate any significant problems in connection with its dust emission, though it expects ongoing expenditures for the maintenance of its dust collection systems and required annual fees. The Company's mineral operations are also subject to other federal, state, local and foreign laws and regulations relating to the environment and to health and safety matters. Certain of these laws and regulations provide for the imposition of substantial penalties for non-compliance. While the costs of compliance with, and penalties imposed under, these laws and regulations have not had a material adverse effect on the Company, future events, such as changes in, or modified interpretations of, existing laws and regulations or enforcement policies or further investigation or evaluation of potential health hazards of certain products, may give rise to additional compliance and other costs that could have a material adverse effect on the Company. ABSORBENT POLYMERS Since the early 1970s, the Company has utilized a technique called modified bulk polymerization ("MBP") to manufacture water soluble polymers for the oil well drilling industry. This technique has been modified to produce superabsorbent polymers ("SAP"), a category of polymers known for its extremely high water absorbency. Chemdal Corporation was formed in 1986 to manufacture and market absorbent polymers, with primary emphasis on SAP. To date, the Company's sales of SAP have been almost exclusively for use as an absorbent in personal care products, primarily disposable baby diapers. The Company produces SAP at its U.S. facility with an annual capacity of 70,000 tons, and at its U.K. facility through Chemdal Limited, with an annual capacity of 40,000 tons. Demand for the Company's products in the United States has grown significantly in recent years as the amount of SAP used in new diaper designs has increased. SAP is more absorbent than the fluff pulp used in traditional disposable diapers. The use of SAP in diapers allows for a thinner diaper that occupies less shelf space in stores and less landfill space. SAP also helps to hold moisture inside the diaper, thereby causing less irritation to the wearer's skin and reducing leakage. Based upon the Company's expectations regarding consumer and retail preferences, the Company believes that SAP will continue to be used in new diaper designs. While no assurance can be given that markets in developing countries will follow the trends of developed countries, the Company also believes that disposable diapers containing increasing amounts of SAP will gain more acceptance in developing countries as per capita incomes in those countries rise. Principal Products and Markets The Company's SAP is primarily marketed under the trade names ARIDALLAE and ASAPAE. To date, the Company's customers have been primarily private label and national brand diaper manufacturers. The Company believes that this segment of the diaper market has grown faster than the brand name segment, which currently accounts for the majority of that market. During 1995, the Company began selling to manufacturers of brand name personal care products and is seeking to increase its sales to that segment of the market. Sales and Distribution The Company sells SAP to the personal care market in the United States on a direct basis and, in other countries, both on a direct basis and through distributors. The Company expects to rely increasingly on a direct sales approach in the personal care market. The Company's direct sales efforts employ a team approach that includes both technical and marketing representatives. In 1995, the top two customers accounted for approximately 45% of the Company's polymer sales, and the top five customers accounted for approximately 58% of such sales. Research and Development The Company continually seeks to improve the performance of its absorbent polymers. It also intends to pursue additional applications for its absorbent polymers in other markets either directly, or indirectly through marketing or distribution arrangements. Polymers also have applications in water treatment and in cosmetics, and acrylic-based polymers can be used in the newer, more concentrated detergents which use smaller packaging. The Company owns several patents relating to its MBP process developed in the 1970s, and to modifications of its MBP process developed in the 1980s which relate to its SAP manufacturing process. The patents on the MBP process have begun to expire. The patents relating to the SAP modifications thereto expire at various times commencing in 2002. The Company follows the practice of obtaining patents on new developments whenever reasonably practicable. The Company also relies on unpatented know-how, trade secrets and improvements in connection with its SAP manufacturing process. There can be no assurance that others will not independently develop substantially equivalent proprietary information and techniques, or otherwise gain access to or disclose the Company's trade secrets, or that the Company can meaningfully protect its rights to its unpatented trade secrets. Raw Materials The process used by the Company to produce SAP primarily uses acrylic acid and, to a lesser extent, potassium and sodium alkalies and catalysts. The Company's polymer operations are supplied by three major producers of acrylic acid. The Company has been able to obtain adequate supplies of acrylic acid to meet its production requirements to date. The Company knows of four acrylic acid suppliers in the United States, three in Europe and four in the Far East. The Company is aware that at least five of these suppliers manufacture SAP and, therefore, compete with the Company in this market. Potassium and sodium alkalies are available on a commercial basis worldwide with no meaningful limitations on availability. Catalysts are available from a small number of high-technology chemical manufacturers; however, the Company does not anticipate any difficulties in obtaining catalysts. Competition The Company believes that there are approximately five polymer manufacturers and several importers that compete with its U.S. operation, several of which have substantially greater resources than the Company. The Company's U.K. operation competes with a total of approximately seven producers and several importers. Only one producer has substantially more production capacity and several producers have greater resources than the Company. Further, several of these competitors are vertically integrated and produce acrylic acid, the primary cost component of SAP. The competition in both the Company's domestic and international markets is primarily a matter of product quality and price, and it historically has been very vigorous. The Company believes that its polymer manufacturing process has enabled it to add polymer production capacity at a lower capital investment cost than that required by other processes currently in widespread commercial use. Regulation and Environmental The Company's production process for SAP consumes virtually all chemicals and other raw materials used in the process. Virtually all materials which are not consumed by the end product are recycled through the process. The Company's polymer plants, therefore, generate a minimal amount of chemical waste. The handling of dried polymer is part of the production process, and, because this generates dust, the Company's polymer plants must meet clean air standards. The Company's polymer plants are equipped with dust collection systems, and the Company believes that it is in material compliance with applicable state and federal clean air regulations. The Company's absorbent polymer business is subject to other federal, state, local and foreign laws and regulations relating to the environment and to health and safety matters. Certain of these laws and regulations provide for the imposition of substantial penalties for non-compliance. While the costs of compliance with, and penalties imposed under, these laws and regulations have not had a material adverse effect on the Company, future events, such as changes in, or modified interpretations of, existing laws and regulations or enforcement policies or further investigation or evaluation of potential health hazards of certain products, may give rise to additional compliance and other costs that could have a material adverse effect on the Company. TRANSPORTATION The Company operates a long-haul trucking business and a freight brokerage business primarily for delivery of its own products in package and bulk form throughout the continental United States. Through its transportation operations, the Company is better able to control costs, maintain delivery schedules and assure equipment availability. The long-haul trucking subsidiary performs transportation services on outbound movements from the Company's production plants and attempts to haul third parties' products on return trips whenever possible. In 1995, approximately 74% of the revenues of this segment involved the Company's products. FOREIGN OPERATIONS AND EXPORT SALES Approximately 35% of the Company's 1995 net sales were to customers in approximately 60 countries other than the United States. To enhance its overseas market penetration, the Company maintains a mineral processing plant in the United Kingdom A processing plant, 60% owned by the Company, operates in Australia, as well as a blending plant in Canada. Through a joint venture, the Company also has the capability to process minerals in Mexico. Chartered vessels deliver large quantities of the Company's bulk, dried sodium bentonite to the plants in the United Kingdom and Australia, where it is processed and mixed with other clays and distributed throughout Europe and Australia. The Company's U.S. bentonite is also shipped in bulk to Japan. The Company also maintains a worldwide network of independent dealers, distributors and representatives. The Company produces absorbent polymers at its U.S. and U.K. plants, and serves markets in Western Europe, South America, Asia and the Middle East. The Company's international operations are subject to the usual risks of doing business abroad, such as currency devaluations, restrictions on the transfer of funds and import and export duties. The Company, to date, has not been materially affected by any of these risks. See Note 2 of the Company's Notes to Consolidated Financial Statements included elsewhere herein, which Note is incorporated by reference for sales attributed to foreign operations and export sales from the United States. EMPLOYEES As of December 31, 1995, the Company employed 1,375 persons, 241 of whom were employed overseas. At December 31, 1995, there were approximately 751, 289, 261 and 24 persons employed in the Company's minerals, absorbent polymers, environmental and transportation segments, respectively, along with 50 corporate employees. Operating plants are adequately staffed, and no significant labor shortages are presently foreseen. Approximately 187 of the Company's employees in the United States and approximately 33 of the Company's employees in the United Kingdom are represented by six labor unions, which have entered into separate collective bargaining agreements with the Company. Employee relations are considered good. Item 2. Properties The Company and its subsidiaries operate the following principal plants, mines and other facilities, all of which are owned, except as noted:
Location Principal Function MINERALS Belle Fourche, SD.................. Mine and process sodium bentonite Colony, WY (two plants)............ Mine and process sodium bentonite Upton, WY ......................... Mine and process sodium bentonite Mounds, IL......................... Mine and process fuller's earth Paris, TN.......................... Mine and process fuller's earth Rock Springs, NV................... Mine and process calcium bentonite and diatomaceous earth Gascoyne, ND....................... Mine and process leonardite Aberdeen, MS....................... Process calcium bentonite Letohatchee, AL.................... Package and load calcium bentonite Sandy Ridge, AL.................... Mine and process calcium bentonite; blend ADDITROLAE Columbus, OH (1)................... Blend ADDITROLAE; process chromite sand Granite City, IL (1)............... Package cat litter; process chromite sand Waterloo, IA....................... Blend ADDITROLAE Albion, MI (1)..................... Blend ADDITROLAE York, PA........................... Blend ADDITROLAE; package cat litter Chattanooga, TN.................... Blend ADDITROLAE Neenah, WI......................... Blend ADDITROLAE Toronto, Ontario, Canada........... Blend ADDITROLAE Geelong, Victoria, Australia (1)... Process bentonite; blend ADDITROLAE Birkenhead, Merseyside, U.K. (2)... Process bentonite and chromite sand; blend ADDITROLAE; research laboratory ENVIRONMENTAL Lovell, WY......................... Mine and process sodium bentonite Villa Rica, GA .................... Manufacture BentomatAEgeosynthetic clay liner Sulphur, LA ....................... Manufacture environmental equipment Fairmount, GA (1).................. Manufacture ClaymaxAEgeosynthetic clay liner Morgantown, WV (1)................. Reactivate spent carbon for Regeneration Technologies, Inc. Salt Lake City, UT (1)............. Sales and engineering for CETCO Various service centers (1)........ Distribution and service facilities for CETCO recycling services ABSORBENT POLYMERS Aberdeen, MS....................... Manufacture absorbent polymers Birkenhead, Merseyside, U.K. ...... Manufacture absorbent polymers; research laboratory and headquarters for Chemdal Limited Palatine, IL (1)................... Chemdal Corporation headquarters; research laboratory TRANSPORTATION Scottsbluff, NE.................... Transportation headquarters and terminal CORPORATE Arlington Heights, IL (1) ......... Corporate headquarters; CETCO headquarters; Nanocor, Inc. headquarters; research laboratory (1) Leased. (2) Certain offices & facilities are leased.
Item 3. Legal Proceedings The Company is party to a number of lawsuits arising in the normal course of its business. The Company does not believe that any pending litigation will have a material adverse effect on its consolidated financial position. The Company's processing operations require permits from various governmental authorities. From time to time, the Company has been contacted by government agencies with respect to required permits or compliance with existing permits, while the Company has been notified of certain situations of non-compliance, management does not expect the fines, if any, to be significant. Item 4. Submission of Matters to a Vote of Security Holders None. Executive Officers of Registrant
Name Age Principal Occupation for Last Five Years ---- --- ---------------------------------------- John Hughes 53 President and Chief Executive Officer since 1985; a Director since 1984. Peter L. Maul 46 Vice President since 1993; prior thereto Vice President of Marketing at Chemstar, Inc. 1986-1992; prior thereto, Vice President at American Colloid Company. Roger P. Palmer 59 Senior Vice President since 1994 and President of Colloid Environmental Technologies Company since August 1994; prior thereto, Vice President since 1990 and Vice President and General Manager of Colloid Environmental Technologies Company since 1991; prior thereto, Group Sales Manager of the Building Materials Group. Clarence O. Redman 53 Secretary of the Company since 1982; a Director since 1989 and Partner and Chief Executive Officer, Keck, Mahin & Cate (law firm).* Paul G. Shelton 46 Senior Vice President - Chief Financial Officer since 1994 and President of AMCOL International's transportation units since May 1994; prior thereto, Vice President - Chief Financial Officer since 1984; a Director since 1988. Robert C. Steele 43 Senior Vice President since 1994 and President of American Colloid Company since May, 1994; prior thereto, Vice President since 1986. Lawrence E. Washow 43 Senior Vice President since 1994 and President of Chemdal International Corporation since September 1992; prior thereto, Vice President of the Company and Vice President and General Manager of Chemdal Corporation since 1986. - ------------------ * Keck, Mahin & Cate has been retained as counsel to the Company.
All officers of the Company are elected annually by the Board of Directors for a term expiring at the annual meeting of directors following their election or when their respective successors are elected and shall have qualified. All directors are elected by the stockholders for a three-year term or until their respective successors are elected and shall have qualified. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters. The Common Stock is traded on The Nasdaq Stock Market under the symbol ACOL. The following table sets forth, for the periods indicated, the high and low sale prices of the Common Stock, as reported by The Nasdaq Stock Market, and cash dividends declared per share. Prices and cash dividends have been adjusted to reflect three-for-two and two-for-one stock dividends paid in January 1993 and June 1993, respectively.
Cash Dividends Stock Price Declared ----------------------- Per High Low Share ---- ----- --------- Fiscal Year Ended December 31, 1995: 1st Quarter ........................................ $14.63 $11.87 $ .0600 2nd Quarter ........................................ 16.25 12.75 .0600 3rd Quarter ........................................ 18.25 15.25 .0700 4th Quarter ........................................ 17.37 14.13 .0700 Fiscal Year Ended December 31, 1994: 1st Quarter ........................................ 25.25 13.50 .0600 2nd Quarter ........................................ 16.25 10.50 .0600 3rd Quarter ........................................ 16.00 12.00 .0600 4th Quarter ........................................ 17.75 13.75 .0600 Fiscal Year Ended December 31, 1993: 1st Quarter ........................................ 12.75 9.13 .0500 2nd Quarter ........................................ 15.63 11.25 .0500 3rd Quarter ........................................ 28.50 13.25 .0500 4th Quarter ........................................ 33.00 19.25 .0500 - -------------------- As of February 21, 1996, there were 2,304 holders of record of the Common Stock, excluding shares held in street name.
