8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 11, 2006

AMCOL INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware	0-15661	36-0724340
State of Other Jurisdiction of Incorporation	Commission File Number	I.R.S. Employer Identification Number
One North Arlington, 1500 West Shure Drive, Suite 500 Arlington Heights, IL 60004-7803
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (847) 394-8730

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

Approval of the Long-Term Incentive Plan, the Annual Cash Incentive Plan and the Discretionary Cash Incentive Plan

          On May 11, 2006, at the Annual Meeting of Shareholders of AMCOL International Corporation (“AMCOL” or the “Company”), AMCOL’s shareholders approved (i) the AMCOL International Corporation 2006 Long-Term Incentive Plan (the “Long-Term Incentive Plan”) and (ii) the AMCOL International Corporation Annual Cash Incentive Plan (the “Annual Cash Incentive Plan”).  On February 7, 2006, the AMCOL board of directors approved the AMCOL International Corporation Annual Discretionary Cash Incentive Plan (the “Discretionary Cash Incentive Plan”), effective as of the 2006 Annual Meeting of Shareholders.  A summary of the Long-Term Incentive Plan, the Annual Cash Incentive Plan and the Discretionary Cash Incentive Plan is set forth below.  The Long-Term Incentive Plan, the Annual Cash Incentive Plan and the Discretionary Cash Incentive Plan are incorporated herein by reference and are attached hereto in their entirety as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3, respectively.

Summary of the Long-Term Incentive Plan

          Type of Awards.  The Long-Term Incentive Plan provides for the granting of awards of nonqualified stock options (“NSOs”), incentive stock options (“ISOs”), restricted stock or restricted stock units, some of which may be issued as qualified performance-based awards, and stock appreciation rights (“SARs”) (collectively, “Awards”).

          Administration.  The Long-Term Incentive Plan will be administered by our Compensation Committee.  All determinations of the Compensation Committee are made by a majority vote of its members and are final and binding on all participants. The Compensation Committee has discretionary authority to: (i) construe and interpret the Long-Term Incentive Plan; (ii) establish, amend and rescind appropriate rules and regulations relating to the Long-Term Incentive Plan; (iii) select the individuals who will receive Awards under the Long-Term Incentive Plan and determine the size and terms of such Awards, retaining the right to amend or modify the Awards as permitted under the Long-Term Incentive Plan; (iv) contest rulings or decisions on matters relating to the Long-Term Incentive Plan or to any Awards; (v) make other decisions necessary or advisable for the administration of the Long-Term Incentive Plan; and (vi) determine the form in which tax withholding under the Long-Term Incentive Plan will be made.

          Participants.  Present and future directors, officers and employees of AMCOL or any subsidiary or affiliate shall be eligible to participate in the Long-Term Incentive Plan.  The Compensation Committee from time to time shall select those officers, directors and employees of AMCOL and any subsidiary or affiliate of AMCOL who shall be designated as participants.

          Number of Shares of Common Stock Available.  The Long-Term Incentive Plan permits a total of 1,500,000 shares of AMCOL’s common stock to be awarded to participants.  Shares issued under the Long-Term Incentive Plan may be either authorized but unissued shares or treasury shares.  If any Award shall terminate, expire, be cancelled or forfeited as to any number of shares of common stock (other than a cancellation within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”)), new Awards may thereafter be awarded with respect to such shares.  The maximum number of shares for which Awards may be granted under the Long-Term Incentive Plan pursuant to ISOs shall be 500,000 and the maximum number of shares of common stock for which Awards of restricted stock and restricted stock units may be granted under the Long-Term Incentive Plan shall be 500,000.  In addition, the total number of shares of common stock with respect to which Awards may be granted to any participant in any calendar year shall not exceed 200,000 shares and the total number of shares of common stock with respect to Qualified Performance-Based Awards (defined below) that can be paid to any Covered Employee (defined below) in any performance period shall not exceed 100,000 shares.

          Nonqualified Stock Options.  The Long-Term Incentive Plan provides for the granting of NSOs to any participant.  The Compensation Committee has the authority to determine the terms and conditions of each grant including the number of shares subject to each NSO, the option period and the option exercise price.  The NSO exercise price may not be less than 100% of the fair market value of the common stock on the date of grant.

          Unless the Compensation Committee otherwise determines, the option period for NSOs granted pursuant to the Long-Term Incentive Plan will expire upon the earliest of: ten years after the date of grant; three months after termination of employment for any reason other than cause, death, total and permanent disability or retirement on or after age 65 (nonemployee directors will be treated as being terminated when they cease to serve on the Board); immediately upon termination of employment for cause; sixty months after termination of employment on account of retirement after age 65; twelve months after death or termination of employment on account of total and permanent disability; or such other date or event as specified by the Compensation Committee.

          Incentive Stock Options.  The Long-Term Incentive Plan provides for the granting of ISOs to any employee of AMCOL.  The Compensation Committee has the authority to determine the terms and conditions of each ISO grant, including without limitation, the number of shares subject to each ISO and the option period.  The ISO exercise price is also determined by the Compensation Committee and may not be less than the fair market value of AMCOL’s common stock on the date of grant and not less than 110% of such fair market value if the participant was the holder of more than 10% of AMCOL’s outstanding voting securities on the date of the grant.

          Unless the Compensation Committee otherwise determines, the option period for ISOs granted under the Long-Term Incentive Plan will expire upon the earliest of: ten years after the date of grant (five years in the case of a holder of more than 10% of AMCOL’s outstanding voting securities); three months after termination of employment for any reason other than cause, death or total and permanent disability; immediately upon termination of employment for cause; twelve months after death or termination of employment on account of total and permanent disability; or such other date or event as specified by the Compensation Committee.

          Restricted Stock and Restricted Stock Units.  The Long-Term Incentive Plan permits the granting of awards of shares of restricted stock and restricted stock units to any participant.  Awards of shares of restricted stock and restricted stock units may be issued to participants without payment.  Upon completion of a vesting period and the fulfillment of any required conditions, restrictions upon the shares of restricted stock or the restricted stock units expire and new certificates representing unrestricted shares of common stock are issued to the participant.  Generally, in the case of shares of restricted stock, the participant will have all of the rights of a shareholder of AMCOL including, but not limited to, the right to vote such shares and the right to receive dividends payable with respect to the shares of restricted stock.  In the case of an Award of restricted stock units, no shares of common stock or other property shall be issued at the time the Award is granted.  Upon the lapse or waiver of restrictions and the restricted period relating to restricted stock units, shares of common stock shall be issued to the holder of the restricted stock units and evidenced in such manner as the Compensation Committee may deem appropriate.

          Stock Appreciation Rights.  The Long-Term Incentive Plan provides for the granting of SARs to any participant.  SARs granted by the Compensation Committee pursuant to the Long-Term Incentive Plan may relate to and be associated with all or any part of a specific ISO or NSO.  A SAR shall entitle the participant to surrender any then exercisable portion of the SAR and, if applicable, the related ISO or NSO.  In exchange, the participant would receive from AMCOL an amount equal to the product of the excess of 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 exercise price under such option and the number of shares of common stock subject to such SAR, and, if applicable, the related option which is surrendered.  SARs may be exercisable during a period established by the Compensation Committee and, if related to an ISO or NSO, shall terminate on the same date as the related option.  Upon exercise, participants may be paid in shares of common stock or cash, as determined by the Compensation Committee.

          Performance-Based Awards.  The Compensation Committee may grant awards of restricted stock or restricted stock units that are subject to the achievement of performance goals as may be determined by the Compensation Committee.  Such Awards, when they are intended to qualify under Section 162(m) of the Code, are called “Qualified Performance-Based Awards,” and will be granted to persons whom the Compensation Committee anticipates to be “Covered Employees” within the meaning of Section 162(m) of the Code.  The term Covered Employee means AMCOL’s Chief Executive Officer and each other person whose compensation is required to be disclosed in AMCOL’s filings with the Securities and Exchange Commission by reason of that person being among the four highest compensated executive officers of AMCOL on the last day of a taxable year.  The Compensation Committee may in its discretion grant Awards to Covered Employees that are performance based but are not intended to qualify as Qualified Performance-Based Awards.

          To the extent necessary to comply with the Qualified Performance-Based Award requirements of Section 162(m) of the Code, with respect to any award of restricted stock or restricted stock units that may be granted to one or more Covered Employees and intended to comply with the requirements for performance-based awards under Section 162(m), the Compensation Committee will, in writing, (a) designate one or more Covered Employees, (b) select the performance criteria applicable to the performance period, (c) establish the performance goals, and amounts of such Awards, as applicable, which may be earned for such performance period, and (d) specify the relationship between performance criteria and the performance goals and the amounts of such Awards, as applicable, to be earned by each Covered Employee for the performance period.  Following the completion of each performance period, the Compensation Committee will certify in writing whether the applicable performance goals have been achieved for the performance period.  No Award or portion thereof that is subject to the satisfaction of any condition will be considered to be earned or vested until the Compensation Committee certifies in writing that the conditions to which the distribution, earning or vesting of the Award is subject have been achieved.  During the performance period, the Compensation Committee may not increase the amount of a Qualified Performance-Based Awards that would otherwise be payable upon satisfaction of the conditions, but may reduce or eliminate the payments as provided for in the Award Agreement.

