FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-15661
AMCOL INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 36-0724340
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
</TABLE>
1500 West Shure Drive, Suite 500, Arlington Heights, Illinois 60004-7803
(Address of principal executive offices) (Zip Code)
(847) 394-8730
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at April 18, 1997
(Common stock, $.01 par value) 19,051,017
<PAGE>
AMCOL INTERNATIONAL CORPORATION
<TABLE>
<CAPTION>
INDEX
Part I - Financial Information
<S> <C> <C>
Item 1 Financial Statements Page No.
Condensed Consolidated Balance Sheet -
March 31, 1997 and December 31, 1996 1
Condensed Consolidated Statement of Operations -
three months ended March 31, 1997 and 1996 2
Condensed Consolidated Statement of Cash Flows -
three months ended March 31, 1997 and 1996 3
Notes to Condensed Consolidated Financial Statements 4
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
Part II - Other Information
Item 6 Exhibits and Reports on Form 8-K 9
</TABLE>
<PAGE>
Part I - FINANCIAL INFORMATION
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(In thousands)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
--------------------- -------------------
<S> <C> <C>
Current assets: *
Cash and cash equivalents $ 5,172 $ 3,054
Accounts receivable, net 77,672 81,519
Inventories 60,296 56,314
Prepaid expenses 3,583 4,502
Current deferred tax asset 3,145 3,086
Total current assets 149,868 148,475
Property, plant, equipment and mineral reserves 302,623 299,366
Less accumulated depreciation 124,258 118,490
178,365 180,876
Intangible assets, net 14,902 15,217
Other long-term assets, net 5,714 6,140
$ 348,849 $ 350,708
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current maturities of debt $ 9,423 $ 8,969
Accounts payable 21,331 24,389
Accrued liabilities 23,010 18,512
Total current liabilities 53,764 51,870
Long-term debt 115,444 118,855
Deferred credits and other liabilities 12,743 12,579
Stockholders' equity:
Common stock 213 213
Additional paid-in capital 75,689 75,576
Foreign currency translation adjustment 235 2,868
Retained earnings 98,421 96,579
Treasury stock (7,660) (7,832)
166,898 167,404
$ 348,849 $ 350,708
</TABLE>
*Condensed from audited financial statements.
The accompanying notes are an integral part of these
condensed financial statements.
-1-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(In thousands, except number of shares and per share data)
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<CAPTION>
Three Months Ended
March 31,
----------------------------------------------
1997 1996
-------------------- --------------------
<S> <C> <C>
Net sales $ 107,918 $ 85,536
Cost of sales 86,107 69,536
Gross profit 21,811 16,000
General, selling and administrative expenses 14,507 12,423
Operating profit 7,304 3,577
Other income (expense):
Interest expense, net (2,162) (2,055)
Other income, net (105) 255
(2,267) (1,800)
Income before income taxes and minority interest 5,037 1,777
Income taxes 1,864 640
Income before minority interest 3,173 1,137
Minority interest - (6)
Net income $ 3,173 $ 1,131
Weighted average common and common
equivalent shares 19,455,401 19,659,827
Earnings per share $ .16 $ .06
Dividends declared per share $ .07 $ .07
</TABLE>
The accompanying notes are an integral part of these
condensed financial statements.
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(In thousands)
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<CAPTION>
Three Months Ended
March 31,
----------------------------------------------
Cash flow from operating activities:
<S> <C> <C>
Net income $ 3,173 $ 1,131
Adjustments to reconcile net income to net cash
Provided by operating activities:
Depreciation, depletion, and amortization 7,567 6,382
Other 390 (320)
(Increase)/decrease in current assets 538 185
Increase/(decrease) in current liabilities 1,889 2,323
Net cash provided by (used in) operations 13,557 9,701
Cash flow from investing activities:
Acquisition of land, mineral reserves,
Depreciable and intangible assets (7,382) (8,643)
Sale of mineral reserves - 2,701
Other 395 (391)
Net cash used in investing activities (6,987) (6,333)
Cash flow from financing activities:
Net change in outstanding debt (3,406) (145)
Dividends paid (1,331) (1,340)
Other 285 (236)
Net cash provided by financing activities (4,452) (1,721)
Net (increase) in cash and cash equivalents 2,118 1,647
Cash and cash equivalents at beginning of period 3,054 1,888
Cash and cash equivalents at end of period $ 5,172 $ 3,535
Supplemental Disclosure of Cash Flows Information (In
thousands)
Actual cash paid for:
Interest $ 686 $ 557
Income taxes $ 548 $ 259
</TABLE>
The accompanying notes are an integral part of these
condensed financial statements.
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands)
Note 1: BASIS OF PRESENTATION
The financial information included herein, other than the condensed
consolidated balance sheet as of December 31, 1996, has been prepared by
management without audit by independent certified public accountants who do not
express an opinion thereon. The condensed consolidated balance sheet as of
December 31, 1996, has been derived from and does not include all the
disclosures contained in the audited consolidated financial statements for the
year ended December 31, 1996. The information furnished herein includes all
adjustments which are, in the opinion of management, necessary for a fair
statement of the results of the interim period, and all such adjustments are of
a normal recurring nature. Management recommends the accompanying consolidated
financial information be read in conjunction with the consolidated financial
statements and related notes included in the Company's 1996 Form 10-K which
accompanies the 1996 Corporate Report.
The results of operations for the three-month period ended March 31, 1997,
are not necessarily indicative of the results to be expected for the full year.
Certain items in the 1996 consolidated financial statements have been
reclassified to comply with the consolidated financial statements presentation
for 1997.
Note 2: INVENTORIES
Inventories at March 31, 1997 have been valued using the same methods as at
December 31, 1996. The composition of inventories at March 31, 1997 and December
31, 1996, was as follows:
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<CAPTION>
March 31, December 31,
1997 1996
-------------------- --------------------
<S> <C> <C>
Advance mining, crude stockpile and in-process inventories $ 40,977 $ 36,493
Other raw material, container and supplies inventories 19,319 19,821
$ 60,296 $ 56,314
</TABLE>
Note 3: EARNINGS PER SHARE
Earnings per share are computed by dividing net income by the weighted
average number of common shares outstanding and the dilutive effect of stock
options outstanding at the end of each period.
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial position and
operating results during the periods included in the accompanying condensed
consolidated financial statements.
Three Months Ended March 31, 1997 vs. 1996
Net sales increased by $22.4 million, or 26.2%, and gross profits and
operating profits increased by $5.8 million, or 36.3%, and $3.7 million, or
104.2%, respectively. Higher selling, general and administrative expenses
reflected higher expenditures associated with the development of the
nanocomposite technology and additional polymer products, as well as higher
costs for new market development. Net interest expense increased by $.1 million,
or 5.2%, as March 31, 1997 debt (both long-term and short-term) increased by
$2.9 million, or 2.4%, over the prior-year quarter. Earnings per share were $.16
for the 1997 quarter compared with $.06 for the 1996 quarter.
A brief discussion by business segment follows:
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<CAPTION>
Quarter Ended March 31,
-------------------------------------------------------------------------------------
1997 1996 1997 vs. 1996
------------------------- ---------------------- ---------------------------
Minerals (Dollars in Thousands) $ Change % Change
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 39,258 100.0% $ 34,557 100.0% $ 4,701 13.6%
Cost of sales 33,153 84.4% 29,853 86.4%
Gross profit 6,105 15.6% 4,704 13.6% 1,401 29.8%
General, selling and
Administrative expenses 3,875 9.9% 3,798 11.0% 77 2.0%
Operating profit 2,230 5.7% 906 2.6% 1,324 146.1%
</TABLE>
Sales increased by $4.7 million, or 13.6% , over the prior-year period. The
primary increases came from cat litter and metalcasting products, offset by
declines in sales of refining chemicals (a business which was sold later in
1996) and shipments to the iron ore pelletizing market. Reduced sales to the
iron ore pelletizing market are anticipated to continue, although the remaining
shipments will reflect higher unit selling prices. The gross profit margin
improved from the prior year when margins were depressed as a result of higher
costs associated with excess cat litter capacity.
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)
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<CAPTION>
Quarter Ended March 31,
-------------------------------------------------------------------------------------
1997 1996 1997 vs. 1996
------------------------- ---------------------- ---------------------------
Absorbent Polymers (Dollars in Thousands) $ Change % Change
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 45,161 100.0% $ 32,046 100.0% $ 13,115 40.9%
Cost of sales 35,568 78.8% 25,720 80.3%
Gross profit 9,593 21.2% 6,326 19.7% 3,267 51.6%
General, selling and
Administrative expenses 3,015 6.7% 2,479 7.7% 536 21.6%
Operating profit 6,578 14.5% 3,847 12.0% 2,731 71.0%
</TABLE>
Revenues increased by $13.1 million, or 40.9%, over the prior-year period
as sales volume increased by 57.0%. The gross profit margin in the prior-year
quarter reflected the additional costs associated with supplemental shipments of
product from the United States to meet European demand in excess of U.K. plant
capacity. The U.K. plant capacity in the current year was adequate to meet
demand. The increase in general, selling and administrative expenses reflected
higher product and business development expenditures for non-superabsorbent
polymer products and increased superabsorbent polymer market development
expenses.
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<CAPTION>
Quarter Ended March 31,
-------------------------------------------------------------------------------------
1997 1996 1997 vs. 1996
------------------------- ---------------------- ---------------------------
Environmental (Dollars in Thousands) $ Change % Change
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 16,565 100.0% $13,767 100.0% $ 2,798 20.3%
Cost of sales 11,327 68.4% 9,499 69.0%
Gross profit 5,238 31.6% 4,268 31.0% 970 22.7%
General, selling and
Administrative expenses 4,309 26.0% 3,558 25.8% 751 21.1%
Operating profit 929 5.6% 710 4.2% 219 30.8%
</TABLE>
Sales increased by $2.8 million, or 20.3%, over the prior-year period.