The Company has paid cash dividends every year for over 58 years. The Company intends to continue to pay cash dividends on its Common Stock, but the payment of dividends and the amount and timing of such dividends will depend on the Company's earnings, capital requirements, financial condition and other factors deemed relevant by the Company's Board of Directors. Item 6. Selected Financial Data The following is selected financial data for the Company and its subsidiaries for the five years ended December 31, 1995. Per share amounts have been adjusted to reflect a two-for-one stock split and a three-for-two stock split effected in the nature of stock dividends in June 1993 and January 1993, respectively. All per share calculations are fully diluted, based on weighted average number of common and common equivalent shares outstanding during the year. SUMMARY OF OPERATIONS (Dollars in thousands, except per share amounts)
PER SHARE 1995 1994 1993 1992 1991 ---- ---- ---- ---- ---- Shareholders' Equity $ 7.90 $ 7.34 $ 7.38 $ 3.48 $ 3.42 Net Income .90 .78 .76 .52 .26 Dividends .26 .24 .20 .16 .15 Shares Outstanding 19,679,480 19,486,520 17,223,854 16,480,644 15,898,944 INCOME DATA Sales $ 347,688 $ 265,443 $ 219,151 $ 182,669 $ 148,790 Gross Profit 76,562 59,487 49,843 42,454 32,409 Operating Profit 32,397 23,991 21,312 16,510 9,531 Net Interest Expense (6,727) (2,332) (3,036) (3,484) (4,363) Net Other Income (Expense) 1,217 544 474 (325) 246 Pretax Income 26,887 22,203 18,750 12,701 5,414 Income Taxes 9,082 6,828 5,567 4,105 1,207 Net Income 17,771 15,283 13,120 8,506 4,152 BALANCE SHEET Current Assets (2) $ 126,337 $ 108,691 $ 95,870 $ 63,072 $ 64,660 Net Property, Plant & Equipment 175,211 141,420 83,233 61,231 62,245 Total Assets (2) 322,366 263,899 184,029 129,646 132,441 Current Liabilities 35,882 36,617 27,401 21,092 21,534 Long-term Debt 117,016 71,458 16,689 38,312 43,792 Shareholders' Equity (2) 155,494 143,073 127,132 57,338 54,316 RATIO ANALYSIS Pretax Margin 7.73% 8.36% 8.56% 6.95% 3.64% Effective Tax Rate 33.78 30.75 29.69 32.32 22.29 Net Margin 5.11 5.76 5.99 4.66 2.79 Return On Ending Assets 5.51 5.79 7.13 6.56 3.13 Return On Ending Equity 11.43 10.68 10.32 14.83 7.64 OPERATING DATA Operating Margins (1): Minerals 10.19% 12.72% 9.47% 12.12% Absorbent Polymers 14.00 13.58 19.97 11.77 Environmental 10.52 5.79 13.85 13.96 Transportation 4.88 4.74 4.02 3.96 Total Operating Margin 9.32 9.04 9.72 9.04 - ------------------------- (1) The Company did not restate the segment information prior to 1992. (2) Restated 1991 through 1994 for change in inventory method.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Financial Condition At December 31, 1995, the Company had outstanding debt of $121.1 million (including both long- and short-term debt) and cash and cash equivalents of $1.9 million, compared with $75.0 million in debt and $10.4 million in cash and cash equivalents at December 31, 1994. The long-term debt represented 42.9% of total capitalization at December 31, 1995, compared with 33.3% at December 31, 1994. The Company had a current ratio of 3.52 to 1 on December 31, 1995, with approximately $90.5 million in working capital, compared with 2.97 to 1 and $72.1 million, respectively, at December 31, 1994. The $18.4 million increase (25.5%) in working capital resulted from sales growth of 31.0%, and included increases in accounts receivable of $15.8 million (30.2%), inventories of $6.9 million (17.1%) and prepaid expenses of $3.1 million offset by an $8.5 million reduction in cash balances. Prepaid expenses include approximately $2.0 million in income taxes, which will be applied toward 1996 estimated tax payments. The cash balances were lower, as proceeds of the October 1994 private debt placement were invested in capital expenditures. On September 25, 1995, the Company increased its revolving credit facility from $50 million to $100 million and extended its term from October 1997 to October 2000. The Company had $43.2 million in unused, committed credit lines at December 31, 1995. The Company currently anticipates capital expenditures of approximately $40 million for 1996. Capacity expansion of the U.K. polymer operation and a modification of existing U.S. polymer capacity are anticipated; however, no acquisitions are included in the estimate. The current indicated annual dividend rate is $.28 per share. If the rate remains constant and the Board of Directors continues to declare dividends, the dividend payments will be approximately $5.4 million in 1996, compared with approximately $5.0 million in 1995. Management believes that the Company has adequate resources to fund the capital expenditures discussed above, the dividend payments and anticipated increases in working capital requirements through its existing, committed credit lines, cash balances and operating cash flow. In addition to the capital expenditures which have been authorized by the Board of Directors, management continues to explore growth opportunities in the environmental and minerals markets, as well as further capacity expansion in the polymer segment. Results of Operations for the Three Years Ended December 31, 1995 Net sales increased by $82.2 million, or 31.0% , from 1994 to 1995, and by $46.3 million, or 21.1%, from 1993 to 1994. Operating profits increased by $8.4 million, or 35.0%, from 1994 to 1995, and by $2.7 million, or 12.6%, from 1993 to 1994. A review of sales, gross profit, general, selling and administrative expenses, and operating profit by segment follows: Minerals
Year Ended December 31, ---------------------------------------------------------------------------------------------- 1995 1994 1993 1995 vs. 1994 1994 vs. 1993 ---------------- --------------- ------------------ ----------------- ----------------- $ % $ % ----- ----- ----- ----- (Dollars in Thousands) Net sales....... $154,840 100.0% $154,490 100.0% $129,879 100.0% 350 0.2% $24,611 18.9% Cost of sales... 122,264 79.0% 121,213 78.5% 104,921 80.8% ------- ------ ------- ----- --------- ----- Gross profit. 32,576 21.0% 33,277 21.5% 24,958 19.2% (701) -2.1% 8,319 33.3% General, selling and administrative expenses 16,801 10.9% 13,632 8.8% 12,653 9.7% 3,169 23.2% 979 7.7% ------ ----- ------ ----- ------ ---- Operating profit 15,775 10.1% 19,645 12.7% 12,305 9.5% (3,870) -19.7% 7,340 59.7%
Sales increased in the durable goods and consumables sectors from 1993 to 1994, both domestically and overseas, as a result of an improved economy, higher U.K. sales volume, $2.3 million higher royalty income and a full year of sales to the agricultural carrier market. Sales decreased domestically during 1995 as royalties declined by approximately $3.8 million, as anticipated, and the principal customer for clay carrier products switched to a local, non-clay alternative at mid-year. Construction and environmental products contributed to the U.K. operation's sales growth, as did favorable translation exchange rates. Gross profit margins for 1995 declined from those of 1994 by approximately 2.3%, compared with a 12.0% improvement from 1993 to 1994. The 1993 to 1994 gross profit margin improvement was primarily related to the increased royalties, whereas the decline in gross profit margin from 1994 to 1995 was not as severe as would have been anticipated with the royalty decline, largely due to price increases in certain markets. General, selling and administrative expenses for 1995 increased by $3.2 million, or 23.2%, over 1994, which were 7.7% higher than the 1993 level. Higher costs for research and development, and management information systems contributed to the higher general, selling and administrative expense increase. A more precise division of expenses shared between minerals and corporate was accomplished during 1995 than for 1994, causing a higher percentage increase. The lower royalty level experienced in 1995 is anticipated to continue, as many of the agreements have been converted to fully paid licenses. Cat litter volume continues to grow. The cat litter facilities added during 1995, however, have yet to be fully utilized. This temporary overcapacity, plus lower business volumes which were experienced in other markets during the last months of 1995, are likely to depress operating margins in the near-term. Absorbent Polymers
Year Ended December 31, ---------------------------------------------------------------------------------------------- 1995 1994 1993 1995 vs. 1994 1994 vs. 1993 ---------------- --------------- ------------------ ----------------- ----------------- $ % $ % ----- ----- ----- ----- (Dollars in Thousands) Net sales....... $120,762 100.0% $58,591 100.0% $51,820 100.0% 62,171 106.1% $6,771 13.1% Cost of sales... 94,924 78.6% 43,325 73.9% 36,127 69.7% ------ ----- ------ ----- ------- ----- Gross profit. 25,838 21.4% 15,266 26.1% 15,693 30.3% 10,572 69.3% (427) -2.7% General, selling and administrative expenses 8,936 7.4% 7,307 12.5% 5,347 10.3% 1,629 22.3% 1,960 36.7% ------ ----- ------ ----- ------ ----- Operating profit 16,902 14.0% 7,959 13.6% 10,346 20.0% 8,943 112.4% (2,387) -23.1%
Sales of absorbent polymers for 1995 increased by 106.1% over 1994 levels on a unit sales volume increase of 116.1%. This compares to a 13.1% sales increase from 1993 to 1994 on a unit volume increase of 15.9%. The unit volume increase in 1995 was largely attributable to the growth in European market share. Gross profit margins declined 13.9% from 1993 to 1994 as capacity expanded from 30,000 metric tons to 80,000 metric tons. Unit sales volume increased only 16%. Gross margins declined a further 18.0% in 1995 as the cost of raw materials, principally acrylic acid, increased, and unit selling prices declined. The general, selling and administrative expense increase from 1993 to 1994 was directed to the marketing and administrative infrastructure to accommodate the growth which occurred from 1994 to 1995. Despite lower unit selling prices and higher raw material costs, the operating profit margin improved by 2.9% from 1994 to 1995 because of the increase in volume. The Company aggressively expanded its capacity from 1993 to 1995 to produce absorbent polymers. The Company began the three-year period with worldwide capacity of 20,000 metric tons, and ended with 110,000 metric tons. The Company's production capability is presently among the largest in the world. The expansions were undertaken ahead of the industry demand curve. Fourth quarter 1995 capacity utilization was approximately 56%, thus allowing for greater output as demand increases. Depreciation on the most recent U.S. expansion of 30,000 metric tons will be calculated on the units-of-production basis until the third quarter of 1996. All other depreciation is calculated using the straight-line method. Management anticipates lower average unit selling prices as larger volume customers are expected to account for a greater proportion of the sales. The average cost of acrylic acid is expected to be lower in 1996 than in 1995, however it is unknown whether the combination of lower acrylic costs and greater plant throughput will offset the expected price decline. Management does not anticipate a return of operating profit margins to the 20% level experienced during 1993. Environmental
Year Ended December 31, ---------------------------------------------------------------------------------------------- 1995 1994 1993 1995 vs. 1994 1994 vs. 1993 ---------------- --------------- ------------------ ----------------- ----------------- $ % $ % ----- ----- ----- ----- (Dollars in Thousands) Net sales....... $50,420 100.0% $30,726 100.0% $20,108 100.0% 19,694 64.1% $10,618 52.8% Cost of sales... 34,964 69.3% 22,397 72.9% 12,937 64.3% ------- ------ ------- ------ ------- ----- Gross profit. 15,456 30.7% 8,329 27.1% 7,171 35.7% 7,127 85.6% 1,158 16.1% General, selling and administrative expenses 10,151 20.1% 6,549 21.3% 4,387 21.8% 3,602 55.0% 2,162 49.3% ------ ----- ----- ----- ----- ----- Operating profit 5,305 10.6% 1,780 5.8% 2,784 13.9% 3,525 198.0% (1,004) -36.1%
Approximately 50% of the sales increase from 1994 to 1995 was attributable to acquisitions. A further 14% of the growth came from increased sales in international markets. Approximately 85% of the sales growth from 1993 to 1994 came from the combination of acquisitions and increased sales of BentomatAE environmental liner products. Gross profit margins in 1995 improved by 13.3%. Inventory charges and changes in distribution during 1994 accounted for the difference between 1994 and 1995. Increased sales of lower margin products and the non-recurring charges accounted for the 24.1% gross margin decline from 1993 to 1994. General, selling and administrative expenses increased from 1993 to 1994, primarily as a result of increased staff associated with the acquisitions and increased staffing in marketing, including the establishment of an international marketing department. The 1995 increase reflected further expansion of the international marketing group and additional staff associated with the Claymax acquisition. Transportation
Year Ended December 31, ---------------------------------------------------------------------------------------------- 1995 1994 1993 1995 vs. 1994 1994 vs. 1993 ---------------- --------------- ------------------ ----------------- ----------------- $ % $ % ----- ----- ----- ----- (Dollars in Thousands) Net sales....... $21,666 100.0% $21,636 100.0% $17,344 100.0% 30 0.1% $4,292 24.7% Cost of sales... 18,974 87.6% 19,021 87.9% 15,323 88.3% ------- ----- ------- ------ ------- ------ Gross profit. 2,692 12.4% 2,615 12.1% 2,021 11.7% 77 2.9% 594 29.4% General, selling and administrative expenses 1,635 7.5% 1,590 7.3% 1,324 7.6% 45 2.8% 266 20.1% ------ ----- ------ ------ ------ ------ Operating profit 1,057 4.9% 1,025 4.8% 697 4.1% 32 3.1% 328 47.1%
Increased brokerage of cat litter and environmental shipments fueled the growth in transportation revenues from 1993 to 1994. The conversion of shipments of bentonite used in the manufacturing of liner products from truck to rail offset the further revenue gains made in the shipment of cat litter products during 1995. Gross profit margins have benefitted from the high volume levels, as well as greater truck availability during the three-year period. Corporate
Year Ended December 31, ---------------------------------------------------------------------------------------------- 1995 1994 1993 1995 vs. 1994 1994 vs. 1993 ---------------- --------------- ------------------ ----------------- ----------------- $ % $ % ----- ----- ----- ----- (Dollars in Thousands) General, selling and administrative expenses $ 6,642 $ 6,418 $ 4,820 224 3.5% 1,598 33.2% ------ ------ ------- Operating loss.. (6,642) (6,418) (4,820)
Corporate costs include management information systems, human resources, investor relations and corporate communications, finance, purchasing, research costs for new markets and corporate governance costs. During 1994, the Company installed a new management information system and significantly increased research and development activities. These expenditures continued into 1995. The 1995 expenses reflected a more precise split of the costs previously shared by minerals and corporate. The Company is actively engaged in research and development efforts to create new applications for its reserves of bentonite. The Company has formed a wholly-owned subsidiary, Nanocor, Inc., to capitalize on its research and development progress in bentonite-based nanocomposites. When incorporated into plastics, bentonite-based nanocomposites can produce material with significantly improved properties that encompass a variety of commercial applications. Nanocor's technologies are still in the developmental stage, but management feels that these products have the potential to become a significant part of the Company's future growth. An incremental increase in research and development costs of approximately $2 million is expected for 1996 as Nanocor, Inc. expands its product development efforts. All costs associated with Nanocor, Inc. will be carried in corporate for 1996. Net interest expense Net interest expense increased by $4.4 million from 1994 to 1995 as a result of higher borrowing levels primarily associated with capital expenditures and acquisitions. Net interest expense for 1994 was $.7 million lower than in 1993 as a result of higher levels of capitalized interest. Other income (expense) Other income for 1995 included investment grants of approximately $.5 million and a $.6 million gain related to the cancellation of an interest rate swap, compared with $.5 million of investment grants in 1994 and $.5 million in recovered defense costs in 1993. Income taxes The income tax rate for 1995 was 33.8% compared with 30.8% in 1994 and 29.7% in 1993. The estimated effective tax rate for 1996 is 36%. Earnings Per Share Earnings per share were calculated using the weighted average number of shares, including common stock equivalents, outstanding during the year. Stock options issued to key employees and directors are considered common stock equivalents. The 1993 weighted average shares outstanding were approximately 17.2 million shares compared with approximately 19.5 million shares and 19.7 million shares in 1994 and 1995, respectively. An equity offering of 3.5 million shares was completed in October 1993, accounting for most of the difference in the shares outstanding between the periods. Item 8. Financial Statements and Supplementary Data See the Index to Financial Statements and Financial Statement Schedules on Page F-1. Such Financial Statements and Schedules are incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. PART III Item 10. Directors and Executive Officers of the Registrant The table below lists the names and ages of all directors and nominees of the Company, and all positions each person holds with the Company. Board of Directors of the Registrant Arthur Brown, 55, (2) Chairman,President and Chief Executive Officer of Hecla Mining Company. Director since 1990. Robert E. Driscoll, III, 57, (2, 5) Former Dean and Professor of Law, University of South Dakota. Director since 1985. Raymond A. Foos, 67, (2, 3) Former Chairman of the Board, President and Chief Executive Officer of Brush Wellman, Inc. (manufacturer of beryllium and specialty materials). Director since 1981. John Hughes, 53, (1) President and Chief Executive Officer, AMCOL International Corporation. Director since 1984. Robert C. Humphrey, 77, (1, 3, 4) Retired Chairman of the Board, NBD Bank Evanston, N.A. Director since 1977, except for a three-month period in 1989. Jay D. Proops, 54, (1, 3) Private investor and former Vice Chairman and co-founder of The Vigoro Corporation. Director since June 1995. C. Eugene Ray, 63, (1, 2, 3, 4) Chairman of the Board since 1988. Former Executive Vice President - Finance of Signode Industries, Inc. (manufacturer of industrial strapping products). Director since 1981. Clarence O. Redman, 53, (1, 5) Partner and Chief Executive Officer of the law firm of Keck, Mahin & Cate. Secretary of the Company since 1982. Director since 1989. Paul G. Shelton, 46, (1) Senior Vice President - Chief Financial Officer, AMCOL International Corporation. Director since 1988. Dale E. Stahl, 48, (1, 3) President and Chief Operating Officer of Gaylord Container Corporation. Director since June 1995. Paul C. Weaver, 33, (1, 2) Senior Corporate Account Manager for Nielsen Marketing Research. Director since May 1995. (1) Member of Executive Committee of the Board of Directors (2) Member of Audit Committee (3) Member of Compensation Committee (4) Member of Nominating Committee (5) Member of Option Committee Additional information regarding the directors of the Company is included under the caption "Election of Directors", "Information Concerning Members of the Board" and "Compliance with Section 16(a) of the Securities Exchange Act." in the Company's proxy statement to be dated on or about April 8, 1996, and is incorporated herein by reference. Information regarding executive officers of the Company is included under a separate caption in Part I hereof, and is incorporated herein by reference, in accordance with General Instruction G(3) to Form 10-K and Instruction 3 to Item 401(b) of Regulation S-K. Item 11. Executive Compensation Information regarding the above is included under the caption "Compensation and Other Transactions with Management" in the Company's proxy statement to be dated on or about April 8, 1996, and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management Information regarding the above is included under the caption "Security Ownership" in the Company's proxy statement to be dated on or about April 8, 1996, and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions Information regarding the above is included under the caption "Compensation and Other Transactions with Management" in the Company's proxy statement to be dated on or about April 8, 1996, and is incorporated herein by reference. Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a) 1. See Index to Financial Statements and 2. Financial Statement Schedules on Page F-1. Such Financial Statements and Schedules are incorporated herein by reference. 3. See Index to Exhibits immediately following the signature page. (b) None. (c) See Index to Exhibits immediately following the signature page. (d) See Index to Financial Statements and Financial Statement Schedules on Page F-1. Item 14(a) Index to Financial Statements and Financial Statement Schedules