          The payment of performance-based awards under the Long-Term Incentive Plan will be based upon the attainment of performance goals related to one or more performance criteria selected by the Compensation Committee from among the following measures, individually or in combination: (i) return on capital; (ii) earnings per share; (iii) net sales; (iv) net earnings; (v) net operating profits; (vi) expense control; (vii) working capital relating to inventory and/or accounts receivable; (viii) operating margin; (ix) share price performance; (x) implementation or completion of critical projects; and (xi) total return to shareholders.

          The Manner of Option Exercise.  The Compensation Committee may permit the exercise price for options granted under the Long-Term Incentive Plan to be paid in cash or shares of common stock, including shares which the participant received upon the exercise of one or more options, provided that the shares meet any criteria established by the Compensation Committee.  The Compensation Committee may also permit the option exercise price to be paid by the participant’s delivery of an election directing AMCOL to withhold shares from the common stock otherwise due upon exercise of the option or any method permitted by law.

          Nontransferability.  ISOs are not transferable, voluntarily or involuntarily, other than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code.  During a participant’s lifetime, his ISOs may be exercised only by him.  All other Awards are not transferable other than by will or the laws of descent and distribution, pursuant to a qualified domestic relations order as defined by the Code or in the Compensation Committee’s discretion after vesting.

          Vesting.  Unless the Compensation Committee establishes a different vesting schedule at the time of grant, Awards generally vest 33% after one year, 66% after two years and 100% after three years.  A participant may not exercise an option or SAR or transfer shares of restricted stock until the Award has vested.  Under the Long-Term Incentive Plan, generally, if a participant’s employment with AMCOL or service on the Board of Directors is terminated due to retirement (after the participant’s 65th birthday or 55th birthday with the consent of the Compensation Committee), death or disability, the participant’s Awards will become fully vested.  If within 12 months following a “Change of Control” (as defined in the Long-Term Incentive Plan), the employment of a participant is terminated without cause or the participant resigns for good reason, any Award issued to the participant shall be fully vested, and, in the case of an Award other than an Award of restricted stock or restricted stock units, fully exercisable for 90 days following the date on which the participant’s service with AMCOL is terminated, but not beyond the date the Award would otherwise expire.  If a participant’s employment with or service with AMCOL is terminated for any other reason, any Awards that are not yet vested are forfeited.

          Adjustments for Change in Capitalization.  The Long-Term Incentive Plan provides that in the event of a stock dividend, stock split, reverse stock split, share combination, or recapitalization or similar event affecting the capital structure of AMCOL, or a merger, consolidation, acquisition of property or shares, separation, spinoff, reorganization, stock rights offering, liquidation, the Compensation Committee may in its discretion make such substitutions or adjustments as it deems appropriate and equitable to the share reserve, the share limitations described above, and the purchase price and number of shares subject to outstanding Awards.

          Cashouts.  In the event of an extraordinary dividend or other distribution, merger, reorganization, consolidation, combination, sale of assets, split up, exchange, or spin off, or other extraordinary corporate transaction, the Compensation Committee may, in such manner and to such extent (if any) as it deems appropriate and equitable, make provision for a cash payment or for the substitution or exchange of any or all outstanding Awards for the cash, securities or property deliverable to the holder of any or all outstanding Awards based upon the distribution or consideration payable to holders of common stock upon or in respect of such event.  However, in each case, that with respect to any ISO no such adjustment may be made that would cause the Long-Term Incentive Plan to violate Section 422 of the Code (or any successor provision).

          Withholding Tax.  AMCOL shall have the right to withhold in cash or shares of common stock with respect to any payments made to participants, any taxes required by law to be withheld because of such payments.

          Federal Tax Consequences.  The following brief description of the tax consequences of Awards under the Long-Term Incentive Plan is based on federal income tax laws currently in effect and does not purport to be a complete description of such federal income tax consequences.

          Incentive Stock Options.  A grantee generally will have no taxable income upon either the grant or exercise of an ISO.  If the grantee does not dispose of shares acquired pursuant to the exercise of an ISO within two years of the grant or one year of the exercise, any gain or loss realized in his subsequent disposition will be capital gain or loss.  If such holding period requirements are not satisfied, the grantee will generally realize ordinary income at the time of disposition in an amount equal to the excess of the fair market value of the shares on the date of exercise (or if less, the amount realized upon disposition) over the option price.  Any remaining gain is taxed as long-term or short-term capital gain.

          Nonqualified Stock Options.  The grant of an NSO generally is not a taxable event for the grantee.  Upon exercise of the option, the grantee generally will recognize ordinary income in an amount equal to the excess of the fair market value of the stock acquired upon exercise (determined as of the date of exercise) over the exercise price of such option.  AMCOL will be entitled to a deduction equal to the amount of ordinary income recognized by the grantee in the year in which such taxable income is recognized and AMCOL is required to withhold federal income taxes with respect to any amounts included in the grantee’s taxable income.

          Stock Appreciation Rights.  The grant of a SAR generally is not a taxable event for the grantee. However, upon exercise of the SAR, the grantee generally will recognize ordinary income equal to the amount of any cash received or the fair market value of any common stock received.

          Restricted Stock Awards and Restricted Stock Units.  A grant of restricted stock or restricted stock units generally is not a taxable event for the grantee. However, when the applicable restrictions lapse, the grantee generally will recognize ordinary income equal to the excess of the fair market value of such stock on the date of lapse over the amount, if any, paid for such stock and AMCOL is permitted a commensurate compensation expense deduction for income tax purposes.  Alternatively, with respect to a grant of restricted stock, the grantee may file an election under Section 83(b) of the Code, in which case the grantee will recognize ordinary income on the date of grant equal to the excess of the fair market value of such stock on the date of grant over the amount, if any, paid for such stock.

          AMCOL is entitled to a deduction equal to the amount includable in the participant’s gross income for AMCOL’s tax year in which or with which ends the participant’s taxable year in which the amount is included in the participant’s gross income.  AMCOL’s deduction is also subject to the limitations imposed by Code Section 162(m) mentioned below.  If the participant subsequently disposes of the restricted stock after it becomes substantially vested, the participant will recognize capital gain or loss equal to the difference between the amount realized and the participant’s basis in the restricted stock, assuming the restricted stock is held as a capital asset.  Unless an election under Code Section 83(b) is made, dividends paid to a participant while the restricted stock remains subject to restrictions are treated as compensation for federal income tax purposes.  Any dividends paid on the restricted stock subsequent to a Code Section 83(b) election are treated as dividend income, rather than compensation, for federal income tax purposes.

          Section 162(m).  Section 162(m) of the Code generally disallows a public company’s tax deduction for compensation in excess of $1 million paid in any taxable year to a Covered Employee. Compensation that qualifies as “performance-based compensation”, however, is excluded from the $1 million deductibility cap.  AMCOL intends that some of the Awards granted to employees whom the Compensation Committee expects to be Covered Employees at the time a deduction arises in connection with the Awards qualify as “performance-based compensation” so that deductions with respect to those Awards will not be subject to the $1 million cap under Section 162(m) of the Code.  Future changes in Section 162(m) of the Code or the regulations thereunder may adversely affect the ability of AMCOL to ensure that Awards under the 2006 Long-Term Incentive Plan will qualify as “performance based compensation” so that deductions are not limited by Section 162(m) of the Code.

          Amendment; Termination.  The Board of Directors may amend the Long-Term Incentive Plan at any time, but may not: 1) impair the rights of participants with respect to any outstanding Awards without the consent of participants; 2) increase the limitations on the shares available under the Long-Term Incentive Plan, unless such increase is approved by the shareholders; or 3) amend the provision of the Long-Term Incentive Plan that requires shareholder approval before repricing an Award.  The Long-Term Incentive Plan will terminate ten years after its adoption by the Board of Directors; provided, however, that the Board of Directors may terminate the Long-Term Incentive Plan at any time.

Summary of the Annual Cash Incentive Plan

          Administration.  The Annual Cash Incentive Plan will be administered by our Compensation Committee, which shall have full and exclusive discretionary power to interpret the terms and the intent of the Annual Cash Incentive Plan and any award agreement or other agreement or document ancillary to or in connection with the Annual Cash Incentive Plan, to determine eligibility for awards and to adopt such rules, regulations, forms, instruments, and guidelines for administering the Annual Cash Incentive Plan as the Compensation Committee may deem necessary or proper.  Such authority shall include, but not be limited to, selecting award recipients, establishing all award terms and conditions, including the terms and conditions set forth in award agreements, determining if such terms and conditions have been met and adopting modifications and amendments to the Annual Cash Incentive Plan or any award agreement.