Sales across all product lines were generally higher, but sales of environmental
liner products were particularly stronger. General, selling and administrative
expenses increased by 21.1%, largely as a result of the increased marketing
costs associated with both domestic and international sales, and the increased
costs of the European unit.
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
<TABLE>
<CAPTION>
Quarter Ended March 31,
-------------------------------------------------------------------------------------
1997 1996 1997 vs. 1996
------------------------- ---------------------- ---------------------------
Transportation (Dollars in Thousands) $ Change % Change
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 6,934 100.0% $ 5,166 100.0% $ 1,768 34.2%
Cost of sales 6,059 87.4% 4,464 86.4%
Gross profit 875 12.6% 702 13.6% 173 24.6%
General, selling and
Administrative expenses 504 7.3% 433 8.4% 71 16.4%
Operating profit 371 5.3% 269 5.2% 102 37.9%
</TABLE>
Net sales increased by $1.8 million, or 34.2%, as a result of stronger
shipments of cat litter and environmental products in 1997 compared with 1996.
In addition, adverse weather conditions caused some rail shipments to
temporarily move to truck shipments during the quarter. Lower gross profit
margin in the 1997 quarter was a result of lower aggregate brokerage margins,
however the operating margin was marginally higher than the prior-year quarter.
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<CAPTION>
Quarter Ended March 31,
-------------------------------------------------------------------------------------
1997 1996 1997 vs. 1996
------------------------- ---------------------- ---------------------------
Corporate (Dollars in Thousands) $ Change % Change
General, selling and
<S> <C> <C> <C> <C>
Administrative expenses $ 2,804 $ 2,155 $649 30.1%
Operating loss 2,804 2,155 649 30.1%
</TABLE>
Corporate costs include management information systems, human resources,
investor relations and corporate communications, corporate finance and corporate
governance costs. The start-up of the nanocomposite business is also included in
the corporate costs. More than 60% of the increase in costs is attributable to
the development and market launch of the Company's nanocomposite technology.
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
Liquidity and Capital Resources
At March 31, 1997, the Company had outstanding debt of $124.9 million
(including both long-term and short-term debt) and cash of $5.2 million compared
with $127.8 million in debt and $3.1 million in cash and cash equivalents at
December 31, 1996. The long-term debt represented 40.9% of total capitalization
at March 31, 1997, compared with 41.5% at December 31, 1996.
The Company had a current ratio of 2.79-to-1 at March 31, 1997, with
approximately $96.1 million in working capital compared with 2.86-to-1 and $96.6
million, respectively, at December 31, 1996.
During the first quarter of 1997, the Company paid dividends of $1.3
million, and acquired property,plant and equipment totaling $7.4 million. The
cumulative foreign exchange translation adjustment, a component of stockholders'
equity, declined by $2.6 million as a result of the weakening of the Pound
Sterling versus the U.S. dollar.
The Company had approximately $38.0 million in unused, committed credit
lines at March 31, 1997. These credit facilities, in conjunction with funds
generated from operations, are adequate to fund the capital expenditure program
approved by the board of directors at this time.
Forward Looking Statements
This filing contains certain forward-looking statements regarding the
company's expected performance for future periods and actual results for such
periods may materially differ. Such forward-looking statements are subject to
uncertainties, which include, but are not limited to, actual growth in AMCOL's
various markets, utilization of the company's plants and factories, customer
concentration in the absorbent polymers segment, operating costs, raw material
prices, weather, and delays in development production and marketing of new
products, and other factors detailed from time to time in the company's annual
report and other reports filed with the Securities and Exchange Commission.
<PAGE>
PART II - OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K
(a) See Index to Exhibits immediately following the signature page.
(b) No reports on Form 8-K have been filed during the quarter ended March
31, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMCOL INTERNATIONAL CORPORATION
Date: April 21, 1997 /s/ John Hughes
John Hughes
President and Chief Executive Officer
Date: April 21, 1997 /s/ Paul G. Shelton
Paul G. Shelton
Senior Vice President and
Chief Financial Officer
INDEX TO EXHIBITS
Exhibit
Number
3.1 Restated Certificate of Incorporation of the Company (5), as amended
(10)
3.2 Bylaws of the Company (10)
4 Article Fourth of the Company's Restated Certificate of Incorporation
(5)
10.1 AMCOL International Corporation 1983 Incentive Stock Option Plan (1);
as amended (3)
10.2 Executive Medical Reimbursement Plan (1)
10.3 Lease Agreement for office space dated September 29, 1986, between the
Company and American National
Bank and Trust Company of Chicago (1) as amended (8)
10.4 AMCOL International Corporation 1987 Non-Qualified Stock Option Plan
(2); as amended (6)
10.5 Change in Control Agreement dated April 1, 1997, by and between
Registrant and John Hughes
10.6 Change in Control Agreement dated April 1, 1997, by and between
Registrant and Paul G. Shelton
10.7 Change in Control Agreement dated February 7, 1996, by and between
Registrant and Lawrence E. Washow (10)
10.8 Change in Control Agreement dated February 7, 1996, by and between
Registrant and Roger P. Palmer (10)
10.9 Change in Control Agreement dated April 1, 1997 by and between
Registrant and Peter L. Maul
10.10 AMCOL International Corporation Dividend Reinvestment and Stock
Purchase Plan (4); as amended (6)
10.11 AMCOL International Corporation 1993 Stock Plan, as amended and
restated (10)
10.12 Credit Agreement by and among AMCOL International Corporation and
Harris Trust and Savings Bank,
individually and as agent, NBD Bank, LaSalle National Bank and the
Northern Trust Company dated October
4, 1994, (7); as amended, First Amendment to Credit Agreement dated
September 25, 1995 (9), as amended,
Second Amendment to Credit Agreement dated March 28, 1996, and Third
Amendment to Credit Agreement dated
September 12, 1996 (11)
10.13 Note Agreement dated October 1, 1994, between AMCOL International
Corporation and Principal Mutual Life
Insurance Company, (7); as amended, First Amendment of Note Agreement
dated September 30, 1996 (11)
10.14 Change in Control Agreement dated August 21, 1996 by and between
Registrant and Frank B. Wright, Jr. (11)
27 Financial Data Schedule
(1) Exhibit is incorporated by reference to the Registrant's Form 10
filed with the Securities and Exchange Commission on July 27, 1987.
(2) Exhibit is incorporated by reference to the Registrant's Form 10-K
filed with the Securities and Exchange Commission for the year ended
December 31, 1988.
(3) Exhibit is incorporated by reference to the Registrant's Form 10-K
filed with the Securities and Exchange Commission for the year ended
December 31, 1993.
(4) Exhibit is incorporated by reference to the Registrant's Form 10-K
filed with the Securities and Exchange Commission for the year ended
December 31, 1992.
(5) Exhibit is incorporated by reference to the Registrant's Form S-3
filed with the Securities and Exchange Commission for the year ended
September 15, 1993.
(6) Exhibit is incorporated by reference to the Registrant's Form 10-K
filed with the Securities and Exchange Commission for the year ended
December 31, 1993.
(7) Exhibit is incorporated by reference to the Registrant's Form 10-Q
filed with the Securities and Exchange Commission for the quarter ended
September 30, 1994.
(8) Exhibit is incorporated by reference to the Registrant's Form 10-K
filed with the Securities and Exchange Commission for the year ended
December 31, 1994.
<PAGE>
(9) Exhibit is incorporated by reference to the Registrant's Form 10-Q
filed with the Securities and Exchange Commission for the quarter ended
September 30, 1995.
(10) Exhibit is incorporated by reference to the Registrant's Form 10-K
filed with the Securities and Exchange Commission for the year ended
December 31, 1995.
(11) Exhibit is incorporated by reference to the Registrant's Form 10-K
filed with the Securities and Exchange Commission for the year ended
December 31, 1996.
EXHIBIT 10.5
AGREEMENT
WHEREAS, AMCOL International Corporation (the "Company") considers it
essential and in the best interests of the Company and its shareholders to
foster the continued employment of its key management personnel;
WHEREAS, John Hughes ("Employee") is considered a key management employee,
currently serving as President and Chief Executive Officer of the Company; and
WHEREAS, the Company desires to assure the future continuity of Employee's
services in the event of any actual or threatened "Change in Control" (as
defined in Section 6 below) of the Company.
IT IS THEREFORE AGREED AS FOLLOWS:
1. Effect of Agreement. This Agreement shall be effective and binding
immediately upon its execution. However, except as specifically provided herein,
this Agreement shall not alter materially Employee's duties and obligations to
the Company and the remuneration and benefits which Employee may reasonably
expect to receive from the Company in the absence of a Change in Control.
2. Employment On and After Change in Control. Provided that the employee is
an employee of the Company immediately prior to a Change in Control, the Company
shall employ Employee, and Employee shall accept such employment, effective upon
such Change in Control for a period of thirty-six (36) months after said Change
in Control subject to the terms and conditions stated herein.
3. Duties After Change in Control. Employee agrees that during the term of
his employment with the Company after a Change in Control, he shall perform the
duties described in Section 12 below and such other duties for the Company and
its subsidiaries consistent with his experience and training as the Board of
Directors of the Company (the "Board") or the Board's representatives shall
determine from time to time, which duties shall be at least substantially equal
in status, dignity and character to his duties at the date hereof. He shall also
have the title of President and Chief Executive Officer. Employee further agrees
to devote his entire working time and attention to the business of the Company
and its subsidiaries and use his best efforts to promote such business.