Page (1) Financial Statements: Independent Auditors' Report...................................................................... F-2 Consolidated Balance Sheets, December 31, 1995 and 1994........................................... F-3 Consolidated Statements of Operations, Years ended December 31, 1995, 1994, and 1993................................................. F-4 Consolidated Statements of Stockholders' Equity, Years ended December 31, 1995, 1994, and 1993................................................. F-5 Consolidated Statements of Cash Flows, Years ended December 31, 1995, 1994, and 1993................................................. F-6 Notes to Consolidated Financial Statements........................................................ F-7 (2) Financial Statement Schedules: Schedule II -- Valuation and Qualifying Accounts.................................................. F-21
All other schedules called for under Regulation S-X are not submitted because they are not applicable or not required or because the required information is not material or is included in the financial statements or notes thereto. Independent Auditors' Report The Board of Directors and Stockholders AMCOL International Corporation: We have audited the consolidated financial statements of AMCOL International Corporation and subsidiaries as listed in the accompanying index. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule as listed in the accompanying index. These consolidated financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of AMCOL International Corporation and subsidiaries as of December 31, 1995 and 1994, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1995, in conformity with generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. KPMG PEAT MARWICK LLP Chicago, Illinois March 8, 1996 AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets (Dollars in thousands, except per share amounts)
ASSETS December 31, ----------------------- 1995 1994 --------- --------- Current assets: Cash and cash equivalents............................................................. $ 1,888 $ 10,389 Accounts receivable: Trade, less allowance for doubtful accounts of $1,601 and $1,336.................... 65,267 49,144 Other............................................................................... 1,162 1,764 Inventories........................................................................... 47,205 40,302 Advance mining........................................................................ 2,678 2,363 Prepaid expenses...................................................................... 5,355 2,213 Current deferred tax asset............................................................ 2,782 2,516 -------- ---------- Total current assets............................................................... 126,337 108,691 ------- --------- Property, plant, equipment, and mineral rights and reserves: Land and mineral rights and reserves.................................................. 12,626 12,438 Depreciable assets.................................................................... 263,904 213,094 ------- --------- 276,530 225,532 Less accumulated depreciation......................................................... 101,319 84,112 ------- ----------- 175,211 141,420 Other assets: Goodwill, less accumulated amortization of $1,937 and $1,424.......................... 14,109 7,895 Other intangible assets, less accumulated amortization of $6,464 and $5,351........... 6,709 5,893 ----------- ---------- 20,818 13,788 ----------- ---------- $ 322,366 $ 263,899 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term obligations........................................... $ 3,875 $ 3,334 Current capital lease obligations..................................................... 194 173 Accounts payable...................................................................... 18,777 19,373 Accrued income taxes.................................................................. __ 807 Accrued liabilities................................................................... 13,036 12,930 ---------- ---------- Total current liabilities........................................................... 35,882 36,617 ---------- ---------- Long-term obligations: Long-term debt........................................................................ 116,517 70,756 Long-term capital lease obligations................................................... 499 702 ---------- --------- 117,016 71,458 ---------- --------- Deferred income tax liabilities.......................................................... 6,819 5,474 Estimated accrued reclamation............................................................ 4,826 4,839 Other liabilities........................................................................ 1,898 2,041 ---------- ---------- 13,543 12,354 Minority interest in subsidiary.......................................................... 431 397 ---------- ---------- Stockholders' equity: Common stock, par value $.01 per share. Authorized 50,000,000 shares, issued 21,343,864 shares.................................................................. 213 213 Additional paid-in capital............................................................ 74,967 74,279 Retained earnings..................................................................... 86,703 73,911 Cumulative translation adjustments.................................................... (2,351) (1,865) ---------- --------- 159,532 146,538 Less: Treasury stock (2,209,653 shares in 1995 and 2,329,522 shares in 1994)................ (4,038) (3,465) 155,494 143,073 $ 322,366 $ 263,899 =========== ==========
See accompanying notes to consolidated financial statements. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations (Dollars in thousands, except per share amounts)
Year Ended December 31, ------------------------------------ 1995 1994 1993 ---------- ----------- ----------- Net sales...................................................................... $347,688 $265,443 $ 219,151 Cost of sales.................................................................. 271,126 205,956 169,308 --------- -------- --------- Gross profit.............................................................. 76,562 59,487 49,843 General, selling and administrative expenses................................... 44,165 35,496 28,531 --------- --------- ---------- Operating profit.......................................................... 32,397 23,991 21,312 --------- --------- ---------- Other income (expense): Interest expense, net....................................................... (6,727) (2,332) (3,036) Other, net.................................................................. 1,217 544 474 ---------- --------- --------- (5,510) (1,788) (2,562) ------------ ---------- --------- Income before income taxes and minority interest in net income of subsidiary 26,887 22,203 18,750 Income taxes................................................................... 9,082 6,828 5,567 --------- --------- --------- Income before minority interest in net income of subsidiary.............. 17,805 15,375 13,183 Minority interest in net income of subsidiary.................................. (34) (92) (63) --------- -------- -------- Net income................................................................ $ 17,771 $ 15,283 $ 13,120 ========= ======== ======== Earnings per share............................................................. $ .90 $ .78 $ .76 ========= ========= =========
See accompanying notes to consolidated financial statements. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity (Dollars in thousands, except per share amounts)
Common Stock -------------------- Number Additional Cumulative of Paid-in Retained Translation Treasury Loan to Shares Amount Capital Earnings Adjustment Stock Officer Total ---------- ------ ----------- --------- ------------ -------- ------- ----- Balance at December 31, 1992. 18,843,864 $ 9,422 $ 1,487 $53,446 $(2,782) $(4,090) $(144) $ 57,339 Net income........... -- -- -- 13,120 -- -- -- 13,120 Cash dividends ($.20 per share)........ -- -- -- (3,323) -- -- -- (3,323) Repayment of loan to -- -- -- -- -- -- 144 144 officer........... Cumulative foreign exchange -- -- -- -- (537) -- -- (537) translation adjustment........ Amended par value of common shares from $1.00 per share to $0.01 -- (9,328) 9,328 -- -- -- -- -- per share......... Two-for-one stock -- 94 -- (94) -- -- -- -- split............. Purchase of 380 treasury shares... -- -- -- -- -- (3) -- (3) Sale of 385,438 treasury shares... -- -- 1,051 -- -- 509 -- 1,560 Sale of 2,500,000 common shares..... 2,500,000 25 58,808 -- -- -- 58,833 --------- --- ------- ------- ------- ------- ------- - ------- Balance at December 31, 1993. 21,343,864 213 70,674 63,149 (3,319) (3,584) -- 127,133 Net income........... -- -- -- 15,283 -- -- -- 15,283 Cash dividends ($.24 per share)........ -- -- -- (4,521) -- -- -- (4,521) Cumulative foreign exchange -- -- -- -- 1,454 -- -- 1,454 translation adjustment........ Purchase of 33,956 treasury shares... -- -- -- -- -- (443) -- (443) Sale of 420,142 treasury shares... -- -- 3,605 -- -- 562 -- 4,167 --------- -------- --------- -------- --------- --------- ------- -------- Balance at December 31, 1994. 21,343,864 213 74,279 73,911 (1,865) (3,465) -- 143,073 Net income.......... -- -- -- 17,771 -- -- -- 17,771 Cash dividends ($.26 per share)........ -- -- -- (4,979) -- -- -- (4,979) Cumulative foreign exchange -- -- -- -- (486) -- (486) translation adjustment........ Purchase of 58,000 treasury shares... -- -- -- -- -- (838) -- (838) Sale of 177,869 treasury shares -- -- 688 -- -- 265 -- 953 ------- ------- ------- ------- -------- -------- ----- -------- Balance at December 31, 1995. 21,343,864 $ 213 $74,967 $86,703 $(2,351) $(4,038) $ -- $ 15,283 ========== ========= ======= ======= ======== ======== ===== =========
See accompanying notes to consolidated financial statements. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (Dollars in thousands)
Year Ended December 31, 1995 1994 1993 --------- -------- -------- Cash flow from operating activities: Net income............................................................. $ 17,771 $15,283 $13,120 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion, and amortization............................ 21,289 14,442 10,584 Increase (decrease) in allowance for doubtful accounts............... 265 (500) 574 Increase (decrease) in deferred income taxes......................... 1,345 (651) (38) Increase (decrease) in estimated accrued reclamation................. (13) 7 129 Increase (decrease) in other noncurrent liabilities.................. (32) 623 (52) (Gain) loss on sale of depreciable assets............................ (254) (356) (89) Minority interest in net income of subsidiary........................ 34 93 63 (Increase) decrease in current assets: Accounts receivable................................................ (15,786) (11,289) (7,581) Inventories........................................................ (6,903) (10,662) (8,618) Advance mining..................................................... (315) (325) (60) Prepaid expenses................................................... (3,142) 238 142 Current deferred tax asset......................................... (266) (396) (205) Increase (decrease) in current liabilities: Accounts payable................................................... (596) 8,345 3,216 Accrued income taxes............................................... (807) (1,482) 307 Accrued liabilities................................................ 105 2,133 2,999 -------- -------- -------- Net cash provided by operating activities........................ 12,695 15,503 14,491 ------ ------- -------- Cash flow from investing activities: Proceeds from sale of depreciable assets............................... 775 690 170 Acquisition of land, mineral reserves, and depreciable assets.......... (62,782) (80,958) (33,320) (Increase) decrease in other assets.................................... (313) 29 831 ---------- ---------- --------- Net cash used in investing activities............................. (62,320) (80,239) (32,319) -------- -------- ------- Cash flow from financing activities: Proceeds from issuance of debt......................................... 109,984 77,715 30 Principal payments of debt and capital lease obligation................ (63,864) (22,725) (21,866) Proceeds from common stock issuance.................................... -- -- 58,833 Proceeds from sale of treasury stock................................... 953 4,167 1,560 Dividends paid......................................................... (4,979) (4,521) (3,323) Other.................................................................. (837) (499) (71) --------- --------- --------- Net cash provided by (used in) financing activities................. 41,257 54,137 35,163 ------- -------- -------- Cumulative translation adjustment......................................... (133) 486 (285) --------- --------- -------- Net increase (decrease) in cash and cash equivalents...................... (8,501) (10,113) 17,050 Cash at beginning of year................................................. 10,389 20,502 3,452 ------- -------- -------- Cash and cash equivalents at end of year.................................. $ 1,888 $10,389 $20,502 ========= ======= ======= Supplemental Disclosures of Cash Flows Information: Actual cash paid for: Interest............................................................... $ 7,791 $ 3,636 $ 3,399 ========= ======== ======== Income taxes........................................................... $ 10,066 $ 9,143 $ 4,246 ======== ======== ========
See accompanying notes to consolidated financial statements. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Dollars in thousands, except per share amounts) (1) Summary of Significant Accounting Policies Company Operations AMCOL International Corporation (the Company) may be divided into three principal categories of operations; minerals, absorbent polymers and environmental. The Company also operates a transportation business primarily for delivery of its own products. The Company's revenues are derived 44% from the minerals operation, 35% from absorbent polymers, 15% from environmental and 6% from transportation operations. The Company's sales were approximately 65% domestic and 35% overseas. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its foreign and domestic subsidiaries. All subsidiaries are wholly-owned except for one of the Australian subsidiaries, which is 60% owned by the Company, and a 49% interest in a Mexican subsidiary, which is accounted for at cost. All material intercompany balances and transactions, including profits on inventories, have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Translation of Foreign Currencies The accounts and transactions of subsidiaries located outside of the United States are translated into U.S. dollars at rates of exchange in accordance with Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation." The assets and liabilities of these subsidiaries are translated at the rate of exchange at the balance sheet date. The statements of operations are translated at the weighted average monthly rate. Foreign exchange translation adjustments are accumulated as a separate component of stockholders' equity while realized exchange gains or losses are included in income. Inventories Inventories are valued at the lower of cost or market. Cost is determined by the first-in, first-out (FIFO) or moving average methods. During 1995, in order to better match revenues and expenses, the Company adopted the FIFO method for certain inventories that had previously used the last-in, last-out (LIFO) method for determining cost. The Company has applied this change in method retroactively to January 1, 1991, which resulted in an increase in retained earnings of $1,753. The effect on the statement of operations was immaterial. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) (Dollars in thousands, except per share amounts) (1) Summary of Significant Accounting Policies (Continued) Property, Plant, Equipment, and Mineral Rights and Reserves Property, plant, equipment, and mineral rights and reserves are carried at cost. Depreciation is computed using the straight-line method for substantially all of the assets. Certain other assets, primarily field equipment are depreciated on the units-of-production method. Mineral rights and reserves are depleted using the units-of-production method. Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. Goodwill is being amortized on the straight-line method over periods of 15 to 40 years. Other intangibles, including trademarks and noncompete agreements, are amortized on the straight-line method over periods of up to ten years. Income Taxes The Company and its U.S. subsidiaries file a consolidated tax return. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect for the year in which those temporary differences are expected to be recovered or settled. Exploration Costs and Advance Mining Exploration costs are expensed as incurred. Costs incurred in removing overburden and mining bentonite are capitalized as advance mining costs until the bentonite from such mining area is transported to the plant site, at which point the costs are included in crude bentonite stockpile inventory. Research and Development Research and development costs, included in general, selling and administrative expenses, were approximately $4,801, $2,353, and $1,764 for the years ended December 31, 1995, 1994, and 1993. Earnings Per Share Earnings per share are computed by dividing net income by the weighted average of common shares outstanding after consideration of the dilutive effect of stock options outstanding at the end of each period. The weighted average number of common and common equivalent shares outstanding was 19,679,480 for 1995, 19,486,520 for 1994, and 17,223,854 for 1993. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) (Dollars in thousands, except per share amounts) (1) Summary of Significant Accounting Policies (Continued) Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly-liquid investments with original maturities of three months or less as cash equivalents. Reclassification Certain items in the 1994 and 1993 consolidated financial statements have been reclassified to comply with the consolidated financial statements presentation for 1995. (2) Business Segment and Geographic Area Information The Company operates in three major industry segments--minerals, absorbent polymers and environmental, and also operates a transportation business. The minerals segment mines, processes, and distributes clays and products with similar applications to various industrial and consumer markets. The absorbent polymers segment produces and distributes superabsorbent polymers primarily for use in consumer markets. The environmental segment processes and distributes clays and products with similar applications for use as a moisture barrier in commercial construction, landfill liners and in a variety of other industrial and commercial applications. The transportation segment includes a long haul trucking business and a freight brokerage business which provide services to both the Company's plants and outside customers. Intersegment sales are insignificant. Operating profit is defined as sales and other income directly related to a segment's operations, less operating expenses, which do not include interest costs. Identifiable assets by segments are those assets used in the Company's operations in that segment. Corporate assets are primarily cash and cash equivalents, corporate leasehold improvements and miscellaneous equipment. Export sales included in the United States were approximately $28,691, $17,430, and $12,206 for the years ended December 31, 1995, 1994, and 1993. One customer accounted for approximately 11% of sales in 1995. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) (Dollars in thousands, except per share amounts) (2) Business Segment and Geographic Area Information (Continued) The following summaries set forth certain financial information by business segment and geographic area for the years ended December 31, 1995, 1994, and 1993.