          Eligibility.  Awards may be granted under the Annual Cash Incentive Plan to the executive officers and other key employees of AMCOL, as selected by the Compensation Committee in its discretion.

          Terms of the Awards.  The Compensation Committee in its discretion may determine the performance goals to be achieved during any performance period, the length of any performance period and the amount of any award.  All awards are payable in cash and, at the discretion of the Compensation Committee, may be paid following the close of the performance period or on a deferred basis.  The Compensation Committee may establish different levels of payment under an award to correspond with different levels of achievement of performance goals specified in the award.  The Compensation Committee may reduce or eliminate an award made under the Annual Cash Incentive Plan for any reason.  The maximum aggregate award that a participant may receive in any one calendar year may not exceed $2,000,000.

          The payment of awards under the Annual Cash Incentive Plan will be based upon the attainment of performance goals related to one or more performance criteria selected by the Compensation Committee from among the following measures, individually or in combination: (i) return on capital; (ii) earnings per share; (iii) net sales; (iv) net earnings; (v) net operating profits; (vi) expense control; (vii) working capital relating to inventory and/or accounts receivable; (viii) operating margin; (ix) share price performance; (x) implementation or completion of critical projects; and (xi) total return to shareholders.

          Performance-Based Awards.  To the extent necessary to comply with the Qualified Performance-Based Award requirements of Section 162(m) of the Code, the Compensation Committee will, in writing, (a) designate one or more Covered Employees, (b) select the performance criteria applicable to the performance period, (c) establish the performance goals, and amounts of such Awards, as applicable, which may be earned for such performance period, and (d) specify the relationship between performance criteria and the performance goals and the amounts of such Awards, as applicable, to be earned by each Covered Employee for the performance period. 

          Following the completion of each performance period, the Compensation Committee will certify in writing whether the applicable performance goals have been achieved for the performance period.  No Award or portion thereof that is subject to the satisfaction of any condition will be considered to be earned until the Compensation Committee certifies in writing that the conditions to which the distribution of the Award is subject have been achieved.  During the performance period, the Compensation Committee may not increase the amount of a Qualified Performance-Based Awards that would otherwise be payable upon satisfaction of the conditions, but may reduce or eliminate the payments as provided for in the Award Agreement.

          Amendment and Termination.  The Compensation Committee may, at any time and from time to time, alter, amend, modify, suspend, or terminate the Annual Cash Incentive Plan and any award agreement in whole or in part; provided, however, no amendment of the Annual Cash Incentive Plan shall be made without shareholder approval if shareholder approval is required under Section 162(m) of the Code.

          Federal Income Tax Consequences.  Amounts paid pursuant to the Annual Cash Incentive Plan are intended to qualify as “qualified performance-based compensation” under section 162(m) of the Code.  Therefore, AMCOL believes that under existing federal income tax laws, such amounts will be deductible by AMCOL when paid to an award recipient.  An award recipient will generally be required to recognize ordinary income upon receipt of compensation under the Annual Cash Incentive Plan.

Summary of the Discretionary Cash Incentive Plan

          Administration.  The Discretionary Cash Incentive Plan will be administered by our Compensation Committee.  The Compensation Committee shall select the individuals who may participate in the Plan and determine the terms and conditions of each participant’s award.  The Compensation Committee will also construe and  interpret the provisions of the Plan.

          Eligibility.  Awards may be granted under the Annual Cash Incentive Plan to the executive officers and other key employees of AMCOL, as selected by the Compensation Committee in its discretion.

          Awards.  The Compensation Committee will make awards under the Discretionary Cash Incentive Plan to recognize the special effort of participants.  It is anticipated that any awards made under the Discretionary Cash Incentive Plan will be in addition to awards made under the Annual Cash Incentive Plan.  All awards shall be paid in cash. 

          Amendment and Termination.  The Compensation Committee or the board of directors may amend or terminate the Annual Cash Incentive Plan at any time.

          Federal Income Tax Consequences.  Amounts paid pursuant to the Discretionary Cash Incentive Plan will not qualify as “qualified performance-based compensation” under section 162(m) of the Code.  Therefore, AMCOL’s tax deductions for any awards made to Covered Employees under the Discretionary Cash Incentive Plan will be subject to the $1 million cap under Section 162(m) of the Code.  An award recipient will generally be required to recognize ordinary income upon receipt of compensation under the Discretionary Cash Incentive Plan.

2006 Awards Under the Annual Cash Incentive Plan

          In February 2006, the Compensation Committee authorized certain incentive awards to executive officers under the Annual Cash Incentive Plan, subject to shareholder approval of the Annual Cash Incentive Plan.  As described above, AMCOL’s shareholders approved the Annual Cash Incentive Plan at the 2006 Annual Meeting of Shareholders.

          These incentive awards are intended to qualify for full deductibility under Section 162(m) of the Code if they are subsequently earned and paid out.  These are cash incentive awards for the 2006 fiscal year, which will become payable for 2006 performance if certain target performance goals are achieved. 

          Target performance goals may be based upon one or more objective business criteria that apply to the individual participant, one or more business units or subsidiaries or AMCOL as a whole.  The criteria may be weighed differently for each participant.  For 2006, the business criteria for each of the executive officers is set forth in the table below.  For each of the business criteria, there is a threshold, target and maximum performance level, which has been approved by the Compensation Committee.  No amount will be payable unless a specified “threshold” performance level is reached.  All bonus amounts are subject to the following limits:  Mr. Washow, 150% of 2006 salary and Messrs. Castagna, McKendrick and Morrison, 100% of 2006 salary.

Executive Officer	Performance Criteria
Lawrence E. Washow	earnings per share; return on capital employed
President and Chief Executive Officer
Gary L. Castagna	earnings per share; return on capital employed
Senior Vice President, Chief Financial Officer and Treasurer
Ryan F. McKendrick	earnings per share; return on capital employed;
Vice President; President of Colloid Environmental	environmental segment operating profit
Technologies Company and Volclay International Corp.
Gary Morrison	earnings per share; return on capital employed;
Vice President; President of American Colloid Company	minerals segment operating profit

Item 9.01 Financial Statements and Exhibits

(d)     Exhibits

10.1	AMCOL International Corporation 2006 Long-Term Incentive Plan
10.2	AMCOL International Corporation Annual Cash Incentive Plan
10.3	AMCOL International Corporation Discretionary Cash Incentive Plan

SIGNATURE

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AMCOL INTERNATIONAL CORPORATION
Date: May __, 2006	By:	/s/ Gary L. Castagna
		Gary L. Castagna
		Senior Vice President and
		Chief Financial Officer

EX-10.1

EXHIBIT 10.1

AMCOL INTERNATIONAL CORPORATION
2006 LONG-TERM INCENTIVE PLAN

             1.            Preamble.

             AMCOL International Corporation, a Delaware corporation (the “Company”), hereby establishes the AMCOL International Corporation 2006 Long-Term Incentive Plan (the “Plan”) 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) non-qualified stock options (“NSOs”), (iii) stock appreciation rights (“SARs”), (iv) restricted stock (“Restricted Stock”) and (v) restricted stock units (“Restricted Stock Units”):

(a)	provide selected officers, directors and employees with additional incentive to promote the success of the Company’s business;
(b)	encourage such persons to remain in the service of the Company; and
(c)	enable such persons to acquire proprietary interests in the Company.

             2.          Definitions and Rules of Construction.

             2.01     “Affiliate” means any entity during any period that, in the opinion of the Committee, the Company has a significant economic interest in the entity.

             2.02     “Award” means the grant of Options, SARs, Restricted Stock and/or Restricted Stock Units to a Participant.

             2.03     “Award Date” means the date upon which an Award is awarded to a Participant under the Plan.

             2.04     “Board” or “Board of Directors” means the board of directors of the Company.

             2.05     “Cause” with respect to any Award shall have the meaning set forth in the Participant’s employment agreement, or if no meaning is set forth in the Participant’s employment agreement or there is no employment agreement, “Cause” shall mean: Participant’s commission of a felony or misdemeanor that involves fraud, dishonesty or moral turpitude; or Participant’s gross negligence or willful or intentional material misconduct in the performance of his duties.  The Participant shall be considered to have been discharged for “Cause” if the Company determines, within 30 days after the Participant’s resignation, that discharge for Cause was warranted.