4. Compensation Prior to a Change in Control. Prior to a Change in Control
the Company agrees to pay Employee compensation for his services in an amount,
and to provide him with life insurance, disability, health and other benefits,
at least equal to that which he presently receives, only with such changes as
shall be agreed upon between Employee and the Company. For the purpose of this
Section, compensation does not include any bonus or other incentive compensation
plan or stock purchase plan, which may vary from year to year at the discretion
of the Company.
<PAGE>
5. Termination of Employment Prior to a Change of Control. Employee shall
be entitled to terminate his employment prior to a Change in Control at any time
upon sixty (60) days' prior written notice. The Company, shall be able to
terminate Employee's employment at any time prior to a Change in Control with or
without cause upon sixty (60) days' prior written notice (or the payment of
salary in lieu thereof). This Section shall not be construed to reduce any
accrued benefits payable in connection with any termination of Employee's
employment prior to a Change in Control.
Nothing expressed or implied in this Agreement shall create any right or
duty on the part of the Company or Employee to have Employee remain in the
employment of the Company prior to a Change in Control.
6. Termination of Employment On or After Change in Control.
(a) For purposes of this Agreement the term "Change in Control" means the
change in the legal or beneficial ownership of fifty-one percent (51%) of
the shares of the Company's common stock within a six-month period other
than by death or operation of law, or the sale of ninety percent (90%) or
more of the Company's assets within a six-month period.
(b) Employee's employment on and after a Change in Control may be terminated
with just cause by the Company at any time upon not less than ten (10)
days' prior written notice. Prior to termination for just cause on and
after a Change in Control, the Board of Directors shall by majority vote
have declared that Employee's termination is for just cause specifically
stating the basis for such determination. In the event such a termination
occurs, the provisions of Sections 9(a) and 12 below shall apply.
Employee's employment may be terminated on or after a Change in Control
without just cause pursuant to the constructive termination procedures described
in the next paragraph or by the Company giving Employee not less than thirty
(30) days' prior written notice. In the event Employee's employment is
terminated pursuant to the preceding sentence:
(i) the provisions of Section 9(b) below shall apply; and
(ii) although Employee's employment term shall be deemed terminated at the end
of such notice period (or, in the case of a constructive termination
described in the next paragraph, as of the date Employee notifies the
Company of such termination), such termination shall in no way affect the
term of this Agreement or Employee's duties and obligations under Section
12 below.
<PAGE>
For purposes of this Section 6(b), Employee shall be considered as having
been terminated by the Company on or after a Change in Control for other than
just cause provided that he has notified the Company of any of the following
within ten (10) days of the occurrence thereof:
(i) the assignment to Employee of any duties of lesser status, dignity and
character than his duties immediately prior to the effective date of the
Change in Control or a substantial reduction in the nature or status of his
responsibilities from those in effect immediately prior to the effective
date of the Change in Control;
(ii) a post-Change in Control reduction by the Company in Employee's annual base
salary or bonus or incentive plan (as in effect immediately prior to the
effective date of the Change in Control);
(iii)relocation of Employee's office to a location which is more than 35 miles
from the location in which Employee principally works for the Company
immediately prior to the effective date of the Change in Control; the
relocation of the appropriate principal executive office of the Company or
the Company's operating division or subsidiary for which Employee performed
the majority of his services for the Company during the year prior to the
effective date of the Change in Control to a location which is more than 35
miles from the location of such office immediately prior to such date; or
his being required by the Company in order to perform duties of
substantially equal status, dignity and character to those duties he
performed immediately prior to the effective date of the Change in Control
to travel on the Company's business to a substantially greater extent than
is consistent with his business travel obligations as of such date; or
(iv) the failure of the Company to continue to provide Employee with benefits
substantially equivalent to those enjoyed by him under any of the Company's
life insurance, medical, health and accident or disability plans in which
he was participating immediately prior to the effective date of the Change
in Control, the taking of any action by the Company which would directly or
indirectly materially reduce any of such benefits or deprive him of any
material fringe benefit enjoyed by him immediately prior to effective date
of the Change in Control, or the failure of the Company to provide him with
at least the number of paid vacation days to which he is entitled on the
basis of years of service under the Company's normal vacation policy in
effect immediately prior to the effective date of the Change in Control.
<PAGE>
(c) In the event Employee's employment is terminated on or after a Change
in Control in any manner not described in Section 6(b) above:
(i) the provisions of Section 9(b) shall not apply and Employee shall
instead receive the sums and benefits described in Section 9(a);
and
(ii) such termination shall in no way affect the term of this
Agreement or Employee's duties or obligations under Section 12
below.
(d) Any termination of employment of Employee following the commencement of
any discussions by a shareholder or group of shareholders owning legally or
beneficially more than 20% of the common stock or an officially designated
representative of the Board of Directors with a third party that results within
180 days in a Change in Control shall (unless such termination is for cause or
wholly unrelated to such discussions) be deemed to be a termination of Employee
on and after a Change in Control for purposes of this Agreement.
7. Notice of Termination. Any termination by the Company or assertion of
termination by Employee shall be communicated by written notice of termination
to the other party at the following address:
AMCOL International Corporation John Hughes
One North Arlington President and
1500 West Shure Drive Chief Executive Officer
Arlington Heights, IL 60004 AMCOL International Corporation
ATTN: Chairman of the Board One North Arlington
1500 West Shure Drive
Arlington Heights, IL 60004
8. Disability. If as a result of Employee's incapacity due to physical or
mental illness, he shall have been absent from his duties with the Company for
one hundred eighty (180) days within any twelve-(12)- consecutive-month period
and within thirty (30) days after written notice of the Company's intention to
terminate his employment is given, Employee shall not have returned to the
performance of his duties with the Company substantially on a full-time basis,
the Company may terminate his employment for disability. This shall not
constitute a termination for the purposes of obtaining benefits pursuant to
Section 9.
9. Benefits Upon Termination And Leave Of Employment On or After Change in
the Control.
(a) If Employee is terminated for just cause on or after a Change in Control,
he shall only receive the accrued sums and benefits payable to him through
the date he is terminated; the provisions of Section 9(b) below shall not
be applicable in such case and Employee shall not receive (or shall cease
receiving) the payments and benefits described in Section 9(b).
<PAGE>
(b) Subject to Employee's compliance with the provisions of Section 12(a)
below, if Employee is terminated during the thirty-six (36) month period
beginning on and continuing after a Change in Control other than for just
cause (either at the discretion of the Company's management or
constructively by the operation of Section 6), he shall receive the
following payments and benefits in lieu of any other sums or benefits
otherwise payable to him by the Company:
(i) all then accrued pay, benefits, executive compensation and fringe
benefits, including (but not limited to) pro rata bonus and incentive
plan earnings;
(ii) medical, health and disability benefits which are substantially
similar to the benefits the Company is providing him as of the date
of his employment is terminated for a period of thirty-six (36)
months thereafter; and
(iii) one dollar less than three times his base period compensation.
The foregoing payments and benefits shall be deemed compensation payable
for the duties to be performed by Employee pursuant to Section 12 below. For
purposes of this Agreement, (A) Employee's "base period compensation" is the
average annual "compensation" (as defined below) which was includable in his
gross income for his base period (i.e., his most recent five taxable years
ending before the date of the Change in Control); and (B) if Employee's base
period includes a short taxable year or less than all of a taxable year,
compensation for such short or incomplete taxable year shall be annualized
before determining his average annual compensation for the base period. (In
annualizing compensation, the frequency with which payments are expected to be
made over an annual period shall be taken into account. Thus, any amount of
compensation for such a short or incomplete taxable year that represents a
payment that would not be made more than once per year shall not be annualized).
The sum payable to Employee pursuant to Section 9(b)(iii) shall in any and all
cases be reduced by any compensation which Employee receives from the Company
from the date of the Change in Control until the termination date, excluding any
non-qualified deferred compensation, stock option compensation or other stock
incentive bonus plan compensation so received. For purposes of Section 9(iii)
and the definitions pertaining to said Section, Employee's "compensation" is the
compensation which was payable to him by the Company or a related entity
determined without regard to the following Sections of the Internal Revenue Code
of 1986, as amended (the "Code"): 125 (cafeteria plans), 402(a)(8) (cash or
deferred arrangements), 402(h)(1)(B) (elective contributions to simplified
employee pensions), and, in the case of employer contributions made pursuant to
a salary reduction agreement, 403(b) (tax sheltered annuities).
<PAGE>
Except for the benefits described in Section 9(b)(ii) above, the sums due
pursuant to this Section 9(b) shall be paid in up to three (3) annual
installments commencing thirty (30) days after the sums become due. If on or
after the date any payment becomes due hereunder the Company at any time has a
funded debt-to-total capitalization ratio which equals or exceeds 1:1, upon
Employee's written request, the Company shall secure its payment of the
remaining annual installments with a letter of credit or other security
instrument as shall be reasonably acceptable to Employee. Such letter of credit
or other security instruments shall provide Employee with the ability to receive
the remaining installments(s) only if his payment is delinquent. All sums due
hereunder shall be subject to appropriate withholding and statutory
requirements. Employee shall not be required to mitigate the amount of any
payment provided for in this Section 9(b) by seeking other employment or
otherwise. Notwithstanding anything stated in this Section 9(b) to the contrary,
however, the amount of any payment or benefit provided for in this Section 9(b)
shall be reduced by no more than 50% by any compensation earned by Employee as a
result of employment by another employer and the Company shall not be required
to provide medical, health and/or disability benefits to the extent such
benefits would duplicate benefits received by Employee in connection with his
employment with any new employer.