1995 1994 1993 -------- -------- -------- Business Segment: Revenues: Minerals......................................................... $154,840 $154,490 $129,879 Absorbent polymers............................................... 120,762 58,591 51,820 Environmental.................................................... 50,420 30,726 20,108 Transportation................................................... 21,666 21,636 17,344 -------- -------- -------- Total $347,688 $265,443 $219,151 ======== ======== ======== Operating profit: Minerals......................................................... $ 15,775 $ 19,645 $ 12,305 Absorbent polymers............................................... 16,902 7,959 10,346 Environmental.................................................... 5,305 1,780 2,784 Transportation................................................... 1,057 1,025 697 Corporate........................................................ (6,642) (6,418) (4,820) --------- --------- --------- Total $ 32,397 $ 23,991 $ 21,312 ========= ========= ========= Identifiable assets: Minerals......................................................... $134,250 $128,788 $105,561 Absorbent polymers............................................... 126,392 95,121 44,021 Environmental.................................................... 50,264 28,570 11,937 Transportation................................................... 1,235 1,242 1,311 Corporate........................................................ 10,225 10,178 21,199 -------- -------- -------- Total $322,366 $263,899 $184,029 ======== ======== ======== Depreciation, depletion, and amortization: Minerals......................................................... $ 10,748 $ 9,506 $ 8,236 Absorbent polymers............................................... 7,176 3,476 1,940 Environmental.................................................... 2,432 906 229 Transportation................................................... 35 30 25 Corporate........................................................ 898 524 154 --------- --------- --------- Total $ 21,289 $ 14,442 $ 10,584 ========= ========= ========= Capital expenditures: Minerals......................................................... $ 20,021 $ 23,979 $ 14,808 Absorbent polymers............................................... 24,178 44,606 15,465 Environmental.................................................... 16,775 10,373 1,074 Transportation................................................... 61 66 18 Corporate........................................................ 1,747 1,934 1,955 --------- --------- --------- Total $ 62,782 $ 80,958 $ 33,320 ========= ========= =========
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) (Dollars in thousands, except per share amounts) (2) Business Segment and Geographic Area Information (Continued)
1995 1994 1993 -------- --------- -------- Geographic area: Sales to unaffiliated customers from: North America.................................................... $255,920 $226,483 $188,598 Europe........................................................... 89,842 37,154 28,974 Australia........................................................ 1,926 1,806 1,579 -------- -------- -------- Total $347,688 $265,443 $219,151 ======== ======== ======== Sales or transfers between geographic areas: North America.................................................... $ 5,416 $ 4,086 $ 1,962 Europe........................................................... 86 103 -- Australia........................................................ -- -- -- -------- -------- -------- Total $ 5,502 $ 4,189 $ 1,962 ======== ======== ======== Operating profit from: North America.................................................... $ 23,047 $ 22,639 $ 19,059 Europe........................................................... 9,471 972 2,055 Australia........................................................ 109 360 261 Adjustments and eliminations..................................... (230) 20 (63) -------- -------- -------- Total $ 32,397 $ 23,991 $ 21,312 ======== ======== ======== Identifiable assets in: North America.................................................... $246,242 $199,175 $154,176 Europe........................................................... 73,175 65,886 30,412 Australia........................................................ 2,314 1,582 1,276 Adjustments and eliminations..................................... 635 (2,744) (1,835) -------- -------- -------- Total $322,366 $263,899 $184,029 ======== ======== ========
(3) Inventories Inventories consisted of:
1995 1994 --------- --------- Crude stockpile inventories..................................................... $ 10,284 $ 9,388 In-process inventories.......................................................... 19,421 15,386 Other raw material, container, and supplies inventories......................... 17,500 15,528 -------- -------- $ 47,205 $ 40,302 ======== ========
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) (Dollars in thousands, except per share amounts) (4) Property, Plant, Equipment, and Mineral Rights and Reserves Property, plant, equipment, and mineral rights and reserves consisted of the following:
December 31 Depreciation/ ---------------------- Amortization- 1995 1994 Annual Rates --------- --------- ------------- Mineral rights and reserves...................................... $ 10,084 $ 10,358 Other land....................................................... 2,542 2,080 Buildings and improvements....................................... 48,969 40,773 2.2% to 20.0% Machinery and equipment.......................................... 214,935 172,321 5.0% to 33.3% ------- -------- $276,530 $225,532 ======== ========
Depreciation and depletion were charged to income as follows:
1995 1994 1993 -------- -------- -------- Depreciation expense.................................................. $ 19,209 $ 13,045 $ 9,086 Depletion expense..................................................... 587 588 515 -------- -------- ------- $ 19,796 $ 13,633 $ 9,601 ======== ======== =======
(5) Income Taxes The components of the provision for domestic and foreign income tax expense for the years ended December 31, 1995, 1994 and 1993 consist of:
1995 1994 1993 -------- -------- -------- Income before income taxes and minority interest in net income of subsidiary: Domestic................................................................. $22,796 $21,810 $17,051 Foreign.................................................................. 4,091 393 1,699 ------- -------- ------- $26,887 $22,203 $18,750 ======= ======= ======= Provision for income taxes: Domestic Federal Current................................................................ $ 5,283 $ 5,416 $ 4,037 Deferred............................................................... 390 (370) (34) Domestic State Current................................................................ 1,358 1,548 788 Deferred............................................................... 43 (38) (62) Foreign Current................................................................ 1,362 911 985 Deferred............................................................... 646 (639) (147) -------- -------- -------- $ 9,082 $ 6,828 $ 5,567 ======== ======== ========
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) (Dollars in thousands, except per share amounts) (5) Income Taxes (Continued) The components of the deferred tax assets and liabilities as of December 31, 1995 and 1994 are as follows:
1995 1994 -------- --------- Deferred tax assets: Accounts receivable, due to allowance for doubtful accounts........................... $ 620 $ 434 Inventories, due to additional costs inventoried for tax purposes pursuant to the Tax Reform Act of 1986 and reserve for obsolete inventories............................ 848 1,044 Other................................................................................. 7,210 6,018 -------- -------- Total deferred tax assets........................................................... 8,678 7,496 -------- -------- Deferred tax liabilities: Plant and equipment, due to differences in depreciation............................... (9,379) (6,942) Land and mineral reserves, due to differences in depletion............................ (2,385) (2,389) Inventories, due to change in accounting method....................................... (915) (1,098) Other................................................................................. (36) (25) ---------- ---------- Total deferred tax liabilities...................................................... (12,715) (10,454) ---------- ---------- Net deferred tax liability.......................................................... $ (4,037) $ (2,958) ========== ==========
The following analysis reconciles the statutory Federal income tax rate to the effective tax rates:
1995 1994 1993 ----------------------- ------------------------- ---------------------- Percent of Percent of Percent of Pretax Pretax Pretax Amount Income Amount Income Amount Income -------- ---------- -------- ---------- -------- ---------- Domestic and foreign taxes on income at United States statutory rate.............. $9,410 35.0% $7,771 35.0% $6,563 35.0% Increase (decrease) in taxes resulting from: Percentage depletion...................... (840) (3.1) (781) (3.5) (690) (3.7) State taxes............................... 1,358 5.0 1,510 6.8 726 3.9 Other..................................... (846) (3.1) (1,672) (7.5) (1,032) (5.5) ------- ------ ------ ------ ------ ------ $9,082 33.8% $6,828 30.8% $5,567 29.7% ====== ====== ====== ====== ====== ======
(6) Long-term Debt Long-term debt consisted of the following:
December 31, ----------------------- 1995 1994 --------- ---------- Short-term debt supported by revolving credit agreement................................ $ 57,618 $ 7,982 Term note, at 9.68% (Series D)......................................................... 11,420 14,280 Term note, at 7.36% (Series A)......................................................... 25,000 25,000 Term note, at 7.83% (Series B)......................................................... 10,000 10,000 Term note, at 8.10% (Series C)......................................................... 15,000 15,000 Industrial Revenue Bond, at 68% of prime............................................... 1,050 1,283 Other notes payable, at 0% to 10%...................................................... 304 545 -------- --------- 120,392 74,090 Less current portion................................................................... 3,875 3,334 -------- --------- $ 116,517 $ 70,756 ========= =========
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) (Dollars in thousands, except per share amounts) (6) Long-term Debt (Continued) The Company has a committed $100,000 revolving credit agreement which matures October 31, 2000, with an option to extend for three one-year periods. As of December 31, 1995, there was $43,167 available in unused lines of credit. The revolving credit note is a multi-currency agreement which allows the Company to borrow at various interest rates including, but not limited to, prime and an adjusted LIBOR rate plus .375% to .75% depending upon debt to capitalization ratios and the amount of the credit line used. The Industrial Revenue Bond outstanding at December 31, 1995, is payable in equal semi-annual installments of $117 until the year 2000. The Aberdeen, Mississippi, bentonite operations of the Company are pledged as collateral. The carrying value of the pledged assets at December 31, 1995 was $1,956. Maturities of long-term debt at December 31, 1995 are as follows:
1996 1997 1998 1999 2000 Thereafter ------- ------- -------- -------- -------- ---------- Short-term debt supported by revolving credit agreement......... $ 699 $ -- $ -- $ -- $56,919 $ -- Term note, at 9.68% (Series D)........ 2,860 2,860 2,860 2,840 -- -- Term note, at 7.36% (Series A)........ -- 4,000 9,500 11,500 -- -- Term note, at 7.83% (Series B)........ -- -- -- -- -- 10,000 Term note, at 8.10% (Series C)........ -- -- -- -- -- 15,000 Industrial Revenue Bond, at 68% of prime.............................. 233 233 233 233 118 Other notes payable, at 0% to 10%..... 83 86 40 45 50 ------ -------- ---------- ---------- ---------- ------- $3,875 $7,179 $12,633 $14,618 $57,087 $25,000 ====== ====== ======= ======= ======= =======
The estimated fair value of the term notes above at December 31, 1995, was $65,364 based on discounting future cash payments at current market interest rates for loans with similar terms and maturities. All loan agreements include covenants which require the maintenance of specific minimum amounts of working capital, tangible net worth and financial ratios and limit additional borrowings and guarantees. The Company is not required to maintain a compensating balance. (7) Financial Instruments The Company uses financial instruments, 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 its committed exposures. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) (Dollars in thousands, except per share amounts) (7) Financial Instruments (Continued) Realized and unrealized foreign exchange gains and losses are recognized and offset against foreign exchange gains or losses on the underlying exposures. The interest differential paid or received on swap agreements is recognized as an adjustment to interest. The Company had $25,000 interest rate swap in place at December 31, 1994. During June 1995, the swap was cancelled for a gain of $632. The gain was recorded as other income. At December 31, 1995, the Company had $3,825 of forward exchange contracts outstanding. The fair value of these contracts and the Company's other financial instruments (except for term notes - see note (6)) approximates their carrying value. (8) Leases The Company leases certain railroad cars, trailers, computer software, office equipment, and office and plant facilities. Total rent expense under operating lease agreements was approximately $2,283, $1,920, and $1,721 in 1995, 1994, and 1993, respectively. Rent expense on railroad cars is offset by mileage earnings paid by the railroads of approximately $115, $124, and $137 in 1995, 1994, and 1993, respectively. Railroad cars and computer software under capital leases are included in machinery and equipment as follows:
December 31, -------------------- 1995 1994 ------ ------- Railroad cars and computer software........................................ $1,768 $1,768 Less accumulated amortization........................................... 1,291 1,139 ------- ------- $ 477 $ 629 ======= =======
The following is a schedule of future minimum lease payments for the capital leases and for operating leases (with initial terms in excess of one year) as of December 31, 1995:
Operating Leases ----------------------------------- Capital Leases Domestic Foreign Total ------ --------- ------- -------- Year ending December 31: 1996...................................................... $ 237 $ 3,710 $ 141 $ 3,851 1997...................................................... 237 2,310 112 2,422 1998...................................................... 171 1,872 69 1,941 1999...................................................... 114 1,652 40 1,692 2000...................................................... 0 937 27 964 Thereafter................................................ 0 774 50 824 -------- --------- ------- -------- Total minimum lease payments................................. 759 $ 11,255 $ 439 $11,694 ======== ====== ======= Less amount representing interest............................ 66 ------- Present value of net minimum lease payments.................. $ 693 ======
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) (Dollars in thousands, except per share amounts) (9) Employee Benefit Plans The Company has noncontributory pension plans covering substantially all of its domestic employees. The Company's funding policy is to contribute annually the maximum amount calculated using the actuarially determined entry age normal method that can be deducted for federal income tax purposes. Contributions are intended to provide not only for benefits attributed to services to date, but also for those expected to be earned in the future. The plan is fully funded for tax purposes. Pension cost in 1995, 1994, and 1993 was comprised of:
1995 1994 1993 -------- -------- -------- Service cost................................................................ $ 980 $ 996 $ 746 Interest cost............................................................... 1,094 964 834 Actual return on plan assets................................................ (1,988) 1,354 (995) Net amortization and deferral............................................... 482 (2,863) (134) ------- ------- ------- Net periodic pension cost................................................... $ 568 $ 451 $ 451 ======== ======== ========
The following table summarizes the funded status and amounts recognized in the Company's balance sheet at December 31, 1995 and 1994:
1995 1994 -------- -------- Actuarial present value of benefit obligations-accumulated benefit obligation, including vested benefits of $10,716 in 1995 and $8,835 in 1994................... $ 11,469 $ 9,522 ======== ========= Projected benefit obligation......................................................... $(15,966) $(13,942) Plan assets at fair value............................................................ 16,690 15,321 --------- --------- Projected benefit obligation less than plan assets................................... 720 1,379 Unrecognized net (gain) loss......................................................... (1,101) (1,049) Unrecognized net obligation at January 1, 1986, being amortized over a period from 19-21 years....................................................................... (1,319) (1,457) --------- --------- Pension liability included in accrued liabilities.................................... $ (1,696) $ (1,127) ========= ========
The Company's pension benefit plan was valued as of October 1, 1995 and 1994, respectively. Approximately 94% of the plan assets are invested in common stocks, corporate bonds and notes, and guaranteed income contracts purchased from insurance companies. The remainder of the plan assets are invested in cash and a real estate trust. The weighted average discount rate used in determining the actuarial present value of the projected benefit obligation was 7.5% in 1995 and 8.0% in 1994, while the rate of increase in future compensation levels was 5.5% in 1995 and 6.0% in 1994. The expected long-term rate of return on plan assets was 9.0% in 1995 and 9.0% in 1994. The Company also has a savings plan for its domestic personnel. The Company has contributed an amount equal to an employee's contribution up to a maximum of 4% of the employee's annual earnings. Company contributions are made using Company stock purchased on the open market. Company contributions under the savings plan were $985 in 1995, $963 in 1994, and $854 in 1993. The foreign pension plans, not subject to ERISA, are funded using individual annuity contracts and therefore, are not included in the information noted above. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) (Dollars in thousands, except per share amounts) (10) Stockholders' Equity On August 23, 1993, the Board of Directors authorized up to 2,500,000 shares of common stock, $.01 par value per share, to be offered and sold pursuant to a public offering. The public offering was completed on October 27, 1993. The par value for these additional shares was increased by $25 and additional paid-in capital was increased by $58,808, the total of which represents the net proceeds from the sale of 2,500,000 shares of common stock. On May 10, 1993, the stockholders of AMCOL International Corporation approved an amendment to the Company's Restated Certificate of Incorporation to increase the number of authorized shares of common stock of the Company from 12 million to 50 million. The stockholders also approved an amendment to change the par value of the common stock from $1.00 per share to $0.01 per share. Additional paid-in capital was increased and common stock reduced by $9,328 for the change in the par value of the common stock. On May 10, 1993, the Board of Directors declared a two-for-one stock split effected in the nature of a stock dividend to stockholders of record on June 8, 1993, which was paid June 23, 1993. The par value of these additional shares was capitalized by a transfer of $94 from retained earnings to common stock. All current and prior-year common share and per share disclosures have been restated to reflect the stock dividends. (11) Stock Option Plans 1983 Incentive Stock Option Plan The Company reserved 1,800,000 shares of its common stock for issuance of incentive stock options to its officers and key employees. Options awarded under this plan, which entitle the optionee to one share of common stock, may be exercised at a price equal to the fair market value at the time of grant. Options awarded under the plan vest 40% after two years and continue to vest at the rate of 20% per year for each year thereafter, until they are fully vested. Options are exercisable as they vest and expire ten years after the date of grant, except in the event of termination, retirement or death of the optionee or a change in control of the Company. This plan expired during 1993, though options which were granted prior to its expiration continue to be valid until the individual option grants expire.
Option price 1995 1994 1993 per share -------- -------- --------- --------------- Options outstanding at January 1...................... 873,971 990,667 1,123,076 $2.00 to $11.75 Granted ............................................. 0 0 254,540 $11.75 Exercised............................................. (171,869) (113,756) (363,840) $2.00 to $11.75 Cancelled............................................. (7,334) (2,940) (23,109) $2.92 to $11.75 ------ ------ ------- Options outstanding at December 31.................... 694,768 873,971 990,667 $2.92 to $11.75 ======= ======= ======= Options exercisable at December 31.................... 471,536 471,225 374,876 ======= ======= ======= Shares available for future grant at December 31...... 0 0 0 ======= ======= =======
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) (Dollars in thousands, except per share amounts) (11) Stock Option Plans (Continued) 1993 Stock Plan The Company reserved 840,000 shares of its common stock for issuance to its officers and key employees in the form of incentive stock options, nonqualified stock options, restricted stock, stock appreciation rights and phantom stock. Different terms and conditions apply to each form of award made under the plan. To date, only incentive stock options have been awarded. Options awarded under this plan, which entitle the optionee to one share of common stock, may be exercised at a price equal to the fair market value at the time of grant. Options awarded under the plan generally vest 40% after two years and continue to vest at the rate of 20% per year for each year thereafter, until they are fully vested, unless a different vesting schedule is established by the Option Committee of the Board of Directors on the date of grant. Options are exercisable as they vest and expire ten years after the date of grant, except in the event of termination, retirement or death of the optionee or a change in control of the Company.
Option price 1995 1994 1993 per Share -------- -------- -------- ---------------- Options outstanding at January 1...................... 198,975 84,150 0 $17.75 to $20.50 Granted............................................... 134,450 117,045 84,150 $12.38 to $20.50 Exercised............................................. 0 0 0 $0.00 Cancelled............................................. (11,635) (2,220) 0 $12.38 to $17.75 -------- ------- ------- Options outstanding at December 31.................... 321,790 198,975 84,150 $12.38 to $20.50 ======= ======= ======= Options exercisable at December 31.................... 0 0 0 ======= ======= ======= Shares available for future grant at December 31...... 518,210 641,025 755,850 ======= ======= =======
1987 Nonqualified Stock Option Plan The Company reserved 340,000 shares of its common stock for issuance of nonqualified stock options to outside officers and directors, as well as key employees. The stock options are exercisable at a price per share which may be no less than the fair market value at the time of grant according to the vesting provisions of the plan. Options awarded under the plan generally vest 40% after two years and continue to vest at the rate of 20% per year for each year thereafter, until fully vested. Options are exercisable as they vest and expire ten years after the date of grant, except in the event of termination, retirement or death of the optionee or a change in control of the Company.
Option price 1995 1994 1993 per Share -------- -------- -------- ---------------- Options outstanding at January 1...................... 140,656 144,400 162,000 $ 2.92 to $17.25 Granted............................................... 17,000 2,256 4,000 $13.25 to $17.75 Exercised............................................. (6,000) (6,000) (21,600) $ 2.92 Cancelled............................................. (800) 0 0 $13.25 ------- ------- ------- Options outstanding at December 31.................... 150,856 140,656 144,400 $ 2.92 to $17.75 ======= ======= ======= Options exercisable at December 31.................... 137,544 123,284 116,240 ======= ======= ======= Shares available for future grant at December 31...... 136,744 153,744 156,000 ======= ======= =======
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) (Dollars in thousands, except per share amounts) (12) Accrued Liabilities
1995 1994 ---------- ---------- Estimated accrued severance taxes.................................................... $ 1,048 $ 1,410 Accrued employee benefits............................................................ 1,837 1,246 Accrued vacation pay................................................................. 1,438 1,172 Accrued dividends.................................................................... 1,344 1,140 Accrued bonus........................................................................ 781 575 Accrued commissions.................................................................. 578 1,125 Other................................................................................ 6,010 6,262 --------- --------- $ 13,036 $ 12,930 ========= =========
(13) Quarterly Results (Unaudited) Unaudited summarized results for each quarter in 1995 and 1994 are as follows:
1995 Quarter -------------------------------------------- First Second Third Fourth ------- ------- ------- ------- Minerals..................................................... $39,097 $39,015 $38,203 $38,525 Absorbent Polymers........................................... 26,480 28,768 31,286 34,228 Environmental................................................ 7,925 10,609 17,790 14,096 Transportation............................................... 5,248 5,268 5,699 5,451 ------- ------- ------- ------- Net Sales................................................. $78,750 $83,660 $92,978 $92,300 ======= ======= ======= ======= Minerals..................................................... $ 8,027 $9,221 $ 7,624 $7,704 Absorbent Polymers........................................... 6,178 6,023 6,263 7,374 Environmental................................................ 2,528 3,552 4,996 4,380 Transportation............................................... 643 633 719 697 ------- ------- ------- ------- Gross Profit.............................................. $17,376 $19,429 $19,602 $20,155 ======= ======= ======= ======= Minerals..................................................... $ 3,791 $ 4,588 $ 4,145 $ 3,251 Absorbent Polymers........................................... 4,084 3,700 3,869 5,249 Environmental................................................ 9 966 2,706 1,624 Transportation............................................... 256 263 315 223 Corporate.................................................... (1,582) (1,739) (1,406) (1,915) -------- -------- -------- -------- Operating Profit.......................................... $ 6,558 $ 7,778 $ 9,629 $ 8,432 ======== ======== ======== ======== Net Income................................................... $ 3,631 $ 4,688 $ 4,917 $ 4,535 ======== ======== ======== ======== Earnings per common and common equivalent share:............. $ 0.19 $ 0.24 $ 0.25 $ 0.23 ======== ======== ======== ========
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) (Dollars in thousands, except per share amounts (13) Quarterly Results (Unaudited) (Continued)
1994 Quarter -------------------------------------------- First Second Third Fourth ------- ------- ------- ------- Minerals..................................................... $ 37,020 $37,756 $ 38,217 $41,497 Absorbent Polymers........................................... 12,205 14,137 16,084 16,165 Environmental................................................ 3,942 6,997 11,016 8,771 Transportation............................................... 4,679 5,122 5,658 6,177 ------- ------ -------- ------- Net Sales................................................. $ 57,846 $64,012 $ 70,975 $72,610 ======= ====== ======== ======= Minerals..................................................... $ 6,882 $7,549 $ 7,854 $10,992 Absorbent Polymers........................................... 3,160 3,444 4,502 4,160 Environmental................................................ 1,288 1,584 3,441 2,016 Transportation............................................... 587 665 698 665 ------- ------ -------- ------- Gross Profit.............................................. $11,917 $13,242 $ 16,495 $17,833 ======= ====== ======== ======= Minerals..................................................... $ 3,593 $ 3,962 $ 4,335 $ 7,755 Absorbent Polymers........................................... 1,507 1,697 2,469 2,286 Environmental................................................ 159 205 1,570 (154) Transportation............................................... 222 268 304 231 ------- ------ -------- ------- Operating Profit.......................................... $ 4,053 $ 4,688 $ 6,912 $ 8,338 ======= ====== ======== ======= Net Income................................................... $ 2,490 $ 3,353 $ 4,238 $ 5,202 ======= ====== ======== ======= Earnings per common and common equivalent share:............. $ 0.13 $ 0.17 $ 0.22 $ 0.26 ======= ====== ======== =======
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES Schedule II Valuation and Qualifying Accounts (Dollars in thousands)
Additions ----------------------- Charged to Balance at Charged to other Other charges Balance at beginning of costs and account add (deduct) end of Year Description year expenses describe describe year - ------ --------------------------------- ------------- ---------- --------- -------------- --------- 1995 Allowance for doubtful accounts $1,336 $769 $-- $ (504)(1) $1,601 ====== ==== === ======= ====== 1994 Allowance for doubtful accounts $1,836 $978 $-- $(1,478)(1)(2) $1,336 ====== ==== === ======= ====== 1993 Allowance for doubtful accounts $1,262 $703 $-- $ (129)(1) $1,836 ====== ==== === ======= ====== - ----------- (1) Bad debts written off. (2) During 1994 the Company acquired Aquatec and Hydron which included allowance for doubtful accounts of $60 and $15 respectively.