             2.06     “Change of Control” with respect to any Award shall have the meaning set forth in the Participant’s employment agreement, or if no meaning is set forth in the Participant’s employment agreement or there is no employment agreement, “Change of Control” shall be deemed to have occurred on the first to occur of any of the following:

(a) any person (as such term is used in Rule 13d-5 under the Exchange Act) or group (as such term is defined in Section 3(a)(9) and 13(d)(3) of the Exchange Act), other than a Subsidiary, any employee benefit plan (or any related trust) of the Company or any of its Subsidiaries or any Excluded Person, becomes the Beneficial Owner (as defined in Rule 13d-3 (or any successor rule) of the Securities and Exchange Commission under the Exchange Act of 1934) of 50.1% or more of the Common Stock of the Company or of Voting Securities representing 50.1% or more of the combined voting power of the Company (such a person or group, a “50.1% Owner”), except that (i) no Change of Control shall be deemed to have occurred solely by reason of such beneficial ownership by a corporation with respect to which both more than 49.9% of the common stock of such corporation and Voting Securities representing more than 49.9% of the aggregate voting power of such corporation are then owned, directly or indirectly, by the persons who were the direct or indirect owners of the common stock and Voting Securities of the Company immediately before such acquisition in substantially the same proportions as their ownership, immediately before such acquisition, of the Common Stock and Voting Securities of the Company, as the case may be and (ii) such corporation shall not be deemed a 50.1% Owner; or

(b)	the Incumbent Directors (determined using the Effective Date of this Plan as the baseline) cease for any reason to constitute at least one-half of the directors of the Company then serving; or
(c)	immediately prior to the consummation by the Company of a merger, reorganization, consolidation, or similar transaction, or a plan or agreement for the sale or other disposition of 50.1% of the consolidated assets of the Company or a plan of liquidation of the Company (any of the foregoing transactions, a “Reorganization Transaction”) which is not an Exempt Reorganization Transaction (provided however, there shall be no Change of Control unless the Reorganization Transaction is actually consummated); or
(d)	the approval by the stockholders of the Company of a plan of liquidation of the Company which, based on information included in the proxy and other written materials distributed to the Company’s stockholders in connection with the solicitation by the Company of such stockholder approval, is not expected to qualify as an Exempt Reorganization Transaction.

             2.07     “Code” means the Internal Revenue Code of 1986, as amended from time to time or any successor thereto.

             2.08     “Committee” means the Compensation Committee of the Board of Directors.

             2.08     “Common Stock” means Common Stock of the Company, par value $.01 per share.

             2.10     “Company” means AMCOL International Corporation, a Delaware corporation, and any successor thereto.

             2.11     “Covered Employee” means an Employee who is, or as determined by the Committee may become, a “covered employee” within the meaning of section 162(m) of the Code (or any successor provision), which generally means, the chief executive officer and the four other highest compensated executive officers of the Company for whom total compensation is required to be reported to stockholders under the Securities Exchange Act of 1934.

             2.12     “Exchange Act” shall mean the Securities Exchange Act of 1934, as it exists now or from time to time may hereafter be amended.

             2.13     “Excluded Person” means any of the Paul Bechtner Trust, Everett P. Weaver, The Estate of William D. Weaver or any Named Executive, any Affiliates or Family Member of any of the foregoing and any group (as such term is defined in Section 3(a)(9) and 13(d)(3) of the Exchange Act) of which any of the foregoing is a member.

             2.14     “Exempt Reorganization Transaction” means a Reorganization Transaction which results (i) in the Persons who were the direct or indirect owners of the outstanding Common Stock and Voting Securities of the Company immediately before such Reorganization Transaction becoming, immediately after the consummation of such Reorganization Transaction, the direct or indirect owners of both more than 49.9% of the then-outstanding common stock of the Surviving Corporation and Voting Securities representing more than 49.9% of the aggregate voting power of the Surviving Corporation, in substantially the same respective proportions as such Persons’ ownership of the common stock and voting Securities of the Company immediately before such Reorganization Transaction; (ii) in the Excluded Person owning 50% or more of the common stock of the Surviving Corporation or Voting Securities representing 50% or more of the combined voting power of the Surviving Corporation; or (iii) from any merger, reorganization, consolidation or similar transaction or a plan or agreement for sale or other disposition of 50.1% of the consolidated assets of the Company or a plan of liquidation of the Company pursuant to the Bankruptcy Code of Title 11 of the United States Code, as amended from time to time, or any similar or successor statute, domestic or foreign.

             2.15     “Fair Market Value” means as of any date, the closing price for the Common Stock on that date, or if no sales occurred on that date, the next trading day on which actual sales occurred (as reported by the New York Stock Exchange or any securities exchange or automated quotation system of a registered securities association on which the Common Stock is then traded or quoted).

             2.16     “Family Members” mean with respect to an individual, any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the individual’s household (other than a tenant or employee), a trust in which these persons have more than 50% of the beneficial interest, a foundation in which these persons (or the individual) control the management of assets, and any other entity in which these persons (or the individual) own more than 50% of the voting interests.

             2.17     “Good Reason” with respect to any Award shall have the meaning set forth in the Participant’s employment agreement, or if no meaning is set forth in the Participant’s employment agreement or there is no employment agreement, shall mean any of the following:

(a)	any significant diminution in the Participant’s title, authority, or responsibilities from and after a Change of Control;
(b)	any reduction in the base compensation payable to the Participant from and after a Change of Control; or
(c)	the relocation after a Change of Control of the Company’s place of business at which the Participant is principally located to a location that is greater than 50 miles from the site immediately prior to the Change of Control.

             2.18     “Incumbent Directors” means individuals serving as members of the Board as of the Effective Date of this Plan; provided that any subsequently-appointed or elected member of the Board whose election, or nomination for election by stockholders of the Company or the Surviving Corporation, as applicable, was approved by a vote or written consent of at least one-half of the directors then comprising the Incumbent Directors shall also thereafter be considered an Incumbent Director, unless the initial assumption of office of such subsequently-elected or appointed director was in connection with (i) an actual or threatened election contest, including a consent solicitation, relating to the election or removal of one or more members of the Board, (ii) a “tender offer” (as such term is used in Section 14(d) of the Exchange Act), (iii) a proposed Reorganization Transaction, or (iv) a request, nomination or suggestion of any Beneficial Owner of Voting Securities representing 35% or more of the aggregate voting power of the Voting Securities of the Company or the Surviving Corporation, as applicable.

             2.19     “ISO” means an incentive stock option within the meaning of section 422 of the Code. “NSO” means a non-qualified stock option which is not intended to or does not qualify as an ISO under section 422 of the Code.

             2.21     “Option” means an ISO or an NSO.

             2.22     “Option Price” means the price per share of Common Stock at which an Option may be exercised.

             2.23     “Participant” means an individual to whom an Award has been granted under the Plan.

             2.24     “Performance Criteria” means the criteria the Committee selects for purposes of establishing the Performance Goal or Performance Goals for a Participant for a Performance Period.  The Performance Criteria that will be used to establish Performance Goals are limited to the following: (i) return on capital; (ii) earnings per share; (iii) net sales; (iv) net earnings; (v) net operating profits; (vi) expense control; (vii) working capital relating to inventory and/or accounts receivable; (viii) operating margin; (ix) share price performance; (x) implementation or completion of critical projects; and (xi) total return to shareholders.  The Committee shall, within the time prescribed by section 162(m) of the Code, define in an objective fashion the manner of calculating the Performance Criteria it selects to use for such Performance Period for such Participant.

             2.25     “Performance Goals” means the goals established in writing by the Committee for the Performance Period based upon the Performance Criteria.  Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or the performance of an Affiliate, a division or business unit of the Company, or an individual.  The Committee shall establish Performance Goals for each Performance Period prior to, or as soon as practicable after, the commencement of such Performance Period.  The Committee, in its discretion, may, within the time prescribed by section 162(m) of the Code, adjust or modify the calculation of Performance Goals for such Performance Period in order to prevent the dilution or enlargement of the rights of Participants (i) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event, or development, or (ii) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions.

             2.26     “Performance Period” means the designated period during which the Performance Goals must be satisfied with respect to the Award to which the Performance Goals relate.

             2.27     “Plan” means this AMCOL International Corporation 2006 Long-Term Incentive Plan, as set forth herein and from time to time amended.

             2.28     “Qualified Performance-Based Award” means an Award that is intended to qualify as “qualified performance-based compensation” within the meaning of section 162(m) of the Code and is designated as a Qualified Performance-Based Award pursuant to Section 14 hereof.

             2.29     “Restricted Stock” means the Common Stock awarded to a Participant pursuant to Section 8 of this Plan.

             2.30     “Restricted Stock Unit” means a unit awarded to a Participant pursuant to Section 8 of this Plan evidencing the right of a Participant to receive a fixed number of shares of Common Stock at some future date.