Notwithstanding anything stated in this Agreement to the contrary, if the
amounts which are payable and the benefits which are provided to Employee under
this Agreement, either alone or together with other payments which Employee has
a right to receive from the Company or any of its affiliates, would constitute a
"parachute payment" (as defined in Code Section 280G), such amounts and benefits
shall be reduced, as necessary, to the largest amount as will result in no
portion of said amounts and benefits being either not deductible as a result of
Code Section 280G or subject to the excise tax imposed by Code Section 4999. The
determination of any reduction in said amounts and benefits pursuant to the
foregoing proviso shall be made by the Company in good faith, and such
determination shall be conclusive and binding on Employee. The amounts provided
to Employee under this Agreement in connection with a Change in Control, if any,
shall be deemed allocated to such amounts and/or benefits to be paid and/or
provided as the Company's Board of Directors in its sole discretion shall
determine.
10. Special Situations. The parties recognize that under certain
circumstances a Change in Control may occur under conditions which make it
inappropriate for Employee to receive the termination benefits or protection set
forth in this Agreement. Therefore, in the event that a Change in Control occurs
for any one of the following reasons, the provisions of Sections 2, 6 and 9
shall not apply:
(a) the purchase of more than fifty percent (50%) of the stock of the Company
by an employee stock ownership plan or similar employee benefit plan of
which Employee is a participant; or
<PAGE>
(b) the purchase of more than fifty percent (50%) of the stock or ninety
percent (90%) of the assets of the Company by a group of individuals or
entities including Employee as a member or participant, including but not
limited to those transactions commonly known as a leveraged or other forms
of management buy- outs.
11. Disputes. Any dispute arising under this Agreement (except Section 12)
shall be promptly submitted to arbitration under the Rules of the American
Arbitration Association. An arbitrator is to be mutually agreed upon by the
parties or upon failure of agreement, designated by the American Arbitration
Association.
12. Non-Competition, Non-Solicitation, and Confidentiality.
(a) In consideration of this Agreement and other good and valuable
consideration, Employee agrees that for so long as he is employed by the
Company and for thirty-six (36) months thereafter he shall not own manage,
operate, control, be employed by or otherwise engage in any competitive
business. Employee's agreement pursuant to the preceding sentence shall be
in addition to any other agreement or legal obligation he may have with or
to the Company. For purposes of the preceding sentence, a "competitive
business" is any business engaged in the production, refinement or sale of
Bentonite and/or any business conducted by the Company, its affiliates or
any subsidiaries thereof as of the date Employee's employment is
terminated. A business which is conducted by the Company, its affiliates or
any subsidiaries which is subsequently sold by the Company is not a
competitive business as of the date such business is sold. An "affiliate"
of the Company is any company which either controls, is controlled by or is
under common control with the Company. The phrase "any business conducted
by the Company, its affiliates or any subsidiaries thereof" includes not
only current businesses but also any new products, product lines or use of
processes under development, consideration or investigation on the date
Employee's employment with the Company is terminated.
Employee also agrees that during the thirty-six (36) month period
described in the first sentence of this Section 12(a) he will not directly
or indirectly, on behalf of himself or any other person or entity, make a
solicitation or conduct business, with any customer or potential customer
of the Company with which he had contact while employed by the Company, its
affiliates and/or any subsidiaries thereof, with respect to any products or
services which are competitive with any business conducted by the Company,
its affiliates or any subsidiaries thereof. For purposes of the preceding
sentence, a "customer" is any person or entity that has purchased goods or
services from the Company, its affiliates or any subsidiaries thereof
within the twenty-four (24) month period ending on the date Employee's
employment is terminated. A "potential customer" is any person or entity
that the Company solicited for business within twelve (12) months prior to
the date Employee's employment with the Company is terminated. The Company
and Employee recognize that his responsibilities have included marketing
throughout the United States and certain foreign countries. Employee's
contacts on behalf of the Company represent a substantial asset of the
Company which are entitled to protection. In recognition of this situation,
the covenants set forth in this Section 12 shall apply to competitive
businesses and solicitation in the United States, Australia, Japan, Canada,
the United Kingdom, Thailand and those countries in which the Company, its
affiliates and/or the subsidiaries thereof has (have) conducted $200,000 or
more of business during the twelve-month period ending on the date
Employee's employment with the Company terminated.
Before and forever after his termination or resignation, Employee
shall keep confidential and refrain from utilizing or disseminating any
confidential, proprietary or trade secret information of the Company for
any purpose other than furthering the business interests of the Company.
(b) During Employee's employment hereunder and during three (3) years
following his resignation or the termination of his employment
hereunder for any reason, Employee will not induce or attempt to
influence any present or future employee of the Company, its
affiliates or any subsidiaries thereof to leave its employ.
13. Other Agreements. Except to the extent expressly set forth herein, this
Agreement shall not modify or lessen any benefit or compensation to which
Employee is entitled under any agreement between Employee and the Company or
under any plan maintained by the Company in which he participates or
participated. Benefits or compensation shall be payable thereunder, if at all,
according to the terms of the applicable plan(s) or agreement(s). The terms of
this Agreement shall supersede any existing agreement between Employee and the
Company executed prior to the date hereof to the extent any such Agreement is
inconsistent with the terms hereof.
14. Successors; Binding Agreement. The Company will require any successor
(whether direct or indirect by purchase, merger, consolidation or otherwise, to
all or substantially all of the business and/or assets of the Company) to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.
This Agreement shall inure to the benefit of and be enforceable by
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
15. Injunction. The remedy at law for any breach of Section 12 will be
inadequate and the Company, its affiliates and any subsidiaries thereof would
suffer continuing and irreparable injury to their business as a direct result of
any such breach. Accordingly, notwithstanding anything stated herein, if
Employee shall breach or fail to perform any term, condition or duty contained
in Section 12 hereof, then, in such event, the Company shall be entitled to
institute and prosecute proceedings in any court of competent jurisdiction,
either in law or in equity, to obtain the specific performance thereof by
Employee or to seek a temporary restraining order or injunctive relief, without
any requirement to show actual damages or post bond, to restrict Employee from
violating the
<PAGE>
provisions of Section 12; however, nothing herein shall be
construed to prevent the Company seeking such other remedy in the courts, in
case of any breach of this Agreement by Employee, as the Company may elect or
invoke. If court proceedings are instituted by the Company to enforce Section 12
hereof, and the Company is the prevailing party, the Company shall receive, in
addition to any damages awarded, reasonable attorneys' fees, court costs and
ancillary expenses.
16. Miscellaneous. This Agreement may not be modified or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by
Employee and such officers of the Company as may be specifically designated by
its Board for that purpose. Except for any failure to give the ten (10) day
notice described in Section 6(b) above, the failure of either party to this
Agreement to object to any breach by the other party or the non-breaching
party's conduct or conduct forbearance shall not constitute a waiver of that
party's rights to enforce this Agreement. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of any subsequent breach by such other party or any
similar or dissimilar provisions or conditions at the same or any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Illinois.
17. Severability. The parties hereto intend this Agreement to be enforced
to the maximum extent permitted by law. In the event any provision of this
Agreement is deemed to be invalid or unenforceable by any court of competent
jurisdiction, such provisions shall be deemed to be restricted in scope or
otherwise modified to the extent necessary to render the same valid and
enforceable. In the event the provisions of Section 12 cannot be modified or
restricted so as to be valid and enforceable, then the same as well as the
Company's obligation to make any payment or transfer any benefit to Employee in
connection with any termination of Employee's employment shall be deemed excised
from this Agreement, and this Agreement shall be construed and enforced as if
such provisions had originally been incorporated herein as so restricted or
modified or as if such provisions had not originally been contained herein, as
the case may be. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement which shall remain in full force and effect.
18. Survival. The obligations of the parties under this Agreement shall
survive the term of this Agreement.
19. Term of Agreement. The term of this Agreement shall commence on April
1, 1997 and end on March 31, 2000. Provided, however, that in the event
Employee's employment is
<PAGE>
terminated while this Agreement is in force, this Agreement shall terminate
when the Company has made all payments to Employee required by Section 9 hereof
and Employee has complied with the duties and obligations described in Section
12 hereof (all of which duties and obligations shall specifically survive the
termination of the Employee's employment). To the extent necessary for the
Company's enforcement of the provisions of Section 12 above (but only for such
purpose), Employee's employment term shall be deemed to continue through the end
of the Agreement term.
Date: _____________________________
Employee AMCOL International Corporation
____________________________________ By: _______________________________
John Hughes
Its: _______________________________
(50023B7F)
EXHIBIT 10.6
AGREEMENT
WHEREAS, AMCOL International Corporation (the "Company") considers it
essential and in the best interests of the Company and its shareholders to
foster the continued employment of its key management personnel;
WHEREAS, Paul G. Shelton ("Employee") is considered a key management
employee, currently serving as Senior Vice-President and Chief Financial Officer
of the Company; and
WHEREAS, the Company desires to assure the future continuity of Employee's
services in the event of any actual or threatened "Change in Control" (as
defined in Section 6 below) of the Company.
IT IS THEREFORE AGREED AS FOLLOWS:
1. Effect of Agreement. This Agreement shall be effective and binding
immediately upon its execution. However, except as specifically provided herein,
this Agreement shall not alter materially Employee's duties and obligations to
the Company and the remuneration and benefits which Employee may reasonably
expect to receive from the Company in the absence of a Change in Control.
2. Employment On and After Change in Control. Provided that the employee is
an employee of the Company immediately prior to a Change in Control, the Company
shall employ Employee, and Employee shall accept such employment, effective upon
such Change in Control for a period of thirty-six (36) months after said Change
in Control subject to the terms and conditions stated herein.
