AMCOL INTERNATIONAL CORP, DEF 14A, 1998-04-02

AMCOL INTERNATIONAL CORP
DEF 14A, 1998-04-02
MINING & QUARRYING OF NONMETALLIC MINERALS (NO FUELS)

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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934, (Amendment No. )

Filed by the registrant [x]

Filed by a party other than the registrant [ ]

Check the appropriate box:

[ ] Preliminary proxy statement
[ ] Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

AMCOL INTERNATIONAL CORPORATION
(Name of Registrant as Specified in Its Charter)

AMCOL INTERNATIONAL CORPORATION
(Name of Person(s) Filing Proxy Statement)

Payment of filing fee (Check the appropriate box):

[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Items 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies: N/A

(2) Aggregate number of securities to which transactions applies: N/A

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): N/A (4)
Proposed maximum aggregate value of transaction: N/A

(5) Total fee paid: N/A

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee is
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.

(1) Amount previously paid: N/A

(2) Form, schedule or registration statement number: N/A

(3) Filing party: N/A

(4) Date filed: N/A
<PAGE>
AMCOL INTERNATIONAL CORPORATION

Annual Meeting of Shareholders to be held May 12, 1998

As a shareholder of AMCOL International Corporation, I acknowledge receipt
of Notice of Annual Meeting and accompanying Proxy Statement and appoint
Clarence O. Redman, Paul G. Shelton and Audrey L. Weaver, or any one of them, to
vote all shares of stock of AMCOL International Corporation that I am entitled
to vote, at the Annual Meeting of Shareholders to be held on Tuesday, May 12,
1998, at 11:00 A.M., Central Daylight Savings Time, and at any adjournments
thereof, at Wyndham Hotel, 400 Park Boulevard, Itasca, Illinois, 60143.

1. The election of Arthur Brown, John Hughes, Jay D. Proops, Lawrence E. Washow
and Paul C. Weaver as Class III Directors;

FOR ALL NOMINEES EXCEPT NOMINEE(S) WRITTEN IN THE SPACE BELOW:

_____________________________________________________________

WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES

2. The amendment to the Company's Restated Certificate of Incorporation to
increase the number of authorized shares of common stock of the Company;

FOR AGAINST ABSTAIN

3. The approval of the Company's 1998 Long-Term Incentive Plan;

FOR AGAINST ABSTAIN

4. The proposal to ratify KPMG Peat Marwick LLP as independent auditors for
1998;

FOR AGAINST ABSTAIN

THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN, AND IN THE
ABSENCE OF SUCH INSTRUCTIONS, SHALL BE VOTED FOR ALL OF THE DIRECTOR NOMINEES
NAMED IN ITEM (1) AND FOR ITEMS (2), (3) AND (4). IF OTHER BUSINESS IS PRESENTED
AT THE MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE BEST JUDGMENT
OF THE PROXIES ON THOSE MATTERS.

This Proxy Is Solicited on Behalf of the Board of Directors

You are urged to mark, sign and return your proxy promptly in the enclosed
self-addressed, postage-paid (if mailed in the United States) envelope.

Dated __________________________________________________________1998

____________________________________________________________________
SIGNATURE OF SHAREHOLDER

When signing the proxy, please date it and take care to have the
signature agree to the shareholder's name as it appears on this side
of the proxy. If shares are registered in the names of two or more
persons, each person should sign. Executors, administrators, trustees
and guardians should so indicate when signing.

<PAGE>
AMCOL INTERNATIONAL CORPORATION

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 12, 1998

To Our Shareholders:

The Annual Meeting of Shareholders of AMCOL International Corporation, a
Delaware corporation (the "Company"), will be held at Wyndham Hotel, 400 Park
Boulevard, Itasca, Illinois, 60143, on Tuesday, May 12, 1998, at 11:00 a.m.,
Central Daylight Savings Time, for the following purposes:

1. To elect five (5) directors for a three-year term or until their successors
are elected and qualified;

2. To amend the Company's Restated Certificate of Incorporation to increase
the number of authorized shares of common stock of the Company;

3. To approve the Company's 1998 Long-Term Incentive Plan;

4. To ratify the appointment of KPMG Peat Marwick LLP as independent auditors
for 1998; and

5. To transact such other business as may properly come before the meeting.

Only shareholders of record as of the close of business on March 27, 1998,
will be entitled to vote at the Annual Meeting. It is important that you cast
your vote, since a majority is required to constitute a quorum.

Please mark, sign, date and mail the proxy card in the enclosed
self-addressed, postage-paid envelope. By doing so, you ensure that your shares
will be voted as you direct, even if you can't attend the meeting. You also can
cancel your proxy for any reason, either by writing the Company before the
meeting or by voting in person at the meeting. Thank you for your interest and
cooperation.

By Order of the Board of Directors,

Clarence O. Redman
Secretary

Arlington Heights, Illinois
April 6, 1998
<PAGE>
AMCOL INTERNATIONAL CORPORATION

One North Arlington
1500 West Shure Drive, Suite 500
Arlington Heights, Illinois 60004-7803
(847) 394-8730

PROXY STATEMENT

Annual Meeting of Shareholders
To Be Held on May 12, 1998

INTRODUCTION

The Board of Directors of AMCOL International Corporation (the "Company")
is soliciting proxies for voting at its Annual Meeting of shareholders to be
held on Tuesday, May 12, 1998, at 11:00 a.m., Central Daylight Savings Time, and
any adjournment thereof ("Annual Meeting"), at Wyndham Hotel, 400 Park
Boulevard, Itasca, Illinois, 60143.

The cost of proxy solicitation will be paid by the Company. In addition to
using mail, certain employees of the Company may devote part of their time (but
will not be specifically paid) to solicitation by facsimile, telephone or in
person.

This proxy statement was first mailed or delivered to shareholders on or
about April 6, 1998.

Who Has the Right to Vote?

The holders of the Company's Common Stock at the close of business on March
27, 1998 are entitled to vote at the Annual Meeting.

As of March 27, 1998, the Company had 28,367,817 shares of Common Stock
outstanding, each of which shares is entitled to one vote. Each shareholder of
record can either vote in person or by proxy. A majority of the outstanding
shares of the Company's Common Stock must be represented in person or by proxy
to constitute a quorum at the Annual Meeting. A broker non-vote is not counted
in determining voting results. If a shareholder elects to abstain on any matter,
it has the same legal effect as a vote "AGAINST" the matter.

Voting Instructions

If you return your signed proxy card to us before the Annual Meeting, your
shares will be voted as you indicate. You can either approve, reject or not vote
for each proposal. You also can vote for all, some or none of the nominees for
director. If you don't specify a vote on a proposal, your proxy will be voted
"FOR" all nominees for director, "FOR" the increase in the number of authorized
shares, "FOR" the 1998 Long-Term Incentive Plan and "FOR" ratification of KPMG
Peat Marwick LLP as independent auditors.

You may cancel your proxy at any time before the meeting by writing to the
Secretary of the Company, AMCOL International Corporation, One North Arlington,
1500 West Shure Drive, Suite 500, Arlington Heights, Illinois, 60004-7803; or
you may do so personally at the Annual Meeting.
<PAGE>
SECURITY OWNERSHIP

The following table sets forth all persons known to be the beneficial owner
of more than 5% of the Company's Common Stock as of February 26, 1998.

<TABLE>
<CAPTION>
Name and Address of Number of Percent
Beneficial Owner Shares and of Class
Nature of
Beneficial
Ownership (1)
--------------------- -----------

<S> <C> <C>
Harris Trust and Savings Bank............................................... 3,101,751 (2) 10.88%
Paul Bechtner Trust
111 West Monroe Street
Chicago, Illinois 60690

Everett P. Weaver........................................................... 3,119,751 (3)(4) 10.94%
c/o AMCOL International Corporation
1500 West Shure Drive, Suite 500
Arlington Heights, Illinois 60004-7803

William D. Weaver........................................................... 4,176,364 (3)(5) 14.64%
c/o AMCOL International Corporation
1500 West Shure Drive, Suite 500
Arlington Heights, Illinois 60004-7803
_______________________
<FN>

(1) Nature of beneficial ownership is direct unless otherwise indicated by
footnote. Beneficial ownership as shown in the table arises from sole
voting and investment power unless otherwise indicated by footnote.

(2) Voting and investment power are shared by the trustees of this trust. See
note (3) below.

(3) Includes 3,101,751 shares held in the Paul Bechtner Trust as to which
Messrs. Everett P. Weaver, William D. Weaver and the Harris Trust and
Savings Bank are co-trustees and share voting and investment power.

(4) Includes 18,000 shares in a trust as to which voting and investment power
are shared with Mr. Weaver's wife.

(5) Includes 675,342 shares held in a living trust and 30,150 shares in a
charitable remainder unit trust as to which Mr. Weaver exercises sole
voting and investment power. Also includes 6,450 shares held by his wife,
218,550 shares held in his wife's living trust, 45,000 shares held by his
wife as trustee for the benefit of her brother, and 56,440 shares held by
his wife for the benefit of their grandchildren as to which Mr. Weaver may
be deemed to share voting and investment power.
</FN>
</TABLE>
<PAGE>
The following table sets forth, as of February 26, 1998, shares
beneficially owned by: (i) each director and nominee; (ii) the Chief Executive
Officer; (iii) the four other most highly compensated executive officers; and
(iv) as a group, such persons and other executive officers.