             2.31     “SAR” means a stock appreciation right issued to a Participant pursuant to Section 9 of this Plan.

             2.32     “SEC” means the Securities and Exchange Commission.

             2.33     “Subsidiary” means any entity during any period which the Company owns or controls more than 50% of (i) the outstanding capital stock, or (ii) the combined voting power of all classes of stock.

             2.34     “Surviving Corporation” means the corporation resulting from a Reorganization Transaction or, if securities representing more than 50% of the aggregate Voting Power of such resulting corporation are directly or indirectly owned by another corporation, such other corporation.

             2.35     “Voting Securities” of a corporation means securities of such corporation that are entitled to vote generally in the election of directors of such corporation, but not including any other class of securities of such corporation that may have voting power by reason of the occurrence of a contingency.

             2.36       Rules of Construction:

          2.36.1     Governing Law and Venue.  The construction and operation of this Plan are governed by the laws of the State of Delaware without regard to any conflicts or choice of law rules or principles that might otherwise refer construction or interpretation of this Plan to the substantive law of another jurisdiction, and any litigation arising out of this Plan shall be brought in the Circuit Court of the State of Illinois or the United States District Court for the Eastern Division of the Northern District of Illinois.

          2.36.2     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.

          2.36.3     Headings.  All headings in this Plan are for reference only and are not to be utilized in construing the Plan.

          2.36.4     Conformity with Section 422.  Any 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 ISOs shall be construed in conformity with this intention.  Any 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 NSOs shall be construed in conformity with this intention.

          2.36.5     Gender.  Unless clearly inappropriate, all nouns of whatever gender refer indifferently to persons or objects of any gender.

          2.36.6     Singular and Plural.  Unless clearly inappropriate, singular terms refer also to the plural and vice versa.

          2.36.7     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.

             3.01     General Limitation.  Subject to adjustment as provided in Section 12 hereof, the aggregate number of shares of Common Stock for which Awards may be issued under this Plan may not exceed 1,500,000 shares.  Reserved shares may be either authorized but unissued shares or treasury shares, in the Board’s discretion.  If any Award shall terminate, expire, be cancelled or forfeited as to any number of shares of Common Stock (other than a cancellation within the meaning of Code section 162(m)), new Awards may thereafter be awarded with respect to such shares. 

             3.02     Individual Limitations.  Subject to adjustment as provided in Section 12 of the Plan:

(a)	the maximum number of shares of Common Stock with respect to which Awards may be granted to any individual during any one calendar year is 200,000 shares; and
(b)	the maximum number of shares of Common Stock with respect to Qualified Performance-Based Awards that can be paid to any Covered Employee under the Plan for a Performance Period is 100,000 shares.

             3.03     Incentive Stock Option Limitation.  Subject to adjustment as provided in Section 12 of the Plan, the maximum number of shares of Common Stock for which Awards may be granted under the Plan pursuant to ISOs shall be 500,000.

             3.04     Restricted Stock Limitation.  Subject to adjustment as provided in Section 12 of the Plan, the maximum number of shares of Common Stock for which Awards of Restricted Stock and Restricted Stock Units may be granted under the Plan shall be 500,000. 

             4.          Administration.

             The Committee shall administer the Plan.  All determinations of the Committee are made by a majority vote of its members.  The Committee’s determinations are final and binding on all Participants.  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 terms of the Plan, to select the individuals who will receive Awards, the times when they will receive them, the form of agreements which evidence such Awards, the number of Options, Restricted Stock, Restricted Stock Units and/or SARs to be subject to each Award, the Option Price, the vesting schedule (including any performance targets to be achieved in connection with the vesting of any Award), the expiration date applicable to each Award and other terms, provisions and restrictions of the Awards (which need not be identical) and subject to Section 18 hereof, to amend or modify any of the terms of outstanding Awards provided, however, that except as permitted by Section 12.01, no outstanding Award may be repriced, whether through cancellation of the Award and the grant of a new Award, or the amendment of the Award, without the approval of the stockholders of the Company;
(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; and
(f)	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).

Except to the extent prohibited by applicable law or the applicable rules of a stock exchange, and except with respect to any Qualified Performance-Based Award intended to satisfy the requirements of Code section 162(m), the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it.  Any such allocation or delegation may be revoked by the Committee at any time.

             5.          Eligible Participants.

             Present and future directors, officers and employees of the Company or any Subsidiary or Affiliate shall be eligible to participate in the Plan.  The Committee from time to time shall select those officers, directors and employees of the Company and any Subsidiary or Affiliate of the Company who shall be designated as Participants and shall designate in accordance with the terms of the Plan the number, if any, of ISOs, NSOs, SARs, Restricted Stock Units and shares of Restricted Stock or any combination thereof, to be awarded to each Participant.

             6.          Terms and Conditions of Non-Qualified Stock Options.

             Subject to the terms of the Plan, the Committee, in its discretion, may award an NSO to any Participant.  Each NSO shall be evidenced by an agreement, in such form as is approved by the Committee, and except as otherwise provided by the Committee, each NSO 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:

             6.01      Option Period.  Each NSO will expire as of the earliest of:

(i)	the date on which it is forfeited under the provisions of Section 11.01;
(ii)	10 years from the Award Date;
(iii)	in the case of a Participant who is an employee of the Company, a Subsidiary or an Affiliate, three months after the Participant’s termination of employment with the Company and its Subsidiaries and Affiliates for any reason other than for Cause, death, total and permanent disability or retirement on or after age 65;
(iv)	in the case of a Participant who is a member of the board of directors of the Company or a Subsidiary or Affiliate, but not an employee of the Company, a Subsidiary or an Affiliate, three months after the Participant’s termination as a member of the board for any reason other than for Cause, death, total and permanent disability or retirement on or after age 65;
(v)	immediately upon the Participant’s termination of employment with the Company and its Subsidiaries and Affiliates or service on a board of directors of the Company or a Subsidiary or Affiliate for Cause;
(vi)	12 months after the Participant’s death or total and permanent disability;
(vii)	60 months after the Participant’s termination of employment  with the Company and its parent and Subsidiaries or service on the Board on account of retirement on or after age 65; or
(viii)	any other date specified by the Committee when the NSO is granted.

             6.02     Option Price.  At the time granted, the Committee shall determine the Option Price of any NSO.  However, the Option Price shall not be less than 100% of the Fair Market Value of the Common Stock subject to the NSO on the Award Date.

             6.03     Vesting.  Unless otherwise determined by the Committee and set forth in the agreement evidencing an Award, NSO Awards shall vest in accordance with Section 11.01.

             6.04     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.

             7.          Terms and Conditions of Incentive Stock Options

             Subject to the terms of the Plan, the Committee, in its discretion, may award an ISO to any employee of the Company or a Subsidiary.  Each ISO shall be evidenced by an agreement, in such form as is approved by the Committee, and except as otherwise provided by the Committee, each ISO 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:

             7.01     Option Period.  Each ISO will expire as of the earliest of:

(i)	the date on which it is forfeited under the provisions of Section 11.01;
(ii)	10 years from the Award Date, except as set forth in Section 7.02 below;
(iii)	immediately upon the Participant’s termination of employment with the Company and its Subsidiaries for Cause;
(iv)	three months after the Participant’s termination of employment with the Company and its Subsidiaries for any reason other than for Cause or death or total and permanent disability;

(v)	12 months after the Participant’s death or total and permanent disability;
(vi)	any other date (within the limits of the Code) specified by the Committee when the ISO is granted.

Notwithstanding the foregoing provisions granting discretion to the Committee to determine the terms and conditions of ISOs, such terms and conditions shall meet the requirements set forth in section 422 of the Code or any successor thereto.

             7.02     Option Price and Expiration.  The Option Price of any ISO shall be determined by the Committee at the time an ISO is granted, and shall be no less than 100% of the Fair Market Value of the Common Stock subject to the ISO on the Award Date; provided, however, that if an ISO is granted to a Participant who, immediately before the grant of the ISO, beneficially owns stock representing more than 10% of the total combined voting power of all classes of stock of the Company or its parent or subsidiary corporations, the Option Price shall be at least 110% of the Fair Market Value of the Common Stock subject to the ISO on the Award Date and in such cases, the exercise period specified in the Option agreement shall not exceed five years from the Award Date.

             7.03     Vesting.  Unless otherwise determined by the Committee and set forth in the agreement evidencing an Award, ISO Awards shall vest in accordance with Section 11.01.

             7.04     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 the regulations thereunder.

             7.05     $100,000 Limitation.  To the extent required by Code section 422, if the aggregate Fair Market Value (determined as of the time of grant) of Common Stock with respect to which ISOs are exercisable for the first time by a Participant during any calendar year (under this Plan and all other plans of the Company and its Subsidiaries) exceeds $100,000, the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as NSOs.