SIGNATURES Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: March 28, 1996 AMCOL INTERNATIONAL CORPORATION By: /s/ John Hughes --------------------------------- John Hughes President; Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. /s/ John Hughes March 28, 1996 - ---------------------------------------- John Hughes President; Chief Executive Officer and Director /s/ Paul G. Shelton March 28, 1996 - ---------------------------------------- Paul G. Shelton Senior Vice President - Chief Financial Officer; Treasurer and Director /s/ C. Eugene Ray March 28, 1996 - ---------------------------------------- C. Eugene Ray Director; Chairman of the Board /s/ Jay D. Proops March 28, 1996 - ---------------------------------------- Jay D. Proops Director /s/ Robert C. Humphrey March 28, 1996 - ---------------------------------------- Robert C. Humphrey Director /s/ Robert E. Driscoll, III March 28, 1996 - ---------------------------------------- Robert E. Driscoll, III Director /s/ Raymond A. Foos March 28, 1996 - ---------------------------------------- Raymond A. Foos Director /s/ Clarence O. Redman March 28, 1996 - ---------------------------------------- Clarence O. Redman Director /s/ Arthur Brown March 28, 1996 - ---------------------------------------- Arthur Brown Director /s/ Dale E. Stahl March 28, 1996 - ---------------------------------------- Dale E. Stahl Director /s/ Paul C. Weaver March 28, 1996 - ---------------------------------------- Paul C. Weaver Director INDEX TO EXHIBITS
Exhibit Number 3.1 Restated Certificate of Incorporation of the Company (5) 3.2 Bylaws of the Company (1), as amended 4 Article Fourth of the Company's Restated Certificate of Incorporation (5) 10.1 AMCOL International Corporation 1983 Incentive Stock Option Plan (1); as amended (3)* 10.4 Executive Medical Reimbursement Plan (1)* 10.5 Lease Agreement for office space dated September 29, 1986, between the Company and American National Bank and Trust Company of Chicago (1) as amended (8) 10.6 AMCOL International Corporation 1987 Non-Qualified Stock Option Plan (2); as amended (6)* 10.7 Change in Control Agreement dated April 1, 1994, by and between Registrant and John Hughes (6)* 10.8 Change in Control Agreement dated April 1, 1994, by and between Registrant and Paul G. Shelton (6)* 10.9 Change in Control Agreement dated February 7, 1996, by and between Registrant and Robert C. Steele 10.10 Change in Control Agreement dated February 7, 1996, by and between Registrant and Lawrence E. Washow 10.11 Change in Control Agreement dated February 7, 1996, by and between Registrant and Roger P. Palmer 10.12 Change in Control Agreement dated January 24, 1994, by and between Registrant and Peter L. Maul (6)* 10.13 AMCOL International Corporation Dividend Reinvestment and Stock Purchase Plan (4); as amended (6)* 10.14 AMCOL International Corporation 1993 Stock Plan (6)*, as amended 10.15 Credit 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, 1996 (9) 10.16 Note Agreement dated October 1, 1994, between AMCOL International Corporation and Principal Mutual Life Insurance Company (7) 18 Letter regarding change in accounting principles 21 Subsidiary of the Company 23 Consent of Independent Public Accountants 27 Financial Data Schedule - ---------------- (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, 1989. (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. * Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K pursuant to Item 14(c) of Form 10-K.
EX-3.(I) 2 ARTICLES OF INCORPRATION Amended Provisions of AMCOL International Corporation's Restated Certificate of Incorporation FIRST. The name of the corporation is AMCOL International Corporation. FOURTEENTH. Section 1. The number of directors which shall constitute the whole Board of Directors shall be determined from time to time by resolution adopted by a majority of the entire Board of Directors. No decrease in the number of directors shall shorten the term of any incumbent director. Section 2. The Board of Directors shall be classified, with respect to the time for which they severally hold office, into three (3) classes, as nearly equal in number as possible. At the annual meeting of stockholders in 1995, the three classes of directors shall be elected to serve terms expiring in 1996, 1997 and 1998, respectively, and at each annual meeting of stockholders thereafter, the successors of the class of directors whose term is expiring at such meeting shall be elected to hold office for a term expiring at the annual meeting of the stockholders to be held in the third year following their election, with each such director in each case to hold office until his or her successor is elected and qualified. Section 3. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, and the directors so chosen shall hold office for a term expiring at the next election of the class for which such director was appointed and until his or her successor is elected and qualified. Section 4. Any director may be removed from office at any time, but only for cause and only upon the affirmative vote of the holders of at least 66-2/3% of the voting power of the then outstanding shares of the capital stock of the corporation. Section 5. Notwithstanding any provision in this Certificate of Incorporation to the contrary, the affirmative vote of the holders of at least 66-2/3% of the voting power of the then outstanding shares of the capital stock of the corporation shall be required to repeal, amend, modify or adopt any provision inconsistent with the provisions of this Article Fourteenth. EX-3.(II) 3 BY-LAWS AMCOL INTERNATIONAL CORPORATION BY-LAWS ARTICLE I OFFICES Section 1. Principal Offices. The principal office shall be in the City of Wilmington, County of New Castle, State of Delaware. Section 2. Other Offices. The corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 1. Place of Meetings. Meetings of the stockholders for whatever purpose shall be held at such place, either within or without the State of Delaware, and at such time as may be fixed from time to time by the Board of Directors. Section 2. Annual Meetings. Annual meetings of stockholders shall be held on such date and at such time and place as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. Section 3. Notice of Annual Meeting. Written notice of the annual meeting shall be given to each stockholder entitled to vote thereat not fewer than ten days or more than sixty days before the date fixed for the meeting. Section 4. Special Meetings of Stockholders. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called by the Board of Directors or by the Chairman of the Board, and shall be called by the Chairman or the Chief Executive Officer at the request in writing of a majority of the Board of Directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. Section 5. Notice of Special Meetings. Written notice of a special meeting of stockholders, stating the time, place and object thereof, shall be given to each stockholder entitled to vote thereat, not fewer than ten or more than sixty days before the date fixed for the meeting. Section 6. Business which may be Transacted. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Section 7. Notice of Stockholder Business and Nominations. (A) Annual Meeting of Stockholders. (1) Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders (a) pursuant to the Corporation's notice of meeting, (b) by or at the direction of the Board of Directors or (c) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this By-Law, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this By-Law. (2) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of this By-Law, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must otherwise be a proper matter for stockholder action. To be timely, a stockholder's notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 60th day nor earlier than the close of business on the 90th day prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a stockholder's notice as described above. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and rule 14a-11 thereunder (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner and (ii) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner. (3) Notwithstanding anything in the second sentence of paragraph (A)(2) of this By-Law to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least 70 days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice required by this By-Law shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation. (B) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation's notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation's notice of meeting (a) by or at the direction of the Board of Directors or (b) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this By-law, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this By-Law. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation's notice of meeting, if the stockholder's notice required by paragraph (A)(2) of this By-Law shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 90th day prior to such special meeting and not later than the close of business on the later of the 60th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment of a special meeting commence a new time period for the giving of a stockholder's notice as described above. (C) General. (1) Only such persons who are nominated in accordance with the procedures set forth in this By-Law shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this By-Law. Except as otherwise provided by law, the Certificate of Incorporation or these By-Laws, the Chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this By-Law and, if any proposed nomination or business is not in compliance with this By-Law, to declare that such defective proposal or nomination shall be disregarded. (2) For purposes of this By-Law, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. (3) Notwithstanding the foregoing provisions of this By-Law, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this By-Law. Nothing in this By-Law shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of Preferred Stock to elect directors under specified circumstances. Section 8. Inspectors of Elections: Opening and Closing the Polls. The Board of Directors by resolution shall appoint one or more inspectors, which inspector or inspectors may include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees, agents or representatives, to act at the meetings of stockholders and make a written report thereof. One or more persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate has been appointed to act or is able to act at a meeting of stockholders, the Chairman of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall have the duties prescribed by law. The Chairman of the meeting shall fix and announce at the meeting the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting. Section 9. Record Date for Action by Written Consent. In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolutions fixing the record date is adopted by the Board of Directors, and which date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within 10 days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within 10 days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business or to any officer of agent of the Corporation having custody of the book in which proceedings of meeting of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action. Section 10. Inspectors of Written Consent. In the event of the delivery, in the manner provided by Section 9, to the Corporation of the requisite written consent or consents to take corporate action and/or any related revocation or revocations, the Corporation shall engage nationally recognized independent inspectors of elections for the purpose of promptly performing a ministerial review of the validity of the consents and revocations. For the purpose of permitting the inspectors to perform such review, no action by written consent without a meeting shall be effective until such date as the independent inspectors certify to the Corporation that the consents delivered to the Corporation in accordance with Section 9 represent at least the minimum number of votes that would be necessary to take the corporate action. Nothing contained in this paragraph shall in any way be construed to suggest or imply that the Board of Directors or any stockholder shall not be entitled to contest the validity of any consent or revocation thereof, whether before or after such certification by the independent inspectors, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation). Section 11. Quorum. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute, the certificate of incorporation or these by-laws. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 12. Powers of the Stockholders. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes, the certificate of incorporation or these by-laws, a different vote is required, in which case such express provision shall govern and control the decision of such question. Election of directors at all meetings of the Stockholders at which directors are elected shall be by ballot, and, subject to the rights of the holders of any class or series of preferred stock to elect directors under specified circumstances, a plurality of the votes cast thereat shall elect directors. Section 13. Voting Rights of Stockholders. Each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date, unless the proxy provides for a longer period, and except where the transfer books of the corporation have been closed or a date has been fixed as a record date for the determination of its stockholders entitled to vote, no share of stock shall be voted on at any election for directors which has been transferred on the books of the corporation within twenty days next preceding such election of directors. Section 14. List of Stockholders. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, showing the address of and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city, town or village where the meeting is to be held and which place shall be specified in the notice of the meeting or, if not specified, at the place where said meeting is to be held, and the list shall be produced and kept at the time and place of meeting during the whole time thereof, and subject to the inspection of any stockholder who may be present. Section 15. Action by Unanimous Written Consent of Stockholders Instead of by Meeting. Unless otherwise provided in the Certificate of Incorporation, whenever the vote of stockholders at a meeting is required or permitted to be taken in connection with any corporate action by any provisions of the statutes, the certificate of incorporation or these by-laws, may be taken without a meeting, without prior notice and without a vote, if a consent in writing setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitles to vote thereon were present. Prompt notice of the taking of corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Section 16. Manner of Sending Notice and Effective Date. Notices to stockholders shall be sent by mail addressed to them at their respective addresses appearing on the books of the corporation. Notice shall be deemed to be given at the time the same shall be mailed. Section 17. Proxy. At any meeting of the stockholders, every stockholder entitled to vote may vote in person or by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this paragraph may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used; provided that, such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission. All voting, excepting where otherwise required by law, the Certificate of Incorporation or the Board of Directors may be a voice vote. Section 18. Chairman of meeting. The Chairman of the Board of Directors shall preside at all meetings of the stockholders. In the absence or inability to act of the chairman, the chief executive officer, the president, an executive vice president or a vice president (in that order) shall preside, and in their absence or inability to act another person designated by one of them shall preside. The secretary of the Corporation shall act as secretary of each meeting of the stockholders. In the event of his absence or inability to act, the chairman of the meeting shall appoint a person who need not be a stockholder to act as secretary of the meeting. Section 19. Conduct of meetings. Meetings of the stockholders shall be conducted in a fair manner but need not be governed by any prescribed rules of order. The presiding officer's rulings on procedural matters shall be final. The presiding officer is authorized to impose reasonable time limits on the remarks of individual stockholders and may take such steps as such officer may deem necessary or appropriate to assure that the business of the meeting is conducted in a fair, orderly and prompt manner. ARTICLE III DIRECTORS Section 1. Numbers and Manner of Election. The number of directors which shall constitute the whole Board shall be a minimum of five (5) and a maximum of fifteen (15). The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his or her successor is elected and qualified. Directors need not be stockholders. No decrease in the number of Directors shall shorten the term of any incumbent director. Section 2. Permissible Filling of Vacancies by Board. Vacancies and newly created directorships resulting from any increase in the number of directors may be filled by a majority of the directors then in office, although less than a quorum, and the directors so chosen shall hold office for a term expiring at the next election of the class for which such director was elected and until his or her successor is duly elected and shall qualify. Section 3. Powers of the Board. The business of the corporation shall be managed by its Board of Directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these by-laws directed or required to be exercised or done by the stockholders. Section 4. Compensation of Directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors, and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings. Section 5. Honorary Directors. The Board of Directors may, from time to time, appoint such honorary directors as it shall deem appropriate. Honorary directors shall be entitled to attend meetings of the Board but shall have no power to vote and shall not be deemed to be members of the Board of Directors for quorum and other purposes under these by-laws or otherwise. Honorary directors shall receive no compensation but shall be reimbursed for their reasonable travel and living expenses incurred in attending meetings held more than fifty miles from their place of residence. Appointments shall be for a term designated by the Board of Directors subject to the right of the Board of Directors to terminate the appointment at any time in its sole discretion. Section 6. Executive Committee. The Board of Directors, by resolution adopted by a majority of the number of Directors may designate two or more Directors to constitute an Executive Committee, which Committee, to the extent provided in such resolution, shall have and exercise all of the authority of the Board of Directors in the management of the corporation between meetings of the Board of Directors, except as otherwise required by law. Vacancies in the membership of the Committee may be filled by the Board of Directors at a regular or special meeting of the Board of Directors. The Executive Committee shall keep regular minutes of its proceedings and report the same to the Board when required. Section 7. Other Committees. The Board of Directors by resolution adopted by a majority of a number of Directors may designate two or more Directors to constitute an additional Committee or Committees, which Committee or Committees, to the extent provided in such resolution, shall make recommendations to the Board of Directors as to all matters within the scope of their respective Committee. Vacancies in the membership of a Committee may be filled by the Board of Directors at a regular or special meeting of the Board of Directors. Such Committee or Committees shall keep regular minutes of its proceedings and report the same to the Board when required. Section 8. General. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board of Directors as provided in subsection (a) of Section 151 of the General Corporation Law of the State of Delaware, fix the designations and any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the Corporation or fix the number of shares of any series of stock or authorize the increase or decrease of the number of shares of any series), and if the resolution which designates the committee or a supplemental resolution of the Board of Directors shall so provide, such committee shall have the power and authority to adopt an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all the Corporation's property and assets, recommending to the stockholders a dissolution, removing or indemnifying directors or amending these by-laws; and, unless a resolution of the Board of Directors so provided, no such committee shall have the power or authority to declare a dividend, to authorize the issuance of stock or to adopt a certificate of ownership or merger pursuant to Section 253 of the General Corporation Law of the State of Delaware. Section 9. Meetings. Each committee shall keep regular minutes of its meetings and shall file such minutes and all written consents executed by its members with the secretary of the Corporation. Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to members of all meetings; a majority of the members shall constitute a quorum unless the committee shall consist of one or two members, in which event one member shall constitute a quorum; and all matters shall be determined by a majority vote of the members present. Action may be taken by any committee without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of such committee. Members of any committee of the Board of Directors may participate in any meeting of such committee by means of conference telephone or similar communications equipment by means of which all persons participating may hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. ARTICLE IV MEETINGS OF THE BOARD OF DIRECTORS Section 1. Place of Meetings. The Board of Directors of the corporation may hold meetings, both regular and special either within or without the State of Delaware. Section 2. Annual Meetings. The annual meeting of the Board of Directors shall be held, at such time and place, as shall be fixed by order of the Chairman of the Board of the corporation. At such meeting the directors shall elect officers of the corporation to serve until the next annual meeting of the Board and until their respective successors are elected and qualified, and any other business may be transacted at this meeting which falls within the scope of the powers of the Board. The annual meeting of the Board of Directors shall be a regular meeting. Ten days notice of the annual meeting shall be sent to each director by mail. Section 3. Other Regular Meetings. The Board of Directors may by resolution, which it may from time to time alter or rescind at its discretion, establish other regular meetings, to be held at such times and places and upon such notice (or without notice) as it shall determine. Section 4. Special Meetings. Special meetings of the Board may be called by resolution of the Board at a prior meeting, or by the Chairman of the Board or Chief Executive Officer, on three days notice to each director personally, or sent by mail or by telegram or facsimile; special meetings shall be called by the Chairman of the Board or the secretary on like notice, on request of three directors, provided that such request shall state what matters the signers wish to have considered at the meeting. At all special meetings of the Board, if the notice states that any matters properly presented will be considered, the directors may take any action within the scope of their powers, and it shall not be necessary that any matters which are to be considered be specified in the notice unless required by statute, by the certificate of incorporation, or elsewhere by these by-laws. Section 5. Manner of Giving Notice to Directors and Effective Date. In the case of all notices of meetings of the Board of Directors, other than those given personally, the same shall be sent to the directors at their respective addresses appearing on the books of the corporation at least seventy-two hours in advance of the meeting. Notice sent by mail shall be deemed to be given at the time when the same shall be mailed, and if sent by wire, at the time the telegram is delivered to the telegraph company and if sent by facsimile when transmitted. Section 6. Waiver of Notice. Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these by-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein shall be deemed equivalent thereto. Section 7. Quorum. At all meetings of the Board a majority of the directors then in office (but not less than three directors), shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum shall not be present at any meeting of the Board, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 8. Action by Unanimous Written Consent of Directors Instead of by Meeting. Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the Board of Directors or any committee designated by the Board of Directors may be taken without a meeting, if a written consent thereto is signed by all members of the Board or such committee, and such written consent is filed with the minutes of proceedings of the Board or such committee. Section 9. Telephonic meetings. Members of the Board of Directors may participate in any meeting by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting. ARTICLE V OFFICERS Section 1. Specified Officers. The officers of the corporation shall be a Chairman of the Board, a Chief Executive Officer, a Chief Operating Officer, a President, one or more Executive Vice Presidents, such number of other Vice Presidents as the Board shall from time to time determine, a Chief Financial Officer, a Secretary, a Treasurer, such number of Assistant Secretaries and Assistant Treasurers as the Board shall from time to time determine and such other officers as the Board shall from time to time determine. One person may hold and perform the duties of any lawful number of said offices. The same person may not execute any document or instrument on behalf of the corporation in more than one capacity. Failure to elect any specified officer in any year shall not be deemed to be an amendment to these by-laws, but shall be a conclusive presumption that the office was deliberately left vacant. Section 2. Election. All officers of the corporation shall be elected by the Board of Directors. The Board at its annual meeting shall elect a Chairman of the Board of Directors and a Chief Executive Officer from among the directors, and shall elect the other officers specified in Section 1 hereof, none of whom need be members of the Board; provided that vacancies occurring in any of said offices between annual meetings of the Board or any additional offices created between such annual meetings, may be filled by the Board at any meeting held between such annual meetings. Section 3. Removal. Any officer elected by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors then in office. Any such removal shall be without prejudice to the contractual rights of such officer or agent, if any, with the Corporation, but the election of an officer or agent shall not of itself create any contractual rights. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Board of Directors. Section 4. Term of Office. The officers of the corporation shall hold office either until the annual meeting of the Board following their election or until their respective successors are elected and qualify, or for a lesser term as may be specified by the Board of Directors, subject to the power of removal specified in Section 4 hereto. Section 5. Chairman of the Board of Directors. The Chairman of the Board of Directors shall preside at all meetings of the stockholders and the Board of Directors of the corporation. The Chairman of the Board shall designate another director to preside in his absence. In the event of the absence of the Chairman of the Board without the designation of a director to preside, the Chief Executive Officer shall preside. The Chairman may sign and execute in the name of the corporation all authorized contracts, bonds, mortgages, or other authorized corporate obligations or instruments, and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. Section 6. Chief Executive Officer. The Chief Executive Officer shall have general charge, control, direction and supervision over the business and affairs of the corporation, subject to the control and direction of the Board of Directors and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. Section 7. The President. The President shall have such duties and exercise such powers as the Board of Directors may from time to time prescribe under the direction of the Chief Executive Officer and subject to the control of the Board of Directors. He may sign and execute in the name of the corporation all authorized contracts, bonds, mortgages or other authorized corporate obligations or instruments, and may with the Secretary or an Assistant Secretary sign all certificates of the capital stock of the corporation. Section 8. Chief Operating Officer. The Chief Operating Officer shall have general charge, control, direction and supervision over the day-to-day operations of the corporation, under the direction of the Chief Executive Officer, subject to the control of the Board of Directors and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. Section 9. Chief Financial Officer. The Chief Financial Officer shall be responsible for the financial affairs of the corporation, under the direction of the Chief Executive Officer and subject to the control of the Board of Directors and shall render to the Chief Executive Officer and the Board of Directors at its regular meetings, or when the Board of Directors so requires, an account of the financial condition of the corporation. He shall also perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. Section 10. Executive Vice President. The Executive Vice President (or, if there shall be more than one, the Executive Vice Presidents in the order designated by the Board of Directors, or in the absence of any designation, then in order of their election) shall, in the absence or disability of the President, perform the duties and exercise the powers of the President and shall perform such other duties and have such other powers as the Chief Executive Officer or the Board of Directors may from time to time prescribe. Section 11. Vice Presidents. The Vice Presidents in the order of their election unless otherwise determined by the Board of Directors, shall, in the absence or disability of the Chief Executive Officer, the President, the Chief Operating Officer, or any Executive Vice Presidents, perform the duties and exercise the powers of the President, and shall perform such other duties and have such other powers as the Chief Executive Officer or the Board of Directors may from time to time prescribe. Section 12. The Secretary. The Secretary shall when practicable attend all meetings of the Board of Directors and all meetings of the stockholders, and record all the proceedings of the meetings of the corporation and of the Board of Directors in a book to be kept for that purpose, and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and notice of all meetings of the Board of Directors, where required by the by-laws or by resolution or order of the Board. He shall perform such other duties as may be prescribed by the Board of Directors or the Chief Executive Officer of the corporation. He shall keep in safe custody the seal of the corporation and, when authorized by the Board of Directors, affix the same to any instrument requiring it and, when so affixed, it shall be attested by his signature or by the signature of an assistant secretary. Section 13. The Assistant Secretary. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order of their election, shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary, and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. Section 14. The Treasurer. (a) The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation, and shall cause to be deposited all monies and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors. (b) He shall disburse or cause to be disbursed, the funds of the corporation as may be ordered by the Board of Directors by general resolution or otherwise, taking proper vouchers for such disbursements, and shall render to the Chief Executive Officer and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer. (c) If required by the Board of Directors, he shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind, in his possession or under his control, belonging to the corporation. Section 15. The Assistant Treasurers. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order of their election unless otherwise determined by the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. Section 16. Other officers. Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers. Section 17. Duties of officers. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chairman of the Board, Chief Executive Officer, President or any Vice President and any such officer may in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at a meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and powers incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may be resolution, from time to time confer like powers upon any other person or persons. ARTICLE VI CERTIFICATES OF STOCK Section 1. Stock Certificates. Every holder of stock in a corporation shall be entitled to have a certificate signed by, or in the name of the corporation, by the Chairman of the Board of Directors, the Chief Executive Officer or the President or an Executive Vice President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of such corporation certifying the number of shares owned by him in such corporation. Any of or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. Section 2. Lost Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require, and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost or destroyed. Section 3. Transfer of Stock. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed, or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its book. Section 4. Fixing of Record Date. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. Section 5. Registered Stockholders. The corporation shall be entitled to recognize the exclusive rights of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof except as otherwise provided by the laws of Delaware. ARTICLE VII GENERAL PROVISIONS Section 1. Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation. Section 2. Reserves. Before payment of any dividend there may be set aside out of any funds of the corporation available for dividends, such sum or sums as the directors from time to time in their absolute discretion think proper as a reserve or reserves to meet contingencies or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created. Section 3. Banking Accounts. The Board of Directors may from time to time by resolution establish banking accounts with such banks, trust companies or other financial institutions wheresoever located, as it shall see fit, and may in its sole discretion disestablish any of such banking accounts or amend the resolutions establishing and governing the same. Section 4. Checks, etc. All checks and demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate either in the resolutions pertaining to its banking accounts or otherwise. Section 5. Fiscal Year. The fiscal year of the corporation shall coincide with the calendar year. Section 6. Seal. The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization, and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. ARTICLE VIII AMENDMENTS These by-laws or any part thereof may be altered, amended or repealed at any regular or special meeting of the stockholders or of the Board of Directors, if such proposed alteration, amendment or repeal or the substance thereof, be set forth in the notice of such meeting, together with notice that the same will be proposed for adoption. ARTICLE IX INDEMNIFICATION The Corporation shall indemnify those persons specified in Article TWELFTH of the Corporation's certificate of incorporation, as amended from time to time, to the extent, in the manner, and subject to compliance with the applicable standards of conduct, provided by said Article TWELFTH. EX-10 4 MATERIAL CONTRACTS AMCOL INTERNATIONAL CORPORATION 1993 STOCK PLAN (As Amended and Restated as of May 9, 1995) 1. Preamble American Colloid Company, now known as AMCOL International Corporation, previously established the American Colloid Company 1993 Stock Plan. The following is an amendment and restatement of the Plan. The Plan is established as a means whereby the Company may, through awards of (i) incentive stock options ("ISOs") within the meaning of Section 422 of the Code, (ii) stock appreciation rights ("SARs"), (iii) nonqualified stock options ("NSOs"), (iv) restricted stock ("Restricted Stock"), and (v) phantom stock ("Phantom Stock"): (a) provide key employees who have substantial responsibility for the direction and management of the Company with additional incentive to promote the success of the Company's business; (b) encourage such employees to remain in the employ of the Company; and (c) enable such employees to acquire proprietary interests in the Company. The provisions of this Plan do not apply to or affect any option, stock, stock appreciation right, restricted stock or phantom stock heretofore or hereafter granted under any other stock plan of the Company, and all such options, stock, stock appreciation right, restricted stock or phantom stock continue to be governed by and subject to the applicable provisions of the plan under which they were granted. 2. Definitions 2.01 "Award" means the grant of Options, SARs, Phantom Stock and/or Restricted Stock to a Participant. 2.02 "Award Date" means the date upon which an Option, SAR, Restricted Stock or Phantom Stock is awarded to a Participant under the Plan. 2.03 "Board" or "Board of Directors" means the board of directors of the Company. 2.04 "Code" means the Internal Revenue Code of 1986, as it exists now and as it may be amended from time to time. 2.05 "Committee" means two or more individuals selected by the Board of Directors. Each member of the Committee shall not have at any time within one year prior thereto, or at any time during such member's term of service on the Committee, received or been eligible to receive any stock options, stock appreciation rights, phantom stock or allocations of any equity securities under the Plan or any other plan maintained by the Company or any of its affiliates, except as permitted pursuant to the provisions of Rule 16b-3(c)(2)(i) of the Securities and Exchange Commission or any successor rule thereof. Once appointed, the Committee shall continue to serve until otherwise directed by the Board of Directors. 2.06 "Common Stock" means the common stock of the Company, par value $.01 per share. 2.07 "Company" means AMCOL International Corporation, a Delaware corporation, and any successor thereto. 2.08 "Exchange Act" shall mean the Securities Exchange Act of 1934, as it exists now or from time to time may hereafter be amended. 2.09 "Fair Market Value" means the closing sale price for Common Stock as of the close of business on that day (as reported by the NASDAQ System). 2.10 "ISO" means incentive stock options within the meaning of Section 422 of the Code. 2.11 "NSO" means nonqualified stock options, which are not intended to qualify under Section 422 of the Code. 2.12 "Option" means the right of a Participant, whether granted as an ISO or an NSO, to purchase a specified number of shares of Common Stock, subject to the terms and conditions of the Plan. 2.13 "Option Price" means the price per share of Common Stock at which an Option may be exercised. 2.14 "Participant" means an individual to whom an Award has been granted under the Plan. 2.15 "Phantom Stock" means hypothetical shares of Common Stock issued as phantom stock under the Plan. 2.16 "Plan" means the AMCOL International Corporation 1993 Stock Plan, as set forth herein and from time to time amended. 2.17 "Restricted Stock" means Common Stock awarded to a Participant pursuant to this Plan and subject to the restrictions contained in Section 9 of the Plan. 2.18 "SAR" means a stock appreciation right issued pursuant to Section 8 of the Plan. 2.19 Rules of Construction 2.19.1 Governing Law. The construction and operation of this Plan are governed by the laws of the State of Illinois. 2.19.2 Undefined Terms. Unless the context requires another meaning, any term not specifically defined in this Plan is used in the sense given to it by the Code. 2.19.3 Headings. All headings in this Plan are for reference only and are not to be utilized in construing the Plan. 2.19.4 Conformity with Section 422. The ISOs issued under this Plan are intended to qualify as incentive stock options described in Section 422 of the Code and all provisions of the Plan relating to the ISOs shall beconstrued in conformity with this intention. The NSOs issued under this Plan are not intended to qualify as incentive stock options described in Section 422 of the Code and all provisions of the Plan relating to the NSOs shall be construed in conformity with this intention. 2.19.5 Gender. Unless clearly inappropriate, all nouns of whatever gender refer indifferently to persons or objects of any gender. 2.19.6 Singular and Plural. Unless clearly inappropriate, singular terms refer also to the plural and vice versa. 2.19.7 Severability. If any provision of this Plan is determined to be illegal or invalid for any reason, the remaining provisions are to continue in full force and effect and to be construed and enforced as if the illegal or invalid provision did not exist, unless the continuance of the Plan in such circumstances is not consistent with its purposes. 3. Stock Subject to the Plan Except as otherwise provided in Section 13, the aggregate number of shares of Common Stock that may be issued under Options or as Restricted Stock through this Plan may not exceed Four Hundred and Twenty Thousand (420,000) shares. Reserved shares may be either authorized but unissued shares or treasury shares, in the Board's discretion. If any Awards of Options and Restricted Stock hereunder shall terminate or expire, as to any number of shares, new Options, and Restricted Stock may thereafter be awarded with respect to such shares. 4. Administration The Plan is administered by the Committee. In addition to any other powers set forth in this Plan, the Committee has the following powers: (a) to construe and interpret the Plan; (b) to establish, amend and rescind appropriate rules and regulations relating to the Plan; (c) subject to the express provisions of the Plan, to select the individuals who will receive Awards, the times when they will receive them, the number of Options, Restricted Stock, Phantom Stock and/or SARs to be subject to each Award, the vesting schedule and the Option Price, payment terms, payment method, and expiration date applicable to each Award; (d) to contest on behalf of the Company or Participants, at the expense of the Company, any ruling or decision on any matter relating to the Plan or to any Awards; (e) generally, to administer the Plan, and to take all such steps and make all such determinations in connection with the Plan and the Awards granted thereunder as it may deem necessary or advisable; (f) to determine the form in which payment of a SAR or a Phantom Stock Award granted hereunder will be made (i.e., cash, Common Stock or a combination thereof) or to approve a Participant's election to receive cash in whole or in part in settlement of the SAR or Phantom Stock Award; and (g) to determine the form in which tax withholding under Section 16 of this Plan will be made (i.e., cash, Common Stock or a combination thereof). 5. Eligible Employees Subject to the provisions of the Plan, the Committee shall from time to time select those key employees of the Company and any subsidiary or affiliate of the Company who shall be designated as Participants and the number, if any, of ISOs, SARs, Restricted Stock, Phantom Stock and NSOs, or any combination thereof, to be awarded to each such Participant; provided, however, that no ISOs, or SARs granted with respect to ISOs, shall be awarded under the Plan after the expiration of the period of ten years from the date this Plan is adopted by the Board. 6. Terms and Conditions of Incentive Stock Options Each ISO agreement, in such form as is approved by the Committee, shall be subject to the following express terms and conditions and to such other terms and conditions, not inconsistent with the Plan, as the Committee may deem appropriate: (a) Option Period. Each ISO will expire as of the earliest of: (i) the date on which it is forfeited under the provisions of Section 12; (ii) ten years (or five years as specified in paragraph (d) below) from the Award Date; (iii) three (3) months after the Participant's termination of employment with the Company and its parent and subsidiaries for any reason other than death; (iv) twelve (12) months after the Participant's death; or (v) any other date (within the limits of the Code) specified by the Committee when the ISO is granted. (b) Option Price. Subject to the provisions of paragraph (d) below, the Option Price shall be determined by the Committee at the time an ISO is granted, and shall not be less than the Fair Market Value of the Common Stock on the Award Date. (c) Other Option Provisions. The form of ISO authorized by the Plan may contain such other provisions as the Committee may, from time to time, determine; provided, however, that such other provisions may not be inconsistent with any requirements imposed on incentive stock options under Code Section 422 and related Treasury regulations. (d) Awards to Certain Stockholders. Notwithstanding paragraphs (a) and (b) above, if an ISO is granted to a Participant who, immediately before the grant of the ISO, owns stock representing more than 10 percent of the total combined voting power of all classes of stock of the Company or its parent or subsidiary corporations, the exercise period specified in the option agreement for which the ISO thereunder is granted shall not exceed five years from the Award Date, and the Option Price shall be at least 110 percent of the Fair Market Value (as of the Award Date) of the stock subject to the ISO. 7. Terms and Conditions of Nonqualified Stock Options Each NSO agreement, in such form as is approved by the Committee, shall be subject to the following express terms and conditions and to such other terms and conditions, not inconsistent with the Plan, as the Committee may deem appropriate: (a) Option Period. Each NSO will expire as of the earliest of: (i) the date on which it is forfeited under the provisions of Section 12; (ii) three (3) months after the Participant's termination of employment with the Company and its parent and subsidiaries for any reason other than death; (iii) twelve (12) months after the Participant's death; or (iv) any other date specified by the Committee when the NSO is granted. (b) Option Price. At the time granted, the Board of Directors will fix the Option Price, which will be no less than eighty-five percent (85%) of the Fair Market Value of the shares subject to the NSO on the Award Date. (c) Other Option Provisions. The form of NSO authorized by the Plan may contain such other provisions as the Committee may from time to time determine. 8. Terms and Conditions of Stock Appreciation Rights The Committee may, in its discretion, grant an SAR to any Participant under the Plan. Each SAR shall be evidenced by an agreement between the Company and the Participant, and may relate to and be associated with all or any part of a specific ISO or NSO. An SAR shall entitle the Participant to whom it is granted the right, so long as such SAR is exercisable and subject to such limitations as the Committee shall have imposed, to surrender any then exercisable portion of his SAR and, if applicable, the related ISO or NSO, in whole or in part, and receive from the Company in exchange, without any payment of cash (except for applicable employee withholding taxes), that number of shares of Common Stock having an aggregate Fair Market Value on the date of surrender equal to the product of (i) the excess of the Fair Market Value of a share of Common Stock on the date of surrender over the Fair Market Value of the Common Stock on the date the SARs were issued, or, if the SARs are related to an ISO or an NSO, the per share Option Price under such ISO or NSO on the Award Date, and (ii) the number of shares of Common Stock subject to such SAR, and, if applicable, the related ISO or NSO or portion thereof which is surrendered. An SAR granted in conjunction with an ISO or NSO shall terminate on the same date as the related ISO or NSO and shall be exercisable only if the Fair Market Value of a share of Common Stock exceeds the Option Price for the related ISO or NSO, and then shall be exercisable to the extent, and only to the extent, that the related ISO or NSO is exercisable. The Committee may at the time of granting any SAR add such additional conditions and limitations to the SAR as it shall deem advisable, including, but not limited to, limitations on the period or periods within which the SAR shall be exercisable and the maximum amount of appreciation to be recognized with regard to such SAR. If a Participant is subject to Section 16(a) and Section 16(b) of the Exchange Act, the Committee may at any time add such additional conditions and limitations to such SAR which, in its discretion, the Committee deems necessary or desirable to comply with such Section 16(a) or Section 16(b) and the rules and regulations issued thereunder, or to obtain any exemption therefrom. Any ISO or NSO or portion thereof which is surrendered with an SAR shall no longer be exercisable. The Committee, in its sole discretion, may allow the Company to settle all or part of the Company's obligation arising out of the exercise of an SAR by the payment of cash equal to the aggregate Fair Market Value of the shares of Common Stock which the Company would otherwise be obligated to deliver. 