<TABLE>
<CAPTION>
Beneficial Owner Number of Percent
Shares and of Class
Nature of
Beneficial
Ownership (1)
--------------------- -----------
<S> <C> <C>
Arthur Brown................................................................ 25,637 *
Robert E. Driscoll, III..................................................... 407,295 1.41%
Raymond A. Foos............................................................. 72,696 *
John Hughes................................................................. 755,670 2.59%
James A. McClung............................................................ - *
Jay D. Proops............................................................... 6,600 *
C. Eugene Ray............................................................... 115,638 *
Clarence O. Redman.......................................................... 68,138 *
Paul G. Shelton............................................................. 413,765 1.42%
Dale E. Stahl............................................................... 23,100 *
Lawrence E. Washow.......................................................... 396,543 1.36%
Audrey L. Weaver............................................................ 645,870 2.22%
Paul C. Weaver.............................................................. 381,820 1.31%
Frank B. Wright, Jr......................................................... 5,075 *
Roger P. Palmer............................................................. 73,055 *
All of the above and other executive
officers as a group (18 persons)....................................... 2,993,447 10.28%
<FN>
____________________

* Percentage represents less than 1% of the total shares of Common Stock outstanding as of February 26, 1998.

(1) Nature of beneficial ownership is set forth on page 4.
</FN>
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Nature of Beneficial Ownership (Shares Held)

Beneficial Owner Directly (1) In the In As Trustee As By As Trustee As Trustee Subject to Total
Company's Limited or Custodian Family of the of the Options
Savings Partnership Co-Trustee Members Company's Company's Exercisable
Plan (2) Pension Savings in 60 Days
Plan (4) Plan (4)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Arthur Brown - - - - - - - - 25,637 25,637
Robert E. Driscoll, III 30,000 - 371,295 (3) 6,000 - - - - - 407,295
Raymond A. Foos 59,959 - - - - 3,000 - - 9,737 72,696
John Hughes 239,892 21,078 - 22,989 - 44,557 232,500 7,500 187,155 755,670
James A. McClung - - - - - - - - - -
Jay D. Proops 3,000 - - - - - - - 3,600 6,600
C. Eugene Ray 24,750 - - - - 20,250 - - 70,638 115,638
Clarence O. Redman 30,374 14,364 - - - - - - 23,400 68,138
Paul G. Shelton 48,235 20,272 - - 14,492 935 232,500 7,500 89,831 413,765
Dale E. Stahl 19,500 - - - - - - - 3,600 23,100
Lawrence E. Washow 52,643 12,830 - - 7,500 - 232,500 7,500 83,570 396,543
Audrey L. Weaver 643,470 - - - - 2,400 - - - 645,870
Paul C. Weaver 318,876 - - 30,638 - 31,706 - - 600 381,820
Frank B. Wright, Jr. 1,350 3,185 - - - - - - 540 5,075
Roger P. Palmer 6,179 19,491 - - - - - - 47,385 73,055
All Directors 1,487,678 108,499 371,295 59,627 21,992 102,848 232,500 7,500 601,508 2,993,447
and Executive Officers
<FN>
(1) Includes shares held in joint tenancy with spouses for which voting rights
may be shared.
(2) With the exception of Mr. Redman's shares which are held in the Clarence O.
Redman PC Savings Plan, the shares are held in the Company's Savings Plan.
(3) Mr. Driscoll is a general partner.
(4) Messrs. Hughes, Shelton and Washow share voting rights.
</FN>
</TABLE>
<PAGE>
ITEM 1

ELECTION OF DIRECTORS

It is intended that the shares represented by the enclosed proxy will be
voted, unless votes are withheld in accordance with the instructions contained
in the proxy, for the election of the five (5) nominees for Director named
below. In the event that any nominee for Director should become unavailable,
which is not anticipated, the Board of Directors in its discretion may designate
substitute nominees, in which event such shares will be voted for such
substitute nominees. Provided a quorum is present, the affirmative vote by the
holders of a majority of the shares of the Common Stock represented at the
Annual Meeting, in person or by proxy, is required for the election of each
nominee.

INFORMATION CONCERNING NOMINEES

CLASS III
(Term expiring in 2001)
<TABLE>
<CAPTION>

Director
Name Age Since Principal Occupation for Last Five Years

<S> <C> <C> <C>
Arthur Brown.................... 57 1990 Chairman, President and Chief Executive Officer of
Hecla Mining Company.

John Hughes*.................... 55 1984 President and Chief Executive Officer of the Company.

Jay D. Proops*.................. 56 1995 Private investor since 1995; prior thereto, former Vice
Chairman and co-founder of The Vigoro Corporation. Also
a Director of Great Lakes Chemical Corporation.

Lawrence E. Washow ............. 45 1998 Executive Vice President and Chief Operating Officer of
the Company since August 1997; prior thereto, Senior
Vice President of the Company and President of Chemdal
International Corporation.

Paul C. Weaver (1)*............. 35 1995 Managing partner of Consumer Aptitudes, Inc. since July
1997, a marketing research firm; prior thereto, various
sales and account management positions for ACNielsen
Company, a provider of marketing information services.
<FN>
* Member of the Executive Committee of the Board of Directors
(1) Paul C. Weaver and Audrey L. Weaver are first cousins.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR EACH OF THE NOMINEES NAMED ABOVE.
</FN>
</TABLE>
<PAGE>
INFORMATION CONCERNING CONTINUING MEMBERS OF THE BOARD

CLASS I
(Term expiring in 1999)
Director
<TABLE>
<CAPTION>
Name Age Since Principal Occupation for Last Five Years

<S> <C> <C> <C>
Raymond A. Foos................. 69 1981 Retired Chairman of the Board, President and Chief
Executive Officer of Brush Wellman, Inc., a
manufacturer of beryllium and specialty materials.

Clarence O. Redman*............. 55 1989 Secretary of the Company. Also, of counsel to Lord,
Bissell & Brook since October 1997, the law firm that
serves as Corporate Counsel to the Company; prior
thereto, he was the sole shareholder and President of
Clarence Owen Redman, Ltd., a corporate partner of the
law firm of Keck, Mahin & Cate. Mr. Redman and his
professional corporation also served as Chief Executive
Officer of Keck, Mahin & Cate. In December 1997, Keck,
Mahin & Cate filed a voluntary petition in bankruptcy
under Chapter 11 of the United States Bankruptcy Code.
Also a Director of U.S. Forest Industries, Inc.

Paul G. Shelton*................ 48 1988 Senior Vice President and Chief Financial Officer of
the Company.

Audrey L. Weaver (1)............ 43 1997 Private investor.
</TABLE>

CLASS II
(Term expiring in 2000)
<TABLE>
<CAPTION>
Director
Name Age Since Principal Occupation for Last Five Years

<S> <C> <C> <C>
Robert E. Driscoll, III......... 59 1985 Retired Dean and Professor of Law, University of South
Dakota.

James A. McClung* .............. 60 1997 Vice President of FMC Corporation, a diversified
producer of chemicals, machinery and other products for
industry, government and agriculture.

C. Eugene Ray*.................. 65 1981 Chairman of the Board of the Company; Retired Executive
Vice President - Finance of Signode Industries, Inc., a
manufacturer of industrial strapping products.

Dale E. Stahl*.................. 50 1995 President and Chief Operating Officer of Gaylord
Container Corporation, a manufacturer and distributor
of brown paper and packaging products.
<FN>
_________________

* Member of the Executive Committee of the Board of Directors

(1) Audrey L. Weaver and Paul C. Weaver are first cousins.
</FN>
</TABLE>
<PAGE>
The Board of Directors held five meetings during the 1997 fiscal year.
During the last year, all Directors attended at least 75% of the aggregate of
the total number of meetings of the Board of Directors and the total number of
meetings held by each committee of the Board on which such Directors served. In
addition to the Executive Committee, the Board of Directors of the Company has
standing Audit, Compensation, and Nominating Committees.

The Audit Committee held three meetings during the 1997 fiscal year. This
Committee is responsible for reviewing the proposed audit program for each
fiscal year, the results of the audits and the adequacy of the Company's systems
of internal accounting control with the Company's financial management and its
independent auditors. The Committee recommends to the Board of Directors the
appointment of the independent auditors for each fiscal year. Directors Brown,
Driscoll, Foos, Ray, Audrey L. Weaver and Paul C. Weaver are members of this
Committee.

The Compensation Committee held three meetings during the 1997 fiscal year.
This Committee is responsible for annually reviewing the salaries and bonuses of
all executive officers, and oversees the Company's compensation, incentive and
employee benefit programs. This Committee is also responsible for the selection
of those officers, directors and key employees who are eligible to receive
options, determines the number of options to be awarded and the period during
which options may be exercised under the Company's various option plans. The
Committee is comprised of non-employee directors. Directors Driscoll, Foos,
Proops, Ray, Redman and Stahl are members of this Committee.

The Nominating Committee held one meeting during the 1997 fiscal year. This
Committee is responsible for recommending to the Board of Directors, at the
request of the Board of Directors, nominees who are deemed by the Committee to
be qualified for Board of Directors' membership. This Committee does not
consider nominees recommended by shareholders. Directors Proops, Ray, Stahl and
Paul C. Weaver are members of this Committee.
<PAGE>
COMPENSATION AND OTHER TRANSACTIONS WITH MANAGEMENT

Summary Compensation Table

The Summary Compensation Table below includes, for each of the fiscal years
ended December 31, 1997, 1996 and 1995, individual compensation for services to
the Company and its subsidiaries of those persons who were at December 31, 1997:
(i) the Chief Executive Officer; and (ii) the four other most highly compensated
executive officers of the Company (collectively, the "Named Officers").