             8.         Terms and Conditions of Awards of Restricted Stock or Restricted Stock Units.

             Subject to the terms of the Plan, the Committee, in its discretion, may award Restricted Stock or Restricted Stock Units to any Participant.  Each Award of Restricted Stock or Restricted Stock Units shall be evidenced by an agreement, in such form as is approved by the Committee, and, except as otherwise provided by the Committee, all shares of Common Stock awarded to Participants under the Plan as Restricted Stock and all Restricted Stock Units 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.  Restricted Stock Units and shares of Restricted Stock awarded under this Section 8 may not be sold, assigned, transferred, pledged or otherwise encumbered before they vest, other than as permitted by Section 13 hereof.

(b)

Vesting.  Unless otherwise determined by the Committee, Awards of Restricted Stock and Restricted Stock Units under this Section 8 shall vest in accordance with Section 11.02.  Until a Participant’s shares of Restricted Stock vest, he will have all of the rights of a shareholder of the Company including, but not limited to, the right to vote such shares and the right to receive cash dividends declared thereon, but all noncash dividends and distributions with respect to shares of Restricted Stock shall be subject to the same vesting and other restrictions applicable to the underlying shares of Restricted Stock.

(c)	Certificate Legend for Restricted Stock Awards.  Each certificate issued in respect of shares of Restricted Stock awarded under this Section 8 shall be registered in the name of the Participant and shall bear the following (or a similar) legend until such shares have vested:
	“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 Section 8 of the AMCOL International Corporation 2006 Long-Term Incentive 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)	Restricted Stock Units.  In the case of an Award of Restricted Stock Units, no shares of Common Stock or other property shall be issued at the time such Award is granted.  Upon the lapse or waiver of restrictions and the restricted period relating to Restricted Stock Units, shares of Common Stock shall be issued to the holder of the Restricted Stock Units and evidenced in such manner as the Committee may deem appropriate.

             9.         Terms and Conditions of Stock Appreciation Rights.

             The Committee may, in its discretion, grant a 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.  A 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.

             Except as otherwise determined by the Committee and set forth in the Agreement, a 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.  Any ISO or NSO or portion thereof which is surrendered with a SAR shall no longer be exercisable.  A SAR that is not granted in conjunction with an ISO or NSO shall terminate on such date as is specified by the Committee in the SAR agreement and shall vest in accordance with Section 11.02.  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 a 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.

             10.     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, provided such shares of Common Stock meet such criteria as the Committee shall from time to time establish (e.g. that such shares are “mature” shares under generally accepted accounting principles).

The Committee may permit a Participant to elect to pay the Option Price upon the exercise of an Option by authorizing a third party to sell shares of Common Stock (or a sufficient portion of the shares) acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale proceeds to pay the entire Option Price and any tax withholding resulting from such exercise.  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.

             11.      Vesting.

             11.01  Options.  A Participant may not exercise an Option until it has vested.  The portion of an Award of Options that is vested depends upon the period that has elapsed since the Award Date.  The following schedule applies to any Award of Options under this Plan unless the Committee establishes a different vesting schedule:

Number of Years Since Award Date	Vested Percentage
Fewer than one	0%
One but fewer than two	33%
Two but fewer than three	66%
Three or more	100%

             Notwithstanding the above schedule, unless otherwise determined by the Committee, a Participant’s Awards shall become fully vested if a Participant’s employment with the Company and its Subsidiaries and Affiliates or service on the board of directors of the Company, a Subsidiary or an Affiliate is terminated due to: (i) retirement on or after his sixty-fifth birthday; (ii) retirement on or after his fifty-fifth birthday with consent of the Company; (iii) retirement at any age on account of total and permanent disability as determined by the Company; or (iv) death.  Unless the Committee otherwise provides or the preceding sentence of this Section or Section 11.03 applies, if a Participant’s employment with or service to the Company, a Subsidiary or an Affiliate terminates for any other reason, any Awards that are not yet vested are immediately and automatically forfeited; provided, however, in such special circumstances as the Committee deems appropriate, the Committee may take such action as it deems equitable in the circumstances or in the best interests of the Company, including, without limitation, fully vesting an Award or waiving or modifying any other limitation or requirement under the Award.

             A Participant’s employment shall not be considered to be terminated hereunder by reason of a transfer of his employment from the Company to a Subsidiary or Affiliate, or vice versa, or a leave of absence approved by the Participant’s employer.  A Participant’s employment shall be considered to be terminated hereunder if, as a result of a sale or other transaction, the Participant’s employer ceases to be a Subsidiary or Affiliate (and the Participant’s employer is or becomes an entity that is separate from the Company and its Subsidiaries and Affiliates).

             11.02     Restricted Stock, Restricted Stock Units and SARs.  The Committee shall establish the vesting schedule to apply to any Award of Restricted Stock, Restricted Stock Units or SAR that is not associated with an ISO or NSO granted under the Plan to a Participant, and in the absence of such a vesting schedule set forth in the Agreement evidencing the Award, such Award shall vest in accordance with Section 11.01.

             11.03     Effect of “Change of Control”.   Notwithstanding Sections 11.01 and 11.02 above, if within 12 months following a “Change of Control” the employment of a Participant with the Company and its Subsidiaries and Affiliates is terminated without Cause or the Participant resigns for Good Reason, any Award issued to the Participant shall be fully vested, and in the case of an Award other than an Award of Restricted Stock or Restricted Stock Units, fully exercisable for 90 days following the date on which the Participant’s service with the Company and its Subsidiaries and Affiliates is terminated, but not beyond the date the Award would otherwise expire but for the Participant’s termination of employment.

             12.         Adjustments to Reflect Changes in Capital Structure.

             12.01     Adjustments.  If there is any change in the corporate structure or shares of the Company, the Committee may make any appropriate adjustments, including, but not limited to, such adjustments deemed necessary to prevent accretion, or to protect against dilution, in the number and kind of shares of Common Stock with respect to which Awards may be granted under this Plan (including the maximum number of shares of Common Stock with respect to which Awards may be granted under this Plan in the aggregate and individually to any Participant during any calendar year as specified in Section 3) and, with respect to outstanding Awards, in the number and kind of shares covered thereby and in the applicable Option Price.  For the purposes of this Section 12, 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 (including a partial 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.

             12.02     Cashouts.  In the event of an extraordinary dividend or other distribution, merger, reorganization, consolidation, combination, sale of assets, split up, exchange, or spin off, or other extraordinary corporate transaction, the Committee may, in such manner and to such extent (if any) as it deems appropriate and equitable, make provision for a cash payment or for the substitution or exchange of any or all outstanding Awards for the cash, securities or property deliverable to the holder of any or all outstanding Awards based upon the distribution or consideration payable to holders of Common Stock upon or in respect of such event; provided, however, in each case, that with respect to any ISO no such adjustment may be made that would cause the Plan to violate section 422 of the Code (or any successor provision).

             12.03     Section 409A.  Notwithstanding the foregoing: (i) any adjustments made pursuant to Section 12 hereof to Awards that are considered “deferred compensation” within the meaning of section 409A of the Code shall be made in compliance with the requirements of section 409A of the Code unless the Participant consents otherwise; (ii) any adjustments made pursuant to Section 12 of the Plan to Awards that are not considered “deferred compensation” subject to section 409A of the Code shall be made in such a manner as to ensure that after such adjustment, the Awards either continue not to be subject to section 409A of the Code or comply with the requirements of section 409A of the Code unless the Participant consents otherwise; and (iii) the Committee shall not have the authority to make any adjustments pursuant to Section 12 of the Plan to the extent that the existence of such authority would cause an Award that is not intended to be subject to section 409A of the Code to be subject thereto.

             13.         Nontransferability of Awards.

             13.01     ISOs.  ISOs are not transferable, voluntarily or involuntarily, other than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code.  During a Participant’s lifetime, his ISOs may be exercised only by him. 

             13.02     Awards Other Than ISOs.  All Awards granted pursuant to this Plan other than ISOs are transferable by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code, or in the Committee’s discretion after vesting.  With the approval of the Committee, a Participant may transfer an Award (other than an ISO) for no consideration to or for the benefit of one or more Family Members of the Participant subject to such limits as the Committee may establish, and the transferee shall remain subject to all the terms and conditions applicable to the Award prior to such transfer.  The transfer of an Award pursuant to this Section 13 shall include a transfer of the right set forth in Section 18 hereof to consent to an amendment or revision of the Plan and, in the discretion of the Committee, shall also include transfer of ancillary rights associated with the Award.  The provisions of this Section 13 shall not apply to any Common Stock issued pursuant to an Award for which all restrictions have lapsed and is fully vested.