3. Duties After Change in Control. Employee agrees that during the term of
his employment with the Company after a Change in Control, he shall perform the
duties described in Section 12 below and such other duties for the Company and
its subsidiaries consistent with his experience and training as the Board of
Directors of the Company (the "Board") or the Board's representatives shall
determine from time to time, which duties shall be at least substantially equal
in status, dignity and character to his duties at the date hereof. He shall also
have the title of Vice-President and Chief Financial Officer. Employee further
agrees to devote his entire working time and attention to the business of the
Company and its subsidiaries and use his best efforts to promote such business.
4. Compensation Prior to a Change in Control. Prior to a Change in Control
the Company agrees to pay Employee compensation for his services in an amount,
and to provide him with life insurance, disability, health and other benefits,
at least equal to that which he presently receives, only with such changes as
shall be agreed upon between Employee and the Company. For the purpose of this
Section, compensation does not include any bonus or other incentive compensation
plan or stock purchase plan, which may vary from year to year at the discretion
of the Company.
<PAGE>
5. Termination of Employment Prior to a Change of Control. Employee shall
be entitled to terminate his employment prior to a Change in Control at any time
upon sixty (60) days' prior written notice. The Company, shall be able to
terminate Employee's employment at any time prior to a Change in Control with or
without cause upon sixty (60) days' prior written notice (or the payment of
salary in lieu thereof). This Section shall not be construed to reduce any
accrued benefits payable in connection with any termination of Employee's
employment prior to a Change in Control.
Nothing expressed or implied in this Agreement shall create any right or
duty on the part of the Company or Employee to have Employee remain in the
employment of the Company prior to a Change in Control.
6. Termination of Employment On or After Change in Control.
(a) For purposes of this Agreement the term "Change in Control" means the
change in the legal or beneficial ownership of fifty-one percent (51%)
of the shares of the Company's common stock within a six-month period
other than by death or operation of law, or the sale of ninety percent
(90%) or more of the Company's assets within a six-month period.
(b) Employee's employment on and after a Change in Control may be
terminated with just cause by the Company at any time upon not less
than ten (10) days' prior written notice. Prior to termination for
just cause on and after a Change in Control, the Board of Directors
shall by majority vote have declared that Employee's termination is
for just cause specifically stating the basis for such determination.
In the event such a termination occurs, the provisions of Sections
9(a) and 12 below shall apply.
Employee's employment may be terminated on or after a Change in
Control without just cause pursuant to the constructive termination
procedures described in the next paragraph or by the Company giving
Employee not less than thirty (30) days' prior written notice. In the
event Employee's employment is terminated pursuant to the preceding
sentence:
(i) the provisions of Section 9(b) below shall apply; and
(ii) although Employee's employment term shall be deemed terminated at
the end of such notice period (or, in the case of a constructive
termination described in the next paragraph, as of the date
Employee notifies the Company of such termination), such
termination shall in no way affect the term of this Agreement or
Employee's duties and obligations under Section 12 below.
<PAGE>
For purposes of this Section 6(b), Employee shall be considered as having been
terminated by the Company on or after a Change in Control for other than just
cause provided that he has notified the Company of any of the following within
ten (10) days of the occurrence thereof:
(i) the assignment to Employee of any duties of lesser status,
dignity and character than his duties immediately prior to the
effective date of the Change in Control or a substantial
reduction in the nature or status of his responsibilities from
those in effect immediately prior to the effective date of the
Change in Control;
(ii) a post-Change in Control reduction by the Company in Employee's
annual base salary or bonus or incentive plan (as in effect
immediately prior to the effective date of the Change in
Control);
(iii)relocation of Employee's office to a location which is more than
35 miles from the location in which Employee principally works
for the Company immediately prior to the effective date of the
Change in Control; the relocation of the appropriate principal
executive office of the Company or the Company's operating
division or subsidiary for which Employee performed the majority
of his services for the Company during the year prior to the
effective date of the Change in Control to a location which is
more than 35 miles from the location of such office immediately
prior to such date; or his being required by the Company in order
to perform duties of substantially equal status, dignity and
character to those duties he performed immediately prior to the
effective date of the Change in Control to travel on the
Company's business to a substantially greater extent than is
consistent with his business travel obligations as of such date;
or
(iv) the failure of the Company to continue to provide Employee with
benefits substantially equivalent to those enjoyed by him under
any of the Company's life insurance, medical, health and accident
or disability plans in which he was participating immediately
prior to the effective date of the Change in Control, the taking
of any action by the Company which would directly or indirectly
materially reduce any of such benefits or deprive him of any
material fringe benefit enjoyed by him immediately prior to
effective date of the Change in Control, or the failure of the
Company to provide him with at least the number of paid vacation
days to which he is entitled on the basis of years of service
under the Company's normal vacation policy in effect immediately
prior to the effective date of the Change in Control.
<PAGE>
(c) In the event Employee's employment is terminated on or after a
Change in Control in any manner not described in Section 6(b)
above:
(i) the provisions of Section 9(b) shall not apply and Employee
shall instead receive the sums and benefits described in
Section 9(a); and
(ii) such termination shall in no way affect the term of this
Agreement or employee's duties or obligations under Section
12 below.
(d) Any termination of employment of Employee following the
commencement of any discussions by a shareholder or group of
shareholders owning legally or beneficially more than 20% of the
common stock or an officially designated representative of the
Board of Directors with a third party that results within 180
days in a Change in Control shall (unless such termination is for
cause or wholly unrelated to such discussions) be deemed to be a
termination of Employee on and after a Change in Control for
purposes of this Agreement.
7. Notice of Termination. Any termination by the Company or assertion of
termination by Employee shall be communicated by written notice of termination
to the other party at the following address:
AMCOL International Corporation Paul G. Shelton
One North Arlington Senior Vice-President and
1500 West Shure Drive Chief Financial Officer
Arlington Heights, IL 60004 AMCOL International Corporation
ATTN: Chairman of the Board One North Arlington
1500 West Shure Drive
Arlington Heights, IL 60004
8. Disability. If as a result of Employee's incapacity due to physical or
mental illness, he shall have been absent from his duties with the Company for
one hundred eighty (180) days within any twelve-(12)- consecutive-month period
and within thirty (30) days after written notice of the Company's intention to
terminate his employment is given, Employee shall not have returned to the
performance of his duties with the Company substantially on a full-time basis,
the Company may terminate his employment for disability. This shall not
constitute a termination for the purposes of obtaining benefits pursuant to
Section 9.
9. Benefits Upon Termination And Leave Of Employment On or After Change in
the Control.
(a) If Employee is terminated for just cause on or after a Change in
Control, he shall only receive the accrued sums and benefits
payable to him through the date he is terminated; the provisions
of Section 9(b) below shall not be applicable in such case and
Employee shall not receive (or shall cease receiving) the
payments and benefits described in Section 9(b).
<PAGE>
(b) Subject to Employee's compliance with the provisions of Section
12(a) below, if Employee is terminated during the thirty-six (36)
month period beginning on and continuing after a Change in
Control other than for just cause (either at the discretion of
the Company's management or constructively by the operation of
Section 6), he shall receive the following payments and benefits
in lieu of any other sums or benefits otherwise payable to him by
the Company:
(i) all then accrued pay, benefits, executive compensation and
fringe benefits, including (but not limited to) pro rata
bonus and incentive plan earnings;
(ii) medical, health and disability benefits which are
substantially similar to the benefits the Company is
providing him as of the date of his employment is
terminated for a period of thirty-six (36) months
thereafter; and
(iii) one dollar less than three times his base period
compensation.
The foregoing payments and benefits shall be deemed compensation payable
for the duties to be performed by Employee pursuant to Section 12 below. For
purposes of this Agreement, (A) Employee's "base period compensation" is the
average annual "compensation" (as defined below) which was includable in his
gross income for his base period (i.e., his most recent five taxable years
ending before the date of the Change in Control); and (B) if Employee's base
period includes a short taxable year or less than all of a taxable year,
compensation for such short or incomplete taxable year shall be annualized
before determining his average annual compensation for the base period. (In
annualizing compensation, the frequency with which payments are expected to be
made over an annual period shall be taken into account. Thus, any amount of
compensation for such a short or incomplete taxable year that represents a
payment that would not be made more than once per year shall not be annualized).
The sum payable to Employee pursuant to Section 9(b)(iii) shall in any and all
cases be reduced by any compensation which Employee receives from the Company
from the date of the Change in Control until the termination date, excluding any
non-qualified deferred compensation, stock option compensation or other stock
incentive bonus plan compensation so received. For purposes of Section 9(iii)
and the definitions pertaining to said Section, Employee's "compensation" is the
compensation which was payable to him by the Company or a related entity
determined without regard to the following Sections of the Internal Revenue Code
of 1986, as amended (the "Code"): 125 (cafeteria plans), 402(a)(8) (cash or
deferred arrangements), 402(h)(1)(B) (elective contributions to simplified
employee pensions), and, in the case of employer contributions made pursuant to
a salary reduction agreement, 403(b) (tax sheltered annuities).
<PAGE>
Except for the benefits described in Section 9(b)(ii) above, the sums due
pursuant to this Section 9(b) shall be paid in up to three (3) annual
installments commencing thirty (30) days after the sums become due. If on or
after the date any payment becomes due hereunder the Company at any time has a
funded debt-to-total capitalization ratio which equals or exceeds 1:1, upon
Employee's written request, the Company shall secure its payment of the
remaining annual installments with a letter of credit or other security
instrument as shall be reasonably acceptable to Employee. Such letter of credit
or other security instrument shall provide Employee with the ability to receive
the remaining installment(s) only if his payment is delinquent. All sums due
hereunder shall be subject to appropriate withholding and statutory
requirements. Employee shall not be required to mitigate the amount of any
payment provided for in this Section 9(b) by seeking other employment or
otherwise. Notwithstanding anything stated in this Section 9(b) to the contrary,
however, the amount of any payment or benefit provided for in this Section 9(b)
shall be reduced by no more than 50% by any compensation earned by Employee as a
result of employment by another employer and the Company shall not be required
to provide medical, health and/or disability benefits to the extent such
benefits would duplicate benefits received by Employee in connection with his
employment with any new employer.