<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation (1)(2)
Awards
Securities All Other
Bonus Underlying Compensation
Name & Principal Position Year Salary ($) ($)(3) Options (#) ($)
(4)

<S> <C> <C> <C> <C> <C>
John Hughes......................... 1997 400,000 244,650 25,500 24,400
President and 1996 380,000 - 18,900 6,000
Chief Executive Officer 1995 345,000 100,000 27,825 6,000

Lawrence E. Washow.................. 1997 229,256 114,449 12,750 8,740
Executive Vice President 1996 200,077 - 14,321 6,360
and Chief Operating Officer 1995 185,105 29,600 450 6,644

Paul G. Shelton..................... 1997 215,000 102,354 12,750 8,600
Senior Vice President and 1996 200,000 - 9,450 6,000
Chief Financial Officer of 1995 175,000 23,100 11,925 6,000
the Company and President
of Ameri-Co Carriers, Inc.
and Nationwide Freight
Service, Inc.

Frank B. Wright, Jr................. 1997 175,000 70,000 9,563 3,500
Vice President of the 1996 121,221 80,000 8,850 -
Company and President of 1995 28,667 15,720 - -
American Colloid Company

Roger P. Palmer..................... 1997 180,000 22,860 12,750 7,200
Senior Vice President of 1996 160,001 - 9,450 6,000
the Company and President 1995 140,000 18,480 11,925 6,000
of Colloid Environmental
Technologies Company
<FN>
____________________

(1) Includes deferred compensation under the Company's Savings Plan and the
Company's Deferred Compensation Plan.

(2) The incremental cost of non-cash compensation and other personal benefits
during any year presented did not exceed the lesser of $50,000 or 10% of
the total of annual salary and bonus reported for any individual named
above.

(3) The figures in this column reflect bonuses from the Executive Incentive
Compensation Plan and the Bonus Plan as described in the Board Compensation
Committee Report on Executive Compensation. The 1996 bonus amount for Mr.
Wright was a relocation allowance.

(4) The figures in this column include Company matching contributions under the
Company's Savings Plan. During 1997, the Company approved a 401(k)
restoration plan whereby the matching contributions for salary deferrals in
excess of ERISA limits to the Company's Savings Plan were credited to the
Company's Deferred Compensation Plan. Pursuant to the Company's Savings
Plan, the named executive officers received matching contributions in 1997,
1996 and 1995, respectively, as follows: Mr. Hughes, $24,400, $6,000,
$6,000; Mr. Washow, $8,740, $6,000, $6,000; Mr. Shelton, $8,600, $6,000,
$6,000; Mr. Wright, $3,500, $0, $0; and Mr. Palmer, $7,200 $6,000, $6,000.
The figures in this column also include amounts received in connection with
the surrender of certain travel benefits. Pursuant to this arrangement,
Mr.Washow received $0, $360, and $644 in 1997, 1996 and 1995, respectively.
</FN>
</TABLE>
<PAGE>

Option Grants in Last Fiscal Year

Shown below is information on grants of incentive stock options during
the fiscal year ended December 31, 1997 to the Named Officers, which are
reflected in the Summary Compensation Table on Page 8.

<TABLE>
<CAPTION>
Individual Grants in 1997 Grant Date
Value
------------------------------------------------------------- --------------
Number of
Securities % of Total Grant
Underlying Options Date
Options Granted To Exercise Expiration Present
Name Granted (1) Employees(2) Price(3) Date Value (4)
<S> <C> <C> <C> <C> <C>
John Hughes 25,500 8.51% $11.833 02/13/07 $129,377
Lawrence E. Washow 12,750 4.25 11.833 02/13/07 64,689
Paul G. Shelton 12,750 4.25 11.833 02/13/07 64,689
Frank Wright, Jr. 9,563 3.19 11.833 02/13/07 48,520
Roger P. Palmer 12,750 4.25 11.833 02/13/07 64,689

<FN>

(1) These Incentive Stock Options ("ISOs") were issued pursuant to the
Company's 1993 Stock Plan (the "1993 Plan") and may not be exercised until
they vest. These ISOs vest 40% after two years, 60% after three years, 80%
after four years and 100% after five years, provided that on death or
retirement under specified conditions, these ISOs become fully vested. The
exercise price may not be less than the fair market value of the shares
subject to the option on the date of grant. The exercise price may not be
less than 110% of such fair market value if the purchaser is a holder of
more than 10% percent of the Company's outstanding voting securities.

(2) Based on 299,772 options granted to all employees.

(3) Fair market value on the date of grant.

(4) The estimated grant date present value reflected in the above table is
determined using the Black-Scholes model. The material assumptions and
adjustments incorporated in the Black-Scholes model in estimating the value
of the options reflected in the above table include the following: an
exercise price on the option of $11.833, equal to the fair market value of
the underlying stock on the date of grant; an option term of 6 years;
interest rate of 6.17% representing the interest rates on U.S. Treasury
securities on the date of grant with maturity dates corresponding to the
vesting of the options; volatility of 42.45% calculated using daily stock
prices for the six-month period prior to the February 1997 grant; and
dividends at the rate of $0.19 per share representing the annualized
dividends paid with respect to a share of common stock at the date of
grant. There have been no reductions to reflect the probability of
forfeiture due to termination prior to vesting, or to reflect the
probability of a shortened option term due to termination of employment
prior to the option expiration date. The ultimate values of the options
will depend on the future market price of the Company's stock, which cannot
be forecast with reasonable accuracy. The actual value, if any, an optionee
will realize upon exercise of an option will depend on the excess of the
market value of the Company's common stock over the exercise price on the
date the option is exercised.

</FN>
</TABLE>
<PAGE>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values

Shown below is information with respect to (i) options exercised by the
Named Officers pursuant to the 1983 and 1993 Plans during fiscal 1997 and (ii)
unexercised options granted in fiscal 1997 and prior years under the 1983 and
1993 Plans to the Named Officers and held by them at December 31, 1997

<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Shares 12/31/97 12/31/97
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable (1)

<S> <C> <C> <C> <C>
John Hughes................ 26,801 $247,713 175,130 / 86,296 $1,815,482 / $ 488,930
Lawrence E. Washow......... 7,500 69,790 87,495 / 67,977 1,046,987 / 274,212
Paul G. Shelton............ 11,005 84,325 86,315 / 40,159 958,149 / 224,521
Frank B. Wright, Jr........ - - 0 / 18,413 0 / 97,807
Roger P. Palmer............ - - 35,820 / 36,556 323,214 / 202,749
</TABLE>
____________________

(1) Based on the closing sale price as quoted on Nasdaq National Market on that
date.
<PAGE>
<TABLE>
<CAPTION>
Pension Plan Table

Estimated Annual Retirement Benefits for Years of Service Indicated

Remuneration 15 20 25 30 35 40

Pension Plans

The above table shows the estimated annual retirement benefits payable on a
straight life annuity basis to participating employees, including officers, in
the earnings and years of service classifications indicated under the Company's
retirement plans, which cover substantially all of its domestic employees on a
non-contributory basis. The estimated benefits as disclosed below assume (i)
that the plans will be continued and (ii) that the employee will elect to
receive his pension at normal retirement age. The table above and the estimates
below do not reflect the reduction in an individual's final monthly compensation
due to the social security monthly covered compensation. This reduction is based
upon the retirement year for a particular individual.

Covered compensation includes a participant's base salary, commissions,
bonuses and salary reductions under the Company's Savings Plan and Deferred
Compensation Plan. The calculations of retirement benefits under the plans
generally are based upon the average earnings for the highest five consecutive
calendar years preceding the participant's termination of employment. The number
of years of credited service under the plans as of March 15, 1998 for each of
the Named Officers is: Mr. Hughes, 33 years; Mr. Washow, 19 years; Mr. Shelton,
16 years and Mr. Palmer, 16 years. The qualified compensation and estimated
annual retirement benefit as of March 15, 1998, for each of the Named Officers
are: Mr. Hughes, $477,161 and $221,868; Mr. Washow, $220,910 and $60,421; Mr.
Shelton, $210,087 and $49,548; and Mr. Palmer, $161,277 and $40,914. Mr. Wright
has only been employed by the Company for two years, and does not have a vested
pension benefit.

Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986, as
amended, limit the annual benefits that may be paid from a tax-qualified
retirement plan. As permitted by the Employee Retirement Income Security Act of
1974, the Company has a supplemental plan that authorizes the payment out of
general funds of the Company any benefits calculated under provisions of the
Company's pension plan that may be above the limits under these sections. The
accrued, unfunded liability of the supplemental plan at September 30, 1997, was
$521,944.

Director Compensation

The Company has a standard arrangement whereby directors who are not
full-time officers of the Company receive an annual fee of $14,000, plus a
meeting fee of $1,400 per day. In addition, Mr. Ray receives an annual fee of
$16,300 for his services as Chairman of the Board. The committee chairman of the
audit, compensation, nominating and executive committees receives an additional
fee of $1,875 per year. Members of each committee receive $500 per meeting as
compensation for service as a committee member. Directors who are also full-time
officers of the Company are not paid for their services as directors or for
attendance at meetings.
<PAGE>
Pursuant to the 1987 Nonqualified Stock Option Plan, Directors Brown,
Driscoll, Foos, Proops, Ray, Stahl, Audrey L. Weaver and Paul C. Weaver were
each granted 1,500 options at $12.00 per share in 1997. Director McClung was
granted 9,000 options at $12.00 per share in 1997.