             14.         PERFORMANCE-BASED AWARDS

             14.01     Purpose.  The purpose of this Section 14 is to provide the Committee the ability to qualify Awards of Restricted Stock and Restricted Stock Units as Qualified Performance-Based Awards.  If the Committee, in its discretion, decides to grant to a Covered Employee an Award of Restricted Stock or Restricted Stock Units that is intended to constitute a Qualified Performance-Based Award, the provisions of this Section 14 shall control over any contrary provision contained herein; provided, however, that the Committee may in its discretion grant Awards of Restricted Stock or Restricted Stock Units to Covered Employees that are based on Performance Criteria or Performance Goals but that do not satisfy the requirements of this Section 14.

             14.02     Applicability.  This Section 14 shall apply only to those Covered Employees selected by the Committee to receive Qualified Performance-Based Awards.  The designation of a Covered Employee as a Participant for a Performance Period shall not in any manner entitle the Participant to receive an Award for the relevant Performance Period.  Moreover, designation of a Covered Employee as a Participant for a particular Performance Period shall not require designation of such Covered Employee as a Participant in any subsequent Performance Period and designation of one Covered Employee as a Participant shall not require designation of any other Covered Employees as a Participant in such period or in any other period.

             14.03     Procedures with Respect to Qualified Performance-Based Awards.  To the extent necessary to comply with the Qualified Performance-Based Award requirements of section 162(m)(4)(C) of the Code, with respect to any Award of Restricted Stock or Restricted Stock Units that may be granted to one or more Covered Employees, no later than 90 days following the commencement of any fiscal year in question or any other designated fiscal period or period of service (or such other time as may be required or permitted by section 162(m) of the Code), the Committee shall, in writing, (a) designate one or more Covered Employees, (b) select the Performance Criteria applicable to the Performance Period, (c) establish the Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period, and (d) specify the relationship between Performance Criteria and the Performance Goals and the amounts of such Awards, as applicable, to be earned by each Covered Employee for such Performance Period.  Following the completion of each Performance Period, the Committee shall certify in writing whether the applicable Performance Goals have been achieved for such Performance Period.  No Award or portion thereof that is subject to the satisfaction of any condition shall be considered to be earned or vested until the Committee certifies in writing that the conditions to which the distribution, earning or vesting of such Award is subject have been achieved.  The Committee may not increase during a year the amount of a Qualified Performance-Based Award that would otherwise be payable upon satisfaction of the conditions but may reduce or eliminate the payments as provided for in the agreement evidencing the Award.

             14.04     Payment of Qualified Performance-Based Awards.  Unless otherwise provided in the applicable agreement evidencing the Award, a Participant must be employed by the Company or a subsidiary on the day a Qualified Performance-Based Award for such Performance Period is paid to the Participant.  Furthermore, a Participant shall be eligible to receive payment pursuant to a Qualified Performance-Based Award for a Performance Period only if the Performance Goals for such period are achieved.

             14.05     Additional Limitations.  Notwithstanding any other provision of the Plan, any Award granted to a Covered Employee that is intended to constitute a Qualified Performance-Based Award under this Section 14 shall be subject to any additional limitations set forth in section 162(m) of the Code (including any amendment to section 162(m) of the Code) or any regulations or rulings issued thereunder that are requirements for qualification as qualified performance-based compensation as described in section 162(m)(4)(C) of the Code, and the Plan shall be deemed amended to the extent necessary to conform to such requirements.

             14.06     Effect on Other Plans and Arrangements.  Nothing contained in the Plan will be deemed in any way to limit or restrict the Committee from making any award or payment to any person under any other plan, arrangement or understanding, whether now existing or hereafter in effect.

             14.         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 except as otherwise determined by the Committee and set forth in the Agreement.

             16.       Withholding Taxes.

             The Committee may, in its discretion and subject to such rules as it may adopt, permit or require a Participant to pay all or a portion of the federal, state and local taxes, including FICA and Medicare withholding tax, arising in connection with any Awards by (i) having the Company withhold shares of Common Stock at the minimum rate legally required, (ii) tendering back shares of Common Stock received in connection with such Award or (iii) delivering other previously acquired shares of Common Stock having a Fair Market Value approximately equal to the amount to be withheld.

             17.        No Right to Employment.

             Participation in the Plan will not give any Participant a right to be retained as an employee or director of the Company or its Subsidiaries or Affiliates, 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, subject to the following limitations:

(a)	no amendment may, in the absence of written consent to the change by the affected Participant (or, if the Participant is not then living, the affected beneficiary), adversely affect the rights of any Participant or beneficiary under any Award granted under the Plan prior to the date such amendment is adopted by the Board; provided, however, no such consent shall be required if the Committee determines in its sole and absolute discretion that the amendment or revision (i) is required or advisable in order for the Company, the Plan or the Award to satisfy applicable law, to meet the requirements of any accounting standard or to avoid any adverse accounting treatment, or (ii) in connection with any transaction or event described in Section 12, is in the best interests of the Company or its shareholders. The Committee may, but need not, take the tax consequences to affected Participants into consideration in acting under the preceding sentence.
(b)	no amendment may increase the limitations on the number of shares set forth in Section 3, unless any such amendment is approved by the Company’s stockholders; and
(c)	no amendment may be made to the provisions of Section 4(c) relating to repricing unless such amendment is approved by the Company’s stockholders;

provided, however, that adjustments pursuant to Section 12.01 shall not be subject to the foregoing limitations of this Section 18.

             19.        Conditions Upon Issuance of Shares.

             An Option shall not be exercisable and a share of Common Stock shall not be issued pursuant to the exercise of an Option, and Restricted Stock or Restricted Stock Units shall not be awarded until and unless the Award of Restricted Stock or Restricted Stock Units, 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 or national securities association upon which the shares of Common Stock may then be listed or quoted, 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 shares of Common Stock are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned relevant provisions of law.

             20.        Substitution or Assumption of Awards by the Company.

             The Company, from time to time, also may substitute or assume outstanding awards granted by another company, whether in connection with an acquisition of such other company or otherwise, by either (a) granting an Award under the Plan in substitution of such other company’s award, or (b) assuming such award as if it had been granted under the Plan if the terms of such assumed award could be applied to an Award granted under the Plan.  Such substitution or assumption shall be permissible if the holder of the substituted or assumed award would have been eligible to be granted an Award under the Plan if the other company had applied the rules of the Plan to such grant.  In the event the Company assumes an award granted by another company, the terms and conditions of such award shall remain unchanged (except that the exercise price and the number and nature of shares issuable upon exercise of any such option will be adjusted appropriately pursuant to section 424(a) of the Code).  In the event the Company elects to grant a new Award rather than assuming an existing option, such new Award may be granted with a similarly adjusted exercise price.

             21.        Section 409A.

             It is the intention of the Company that no Award shall be “deferred compensation” subject to section 409A of the Code, unless and to the extent that the Committee specifically determines otherwise, and the Plan and the terms and conditions of all Awards shall be interpreted accordingly.  The terms and conditions governing any Awards that the Committee determines will be subject to section 409A of the Code, including any rules for elective or mandatory deferral of the delivery of cash or Shares pursuant thereto, shall be set forth in the applicable agreement governing the Award, and shall comply in all respects with section 409A of the Code.

             22.     Effective Date and Termination of Plan.

             22.01  Effective Date.  This Plan is effective as of the date of its approval by the stockholders of the Company.

             22.02  Termination of the Plan.  The Plan will terminate 10 years after the date it is approved by the stockholders of the Company; provided, however, that the Board of Directors may terminate the Plan at any time prior thereto with respect to any shares that are not then subject to Awards.  Termination of the Plan will not affect the rights and obligations of any Participant with respect to Awards granted before termination.

EX-10.2

Exhibit 10.2

AMCOL INTERNATIONAL CORPORATION
ANNUAL CASH INCENTIVE PLAN

1.          Purpose.  The purpose of the AMCOL International Corporation Annual Cash Incentive Plan (the “Plan”) is to provide performance-based incentive cash compensation to executive officers and other selected key employees of AMCOL International Corporation (the “Company”) and its subsidiaries, in order to promote the growth, performance and success of the Company.

2.          Administration.

             2.1          The Committee.  The Plan will be administered by the Compensation Committee of the Company’s board of directors (the “Committee”).

              2.2          Responsibility and Authority of the Committee.  Subject to the provisions of the Plan, the Committee, acting in its discretion, will have responsibility and authority to (a) select the individuals who may participate in the Plan, which individuals shall be executive officers or other key employees of the Company or its subsidiaries, (b) prescribe the terms and conditions of each participant’s award and make amendments thereto, (c) determine whether and the extent to which performance goals have been met, (d) construe, interpret and apply the provisions of the Plan and of any agreement or other document evidencing an award made under the Plan, and (e) make any and all determinations and take any and all other actions as it deems necessary or desirable in order to carry out the terms of the Plan.  The Committee’s interpretations of the Plan, and all actions taken and determinations made by the Committee pursuant to the powers vested in it hereunder, shall be conclusive and binding on all parties concerned, including the Company, its shareholders and any person granted an opportunity under the Plan.