Notwithstanding anything stated in this Agreement to the contrary, if the
amounts which are payable and the benefits which are provided to Employee under
this Agreement, either alone or together with other payments which Employee has
a right to receive from the Company or any of its affiliates, would constitute a
"parachute payment" (as defined in Code Section 280G), such amounts and benefits
shall be reduced, as necessary, to the largest amount as will result in no
portion of said amounts and benefits being either not deductible as a result of
Code Section 280G or subject to the excise tax imposed by Code Section 4999. The
determination of any reduction in said amounts and benefits pursuant to the
foregoing proviso shall be made by the Company in good faith, and such
determination shall be conclusive and binding on Employee. The amounts provided
to Employee under this Agreement in connection with a Change in Control, if any,
shall be deemed allocated to such amounts and/or benefits to be paid and/or
provided as the Company's Board of Directors in its sole discretion shall
determine.
10. Special Situations. The parties recognize that under certain
circumstances a Change in Control may occur under conditions which make it
inappropriate for Employee to receive the termination benefits or protection set
forth in this Agreement. Therefore, in the event that a Change in Control occurs
for any one of the following reasons, the provisions of Sections 2, 6 and 9
shall not apply:
(a) the purchase of more than fifty percent (50%) of the stock of the
Company by an employee stock ownership plan or similar employee
benefit plan of which Employee is a participant; or
<PAGE>
(b) the purchase of more than fifty percent (50%) of the stock or
ninety percent (90%) of the assets of the Company by a group of
individuals or entities including Employee as a member or
participant, including but not limited to those transactions
commonly known as a leveraged or other forms of management buy-
outs.
11. Disputes. Any dispute arising under this Agreement (except Section 12)
shall be promptly submitted to arbitration under the Rules of the American
Arbitration Association. An arbitrator is to be mutually agreed upon by the
parties or upon failure of agreement, designated by the American Arbitration
Association.
12. Non-Competition, Non-Solicitation, and Confidentiality.
(a) In consideration of this Agreement and other good and valuable
consideration, Employee agrees that for so long as he is employed
by the Company and for thirty-six (36) months thereafter he shall
not own manage, operate, control, be employed by or otherwise
engage in any competitive business. Employee's agreement pursuant
to the preceding sentence shall be in addition to any other
agreement or legal obligation he may have with or to the Company.
For purposes of the preceding sentence, a "competitive business"
is any business engaged in the production, refinement or sale of
Bentonite and/or any business conducted by the Company, its
affiliates or any subsidiaries thereof as of the date Employee's
employment is terminated. A business which is conducted by the
Company, its affiliates or any subsidiaries which is subsequently
sold by the Company is not a competitive business as of the date
such business is sold. An "affiliate" of the Company is any
company which either controls, is controlled by or is under
common control with the Company. The phrase "any business
conducted by the Company, its affiliates or any subsidiaries
thereof" includes not only current businesses but also any new
products, product lines or use of processes under development,
consideration or investigation on the date Employee's employment
with the Company is terminated.
Employee also agrees that during the thirty-six (36) month
period described in the first sentence of this Section 12(a) he
will not directly or indirectly, on behalf of himself or any
other person or entity, make a solicitation or conduct business,
with any customer or potential customer of the Company with which
he had contact while employed by the Company, its affiliates
and/or any subsidiaries thereof, with respect to any products or
services which are competitive with any business conducted by the
Company, its affiliates or any subsidiaries thereof. For purposes
of the preceding sentence, a "customer" is any person or entity
that has purchased goods or services from the Company, its
affiliates or any subsidiaries thereof within the twenty-four
(24) month period ending on the date Employee's employment is
terminated. A "potential customer" is any person or entity that
the Company solicited for business within twelve (12) months
prior to the date Employee's employment with the Company is
terminated.
<PAGE>
The Company and Employee recognize that his
responsibilities have included contacts with, and analysis of,
customers and potential customers throughout the United States
and certain foreign countries, in addition to certain operational
matters. Employee's contacts on behalf of the Company represent a
substantial asset of the Company which are entitled to
protection. In recognition of this situation, the covenants set
forth in this Section 12 shall apply to competition and
solicitation in each of the following countries in which the
Company, its affiliates and/or the subsidiaries thereof has
(have) conducted $500,000 or more of the business during the
12-month period ending on the date Employee's employment with the
Company is terminated:
(i) the United States;
(ii) the United Kingdom;
(iii) Germany;
(iv) Japan; and
(v) Canada.
Before and forever after his termination or resignation,
Employee shall keep confidential and refrain from utilizing or
disseminating any confidential, proprietary or trade secret
information of the Company for any purpose other than furthering
the business interests of the Company.
(b) During Employee's employment hereunder and during three (3) years
following his resignation or the termination of his employment
hereunder for any reason, Employee will not induce or attempt to
influence any present or future employee of the Company, its
affiliates or any subsidiaries thereof to leave its employ.
13. Other Agreements. Except to the extent expressly set forth herein, this
Agreement shall not modify or lessen any benefit or compensation to which
Employee is entitled under any agreement between Employee and the Company or
under any plan maintained by the Company in which he participates or
participated. Benefits or compensation shall be payable thereunder, if at all,
according to the terms of the applicable plan(s) or agree ment(s). The terms of
this Agreement shall supersede any existing agreement between Employee and the
Company executed prior to the date hereof to the extent any such Agreement is
inconsistent with the terms hereof.
14. Successors; Binding Agreement. The Company will require any successor
(whether direct or indirect by purchase, merger, consolidation or otherwise, to
all or substantially all of the business and/or assets of the Company) to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.
This Agreement shall inure to the benefit of and be enforceable by
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
15. Injunction. The remedy at law for any breach of Section 12 will be
inadequate and the Company, its affiliates and any subsidiaries thereof would
suffer continuing and irreparable
<PAGE>
injury to their business as a direct result of
any such breach. Accordingly, notwithstanding anything stated herein, if
Employee shall breach or fail to perform any term, condition or duty contained
in Section 12 hereof, then, in such event, the Company shall be entitled to
institute and prosecute proceedings in any court of competent jurisdiction,
either in law or in equity, to obtain the specific performance thereof by
Employee or to seek a temporary restraining order or injunctive relief, without
any requirement to show actual damages or post bond, to restrict Employee from
violating the provisions of Section 12; however, nothing herein shall be
construed to prevent the Company seeking such other remedy in the courts, in
case of any breach of this Agreement by Employee, as the Company may elect or
invoke. If court proceedings are instituted by the Company to enforce Section 12
hereof, and the Company is the prevailing party, the Company shall receive, in
addition to any damages awarded, reasonable attorneys' fees, court costs and
ancillary expenses.
16. Miscellaneous. This Agreement may not be modified or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by
Employee and such officers of the Company as may be specifically designated by
its Board for that purpose. Except for any failure to give the ten (10) day
notice described in Section 6(b) above, the failure of either party to this
Agreement to object to any breach by the other party or the non-breaching
party's conduct or conduct forbearance shall not constitute a waiver of that
party's rights to enforce this Agreement. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of any subsequent breach by such other party or any
similar or dissimilar provisions or conditions at the same or any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Illinois.
17. Severability. The parties hereto intend this Agreement to be enforced
to the maximum extent permitted by law. In the event any provision of this
Agreement is deemed to be invalid or unenforceable by any court of competent
jurisdiction, such provisions shall be deemed to be restricted in scope or
otherwise modified to the extent necessary to render the same valid and
enforceable. In the event the provisions of Section 12 cannot be modified or
restricted so as to be valid and enforceable, then the same as well as the
Company's obligation to make any payment or transfer any benefit to Employee in
connection with any termination of Employee's employment shall be deemed excised
from this Agreement, and this Agreement shall be construed and enforced as if
such provisions had originally been incorporated herein as so restricted or
modified or as if such provisions had not originally been contained herein, as
the case may be. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement which shall remain in full force and effect.
18. Survival. The obligations of the parties under this Agreement shall
survive the term of this Agreement.
<PAGE>
19. Term of Agreement. The term of this Agreement shall commence on April
1, 1997 and end on March 31, 2000. Provided, however, that in the event
Employee's employment is terminated while this Agreement is in force, this
Agreement shall terminate when the Company has made all payments to Employee
required by Section 9 hereof and Employee has complied with the duties and
obligations described in Section 12 hereof (all of which duties and obligations
shall specifically survive the termination of the Employee's employment). To the
extent necessary for the Company's enforcement of the provisions of Section 12
above (but only for such purpose), Employee's employment term shall be deemed to
continue through the end of the Agreement term.
Date: _________________________
Employee AMCOL International Corporation
_______________________________ By: ___________________________________
Paul G. Shelton
Its: __________________________________
(50023B7E)
EXHIBIT 10.9
AGREEMENT
WHEREAS, AMCOL International Corporation (the "Company") considers it
essential and in the best interests of the Company and its shareholders to
foster the continued employment of its key management personnel;
WHEREAS, Peter Maul ("Employee") is considered a key management employee,
currently serving as Vice President of the Company; and
WHEREAS, the Company desires to assure the future continuity of Employee's
services in the event of any actual or threatened "Change in Control" (as
defined in Section 6 below) of the Company.
IT IS THEREFORE AGREED AS FOLLOWS:
1. Effect of Agreement. This Agreement shall be effective and binding
immediately upon its execution. However, except as specifically provided herein,
this Agreement shall not alter materially Employee's duties and obligations to
the Company and the remunera tion and benefits which Employee may reasonably
expect to receive from the Company in the absence of a Change in Control.