Change In Control Arrangements

Each of Messrs. Hughes, Washow, Shelton, Wright and Palmer (the
"Individual(s)") has an Agreement with the Company which provides that, upon a
change in control of the Company, each of them is to be employed by the Company
for a period of time after the change in control (three years in the case of
Messrs. Hughes, Washow and Shelton and two years for Messrs. Wright and Palmer).
A change in control is defined as a change in legal or beneficial ownership of
51% of the Company's Common Stock within a six-month period other than by death
or operation of law, or the sale of 90% or more of the Company's assets.

After a change in control, the Company may not terminate the employment of
any of the Individuals except for just cause, and any of the following will be
considered to be a termination for other than just cause: (i) the assignment of
duties of lesser status, dignity and character than the Individual's duties
immediately prior to the date of his Agreement or substantial reduction in the
nature or status of responsibilities; (ii) a reduction in annual base salary or
bonus or incentive plans in effect as of the date of the Agreement or as
increased from time to time; (iii) a relocation to an office more than 35 miles
from the location where the Individual principally works, or substantially
greater travel requirements; and (iv) the failure to provide certain fringe
benefits substantially equal to those enjoyed by the Individual as of the date
of the Agreement. In addition, any termination of employment following
discussions by a shareholder or group of shareholders beneficially owning more
than 20% of the Company's Common Stock or a designated representative of the
Board of Directors with a third party that results in a change in control of the
Company within 180 days shall be deemed to be a termination of employment after
a change in control for purposes of the Agreements (unless the termination is
for cause or wholly unrelated to such discussions).

If termination of employment occurs within a specified period after a
change in control for just cause (three years in the case of Messrs. Hughes,
Washow and Shelton and two years in the case of Messrs. Wright and Palmer), the
Individual will receive all accrued sums and benefits required by contract or by
law. If termination occurs within such period for other than just cause, through
either actual termination or constructive termination as described above, they
will receive, in addition, base period compensation (defined as current annual
salary plus the average of the last two years in the case of Messrs. Wright and
Palmer and three years in the case of Messrs. Hughes, Washow and Shelton of
incentive bonus payments) less any compensation received from the date of change
in control to the termination date, provided that the amounts payable under the
Agreement may not exceed an amount equal to two times in the case of Messrs.
Wright and Palmer and three times in the case of Messrs. Hughes, Washow and
Shelton the Individual's average annual compensation payable by the Company
during the five calendar years prior to the date of change in control. They will
also receive continued medical, health and disability benefits for one year
after termination.

The Agreements do not require any of the Individuals to seek other
employment, but the amounts of payments or benefits thereunder are to be reduced
by up to 50% by any compensation earned from other employment. For a period of
years (three years in the case of Messrs. Hughes, Washow and Shelton and two
years in the case of Messrs. Wright and Palmer) from the date of termination of
employment with or without cause, before or after a change in control, each of
the Individuals is prohibited from owning, managing, operating, controlling or
otherwise engaging in any business that competes with any business conducted by
the Company and from inducing or attempting to influence any employee of the
Company to leave its employ.

The Agreements are dated, and their terms commence, as follows: Messrs.
Hughes and Shelton, April 1, 1997; Mr. Washow, February 16, 1998, Mr Wright,
August 21, 1996, and Mr. Palmer, February 7, 1996.
<PAGE>
BOARD COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Company's mission is to supply high-quality performance products and
innovative technologies for absorbent polymers, minerals and environmental
markets worldwide. To accomplish this objective, the Company has developed
comprehensive compensation strategies that emphasize maximizing shareholder
value and growth in sales and earnings. The compensation program has been
designed to reinforce and support the Company's business goals and to help the
organization both attract and retain the highest quality executive talent.

The Compensation Committee of the Board of Directors is comprised of six
non-employee directors whose objectives are to approve the design, assess the
effectiveness and administer compensation programs in support of compensation
policies. The Compensation Committee also evaluates executive performance and
reviews and approves all salary arrangements and other remuneration for the
officer group.

The Compensation Committee is committed to implementing and administering a
compensation program that supports and underscores the Company's mission and
values. The policies underlying the Compensation Committee's compensation
decisions are enumerated more fully below:

Compensation opportunities should strengthen the Company's ability to
attract, retain, and encourage the growth and development of the highest
caliber executive talent upon whose efforts the success of the Company
largely depends.

A substantial portion of pay for senior executives should be comprised of
at-risk, variable compensation whose payout is dependent on the achievement
of specific corporate and individual performance objectives. In addition,
the at-risk components of pay will have a significant equity-based element
to ensure appropriate linkage between executive behavior and shareholder
interests.

Each compensation component targets pay opportunities at the median of
compensation paid to executives included in the Company's comparative
compensation peer group. The Company's comparative compensation group is
not the same as the companies that make up the peer group in the stock
price performance graph included in this proxy statement. In order to
provide an appropriate basis for compensation analysis, a group larger than
the stock price graph's peer group was used; note, however, that a
significant number of the peer group companies are included in the
comparative compensation group.

Components of Compensation

The Company's total compensation program consists of several components,
each of which plays a role in supporting overall business goals and pay
philosophy. In assessing the competitiveness of the Company's senior executive
compensation programs, available salary data consisting of general manufacturing
companies is used for comparison purposes. Pay decisions are based upon pay data
for comparable positions. The total compensation program consists of base
salary, annual incentives and long-term incentives.

Base Pay

Base salaries are set at median levels (50th percentile) relative to
competitive market levels for comparable positions based upon available survey
data from general manufacturing and durable and nondurable goods manufacturing
industries. The Compensation Committee annually reviews each executive's base
salary and makes adjustments based upon levels of responsibility, breadth of
knowledge, internal equity issues, as well as market pay practices. Salary
adjustments are based primarily upon individual performance, which is evaluated
based on individual contributions to the Company.

As reflected in the Summary Compensation Table on Page 8, the Chief
Executive Officer's base salary was increased in 1997 by $20,000 (5.3%). In
arriving at Mr. Hughes' base salary, the Compensation Committee considered his
individual performance and his long-term contributions to the financial success
of the Company. The Committee also compared Mr. Hughes' base salary with the
base salaries of chief executive officers from appropriate salary surveys.
<PAGE>
Annual Incentives

The Executive Incentive Compensation Plan ("Incentive Plan") underscores
the Company's pay-for-performance philosophy by rewarding executives for
meaningful contributions toward predetermined financial performance goals. The
annual incentive opportunity is based upon performance compared to targets for
return on capital and earnings per share. The aggregate amount to be distributed
is determined pursuant to formulas tailored for each business segment. The Chief
Executive Officer does not receive a bonus until the Company achieves a
designated level of Company profitability.

In keeping with the Company's pay-for-performance philosophy, incentive
payouts vary based upon levels of profitability. The Chief Executive Officer was
paid a bonus of $244,650 for the 1997 financial performance of the Company.

Long-Term Incentives

Long-term incentives are provided annually in the form of incentive stock
options (ISOs). Options under the Company's 1993 Stock Plan are granted by the
Compensation Committee. ISOs are granted at a price not less than the fair
market value of the Common Stock on the date of grant. Hence, the options will
only have value when and if the stock price appreciates above the grant date
price. ISOs are the only long-term incentive compensation vehicle currently used
by the Company.

The option program serves to focus executives on long-term shareholder
value creation and foster an ownership mentality among the executive management
team. In keeping with the Company's commitment to provide a total compensation
package that focuses on at-risk pay components, long-term incentives will
continue to comprise a large portion of the value of an executive's total
compensation package. Currently, approximately 15 to 20 percent of the value of
total compensation is comprised of equity incentives.

When determining award sizes, the Compensation Committee considers the
executive's responsibility level, prior experience, historical award data and
ability to positively impact long-term shareholder value. The Compensation
Committee also strives to deliver market competitive long-term incentive award
opportunities to executives based on the dollar value of the award delivered.

In 1997, the Chief Executive Officer received options to purchase 25,500
shares with an exercise price of $11.833, as provided in the Option Grant Table
on Page 5. The Compensation Committee believes the equity incentive program
provides a strong link between management behavior and shareholder interests.

Policy with Respect to the $1 Million Deduction Limit

Section 162(m) of the Internal Revenue Code generally limits the corporate
deduction for compensation paid to executive officers named in the proxy to $1
million unless certain requirements are met. The Compensation Committee has
determined that Section 162(m) is not applicable due to the fact that current
executive compensation levels are below the threshold at which Section 162(m)
becomes applicable. Therefore, no modifications to executive compensation
programs are warranted at this time.

Compensation Committee
Jay D. Proops, Chairman
Robert E. Driscoll, III
Raymond A. Foos
C. Eugene Ray
Clarence O. Redman
Dale E. Stahl
<PAGE>
Performance Graph

The following graph sets forth a five-year comparison of cumulative total
returns for: (i) the Company (which trades on the Nasdaq National Market of The
Nasdaq Stock Market); (ii) S&P SmallCap 600 Index; and (iii) a custom peer group
of publicly traded companies (the "Peer Group").