9. Terms and Conditions of Restricted Stock Awards All shares of Common Stock awarded to Participants under the Plan as Restricted Stock shall be subject to the following express terms and conditions and to such other terms and conditions, not inconsistent with the Plan, as the Committee shall deem appropriate: (a) Restricted Period. Shares of Restricted Stock awarded to Participants may not be sold, assigned, transferred, pledged or otherwise encumbered before they vest. Subject to the provisions of paragraphs (b) and (d) below and any other restrictions imposed by law, any shares of Restricted Stock that vest will be transferred, subject only to the restrictions set forth in Section 20, to the Participant or, in the event of his death, to the beneficiary or beneficiaries designated by writing filed by the Participant with the Committee for such purpose or, if none, to his estate. Delivery of shares in accordance with the preceding sentence shall be made within the thirty-day period after they vest. (b) Forfeitures. A Participant shall forfeit all unpaid accumulated dividends and all shares of Restricted Stock which have not vested prior to the date that his employment with the Company is terminated for any reason. (c) Certificates Deposited With Company. Each certificate issued in respect of shares of Restricted Stock awarded under the Plan shall be registered in the name of the Participant and deposited with the Company. Each such certificate shall bear the following (or a similar) legend: "The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) relating to Restricted Stock contained in the AMCOL International Corporation 1993 Stock Plan and an Agreement entered into between the registered owner and AMCOL International Corporation. Copies of such Plan and Agreement are on file at the principal office of AMCOL International Corporation." (d) Stockholder Rights. Subject to the foregoing restrictions, each Participant shall have all the rights of a stockholder with respect to his shares of Restricted Stock including, but not limited to, the right to vote and to receive dividends on such shares. 10. Terms and Conditions of Phantom Stock The Committee may, in its discretion, award Phantom Stock to any Participant under the Plan. Each Award of Phantom Stock shall be evidenced by an agreement between the Company and the Participant. An Award of Phantom Stock shall entitle the Participant to whom it is awarded the right to elect, so long as such Phantom Stock is vested and subject to such limitations as the Committee shall have imposed, to surrender any then vested portion of the Phantom Stock, in whole or in part, and receive from the Company in exchange for the Fair Market Value of the Common Stock to which the surrendered Phantom Stock relates, payable either in cash or in shares of Common Stock as the Committee may determine. The Committee may at the time of awarding any Phantom Stock add such additional conditions and limitations to the Phantom Stock as it shall deem advisable, including, but not limited to, limitations on the period or periods within which the Phantom Stock may be surrendered, and the maximum amount of appreciation to be recognized with regard to such Phantom Stock. 11. Manner of Exercise of Options To exercise an Option in whole or in part, a Participant (or, after his death, his executor or administrator) must give written notice to the Committee, stating the number of shares with respect to which he intends to exercise the Option. The Company will issue the shares with respect to which the Option is exercised upon payment in full of the Option Price. The Committee may permit the Option Price to be paid in cash or shares of Common Stock held by the Participant having an aggregate Fair Market Value, as determined on the date of delivery, equal to the Option Price. The Committee may also permit the Option Price to be paid by any other method permitted by law, including by delivery to the Committee from the Participant of an election directing the Company to withhold the number of shares of Common Stock from the Common Stock otherwise due upon exercise of the Option having an aggregate Fair Market Value on that date equal to the Option Price. If a Participant pays the Option Price with shares of Common Stock which were received by the Participant upon exercise of one or more ISOs, and such Common Stock has not been held by the Participant for at least the greater of: (a) two years from the date the ISOs were granted or (b) one year after the transfer of the shares of Common Stock to the Participant, the use of the shares shall constitute a disqualifying disposition and the ISO underlying the shares used to pay the Option Price shall no longer satisfy all of the requirements of Code Section 422. 12. Vesting A Participant may not exercise an Option or surrender Phantom Stock or an SAR until it has become vested. Similarly, no share of Restricted Stock may be sold, transferred, reassigned, pledged or otherwise encumbered or disposed of until it is vested. The portion of an Award of Options, SARs, Restricted Stock and/or Phantom Stock that is vested depends upon the period that has elapsed since the Award Date. The following schedule applies to any Award of Options, SARs, Restricted Stock and Phantom Stock under this Plan unless the Committee establishes a different vesting schedule on the Award Date: Number of Years Since Award Date Vested Percentage Fewer than two........................................ None Two but fewer than three ............................. 40% Three but fewer than four............................. 60% Four but fewer than five.............................. 80% Five or more.......................................... 100% Notwithstanding anything herein to the contrary, however, all Awards will become vested and exercisable upon the effective date of a "change in control" and will remain exercisable during the thirty (30) days following the effective date of the change in control. As used in this paragraph, the term "change in control" means the change in the legal or beneficial ownership of fifty-one percent (51%) of the outstanding shares of Common Stock of the Company within a six-month period, other than by death or operation of law, or the sale of ninety percent (90%) or more of the assets of the Company. Regardless of the period elapsed since the Award Date, a Participant's Awards become fully vested if his employment with the Company and its parent and subsidiaries terminates for any of the following reasons: (a) retirement on or after his sixty-fifth (65th) birthday; (b) retirement on or after his fifty-fifth (55th) birthday with consent of the Company; (c) retirement at any age on account of total and permanent disability as determined by the Company; or (d) death. If a Participant terminates employment with the Company for any reason, he forfeits any Awards that are not yet vested. A transfer from the Company to a subsidiary or affiliate, or vice versa, is not a termination of employment for purposes of this Plan. 13. Adjustments to Reflect Changes in Capital Structure If there is any change in the corporate structure or shares of the Company, the Committee may make any adjustments necessary to prevent accretion, or to protect against dilution, in the number and kind of shares authorized by the Plan and, with respect to outstanding Awards, in the number and kind of shares covered thereby and in the applicable Option Price. For the purpose of this Section 13, a change in the corporate structure or shares of the Company includes, without limitation, any change resulting from a recapitalization, stock split, stock dividend, consolidation, rights offering, separation, reorganization, or liquidation and any transaction in which shares of Common Stock are changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or another corporation. 14. Nontransferability of Awards Awards under the Plan are not transferable, voluntarily or involuntarily, other than by will or by the laws of descent and distribution. During a Participant's lifetime, his Options may be exercised only by him. 15. Rights as Stockholder No Common Stock may be delivered upon the exercise of any Option until full payment has been made. A Participant has no rights whatsoever as a stockholder with respect to any shares covered by an Option until the date of the issuance of a stock certificate for the shares. 16. Withholding Tax The Company shall have the right to withhold in cash or shares of Common Stock with respect to any payments made to Participants under the Plan any taxes required by law to be withheld because of such payments. 17. No Right to Employment Participation in the Plan will not give any Participant a right to be retained as an employee of the Company or its parent or subsidiaries, or any right or claim to any benefit under the Plan, unless the right or claim has specifically accrued under the Plan. 18. Amendment of the Plan The Board of Directors may from time to time amend or revise the terms of this Plan in whole or in part and may, without limitation, adopt any amendment deemed necessary; provided, however, that (a) no change in any Award previously granted to a Participant may be made that would impair the rights of the Participant without the Participant's consent, (b) no amendment may extend the period in which a Participant may exercise an ISO beyond the period set forth in Section 6(a)(ii), and (c) the Board of Directors may not, without approval by the holders of a majority of the shares of the Company present at a stockholders meeting, (i) change the aggregate number of shares that may be granted pursuant to Options and Restricted Stock granted under the Plan (except in accordance with the provisions of Section 13), (ii) change the class of eligible employees who may receive Awards under the Plan, (iii) adopt any amendment affecting the Option Price at which Options may be granted, or (iv) materially increase benefits accruing to Participants under the Plan. 19. Stockholder Approval Operation of the Plan shall be subject to approval by the stockholders of the Company within twelve months before or after the date the Plan is adopted by the Board of Directors in accordance with Rule 16b-3(b) of the Exchange Act. If such stockholder approval is obtained at a duly held stockholders' meeting, it may be obtained by the affirmative vote of the holders of a majority of the shares of the Company present at the meeting or represented and entitled to vote thereon. If and in the event that the Company registers any class of any equity security pursuant to Section 12 of the Exchange Act, the approval of such stockholders of the Company shall be solicited substantially in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder, or (2) solicited after the Company has furnished in writing to the holders entitled to vote substantially the same information concerning the Plan as that which would be required by the rules and regulations in effect under Section 14(e) of the Exchange Act at the time such information is furnished. If such stockholder approval is obtained by written consent, it must be obtained by the unanimous written consent of all stockholders of the Company. 20. Conditions Upon Issuance of Shares An Option shall not be exercisable, a share of Common Stock shall not be issued pursuant to the exercise of an Option, and Restricted Stock shall not be awarded until such time as the Plan has been approved by the stockholders of the Company and unless the award of Restricted Stock, exercise of such Option and the issuance and delivery of such share pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the share of Common Stock may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. As a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the share of Common Stock is being purchased only for investment and without any present intention to sell or distribute such share if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned relevant provisions of law. 21. Effective Date and Termination of Plan 21.01 Effective Date. This Plan is effective as of the later of the date of its adoption by the Board of Directors, or the date it is approved by the stockholders of the Company, pursuant to Section 19. 21.02 Termination of the Plan. The Board of Directors may terminate the Plan at any time with respect to any shares that are not then subject to Options or Restricted Stock. Termination of the Plan will not affect the rights and obligations of any Participant with respect to Awards before termination. EX-10 5 MATERIAL CONTRACTS EXHIBIT 10.9 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, Robert C. Steele ("Employee") is considered a key management employee, currently serving as Senior Vice-President of the Company; and 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. 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 in Section 12 below 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. Employee further agrees to devote his entire working time and attention to the business of the Company and its 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 set by 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 of 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 able 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 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 assets within a six-month period. (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 Sections 9(a) and 12 below 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 and obligations under Section 12 below. 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 ten (10) days of the occurrence thereof: (i) the assignment to Employee of any duties of substantially lesser status, dignity and character than the duties as a Vice President of the Company 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 35 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 35 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. (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 obligations under Section 12 below. (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 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 Mr. Robert C. Steele One North Arlington Senior Vice President 1500 West Shure Drive AMCOL International Corporation Arlington Heights, IL 60004 One North Arlington Attn: Chairman of the Board 1500 West Shure Drive Arlington Heights, IL 60004 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-(12)- 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 Section 12(a) below, 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 payable to him by the Company: (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 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 Section 12 below. 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). The sum payable to Employee pursuant to Section 9(b)(iii) shall in any and all cases be reduced by any compensation which Employee receives, excluding stock option or other stock incentive bonus plan compensation from the date of the Change in Control until the termination date. 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), 402(h)(1)(B) (elective contributions to simplified employee pensions), 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 two (2) annual installments commencing thirty (30) days after the sums become due. 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, however, the amount of any payment or benefit provided for in this Section 9(b) shall be reduced by no more than 50% by any compensation earned by Employee as a result of employment by another employer and 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; or (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. 11. Disputes. Any dispute arising under this Agreement (except Section 12) 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. Non-Competition, Non-Solicitation, and Confidentiality. (a) In consideration of this Agreement and other good and valuable consideration, Employee agrees that for so long as he is employed by the Company and for twenty-four (24) months thereafter he shall not own manage, operate, control, be employed by or otherwise engage in any competitive business. Employee's agreement pursuant to the preceding sentence shall be in addition to any other agreement or legal obligation he may have with or to the Company. For purposes of the preceding sentence, a "competitive business" is any business engaged in the production, refinement or sale of Bentonite and/or any business conducted by the Company, its affiliates or any subsidiaries thereof as of the date Employee's employment is terminated. A business which is conducted by the Company, its affiliates or any subsidiaries which is subsequently sold by the Company is not a competitive business as of the date such business is sold. An "affiliate" of the Company is any company which either controls, is controlled by or is under common control with the Company. The phrase "any business conducted by the Company, its affiliates or any subsidiaries thereof" includes not only current businesses but also any new products, product lines or use of processes under development, consideration or investigation on the date Employee's employment with the Company is terminated. Employee also agrees that during the twenty-four (24) month period described in the first sentence of this Section 12(a) he will not directly or indirectly, on behalf of himself or any other person or entity, make a solicitation or conduct business, with any customer or potential customer of the Company with which he had contact while employed by the Company, its affiliates and/or any subsidiaries thereof, with respect to any products or services which are competitive with any business conducted by the Company, its affiliates or any subsidiaries thereof. For purposes of the preceding sentence, a "customer" is any person or entity that has purchased goods or services from the Company, its affiliates or any subsidiaries thereof within the twenty-four (24) month period ending on the date Employee's employment is terminated. A "potential customer" is any person or entity that the Company, its affiliates or any subsidiaries solicited for business within twelve (12) months prior to the date Employee's employment with the Company is terminated. The Company and Employee recognize that his responsibilities have included sales and marketing of bentonite clay products to the construction and environmental markets, domestically and internationally, and establishing contacts and business relationships on behalf of the Company. Employee's contacts on behalf of the Company represent a substantial asset of the Company which are entitled to protection. In recognition of this situation, the covenants set forth in this Section 12 shall apply to competitive businesses and solicitation in the United States and Canada and those countries in Europe, Asia and Latin America in which the Company, its affiliates and/or the subsidiaries thereof have conducted $100,000 or more of business during the twelve-month period ending on the date Employee's employment with the Company terminated. Before and forever after his termination or resignation, Employee shall keep confidential and refrain from utilizing or disseminating any confidential, proprietary or trade secret information of the Company for any purpose other than furthering the business interests of the Company. (b) During Employee's employment hereunder and during two (2) years following his resignation or the termination of his employment hereunder for any reason, Employee will not induce or attempt to influence any present or future employee of the Company, its affiliates or any subsidiaries thereof to leave its employ. 13. 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. 14. 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. 15. Injunction. The remedy at law for any breach of Section 12 will be inadequate and the Company, its affiliates and any subsidiaries thereof would suffer continuing and irreparable injury to their business as a direct result of any such breach. Accordingly, notwithstanding anything stated herein, if Employee shall breach or fail to perform any term, condition or duty contained in Section 12 hereof, then, in such event, the Company shall be entitled to institute and prosecute proceedings in any court of competent jurisdiction, either in law or in equity, to obtain the specific performance thereof by Employee or to seek a temporary restraining order or injunctive relief, without any requirement to show actual damages or post bond, to restrict Employee from violating the provisions of Section 12; however, nothing herein shall be construed to prevent the Company seeking such other remedy in the courts, in case of any breach of this Agreement by Employee, as the Company may elect or invoke. If court proceedings are instituted by the Company to enforce Section 12 hereof, and the Company is the prevailing party, the Company shall receive, in addition to any damages awarded, reasonable attorneys' fees, court costs and ancillary expenses. 16. 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 ten (10) 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. 17. Severability. The parties hereto intend this Agreement to be enforced to the maximum extent permitted by law. In the event any provision of this Agreement is deemed to be invalid or unenforceable by any court of competent jurisdiction, such provisions shall be deemed to be restricted in scope or otherwise modified to the extent necessary to render the same valid and enforceable. In the event the provisions of Section 12 cannot be modified or restricted so as to be valid and enforceable, then the same as well as the Company's obligation to make any payment or transfer any benefit to Employee in connection with any termination of Employee's employment shall be deemed excised from this Agreement, and this Agreement shall be construed and enforced as if such provisions had originally been incorporated herein as so restricted or modified or as if such provisions had not originally been contained herein, as the case may be. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement which shall remain in full force and effect. 18. Survival. The obligations of the parties under this Agreement shall survive the term of this Agreement. 19. Term of Agreement. The term of this Agreement shall commence on February 7, 1996 and end on February 6, 1999. 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 in Section 12 hereof (all of which duties and obligations shall specifically survive the termination of the Employee's employment). To the extent necessary for the Company's enforcement of the provisions of Section 12 above (but only for such purpose), Employee's employment term shall be deemed to continue through the end of the Agreement term.to continue through the end of the Agreement term. Date: February 7, 1996. Employee AMCOL International Corporation /S/ Robert C. Steele By: /S/ John Hughes - ------------------------------- ----------------------------------- Robert C. Steele On Behalf of the Board of Directors Its: President ----------------------------------- Attest: /s/ Clarence O. Redman ----------------------------------- Its Secretary EX-10 6 MATERIAL CONTRACTS EXHIBIT 10.10 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 E. Washow ("Employee") is considered a key management employee, currently serving as Senior Vice President of the Company; and 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. 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 in Section 12 below 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. Employee further agrees to devote his entire working time and attention to the business of the Company and its 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 set by 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 of 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 able 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 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 assets within a six-month period. (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 Sections 9(a) and 12 below 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 and obligations under Section 12 below. 