2. Employment On and After Change in Control. Provided that the employee is
an employee of the Company immediately prior to a Change in Control, the Company
shall employ Employee, and Employee shall accept such employment, effective upon
such Change in Control for a period of twenty-four (24) months after said Change
in Control subject to the terms and conditions stated herein.
3. Duties After Change in Control. Employee agrees that during the term of
his employment with the Company after a Change in Control, he shall perform the
duties described in Section 12 below and such other duties for the Company and
its subsidiaries consistent with his experience and training as the Board of
Directors of the Company (the "Board") or the Board's representatives shall
determine from time to time, which duties shall be at least substantially equal
in status, dignity and character to his duties at the date hereof. He shall also
have the title of Vice President. Employee further agrees to devote his entire
working time and attention to the business of the Company and its subsidiaries
and use his best efforts to promote such business.
4. Compensation Prior to a Change in Control. Prior to a Change in Control
the Company agrees to pay Employee compensation for his services in an amount,
and to provide him with life insurance, disability, health and other benefits,
as set by the Company from time to time. For the purpose of this Section,
compensation does not include any bonus or other incentive compensation plan or
stock purchase plan, which may vary from year to year at the discretion of the
Company.
<PAGE>
5. Termination of Employment Prior to a Change of Control. Employee shall
be entitled to terminate his employment prior to a Change in Control at any time
upon sixty (60) days' prior written notice. The Company, shall be able to
terminate Employee's employment at any time prior to a Change in Control with or
without cause upon sixty (60) days' prior written notice (or the payment of
salary in lieu thereof). This Section shall not be construed to reduce any
accrued benefits payable in connection with any termination of Employee's
employment prior to a Change in Control.
Nothing expressed or implied in this Agreement shall create any right or
duty on the part of the Company or Employee to have Employee remain in the
employment of the Company prior to a Change in Control.
6. Termination of Employment On or After Change in Control.
(a) For purposes of this Agreement the term "Change in Control" means
the change in the legal or beneficial ownership of fifty-one
percent (51%) of the shares of the Company's common stock within
a six-month period other than by death or operation of law, or
the sale of ninety percent (90%) or more of the Company's assets
within a six-month period.
(b) Employee's employment on and after a Change in Control may be
terminated with just cause by the Company at any time upon not
less than ten (10) days' prior written notice. Prior to
termination for just cause on and after a Change in Control, the
Board of Directors shall by majority vote have declared that
Employee's termination is for just cause specifically stating the
basis for such determination. In the event such a termination
occurs, the provisions of Sections 9(a) and 12 below shall apply.
Employee's employment may be terminated on or after a Change
in Control without just cause pursuant to the constructive
termination procedures described in the next paragraph or by the
Company giving Employee not less than thirty (30) days' prior
written notice. In the event Employee's employment is terminated
pursuant to the preceding sentence:
(i) the provisions of Section 9(b) below shall apply; and
(ii) although Employee's employment term shall be deemed
terminated at the end of such notice period (or, in the case
of a constructive termination described in the next
paragraph, as of the date Employee notifies the Company
of such termination), such termination shall in no way
affect the term of this Agreement or Employee's duties and
obligations under Section 12 below.
For purposes of this Section 6(b), Employee shall be
considered as
<PAGE>
having been terminated by the Company on or after a
Change in Control for other than just cause provided that he has
notified the Company of any of the following within ten (10) days
of the occurrence thereof:
(i) the assignment to Employee of any duties of substantially
lesser status, dignity and character than the duties as a
Vice President of the Company immediately prior to the
effective date of the Change in Control;
(ii) a post-Change in Control reduction by the Company in
Employee's annual base salary or bonus or incentive plan (as
in effect immediately prior to the effective date of the
Change in Control); (iii)relocation of Employee's office to
a location which is more than 35 miles from the location in
which Employee principally works for the Company immediately
prior to the effective date of the Change in Control; the
relocation of the appropriate principal executive office of
the Company or the Company's operating division or
subsidiary for which Employee performed the majority of his
services for the Company during the year prior to the
effective date of the Change in Control to a location which
is more than 35 miles from the location of such office
immediately prior to such date; or his being required by the
Company in order to perform duties of substantially equal
status, dignity and character to those duties he performed
immediately prior to the effective date of the Change in
Control to travel on the Company's business to a
substantially greater extent than is consistent with his
business travel obligations as of such date; or
(iv) the failure of the Company to continue to provide Employee
with benefits substantially equivalent to those enjoyed by
him under any of the Company's life insurance, medical,
health and accident or disability plans in which he was
participating immediately prior to the effective date of the
Change in Control, the taking of any action by the Company
which would directly or indirectly materially reduce any of
such benefits or deprive him of any material fringe benefit
enjoyed by him immediately prior to effective date of the
Change in Control, or the failure of the Company to provide
him with at least the number of paid vacation days to which
he is entitled on the basis of years of service under the
Company's normal vacation policy in effect immediately prior
to the effective date of the Change in Control.
(c) In the event Employee's employment is terminated on or after a
Change in Control in any manner not described in Section 6(b)
above:
<PAGE>
(i) the provisions of Section 9(b) shall not apply and Employee
shall instead receive the sums and benefits described in
Section 9(a); and
(ii) such termination shall in no way affect the term of this
Agreement or Employee's duties or obligations under Section
12 below.
(d) Any termination of employment of Employee following the
commencement of any discussions by a shareholder or group of
shareholders owning legally or beneficially more than 20% of the
common stock or an officially designated representative of the
Board of Directors with a third party that results within 180
days in a Change in Control shall (unless such termination is for
cause or wholly unrelated to such discussions) be deemed to be a
termination of Employee on and after a Change in Control for
purposes of this Agreement.
7. Notice of Termination. Any termination by the Company or assertion of
termination by Employee shall be communicated by written notice of termination
to the other party at the following address:
AMCOL International Corporation Mr. Peter Maul
One North Arlington AMCOL International Corporation
1500 West Shure Drive One North Arlington
Arlington Heights, IL 60004 1500 West Shure Drive
Attn: Chairman of the Board Arlington Heights, IL 60004
8. Disability. If as a result of Employee's incapacity due to physical or
mental illness, he shall have been absent from his duties with the Company for
one hundred eighty (180) days within any twelve-(12)-consecutive-month period
and within thirty (30) days after written notice of the Company's intention to
terminate his employment is given, Employee shall not have returned to the
performance of his duties with the Company substantially on a full-time basis,
the Company may terminate his employment for disability. This shall not
constitute a termination for the purposes of obtaining benefits pursuant to
Section 9.
9. Benefits Upon Termination And Leave Of Employment On or After Change in
the Control.
(a) If Employee is terminated for just cause on or after a
Change in Control, he shall only receive the accrued
sums and benefits payable to him through the date he is
terminated; the provisions of Section 9(b) below shall
not be applicable in such case and Employee shall not
receive (or shall cease receiving) the payments and
benefits described in Section 9(b).
(b) Subject to Employee's compliance with the provisions of Section
12(a) below, if Employee is terminated during the twenty-four
(24) month period beginning on and continuing after a Change in
Control other than for just cause (either at the discretion of
the Company's management or constructively by the operation of
Section 6), he shall
<PAGE>
receive the following payments and benefits in lieu of any other
sums or benefits otherwise payable to him by the Company:
(i) all then accrued pay, benefits, executive compensation and
fringe benefits, including (but not limited to) pro rata
bonus and incentive plan earnings;
(ii) medical, health and disability benefits which are
substantially similar to the benefits the Company is
providing him as of the date of his employment is terminated
for a period of twenty-four (24) months thereafter; and
(iii)one dollar less than two times his base period
compensation.
The foregoing payments and benefits shall be deemed
compensation payable for the duties to be performed by Employee
pursuant to Section 12 below. For purposes of this Agreement, (A)
Employee's "base period compensation" is the average annual
"compensation" (as defined below) which was includable in his
gross income for his base period (i.e., his most recent five
taxable years ending before the date of the Change in Control);
and (B) if Employee's base period includes a short taxable year
or less than all of a taxable year, compensation for such short
or incomplete taxable year shall be annualized before determining
his average annual compensation for the base period. (In
annualizing compensation, the frequency with which payments are
expected to be made over an annual period shall be taken into
account. Thus, any amount of compensation for such a short or
incomplete taxable year that represents a payment that would not
be made more than once per year shall not be annualized). The sum
payable to Employee pursuant to Section 9(b)(iii) shall in any
and all cases be reduced by any compensation which Employee
receives, excluding stock option or other stock incentive bonus
plan compensation from the date of the Change in Control until
the termination date. For purposes of Section 9(iii) and the
definitions pertaining to said Section, Employee's "compensation"
is the compensation which was payable to him by the Company or a
related entity determined without regard to the following
Sections of the Internal Revenue Code of 1986, as amended (the
"Code"): 125 (cafeteria plans), 402(a)(8) (cash or deferred
arrangements), 402(h)(1)(B) (elective contributions to simplified
employee pensions), and, in the case of employer contributions
made pursuant to a salary reduction agreement, 403(b) (tax
sheltered annuities).
Except for the benefits described in Section 9(b)(ii) above,
the sums due pursuant to this Section 9(b) shall be paid in up to
two (2) annual installments commencing thirty (30) days after the
sums become due. All sums due shall be subject to appropriate
withholding and statutory requirements. Employee shall not be
required to mitigate the amount of any payment provided for in
this Section 9(b) by seeking other employment or otherwise.