In identifying the Peer Group, the Company reviewed a list of public
companies designated under the Standard Industrial Classification Code (the "SIC
Code") for "Plastics, Materials and Resins" and "Mining, Quarry, and Nonmetal
Materials". Upon a review of these designated companies, the Company selected
the Peer Group that consists of companies whose businesses, sales sizes and
market capitalization were similar to that of the Company.

All returns were calculated assuming dividend reinvestment on a quarterly
basis. The returns of each company in the Peer Group have been weighted
according to market capitalization.

The Peer Group consists of the following companies: CalMat Co., The Dexter
Corporation, Dow Corning Corporation, Dravo Corporation, Electrochemical
Industries, Hercules Incorporated, Nalco Chemical Company, Oil-Dri Corporation
of America1, Penn Virginia Corporation, Rohm and Haas Co., A. Schulman Inc.,
Vulcan Materials Company and Zemex Corporation. ____________________

(1) Oil-Dri Corporation of America is not designated under the SIC Codes
referenced above but is comparable to the Company and, therefore, is
included in the Peer Group.

Comparison of Five-Year Cumulative Total Return*
AMCOL International Corporation, S&P SmallCap 600 and Peer Group

[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
Dec-93 Dec-94 Dec-95 Dec-96 Dec-97
<S> <C> <C> <C> <C> <C>
AMCOL INTERNATIONAL 254.9 160.12 164.31 185.24 284.45
S&P SmallCap 118.76 113.16 147.02 178.30 223.87
Peer Group 124.91 124.61 148.14 156.69 196.26
</TABLE>

Assumes $100 invested on December 31, 1992, in
AMCOL International Corporation Common Stock, S&P SmallCap 600 and Peer Group.

* Total return assumes reinvestment of dividends on a quarterly basis.

Compensation Committee Interlocks and Insider Participation

Clarence Owen Redman is a member of the Company's Compensation Committee
and as such determined the compensation awarded to each of the Named Officers.
Mr. Redman is of counsel to Lord, Bissell & Brook, the principal law firm
engaged by the Company.
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Under the securities laws of the United States, the Company's directors,
its executive officers and any persons holding more than 10% of the Company's
Common Stock are required to report their initial ownership of the Company's
Common Stock and any subsequent changes in that ownership to the Securities and
Exchange Commission. Specific due dates for these reports have been established
and the Company is required to disclose in this proxy statement that Mr. Dale E.
Stahl, a director of the Company, filed a late report covering a transaction
involving a total of 4,500 shares of Common Stock and Mark A. Anderson and Gary
L. Castagna, executive officers, each filed a late initial beneficial ownership
report of Common Stock following their elections to executive officer. In making
these disclosures, the Company has relied solely on written representations of
its directors and executive officers and copies of the reports that they have
filed with the Commission.

ITEM 2

PROPOSED AMENDMENT TO THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION

By resolution adopted on February 10, 1998, the Company's Board of
Directors has proposed and recommended the adoption of an amendment to the
Company's Restated Certificate of Incorporation which would increase the number
of authorized shares of Common Stock from 50,000,000 to 100,000,000. The Board
directed that the proposed amendment be submitted to a vote of the Company's
shareholders.

Of the currently authorized 50,000,000 shares of Common Stock, as of March
27, 1998, 28,367,817 shares were issued and outstanding. As of the same date,
3,647,979 shares were held in the Company's treasury and approximately 550,902,
182,838, 1,247,178 and 1,900,000 shares were reserved for issuance in connection
with options granted or to be granted under the Company's 1983 Incentive Stock
Option Plan, the 1987 Nonqualified Stock Option Plan, the 1993 Stock Plan and
the 1998 Long-Term Incentive Plan (subject to shareholder approval of the 1998
Plan), respectively.

The Board of Directors believes the increase in the number of authorized
shares of Common Stock will enhance the Company's flexibility in connection with
possible future corporate actions, such as stock dividends or splits,
financings, investment opportunities, corporate mergers and acquisitions,
employee benefit programs, stock offerings, and for other corporate purposes
that the Board deems advisable. Except for shares to be issued pursuant to the
Company's stock plans named above, the Company has no current plans to issue
shares for any of these purposes and there can be no assurance that any such
issuance will be made or, if made, as to the timing, type, or size of any such
issuance. Any issuance of shares of Common Stock, including the additional
shares that will be authorized if this proposed amendment is adopted, will be
subject to the approval of the Board of Directors and the Board does not intend
to seek further shareholder approval prior to any such issuance unless required
by law, the Company's Restated Certificate of Incorporation or the listing
requirements of The Nasdaq Stock Market ("Nasdaq").

The issuance of additional shares of Common Stock may, among other things,
have a dilutive effect on earnings per share, and on shareholders' equity and
voting rights. The issuance of additional shares, or the perception that
additional shares may be issued, may also adversely affect the market price of
the Common Stock. Holders of Common Stock have no preemptive rights.

The availability for issuance of additional shares of Common Stock also
could have the effect of rendering more difficult or discouraging an attempt to
obtain control of the Company. For example, the issuance of shares of Common
Stock (within the limits imposed by applicable law and the rules of Nasdaq or
any exchange upon which the Common Stock may be listed) in a public or private
sale, merger or similar transaction would increase the number of outstanding
shares, thereby possibly diluting the interest of a party attempting to obtain
control of the Company. The issuance of additional shares of Common Stock also
could be used to render more difficult a merger or similar transaction even if
it appears to be desirable to a majority of the shareholders. The Company is not
aware of any efforts to obtain control of the Company.
<PAGE>
If the amendment is adopted by the shareholders, the first paragraph of
Article FOURTH of the Company's Restated Certificate of Incorporation will read
as follows:

"FOURTH: The total number of shares which the corporation shall have
authority to issue is one hundred million (100,000,000) and the par value
of each share is $0.01, amounting in the aggregate to One Million Dollars
($1,000,000)."

Board Recommendation

Proxies will be voted for or against approval of the amendment to the
Company's Restated Certificate of Incorporation in accordance with the
specifications marked thereon, and will be voted in favor of approval if no
specification is made. Assuming a quorum is present, approval of the amendment
increasing the number of authorized shares of Common Stock requires the
affirmative vote of the holders of a majority of the shares of Common Stock
outstanding and entitled to vote thereon. If adopted, the amendment would become
effective upon filing a Certificate of Amendment of the Company's Restated
Certificate of Incorporation with the Secretary of State of the State of
Delaware, which filing is expected to take place promptly after the Annual
Meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF
THE PROPOSED AMENDMENT.

ITEM 3

APPROVAL OF THE AMCOL INTERNATIONAL CORPORATION
1998 LONG-TERM INCENTIVE PLAN

At a meeting held on February 10, 1998, the Company's Board of Directors
approved, and recommended for adoption by the shareholders, the AMCOL
International Corporation 1998 Long-Term Incentive Plan (the "Incentive Plan").
The purpose of the Incentive Plan is to provide officers, directors and
employees who have substantial responsibility for the direction and management
of the Company with an additional incentive to promote the success of the
Company's business, to encourage such persons to remain in the service of the
Company and to enable them to acquire proprietary interests in the Company. The
following is a summary of the Incentive Plan. This summary, however, does not
purport to be a complete description of the Incentive Plan. A copy of the
Incentive Plan is attached to this Proxy Statement as Exhibit A.

The Incentive Plan. The Incentive Plan would provide for the granting of
awards of restricted stock ("Restricted Stock"), incentive stock options
("ISOs") within the meaning of Section 422 of the Internal Revenue Code (the
"Code"), nonqualified stock options ("NSOs") and stock appreciation rights
("SARs") (awards of Restricted Stock, ISOs, NSOs and SARs are sometimes
hereinafter collectively referred to as "Awards"), and would permit a total of
1,900,000 shares of the Company's Common Stock, to be awarded to participants
under the Incentive Plan in the form of ISOs, NSOs, Restricted Stock or any
combination thereof. As of March 27, 1998 the closing sale price of Common Stock
was $14.25 per share as reported by Nasdaq.

The Committee. The committee administering the Incentive Plan (the
"Committee") would from time to time grant Awards under the Incentive Plan to
selected eligible officers, directors and employees (the "Participants"),
without payment by the Participant. The Committee shall be composed of two or
more directors elected by the Board of Directors from time to time. In the
absence of an election by the Board, the Committee shall mean the Compensation
Committee of the Board. Members of the Committee will be eligible to receive
Awards under the Incentive Plan. Presently, approximately 300 employees and 13
directors are eligible to participate in the Incentive Plan.
<PAGE>
Restricted Stock Awards. The Committee may in its discretion, grant an
award of Restricted Stock to any Participant. Awards of Restricted Stock would
be issued to Participants without payment. Upon completion of a vesting period
and the fulfillment of any required conditions, restrictions upon the Restricted
Stock would expire and new certificates representing unrestricted shares of
Common Stock would be issued to the Participant. Generally, the Participant
would have all of the rights of a shareholder of the Company with respect to his
shares of Restricted Stock including, but not limited to, the right to vote such
shares and the right to receive dividends payable with respect to the shares of
Restricted Stock.