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 ten (10) days of the occurrence thereof: (i) the assignment to Employee of any duties of substantially lesser status, dignity and character than the duties as a Vice President of the Company 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 35 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 35 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. (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 obligations under Section 12 below. (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 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 Mr. Lawrence E. Washow One North Arlington Senior Vice President 1500 West Shure Drive AMCOL International Corporation Arlington Heights, IL 60004 One North Arlington Attn: Chairman of the Board 1500 West Shure Drive Arlington Heights, IL 60004 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-(12)- 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 Section 12(a) below, 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 payable to him by the Company: (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 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 Section 12 below. 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). The sum payable to Employee pursuant to Section 9(b)(iii) shall in any and all cases be reduced by any compensation which Employee receives, excluding stock option or other stock incentive bonus plan compensation from the date of the Change in Control until the termination date. 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), 402(h)(1)(B) (elective contributions to simplified employee pensions), 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 two (2) annual installments commencing thirty (30) days after the sums become due. 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, however, the amount of any payment or benefit provided for in this Section 9(b) shall be reduced by no more than 50% by any compensation earned by Employee as a result of employment by another employer and 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; or (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. 11. Disputes. Any dispute arising under this Agreement (except Section 12) 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. Non-Competition, Non-Solicitation, and Confidentiality. (a) In consideration of this Agreement and other good and valuable consideration, Employee agrees that for so long as he is employed by the Company and for twenty-four (24) months thereafter he shall not own manage, operate, control, be employed by or otherwise engage in any competitive business. Employee's agreement pursuant to the preceding sentence shall be in addition to any other agreement or legal obligation he may have with or to the Company. For purposes of the preceding sentence, a "competitive business" is any business engaged in the production, refinement or sale of Bentonite and/or any business conducted by the Company, its affiliates or any subsidiaries thereof as of the date Employee's employment is terminated. A business which is conducted by the Company, its affiliates or any subsidiaries which is subsequently sold by the Company is not a competitive business as of the date such business is sold. An "affiliate" of the Company is any company which either controls, is controlled by or is under common control with the Company. The phrase "any business conducted by the Company, its affiliates or any subsidiaries thereof" includes not only current businesses but also any new products, product lines or use of processes under development, consideration or investigation on the date Employee's employment with the Company is terminated. Employee also agrees that during the twenty-four (24) month period described in the first sentence of this Section 12(a) he will not directly or indirectly, on behalf of himself or any other person or entity, make a solicitation or conduct business, with any customer or potential customer of the Company with which he had contact while employed by the Company, its affiliates and/or any subsidiaries thereof, with respect to any products or services which are competitive with any business conducted by the Company, its affiliates or any subsidiaries thereof. For purposes of the preceding sentence, a "customer" is any person or entity that has purchased goods or services from the Company, its affiliates or any subsidiaries thereof within the twenty-four (24) month period ending on the date Employee's employment is terminated. A "potential customer" is any person or entity that the Company, its affiliates or any subsidiaries solicited for business within twelve (12) months prior to the date Employee's employment with the Company is terminated. The Company and Employee recognize that his responsibilities have included sales and marketing of bentonite clay products to the construction and environmental markets, domestically and internationally, and establishing contacts and business relationships on behalf of the Company. Employee's contacts on behalf of the Company represent a substantial asset of the Company which are entitled to protection. In recognition of this situation, the covenants set forth in this Section 12 shall apply to competitive businesses and solicitation in the United States and Canada and those countries in Europe, Asia and Latin America in which the Company, its affiliates and/or the subsidiaries thereof have conducted $100,000 or more of business during the twelve-month period ending on the date Employee's employment with the Company terminated. Before and forever after his termination or resignation, Employee shall keep confidential and refrain from utilizing or disseminating any confidential, proprietary or trade secret information of the Company for any purpose other than furthering the business interests of the Company. (b) During Employee's employment hereunder and during two (2) years following his resignation or the termination of his employment hereunder for any reason, Employee will not induce or attempt to influence any present or future employee of the Company, its affiliates or any subsidiaries thereof to leave its employ. 13. 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. 14. 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. 15. Injunction. The remedy at law for any breach of Section 12 will be inadequate and the Company, its affiliates and any subsidiaries thereof would suffer continuing and irreparable injury to their business as a direct result of any such breach. Accordingly, notwithstanding anything stated herein, if Employee shall breach or fail to perform any term, condition or duty contained in Section 12 hereof, then, in such event, the Company shall be entitled to institute and prosecute proceedings in any court of competent jurisdiction, either in law or in equity, to obtain the specific performance thereof by Employee or to seek a temporary restraining order or injunctive relief, without any requirement to show actual damages or post bond, to restrict Employee from violating the provisions of Section 12; however, nothing herein shall be construed to prevent the Company seeking such other remedy in the courts, in case of any breach of this Agreement by Employee, as the Company may elect or invoke. If court proceedings are instituted by the Company to enforce Section 12 hereof, and the Company is the prevailing party, the Company shall receive, in addition to any damages awarded, reasonable attorneys' fees, court costs and ancillary expenses. 16. 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 ten (10) 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. 17. Severability. The parties hereto intend this Agreement to be enforced to the maximum extent permitted by law. In the event any provision of this Agreement is deemed to be invalid or unenforceable by any court of competent jurisdiction, such provisions shall be deemed to be restricted in scope or otherwise modified to the extent necessary to render the same valid and enforceable. In the event the provisions of Section 12 cannot be modified or restricted so as to be valid and enforceable, then the same as well as the Company's obligation to make any payment or transfer any benefit to Employee in connection with any termination of Employee's employment shall be deemed excised from this Agreement, and this Agreement shall be construed and enforced as if such provisions had originally been incorporated herein as so restricted or modified or as if such provisions had not originally been contained herein, as the case may be. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement which shall remain in full force and effect. 18. Survival. The obligations of the parties under this Agreement shall survive the term of this Agreement. 19. Term of Agreement. The term of this Agreement shall commence on February 7, 1996 and end on February 6, 1999. 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 in Section 12 hereof (all of which duties and obligations shall specifically survive the termination of the Employee's employment). To the extent necessary for the Company's enforcement of the provisions of Section 12 above (but only for such purpose), Employee's employment term shall be deemed to continue through the end of the Agreement term.to continue through the end of the Agreement term. Date: February 7, 1996. Employee AMCOL International Corporation /S/ Lawrence E. Washow By: /S/ John Hughes - ------------------------------- ----------------------------------- Lawrence E. Washow On Behalf of the Board of Directors Its: President ----------------------------------- Attest: /s/ Clarence O. Redman ----------------------------------- Its Secretary EX-10 7 MATERIAL CONTRACTS EXHIBIT 10.11 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, Roger P. Palmer ("Employee") is considered a key management employee, currently serving as Senior Vice-President of the Company; and 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. 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 in Section 12 below 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. Employee further agrees to devote his entire working time and attention to the business of the Company and its 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 set by 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 of 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 able 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 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 assets within a six-month period. (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 Sections 9(a) and 12 below 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 and obligations under Section 12 below. 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 ten (10) days of the occurrence thereof: (i) the assignment to Employee of any duties of substantially lesser status, dignity and character than the duties as a Vice President of the Company 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 35 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 35 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. (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 obligations under Section 12 below. (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 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 Mr. Roger P. Palmer One North Arlington Senior Vice President 1500 West Shure Drive AMCOL International Corporation Arlington Heights, IL 60004 One North Arlington Attn: Chairman of the Board 1500 West Shure Drive Arlington Heights, IL 60004 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-(12)- 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 Section 12(a) below, 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 payable to him by the Company: (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 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 Section 12 below. 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). The sum payable to Employee pursuant to Section 9(b)(iii) shall in any and all cases be reduced by any compensation which Employee receives, excluding stock option or other stock incentive bonus plan compensation from the date of the Change in Control until the termination date. 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), 402(h)(1)(B) (elective contributions to simplified employee pensions), 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 two (2) annual installments commencing thirty (30) days after the sums become due. 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, however, the amount of any payment or benefit provided for in this Section 9(b) shall be reduced by no more than 50% by any compensation earned by Employee as a result of employment by another employer and 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; or (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. 11. Disputes. Any dispute arising under this Agreement (except Section 12) 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. Non-Competition, Non-Solicitation, and Confidentiality. (a) In consideration of this Agreement and other good and valuable consideration, Employee agrees that for so long as he is employed by the Company and for twenty-four (24) months thereafter he shall not own manage, operate, control, be employed by or otherwise engage in any competitive business. Employee's agreement pursuant to the preceding sentence shall be in addition to any other agreement or legal obligation he may have with or to the Company. For purposes of the preceding sentence, a "competitive business" is any business engaged in the production, refinement or sale of Bentonite and/or any business conducted by the Company, its affiliates or any subsidiaries thereof as of the date Employee's employment is terminated. A business which is conducted by the Company, its affiliates or any subsidiaries which is subsequently sold by the Company is not a competitive business as of the date such business is sold. An "affiliate" of the Company is any company which either controls, is controlled by or is under common control with the Company. The phrase "any business conducted by the Company, its affiliates or any subsidiaries thereof" includes not only current businesses but also any new products, product lines or use of processes under development, consideration or investigation on the date Employee's employment with the Company is terminated. Employee also agrees that during the twenty-four (24) month period described in the first sentence of this Section 12(a) he will not directly or indirectly, on behalf of himself or any other person or entity, make a solicitation or conduct business, with any customer or potential customer of the Company with which he had contact while employed by the Company, its affiliates and/or any subsidiaries thereof, with respect to any products or services which are competitive with any business conducted by the Company, its affiliates or any subsidiaries thereof. For purposes of the preceding sentence, a "customer" is any person or entity that has purchased goods or services from the Company, its affiliates or any subsidiaries thereof within the twenty-four (24) month period ending on the date Employee's employment is terminated. A "potential customer" is any person or entity that the Company, its affiliates or any subsidiaries solicited for business within twelve (12) months prior to the date Employee's employment with the Company is terminated. The Company and Employee recognize that his responsibilities have included sales and marketing of bentonite clay products to the construction and environmental markets, domestically and internationally, and establishing contacts and business relationships on behalf of the Company. Employee's contacts on behalf of the Company represent a substantial asset of the Company which are entitled to protection. In recognition of this situation, the covenants set forth in this Section 12 shall apply to competitive businesses and solicitation in the United States and Canada and those countries in Europe, Asia and Latin America in which the Company, its affiliates and/or the subsidiaries thereof have conducted $100,000 or more of business during the twelve-month period ending on the date Employee's employment with the Company terminated. Before and forever after his termination or resignation, Employee shall keep confidential and refrain from utilizing or disseminating any confidential, proprietary or trade secret information of the Company for any purpose other than furthering the business interests of the Company. (b) During Employee's employment hereunder and during two (2) years following his resignation or the termination of his employment hereunder for any reason, Employee will not induce or attempt to influence any present or future employee of the Company, its affiliates or any subsidiaries thereof to leave its employ. 13. 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. 14. 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. 15. Injunction. The remedy at law for any breach of Section 12 will be inadequate and the Company, its affiliates and any subsidiaries thereof would suffer continuing and irreparable injury to their business as a direct result of any such breach. Accordingly, notwithstanding anything stated herein, if Employee shall breach or fail to perform any term, condition or duty contained in Section 12 hereof, then, in such event, the Company shall be entitled to institute and prosecute proceedings in any court of competent jurisdiction, either in law or in equity, to obtain the specific performance thereof by Employee or to seek a temporary restraining order or injunctive relief, without any requirement to show actual damages or post bond, to restrict Employee from violating the provisions of Section 12; however, nothing herein shall be construed to prevent the Company seeking such other remedy in the courts, in case of any breach of this Agreement by Employee, as the Company may elect or invoke. If court proceedings are instituted by the Company to enforce Section 12 hereof, and the Company is the prevailing party, the Company shall receive, in addition to any damages awarded, reasonable attorneys' fees, court costs and ancillary expenses. 16. 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 ten (10) 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. 17. Severability. The parties hereto intend this Agreement to be enforced to the maximum extent permitted by law. In the event any provision of this Agreement is deemed to be invalid or unenforceable by any court of competent jurisdiction, such provisions shall be deemed to be restricted in scope or otherwise modified to the extent necessary to render the same valid and enforceable. In the event the provisions of Section 12 cannot be modified or restricted so as to be valid and enforceable, then the same as well as the Company's obligation to make any payment or transfer any benefit to Employee in connection with any termination of Employee's employment shall be deemed excised from this Agreement, and this Agreement shall be construed and enforced as if such provisions had originally been incorporated herein as so restricted or modified or as if such provisions had not originally been contained herein, as the case may be. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement which shall remain in full force and effect. 18. Survival. The obligations of the parties under this Agreement shall survive the term of this Agreement. 19. Term of Agreement. The term of this Agreement shall commence on February 7, 1996 and end on February 6, 1999. 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 in Section 12 hereof (all of which duties and obligations shall specifically survive the termination of the Employee's employment). To the extent necessary for the Company's enforcement of the provisions of Section 12 above (but only for such purpose), Employee's employment term shall be deemed to continue through the end of the Agreement term.to continue through the end of the Agreement term. Date: February 7, 1996. Employee AMCOL International Corporation /S/ Roger P. Palmer By: /S/ John Hughes - ------------------------------- ----------------------------------- Roger P. Palmer On Behalf of the Board of Directors Its: President ----------------------------------- Attest: /s/ Clarence O. Redman ----------------------------------- Its Secretary EX-18 8 LETTER RE: CHANGE IN ACCOUNTING PRINCIPLES EXHIBIT 18 March 8, 1996 AMCOL International Corporation One North Arlington 1500 West Shure Drive Arlington Heights, Illinois 60004-7803 Gentlemen: We have audited the consolidated balance sheets of AMCOL International Corporation as of December 31, 1995 and 1994, and the related consolidated statements of operations, stockholders' equity, and cash flows, and the financial statement schedule, for each of the years in the three-year period ended December 31, 1995, and have reported thereon under date of March 8, 1996. The aforementioned consolidated financial statements and financial statement schedule and our report thereon are included in the Company's annual report on Form 10-K for the year ended December 31, 1995. As stated in Note 1 to those financial statements, the Company changed its method of accounting for certain inventories from the last-in first-out (LIFO) method to the first-in first-out (FIFO) method, and states that the newly adopted accounting principle is preferable in the circumstances because it better matches revenue and expenses. In accordance with your request, we have reviewed and discussed with company officials the circumstances and business judgment and planning upon which the decision to make this change in the method of accounting was based. With regard to the aforementioned accounting change, authoritative criteria have not been established for evaluating the preferability of one acceptable method of accounting over another acceptable method. However, for purposes of AMCOL International Corporation's compliance with the requirements of the Securities and Exchange Commission, we are furnishing this letter. Based on our review and discussion, with reliance on management's business judgment and planning, we concur that the newly adopted method of accounting is preferable in the Company's circumstances. Very truly yours, /s/ KPMG Peat Marwick LLP EX-21 9 SUBSIDIARIES OF THE REGISTRANT EXHIBIT 21 AMCOL INTERNATIONAL CORPORATION SUBSIDIARY LISTING
Company Name Country State Ownership % - ------------------------------------------ -------------------- ----- ----------- AMCOL International Corporation USA DE Parent ACC-Chem Limited Cyprus 100 ACC-Colloid Technology Limited Cyprus 100 ACP Export, Inc. U.S. Virgin Islands 100 American Coloid Company USA DE 100 American Colloid Company Ltd. Canada Ontario 100 Ameri-Co Carriers, Inc. USA NE 100 CETCO (Europe) Limited England 100 Chemdal Corporation USA DE 100 Chemdal International Corporation USA DE 100 Chemdal Limited England 100 Chemdal Pty., Ltd. Australia 100 Colloid Environmental Technologies Company (CETCO) USA DE 100 Colloid Abwassertechnik GmbH Germany 100 Colloid Australia Pty., Ltd. Australia 100 Foundry Supplies Limited England 100 Montana Minerals Development Company USA 100 Nanocor, Inc. USA DE 100 Nanocor, Ltd. England 100 Nationwide Freight Service, Inc. USA NE 100 Regeneration Technologies, Inc. USA DE 100 Superior Absorbents, Inc. (Formerly Colloid-Piepho, Inc.) USA DE 100 Volclay de Mexico, S.A. de C.V. Mexico 49 Volclay Limited England 100 Volclay Standard Pty., Ltd. Australia 60
EX-23 10 CONSENTS OF EXPERTS AND COUNSEL EXHIBIT 23 Consent of KPMG Peat Marwick LLP The Board of Directors AMCOL International We consent to incorporation by reference in the registration statements Nos. 33-34109, 33-55540, and 33-73350 on Form S-8 of AMCOL International Corporation of our report dated March 8, 1996, relating to the consolidated balance sheets of AMCOL International Corporation and subsidiaries as of December 31, 1995 and 1994, and the related schedule for each of the years in the three-year period ended December 31, 1995, which report appeas in the December 31, 1995 annual report on Form 10-K of AMCOL International Corporation /s/ KPMG Peat Marwick LLP Chicago, Illinois March 22, 1996 EX-27 11 FDS --
5 0000813621 AMCOL INTERNATIONAL CORPORATION 1,000 U.S. Dollars 12-MOS DEC-31-1995 JAN-01-1995 DEC-31-1995 1.00 1,888 0 66,868 1,601 47,205 126,337 276,530 101,319 322,366 35,882 117,016 0 0 213 155,281 322,366 347,688 347,688 271,126 315,291 1,217 769 6,727 26,887 9,082 17,805 0 0 0 17,771 .90 .90
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