Notwithstanding anything stated in this Section 9(b) to the
contrary, however, the amount of any payment or benefit provided
for in this Section 9(b) shall be reduced by no more than 50% by
any compensation earned by Employee as a result of employment by
another employer and the Company shall not be required to provide
medical, health and/or disability benefits to the extent such
benefits
<PAGE>
would duplicate benefits received by Employee in connection
with his employment with any new employer.
Notwithstanding anything stated in this Agreement to the
contrary, if the amounts which are payable and the benefits which
are provided to Employee under this Agreement, either alone or
together with other payments which Employee has a right to
receive from the Company or any of its affiliates, would
constitute a "parachute payment" (as defined in Code Section
280G), such amounts and benefits shall be reduced, as necessary,
to the largest amount as will result in no portion of said
amounts and benefits being either not deductible as a result of
Code Section 280G or subject to the excise tax imposed by Code
Section 4999. The determination of any reduction in said amounts
and benefits pursuant to the foregoing proviso shall be made by
the Company in good faith, and such determination shall be
conclusive and binding on Employee. The amounts provided to
Employee under this Agreement in connection with a Change in
Control, if any, shall be deemed allocated to such amounts and/or
benefits to be paid and/or provided as the Company's Board of
Directors in its sole discretion shall determine.
10. Special Situations. The parties recognize that under certain
circumstances a Change in Control may occur under conditions which make it
inappropriate for Employee to receive the termination benefits or protection set
forth in this Agreement. Therefore, in the event that a Change in Control occurs
for any one of the following reasons, the provisions of Sections 2, 6 and 9
shall not apply:
(a) the purchase of more than fifty percent (50%) of the stock
of the Company by an employee stock ownership plan or
similar employee benefit plan of which Employee is a
participant; or
(b) the purchase of more than fifty percent (50%) of the stock
or ninety percent (90%) of the assets of the Company by a
group of individuals or entities including Employee as a
member or participant, including but not limited to those
transactions commonly known as a leveraged or other forms of
management buy-outs.
11. Disputes. Any dispute arising under this Agreement (except Section 12)
shall be promptly submitted to arbitration under the Rules of the American
Arbitration Association. An arbitrator is to be mutually agreed upon by the
parties or upon failure of agreement, designated by the American Arbitration
Association.
12. Non-Competition, Non-Solicitation, and Confidentiality.
(a) In consideration of this Agreement and other good and
valuable consideration, Employee agrees that for so long as
he is employed by the Company and for twenty-four (24)
months thereafter he shall not own manage, operate, control,
be employed by or otherwise engage in
any competitive business. Employee's agreement pursuant
to the preceding sentence shall be in addition to any other
agreement or legal obligation he may have with or to the
Company. For purposes of the preceding sentence, a
"competitive business" is any business engaged in the
production, refinement or sale of Bentonite and/or any
business conducted by the Company, its affiliates or any
subsidiaries thereof as of the date Employee's employment is
terminated. A business which is conducted by the Company,
its affiliates or any subsidiaries which is subsequently
sold by the Company is not a competitive business as of the
date such business is sold. An "affiliate" of the Company is
any company which either controls, is controlled by or is
under common control with the Company. The phrase "any
business conducted by the Company, its affiliates or any
subsidiaries thereof" includes not only current businesses
but also any new products, product lines or use of processes
under development, consideration or investigation on the
date Employee's employment with the Company is terminated.
Employee also agrees that during the twenty-four (24)
month period described in the first sentence of this Section
12(a) he will not directly or indirectly, on behalf of
himself or any other person or entity, make a solicitation
or conduct business, with any customer or potential customer
of the Company with which he had contact while employed by
the Company, its affiliates and/or any subsidiaries thereof,
with respect to any products or services which are
competitive with any business conducted by the Company, its
affiliates or any subsidiaries thereof. For purposes of the
preceding sentence, a "customer" is any person or entity
that has purchased goods or services from the Company, its
affiliates or any subsidiaries thereof within the
twenty-four (24) month period ending on the date Employee's
employment is terminated. A "potential customer" is any
person or entity that the Company solicited for business
within twelve (12) months prior to the date Employee's
employment with the Company is terminated.
The Company and Employee recognize that his
responsibilities have included product development, sales
and marketing of bentonite clay, fuller's earth,
nanocomposites and related products to various markets
including without limitation the foundry, agricultural,
plastic and well drilling industries and establishing
contacts and business relationships on behalf of the Company
in the domestic and international markets. Employee's
contacts on behalf of the Company represent substantial
assets of the Company which are entitled to protection. In
recognition of this situation, the covenants set forth in
this Section 12 shall apply to competitive businesses and
solicitation in the United States, Australia, Japan and
those countries of Europe and Asia in which the Company, its
affiliates and subsidiaries have conducted $100,000 or more
of business during the twelve-month period ending on the
date Employee's employment with the Company terminated.
Before and forever after his termination or
resignation, Employee shall keep confidential and refrain
from utilizing or disseminating any
<PAGE>
confidential, proprietary or trade secret information
of the Company for any purpose other than furthering the
business interests of the Company.
(b) During Employee's employment hereunder and during two
(2) years following his resignation or the termination
of his employment hereunder for any reason, Employee
will not induce or attempt to influence any present or
future employee of the Company, its affiliates or any
subsidiaries thereof to leave its employ.
13. Other Agreements. Except to the extent expressly set forth herein, this
Agreement shall not modify or lessen any benefit or compensation to which
Employee is entitled under any agreement between Employee and the Company or
under any plan maintained by the Company in which he participates or
participated. Benefits or compensation shall be payable thereunder, if at all,
according to the terms of the applicable plan(s) or agreement(s). The terms of
this Agreement shall supersede any existing agreement between Employee and the
Company executed prior to the date hereof to the extent any such Agreement is
inconsistent with the terms hereof.
14. Successors; Binding Agreement. The Company will require any successor
(whether direct or indirect by purchase, merger, consolidation or otherwise, to
all or substantially all of the business and/or assets of the Company) to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.
This Agreement shall inure to the benefit of and be enforceable by
Employee's personal
or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
15. Injunction. The remedy at law for any breach of Section 12 will be
inadequate and the Company, its affiliates and any subsidiaries thereof would
suffer continuing and irreparable injury to their business as a direct result of
any such breach. Accordingly, notwithstanding anything stated herein, if
Employee shall breach or fail to perform any term, condition or duty contained
in Section 12 hereof, then, in such event, the Company shall be entitled to
institute and prosecute proceedings in any court of competent jurisdiction,
either in law or in equity, to obtain the specific performance thereof by
Employee or to seek a temporary restraining order or injunctive relief, without
any requirement to show actual damages or post bond, to restrict Employee from
violating the provisions of Section 12; however, nothing herein shall be
construed to prevent the Company seeking such other remedy in the courts, in
case of any breach of this Agreement by Employee, as the Company may elect or
invoke. If court proceedings are instituted by the Company to enforce Section 12
hereof, and the Company is the prevailing party, the Company shall receive, in
addition to any damages awarded, reasonable attorneys' fees, court costs and
ancillary expenses.
16. Miscellaneous. This Agreement may not be modified or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by
Employee and such officers of the Company as may be specifically designated by
its Board for that purpose. Except for any failure to give the ten (10) day
notice described in Section 6(b) above, the failure of either party to this
Agreement to object to any breach by the other party or the non-breaching
party's conduct or conduct forbearance shall not constitute a waiver of that
party's rights to enforce this Agreement. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver
<PAGE>
of any subsequent breach by such other party or any similar or dissimilar
provisions or condi tions at the same or any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not expressly set forth in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Illinois.
17. Severability. The parties hereto intend this Agreement to be enforced
to the maximum extent permitted by law. In the event any provision of this
Agreement is deemed to be invalid or unenforceable by any court of competent
jurisdiction, such provisions shall be deemed to be restricted in scope or
otherwise modified to the extent necessary to render the same valid and
enforceable. In the event the provisions of Section 12 cannot be modified or
restricted so as to be valid and enforceable, then the same as well as the
Company's obligation to make any payment or transfer any benefit to Employee in
connection with any termination of Employee's employment shall be deemed excised
from this Agreement, and this Agreement shall be construed and enforced as if
such provisions had originally been incorporated herein as so restricted or
modified or as if such provisions had not originally been contained herein, as
the case may be. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement which shall remain in full force and effect.
18. Survival. The obligations of the parties under this Agreement shall
survive the term of this Agreement.
19. Term of Agreement. The term of this Agreement shall commence on April
1, 1997 and end on March 31, 2000. Provided, however, that in the event
Employee's employment is terminated while this Agreement is in force, this
Agreement shall terminate when the Company has made all payments to Employee
required by Section 9 hereof and Employee has complied with the duties and
obligations described in Section 12 hereof (all of which duties and obligations
shall specifically survive the termination of the Employee's employment). To the
extent necessary for the Company's enforcement of the provisions of Section 12
above (but only for such purpose), Employee's employment term shall be deemed to
continue through the end of the Agreement term.
Date: _______________________
Employee AMCOL International Corporation
_____________________________ By: _________________________________________
Peter Maul
Its: ________________________________________
500232A9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000813621
<NAME> AMCOL INTERNATIONAL CORPORATION
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
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<ALLOWANCES> 2,850
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<PP&E> 302,623
<DEPRECIATION> 124,258
<TOTAL-ASSETS> 348,849
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<TOTAL-LIABILITY-AND-EQUITY> 348,849
<SALES> 107,918
<TOTAL-REVENUES> 107,918
<CGS> 86,107
<TOTAL-COSTS> 100,614
<OTHER-EXPENSES> 105
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,162
<INCOME-PRETAX> 5,037
<INCOME-TAX> 1,864
<INCOME-CONTINUING> 3,173
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,173
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
</TABLE>