Incentive Stock Options. The Incentive Plan would provide that the
Committee would have the authority to grant ISOs to any employee of the Company
and to determine the terms and conditions of each grant, including without
limitation, the number of shares subject to each ISO and the option period. The
ISO exercise price would also be determined by the Committee and would not be
less than the fair market value of the Common Stock on the date of grant. The
exercise price would not be less than 110% of such fair market value if the
Participant was the holder of more than 10% of the Company's outstanding voting
securities. Unless the Committee otherwise determines, the option period for
ISOs will expire upon the earliest of: (i) ten years after the date of grant
(five years in the case of a holder of more than 10% of the Company's
outstanding voting securities), (ii) three months after termination of
employment for any reason other than cause, death or total and permanent
disability, (iii) immediately upon termination of employment for cause, (iv)
twelve months after death or termination of employment on account of total and
permanent disability, or (v) such other date or event as specified by the
Committee.

Nonqualified Stock Options. The Incentive Plan would provide the Committee
with the authority to grant NSOs to any Participant and to determine the terms
and conditions of each grant including the number of shares subject to each NSO,
the option period and the option exercise price. The NSO exercise price would
not be less than 85% of the fair market value of the Common Stock on the date of
grant. Unless the Committee otherwise determines, the option period for NSOs
will expire upon the earliest of: (i) ten years after the date of grant, (ii)
three months after termination of employment for any reason other than cause,
death, total and permanent disability or retirement after age 65 (nonemployee
directors will be treated as being terminated when they cease to serve on the
Board), (iii) immediately upon termination of employment for cause, (iv) 60
months after termination of employment on account of retirement after age 65,
(v) twelve months after death or termination of employment on account of total
and permanent disability, or (vi) such other date or event as specified by the
Committee.

Stock Appreciation Rights. The Committee may, in its discretion, grant an
SAR to any Participant. SARs granted by the Committee pursuant to the Incentive
Plan may relate to and be associated with all or any part of a specific ISO or
NSO. An SAR shall entitle the Participant to surrender any then exercisable
portion of the SAR and, if applicable, the related ISO or NSO. In exchange, the
Participant would receive from the Company an amount equal to the product of (i)
the excess of the fair market value of a share of Common Stock on the date of
surrender over the fair market value of the Common Stock on the date the SARs
were issued, or, if the SARs are related to an ISO or an NSO, the per share
exercise price under such option and (ii) the number of shares of Common Stock
subject to such SAR, and, if applicable, the related option which is
surrendered. SARs would be exercisable during a period established by the
Committee and, if related to an ISO or NSO, shall terminate on the same date as
the related option. Upon exercise, Participants would be paid in shares of
Common Stock or cash, as determined by the Committee.

The Manner of Exercise. The Committee may permit the exercise price for
options granted under the Incentive Plan to be paid in cash or shares of Common
Stock, including shares of Common Stock which the Participant received upon the
exercise of one or more options. The Committee may also permit the option
exercise price to be paid by the Participant's delivery of an election directing
the Company to withhold shares of Common Stock from the Common Stock otherwise
due upon exercise of the option or any method permitted by law.
<PAGE>
Vesting. Unless the Committee establishes a different vesting schedule at
the time of grant, Awards generally vest 40% after two years, 60% after three
years, 80% after four years and 100% after five years. A Participant may not
exercise an option or SAR or transfer shares of Restricted Stock until the Award
has vested.

Generally, if a Participant's employment with the Company or service on the
Board is terminated due to retirement, death, disability or a change in control
of the Company (as determined by the Committee), the Committee may, in its
discretion, accelerate vesting. If a Participant's employment with or service to
the Company is terminated for any other reason, any Awards that are not yet
vested are forfeited.

Nontransferability. Awards are not transferable other than by will or the
laws of descent and distribution or pursuant to a qualified domestic relations
order as defined by the Code; provided, however, that NSOs, SARs and Restricted
Stock are transferable in the Committee's discretion after vesting. During a
Participant's lifetime, his ISOs may be exercised only by him.

Withholding Tax. The Company shall have the right to withhold in cash or
shares of Common Stock with respect to any payments made to Participants, any
taxes required by law to be withheld because of such payments.

Amendment; Termination. The Board of Directors may amend the Incentive Plan
at any time, but may not impair the rights of Participants with respect to any
outstanding Awards without the consent of Participants.

The Incentive Plan will terminate ten years after its adoption by the Board
of Directors; provided, however, that the Board of Directors may terminate the
Incentive Plan at any time. Termination of the Incentive Plan will not affect
the rights of Participants with respect to any Awards granted before the
termination date.

Federal Tax Consequences-Incentive Stock Options. Provided a Participant is
an employee of the Company during the period beginning on the date of grant of
the ISO and ending on the day three months before the date of exercise, neither
the grant nor the exercise of an ISO has an immediate tax consequence to the
Participant or the Company. If subsequent to the exercise of an ISO the
Participant does not dispose of the acquired Common Stock within two years after
the date of the grant of the ISO, or within one year after the date of the
transfer of the Common Stock to the Participant (the "Holding Period"), the
Company is not entitled to a tax deduction, the Participant realizes no ordinary
income, and any gain or loss that is realized on the subsequent sale or taxable
exchange of the Common Stock is treated as a long-term capital gain or loss.
Certain tax deductions and exclusions, known as "tax preference items", give
rise to an "alternative minimum tax" enacted to recapture some of the tax
savings provided by such tax preference items. The tax benefits associated with
an ISO are tax preference items that may affect the alternative minimum tax that
must be paid by certain high income individuals.

If a Participant exercises an ISO and disposes of the acquired Common Stock
before the end of the Holding Period, the Participant's and the Company's tax
treatment will be the same as if the Participant had exercised an NSO (described
below). Therefore, the Participant realizes ordinary income in an amount equal
to the excess, if any, between the option price of the Common Stock and the fair
market value of such Common Stock on the date of exercise. The Company will be
entitled to a corresponding tax deduction in the same amount and at the same
time.

Federal Tax Consequences-Nonqualified Stock Options. Generally, the
recipient of an NSO realizes no taxable income at the time of grant. Similarly,
the Company is not entitled to a deduction with respect to the grant of an NSO.

Upon the exercise of an NSO, a Participant realizes income at ordinary
income tax rates. The amount included in income is the excess of the fair market
value of the Common Stock acquired (as of the date of exercise) over the
exercise price. The Company will generally be entitled to a corresponding
deduction equal to this amount for the Company's taxable year that ends with or
includes the end of the Participant's taxable year of income inclusion. The
Company's deduction is only allowed, however, to the extent the amount is
considered "reasonable compensation".
<PAGE>
A Participant's basis in the Common Stock acquired upon the exercise of an
NSO will be the exercise price, plus any amount includable in the Participant's
gross income upon the exercise of the NSO. The gain or loss realized by the
Participant upon a subsequent sale or exchange of the shares will be a capital
gain or loss.

Federal Tax Consequences-Restricted Stock. Generally, because of the risk
of forfeiture prior to vesting (and certain other restrictions that may be
imposed by the Committee), no taxable income will be recognized by the
Participant upon an Award of Restricted Stock. However, a Participant may make
an election under Section 83(b) of the Code, within 30 days of the date of
issuance of the Restricted Stock, to be taxed at the time of issuance. Any
Participant who makes such an election recognizes ordinary income on the date of
issuance of the Restricted Stock equal to its fair market value at that time.
The Company is entitled to an equivalent deduction. No additional income would
then be recognized by the Participant upon the lapse of restrictions on the
Restricted Stock. Absent an election under Section 83(b) of the Code, a
Participant does not recognize taxable income upon the Award of Restricted
Stock. Rather, the Participant is deemed to receive ordinary income at the time
the restrictions on the Restricted Stock lapse. The amount of the Participant's
taxable income is equal to the fair market value of the unrestricted stock, less
any amount paid by the Participant for the Restricted Stock. The Company is
entitled to a corresponding deduction at such time for the same amount.

Unless an election under Code Section 83(b) is made, dividends paid to a
Participant while the Restricted Stock remains subject to restrictions are
treated as compensation for federal income tax purposes. Any dividends paid on
the Restricted Stock subsequent to an election under Code Section 83(b) are
treated as dividend income, rather than compensation, for federal income tax
purposes.

Effective Date. The Incentive Plan shall become effective as of January 1,
1998, subject to approval by the shareholders of the Company at the Company's
1998 Annual Meeting of Shareholders by a majority of the shares of the Company
present at the meeting or represented and entitled to vote thereon. No Awards
may be granted under the Plan prior to such approval.

Board Recommendation

Proxies will be voted for or against approval of the Incentive Plan in
accordance with the specifications marked thereon, and will be voted in favor of
approval if no specification is made. Assuming a quorum is present, the
affirmative vote of a majority of the shares of Common Stock represented in
person or by proxy at the Annual Meeting and entitled to vote thereon is
required to adopt the Incentive Plan.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR
ADOPTION OF THE INCENTIVE PLAN.

ITEM 4

PROPOSED RATIFICATION OF INDEPENDENT AUDITORS

The Board of Directors selected KPMG Peat Marwick LLP to audit the
financial statements of the Company for the fiscal year ended December 31, 1997.
The Audit Committee has recommended the appointment of KPMG Peat Marwick LLP as
independent auditors for the Company to audit its consolidated financial
statements for 1998 and to perform audit-related services. Such services include
review of the Company's quarterly interim financial information; review of
periodic reports and registration statements filed by the Company with the
Securities and Exchange Commission; issuance of special-purpose reports covering
such matters as employee benefit plans, management incentive compensation and
submissions to various governmental agencies; and consultation in connection
with various accounting and financial reporting matters.