3.          Performance-Based Compensation Opportunities.

             3.1          General.  Each award made under the Plan will represent the right to receive incentive cash compensation upon the achievement of specific objective target performance goals that are established by the Committee in writing and communicated to the recipient of the award by the 90^th day of the applicable performance period or, if earlier, before 25% of the applicable performance period has elapsed.  The Committee will determine the performance period applicable to an award.  Subject to the requirements of the Plan and applicable law, each award will contain such other terms and conditions as the Committee, acting in its discretion, may prescribe.

             3.2          Performance Goals.  The amount, if any, payable to a participant with respect to an award will depend upon whether and the extent to which the performance goal(s) of the award are achieved during the applicable performance period.  Performance goals shall be established on an annual basis and may be established on a corporate-wide basis and/or with respect to operating units, divisions, subsidiaries, acquired businesses, minority investments, partnerships or joint ventures.  The Committee may establish different levels of payment under an award to correspond with different levels of achievement of performance goals specified in the award.  Awards may contain more than one target performance goal.  Multiple performance goals contained in an award may be aggregated, weighted, expressed in the alternativ e or otherwise specified by the Committee.  The level or levels of performance specified with respect to a performance goal may be expressed in absolute terms, as objectives relative to performance in prior periods, as an objective compared to the performance of one or more comparable companies or an index covering multiple companies, or otherwise as the Committee may determine.  Notwithstanding anything to the contrary contained in the Plan, the performance goals under any award must be objective and must otherwise meet the requirements of Section 162(m) of the Internal Revenue Code of 1986 (the “Code”).

             3.3          Business Criteria for Performance Goals.  Target performance goals may be based upon one or more objective business criteria that apply to the individual participant, one or more business units or subsidiaries or the Company as a whole.  The business criteria shall be as follows, individually or in combination: (i) return on capital; (ii) earnings per share; (iii) net sales; (iv) net earnings; (v) net operating profits; (vi) expense control; (vii) working capital relating to inventory and/or accounts receivable; (viii) operating margin; (ix) share price performance; (x) implementation or completion of critical projects; and (xi) total return to shareholders.

             3.4          Adjustments.  The Committee may reduce or eliminate an award made under the Plan for any reason, including, without limitation, changes in the position or duties of a participant during or after a performance period, whether due to termination of employment (including death, disability, retirement, voluntary termination or termination with or without cause) or otherwise. 

             3.5          Certification.  Following the completion of the performance period applicable to an award, the Committee shall determine and shall certify in writing whether and the extent to which the performance goal(s) under the award have been achieved, as well as the amount, if any, payable to the participant as a result of such achievement(s), which determination(s) and certification(s) shall be subject to and shall be made in accordance with the requirements of Section 162(m) of the Code.

             3.6          Payment of Amounts Earned.  Subject to such deferral and/or other conditions as may be permitted or required by the Committee, cash amounts earned under an award will be paid or distributed as soon as practicable following the Committee’s determination and certification of such amounts.

             3.7          Maximum Annual Amount Payable to a Participant.  Notwithstanding anything to the contrary contained herein, no individual may earn more than two million dollars ($2,000,000) in any calendar year pursuant to an award made to such individual under the Plan.

             3.8          Deferral.  Notwithstanding anything contained herein to the contrary, if permitted under Section 409A of the Code, in the event that all or a portion of an annual incentive award shall be ineligible for treatment as “qualified performance-based compensation” under Section 162(m) of the Code, the committee, in its sole discretion, shall have the right, with respect to any participant who is a “covered employee” under Section 162(m) of the Code, to defer, in whole or in part, such participant’s receipt of payment of his or her annual incentive award until the participant is no longer a “covered employee” or until such time as shall be determined by the  Committee, provided that the  Committee may effect such a deferral only in a situation where the Company would be prohibited a deduction under Section 162(m) of the Code and such deferral shall be limited to the portion of the award that is not deductible.

4.          Non-transferability.  No interest in or under an award made or a payment due or to become due under the Plan may be assigned, transferred or otherwise alienated other than by will or the laws of descent and distribution, and any attempted assignment, alienation, sale, transfer, pledge, encumbrance, charge or other alienation of any such interest shall be void and unenforceable.

5.          No Right to Continued Employment.  No award and nothing contained in the Plan or in any document relating to the Plan shall confer upon an eligible employee or participant any right to continue as an employee of the Company or a subsidiary or constitute a contract or agreement of employment.

6.          Withholding Taxes.  The Company (or the relevant subsidiary or affiliate) shall have the right to deduct from all payouts of opportunities hereunder any federal, state, local or foreign taxes required by law to be withheld with respect to such payouts.

7.          Amendment and Termination.  The board of directors of the Company may amend the Plan at any time and from time to time. Any such amendment may be made without approval of the Company’s shareholders unless and except to the extent such approval is required in order to satisfy the shareholder approval requirements of Section 162(m) of the Code.  The Company’s board of directors may terminate the Plan at any time.

8.          Unfunded Plan.  The Plan shall be unfunded.  The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payout of any award under the Plan.

9.          Miscellaneous.

             9.1          Governing Law.  The Plan and any award made under the Plan shall be subject to and construed in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of laws, and applicable federal law.

             9.2          Section 162(m) of the Code.  It is intended that amounts payable pursuant to awards made under the Plan shall constitute “qualified performance-based compensation” and thus be exempt from the annual $1 million limitation on the deductibility of executive compensation.  The Plan and each award made under the Plan will be interpreted, construed and applied accordingly.

             9.3          Effective Date.  Subject to its approval by the shareholders, the Plan shall become effective for the 2006 fiscal year and shall remain effective until the first annual meeting of shareholders in the 2011 fiscal year, subject to the right of the board of directors of the Company to terminate the Plan.  Any award made under the Plan prior to approval of the shareholders shall be effective as of the date made (unless the Committee specifies otherwise at the time an award is made), but no award may be paid out prior to approval of the Plan by the shareholders.  In addition, if the shareholders fail to approve the Plan, any award made under the Plan shall be cancelled.  The performance criteria specified in the Plan shall be re-submitted for shareholder approval as and when required by Treasury Department r egulations in order to ensure compliance with the shareholder approval requirements of Section 162(m) of the Code on an ongoing basis.

EX-10.3

Exhibit 10.3

AMCOL INTERNATIONAL CORPORATION
DISCRETIONARY CASH INCENTIVE PLAN

1.          Purpose.  The purpose of the AMCOL International Corporation Annual Discretionary Cash Incentive Plan (the “Plan”) is to provide a plan under which AMCOL International Corporation (the “Company”) can provide additional cash compensation to executive officers and other selected key employees of the Company and its subsidiaries to reward such employees for their special or extraordinary effort on behalf of the Company.

2.          Administration.

2.1          The Committee.  The Plan will be administered by the compensation committee of the Company’s board of directors (the “Committee”). 

2.2          Responsibility and Authority of the Committee.  Subject to the provisions of the Plan, the Committee, acting in its discretion, will have responsibility and authority to select the individuals who may participate in the Plan, to prescribe the terms and conditions of each participant’s award, to construe, interpret and apply the provisions of the Plan and to make any and all determinations and take any and all other actions as it deems necessary or desirable in order to carry out the terms of the Plan.  The Committee’s interpretations of the Plan, and all actions taken and determinations made by the Committee pursuant to the powers vested in it hereunder, shall be conclusive and binding on all parties concerned, including the Company, its shareholders and any person granted an opportunity under the Plan.

3.          Awards.  Awards under the Plan shall be made to recognize the special effort of participants on behalf of the Company and shall be made at the time and in the manner established by the Committee from time to time. 

4.          No Right to Continued Employment.  No award and nothing contained in the Plan or in any document relating to the Plan shall confer upon an eligible employee or participant any right to continue as an employee of the Company or a subsidiary or constitute a contract or agreement of employment.

5.          Withholding Taxes.  The Company (or the relevant subsidiary or affiliate) shall have the right to deduct from all payouts of opportunities hereunder any federal, state, local or foreign taxes required by law to be withheld with respect to such payouts.

6.          Amendment and Termination.  The board of directors of the Company or the Committee may amend or terminate the Plan at any time and from time to time.

7.          Unfunded Plan.  The Plan shall be unfunded.  The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payout of any opportunity under the Plan.

8.          Miscellaneous.

8.1          Governing Law.  The Plan and any award made under the Plan shall be subject to and construed in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of laws, and applicable federal law.

8.2          Effective Date.  The Plan shall become effective as of the 2006 Annual Meeting of Shareholders for the 2006 fiscal year and shall remain effective until terminated by the board of directors.