The Board is asking for your approval of the appointment of KPMG Peat
Marwick LLP. If the shareholders should not approve, the Audit Committee and the
Board will reconsider the appointment.

A representative of KPMG Peat Marwick LLP will be at the Annual Meeting to
answer questions or comment, where appropriate.
<PAGE>
Proxies will be voted for or against approval of this proposed ratification
in accordance with the specifications marked thereon, and will be voted in favor
of approval if no specification is made. Approval requires the favorable vote of
the holders of a majority of the shares of Common Stock represented at the
Annual Meeting in person or by proxy, assuming that a quorum is present.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
APPROVAL OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT ACCOUNTANTS.

OTHER MATTERS

Shareholder Proposals

To make a proposal to be included in the proxy statement for the 1999
Annual Meeting, you must submit your written request to the Company by December
7, 1998.

According to the Company's by-laws, shareholder proposals for business,
including director nominations, to be conducted at any Annual Meeting of
shareholders (but which will not be included in the Company's proxy materials)
must comply with the notice procedures outlined in the by-laws. Generally, such
proposals must be received by the Company between February 10, 1999, and March
12, 1999. For a free copy of the Company by-laws, shareholders should write to
the Corporate Secretary.

Other Business

The Board of Directors does not know of any other business that will be
presented at the meeting. If any other business come before the meeting, Mr.
Redman, Mr. Shelton and Ms. Weaver will vote using their best judgment.

By Order of the Board of Directors,

Clarence O. Redman
Secretary

Arlington Heights, Illinois
April 6, 1998
<PAGE>
EXHIBIT A

AMCOL INTERNATIONAL CORPORATION 1998 LONG-TERM INCENTIVE PLAN

1. Preamble.

AMCOL International Corporation, a Delaware corporation (the "Company"),
hereby establishes the AMCOL International Corporation 1998 Long-Term Incentive
Plan (the "Plan") as a means whereby the Company may, through awards of (i)
incentive stock options ("ISOs") within the meaning of Section 422 of the Code,
(ii) non-qualified stock options ("NSOs"), (iii) stock appreciation rights
("SARs"), and (iv) restricted stock ("Restricted Stock"):

(a) provide officers, directors and employees who have substantial
responsibility for the direction and management of the Company with
additional incentive to promote the success of the Company's business;

(b) encourage such persons to remain in the service of the Company; and

The provisions of this Plan do not apply to or affect any option, stock,
stock appreciation right, restricted stock or phantom stock heretofore or
hereafter granted under any other stock plan of the Company, and all such
options, stock, stock appreciation rights, restricted stock or phantom stock
shall be governed by and subject to the applicable provisions of the plan under
which they were or will be granted.

2. Definitions and Rules of Construction.

2.01 "Award" means the grant of Options, SARs and/or Restricted Stock
to a Participant.

2.02 "Award Date" means the date upon which an Option, SAR or
Restricted Stock is awarded to a Participant under the Plan.

2.03 "Board" or "Board of Directors" means the board of directors of
the Company.

2.04 "Code" means the Internal Revenue Code of 1986, as amended from
time to time or any successor thereto.

2.05 "Committee" means two (2) or more directors elected by the Board
of Directors from time to time; provided, however, that in the
absence of an election by the Board, the Committee shall mean the
Compensation Committee of the Board of Directors.

2.06 "Common Stock" means common sock of the Company, par value $.01
per share.

2.07 "Company" means AMCOL International Corporation, a Delaware
corporation, and any successor thereto.

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

2.09 "Fair Market Value" as of any date means the closing sale price
for the Common Stock as of the close of business on that day (as
reported by the Nasdaq Stock Market System or any securities
exchange or automated quotation system of a registered securities
association on which the Common Stock is then traded or quoted).
<PAGE>

2.10 "ISO" means an incentive stock option within the meaning of
Section 422 of the Code.

2.11 "NSO" means a non-qualified stock option, which is not intended
to qualify under Section 422 of the Code.

2.12 "Option" means the right of a Participant, whether granted as an
ISO or an NSO, to purchase a specified number of shares of Common
Stock, subject to the terms and conditions of the Plan.

2.13 "Option Price" means the price per share of Common Stock at which
an Option may be exercised.

2.14 "Participant" means an individual to whom an Award has been
granted under the Plan.

2.15 "Plan" means the AMCOL International Corporation 1998 Long-Term
Incentive Plan, as set forth herein and from time to time
amended.

2.16 "Restricted Stock" means the Common Stock awarded to a
Participant pursuant to Section 8 of this Plan.

2.17 "SAR" means a stock appreciation right issued to a Participant
pursuant to Section 9 of this Plan.

2.18 "Subsidiary" means any entity of which the Company owns or
controls more than 50 percent of (i) the outstanding capital
stock, or (ii) the combined voting power of all classes of stock.

2.19 Rules of Construction:

2.19.1 Governing Law. The construction and operation of this Plan
are governed by the laws of the State of Illinois.

2.19.2 Undefined Terms. Unless the context requires another
meaning, any term not specifically defined in this Plan is
used in the sense given to it by the Code.

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

2.19.4 Conformity with Section 422. Any ISOs issued under this
Plan are intended to qualify as incentive stock options
described in Section 422 of the Code, and all provisions of
the Plan relating to ISOs shall be construed in conformity
with this intention. Any NSOs issued under this Plan are not
intended to qualify as incentive stock options described in
Section 422 of the Code, and all provisions of the Plan
relating to NSOs shall be construed in conformity with this
intention.

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

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

2.19.7 Severability. If any provision of this Plan is determined
to be illegal or invalid for any reason, the remaining
provisions are to continue in full force and effect and to
be construed and enforced as if the illegal or invalid
provision did not exist, unless the continuance of the Plan
in such circumstances is not consistent with its purposes.
<PAGE>

3. Stock Subject to the Plan.

Except as otherwise provided in Section 12, the aggregate number of shares
of Common Stock with respect to which Awards may be granted through this Plan
may not exceed 1,900,000 shares. If any Awards shall terminate or expire as to
any number of shares, new Awards may thereafter be awarded with respect to such
shares. The aggregate number of shares of Common Stock with respect to which
Awards may be granted to any Participant in any calendar year may not exceed
100,000 shares.

4. Administration.

The Committee shall administer the Plan. All determinations of the
Committee are made by a majority vote of its members. The Committee's
determinations are final and binding on all Participants. In addition to any
other powers set forth in this Plan, the Committee has the following powers:

(a) to construe and interpret the Plan;

(b) to establish, amend and rescind appropriate rules and regulations
relating to the Plan;

(c) subject to the terms of the Plan, to select the individuals who will
receive Awards, the times when they will receive them, the number of
Options, Restricted Stock and/or SARs to be subject to each Award, the
Option Price, the vesting schedule (including any performance targets
to be achieved in connection with the vesting of any Award), the
expiration date applicable to each Award and other terms and
provisions and restrictions of the Awards (which need not be
identical) and to amend or modify any of the terms of outstanding
Awards;

(d) to contest on behalf of the Company or Participants, at the expense of
the Company, any ruling or decision on any matter relating to the Plan
or to any Awards;

(e) generally, to administer the Plan, and to take all such steps and make
all such determinations in connection with the Plan and the Awards
granted thereunder as it may deem necessary or advisable; and

(f) to determine the form in which tax withholding under Section 15 of
this Plan will be made (i.e., cash, Common Stock or a combination
thereof).

5. Eligible Participants.

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

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

Subject to the terms of the Plan, the Committee, in its discretion, may
award an NSO to any Participant. Each NSO shall be evidenced by an agreement, in
such form as is approved by the Committee, and except as otherwise provided by
the Committee in such agreement, each NSO shall be subject to the following
express terms and conditions, and to such other terms and conditions, not
inconsistent with the Plan, as the Committee may deem appropriate:
<PAGE>

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

(i) the date on which it is forfeited under the provisions of Section
11.1;

(ii) ten (10) years from the Award Date;

(iii)three (3) months after the Participant's termination of
employment with the Company and its parent and Subsidiaries or
service on the Board for any reason other than for cause, death,
total and permanent disability or retirement;

(iv) immediately upon the Participant's termination of employment with
the Company and its parent and Subsidiaries or service on the
Board for cause;

(v) twelve (12) months after the Participant's death or total and
permanent disability;

(vi) sixty (60) months after the Participant's termination of
employment with the Company and its parent and Subsidiaries or
service on the Board on account of retirement on or after age
sixty-five (65); or

(vii)any other date specified by the Committee when the NSO is
granted.

6.02 Option Price. At the time granted, the Committee shall determine the
Option Price of any NSO, which shall not be less than eighty-five percent (85%)
of the Fair Market Value of the Common Stock subject to the NSO on the Award
Date and in the absence of such determination, the Option Price shall be one
hundred percent (100%) of the Fair Market Value of the Common Stock subject to
the NSO on the Award Date.

6.03 Vesting. Unless otherwise determined by the Committee and set forth in
the Award agreement, NSO Awards shall vest in accordance with Section 11.1;
provided, that in no event shall an NSO granted to a Participant who is subject
to Section 16 of the Exchange Act be exercisable earlier than six (6) months
from the Award Date.

6.04 Other Option Provisions. The form of NSO authorized by the Plan may
contain such other provisions as the Committee may from time to time determine.

7. Terms and Conditions of Incentive Stock Options

Subject to the terms of the Plan, the Committee, in its discretion, may
award an ISO to any employee Participant. The aggregate fair market value of the
Common Stock covered by ISOs granted under the Plan or any other stock option
plan of the Company or any subsidiary or parent of the Company that become
exercisable for the first time by any employee in any calendar year shall not
exceed $100,000. The aggregate fair market value will be determined at the Award
Date. Each ISO shall be evidenced by an agreement, in such form as is approved
by the Committee, and except as otherwise provided by the Committee, each ISO
shall be subject to the following express terms and conditions and to such other
terms and conditions, not inconsistent with the Plan, as the Committee may deem
appropriate:

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

(i) the date on which it is forfeited under the provisions of Section
11.1;

(ii) ten (10) years from the Award Date, except as set forth in
Section 7.02 below;
<PAGE>
(iii)immediately upon the Participant's termination of employment
with the Company and any parent and Subsidiary of the Company for
cause;

(iv) three (3) months after the Participant's termination of
employment with the Company and any parent and Subsidiary of the
Company for any reason other than for cause or death or total and
permanent disability;

(v) twelve (12) months after the Participant's death or total and
permanent disability; or

(vi) any other date (within the limits of the Code) specified by the
Committee when the ISO is granted.

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

7.02 Option Price and Expiration. The Option Price of any ISO shall be
determined by the Committee at the time an ISO is granted, and shall be no less
than one hundred percent (100%) of the Fair Market Value of the Common Stock
subject to the ISO on the Award Date; provided, however, that if an ISO is
granted to a Participant who, immediately before the grant of the ISO,
beneficially owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or its parent or
subsidiary corporations, the Option Price shall be at least one hundred ten
percent (110%) of the Fair Market Value of the Common Stock subject to the ISO
on the Award Date and in such cases, the exercise period specified in the Option
agreement shall not exceed five (5) years from the Award Date.

7.03 Vesting. Unless otherwise determined by the Committee and set forth in
the Award agreement, ISO Awards shall vest in accordance with Section 11.1;
provided that in no event shall an ISO granted to a Participant who is subject
to Section 16 of the Exchange Act be exercisable earlier than six (6) months
from the Award Date.

7.04 Other Option Provisions. The form of ISO authorized by the Plan may
contain such other provisions as the Committee may, from time to time,
determine; provided, however, that such other provisions may not be inconsistent
with any requirements imposed on incentive stock options under Code Section 422
and related Treasury regulations.

8. Terms and Conditions of Restricted Stock Awards.

Subject to the terms of the Plan, the Committee, in its discretion, may
award Restricted Stock to any Participant at no additional cost to the
Participant. Each Restricted Stock Award shall be evidenced by an agreement, in
such form as is approved by the Committee, and all shares of Common Stock
awarded to Participants under the Plan as Restricted Stock shall be subject to
the following express terms and conditions and to such other terms and
conditions, not inconsistent with the Plan, as the Committee shall deem
appropriate:

(a) Restricted Period. Shares of Restricted Stock awarded under this
Section 8 may not be sold, assigned, transferred, pledged or otherwise
encumbered before they vest.

(b) Vesting. Restricted Stock Awards under this Section 8 shall vest in
accordance with Section 11.2.
<PAGE>
(c) Certificate Legend. Each certificate issued in respect of shares of
Restricted Stock awarded under this Section 8 shall be registered in
the name of the Participant and shall bear the following (or a
similar) legend until such shares have vested:

"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions
(including forfeiture) relating to Restricted Stock contained in
Section 8 of the AMCOL International Corporation 1998 Long-Term
Incentive Plan and an Agreement entered into between the
registered owner and AMCOL International Corporation. Copies of
such Plan and Agreement are on file at the principal office of
AMCOL International Corporation."

9. Terms and Conditions of Stock Appreciation Rights.

The Committee may, in its discretion, grant a SAR to any Participant under
the Plan. Each SAR shall be evidenced by an agreement between the Company and
the Participant, and may relate to and be associated with all or any part of a
specific ISO or NSO. A SAR shall entitle the Participant to whom it is granted
the right, so long as such SAR is exercisable and subject to such limitations as
the Committee shall have imposed, to surrender any then exercisable portion of
his SAR and, if applicable, the related ISO or NSO, in whole or in part, and
receive from the Company in exchange, without any payment of cash (except for
applicable employee withholding taxes), that number of shares of Common Stock
having an aggregate Fair Market Value on the date of surrender equal to the
product of (i) the excess of the Fair Market Value of a share of Common Stock on
the date of surrender over the Fair Market Value of the Common Stock on the date
the SARs were issued, or, if the SARs are related to an ISO or an NSO, the per
share Option Price under such ISO or NSO on the Award Date, and (ii) the number
of shares of Common Stock subject to such SAR, and, if applicable, the related
ISO or NSO or portion thereof which is surrendered.

A SAR granted in conjunction with an ISO or NSO shall terminate on the same
date as the related ISO or NSO and shall be exercisable only if the Fair Market
Value of a share of Common Stock exceeds the Option Price for the related ISO or
NSO, and then shall be exercisable to the extent, and only to the extent, that
the related ISO or NSO is exercisable. The Committee may at the time of granting
any SAR add such additional conditions and limitations to the SAR as it shall
deem advisable, including, but not limited to, limitations on the period or
periods within which the SAR shall be exercisable and the maximum amount of
appreciation to be recognized with regard to such SAR. If a Participant is
subject to Section 16(a) and Section 16(b) of the Exchange Act, the Committee
may at any time add such additional conditions and limitations to such SAR
which, in its discretion, the Committee deems necessary or desirable to comply
with such Section 16(a) or Section 16(b) and the rules and regulations issued
thereunder, or to obtain any exemption therefrom. Any ISO or NSO or portion
thereof which is surrendered with an SAR shall no longer be exercisable. An SAR
that is not granted in conjunction with an ISO or NSO shall terminate on such
date as is specified by the Committee in the SAR agreement and shall vest in
accordance with Section 11.2. The Committee, in its sole discretion, may allow
the Company to settle all or part of the Company's obligation arising out of the
exercise of an SAR by the payment of cash equal to the aggregate Fair Market
Value of the shares of Common Stock which the Company would otherwise be
obligated to deliver.

10. Manner of Exercise of Options.

To exercise an Option in whole or in part, a Participant (or, after his
death, his executor or administrator) must give written notice to the Committee,
stating the number of shares with respect to which he intends to exercise the
Option. The Company will issue the shares with respect to which the Option is
exercised upon payment in full of the Option Price. The Committee may permit the
Option Price to be paid in cash or shares of Common Stock held by the
Participant having an aggregate Fair Market Value, as determined on the date of
delivery, equal to the Option Price. The Committee may permit a Participant to
elect to pay the Option Price upon the exercise of an Option by authorizing a
third party to sell shares of Common Stock (or a sufficient portion of the
shares) acquired upon exercise of
<PAGE>
the Option and remit to the Company a sufficient portion of the sale proceeds to
pay the entire Option Price and any tax withholding resulting from such
exercise. The Committee may also permit the Option Price to be paid by any other
method permitted by law, including by delivery to the Committee from the
Participant of an election directing the Company to withhold the number of
shares of Common Stock from the Common Stock otherwise due upon exercise of the
Option having an aggregate Fair Market Value on that date equal to the Option
Price. If a Participant pays the Option Price with shares of Common Stock which
were received by the Participant upon exercise of one or more ISOs, and such
Common Stock has not been held by the Participant for at least the greater of:

(a) two (2) years from the date the ISOs were granted; or

(b) one (1) year after the transfer of the shares of Common Stock to the
Participant;

the use of the shares shall constitute a disqualifying disposition and the ISO
underlying the shares used to pay the Option Price shall no longer satisfy all
of the requirements of Code Section 422.

11. Vesting.

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

Number of Years Since Award Date Vested Percentage

Fewer than two None
Two but fewer than three 40%
Three but fewer than four 60%
Four but fewer than five 80%
Five or more 100%

Notwithstanding anything herein to the contrary, however, all Awards will
become vested and exercisable upon the effective date of a "change in control"
and will remain exercisable during the 30 days following the effective date of
the change in control. As used in this paragraph, the term "change in control"
means the change in the legal or beneficial ownership of 51% of the outstanding
shares of Common Stock of the Company within a six-month period, other than by
death or operation of law, or the sale of 90% or more of the assets of the
Company within the six-month period.

If a Participant's employment with the Company or service on the Board is
terminated due to: (i) retirement on or after his sixty-fifth (65th) birthday;
(ii) retirement on or after his fifty-fifth (55th) birthday with consent of the
Company; (iii) total and permanent disability as determined by the Company; (iv)
death; or (v) a change in control of the Company (as determined by the
Committee), the Committee may, in its discretion, accelerate vesting. Unless the
Committee otherwise provides in the Award agreement, if a Participant's
employment with or service to the Company terminates for any other reason, any
Awards that are not yet vested are forfeited. A transfer from the Company to a
Subsidiary or affiliate, or vice versa, is not a termination of employment for
purposes of this Plan. The Committee shall be entitled to make such rules,
regulations and determinations as it deems appropriate in respect of any leave
of absence taken by a Participant. Without limiting the generality of the
foregoing, the Committee shall be entitled to determine (i) whether or not a
Participant's leave of absence shall constitute a termination of employment
within the meaning of the Plan and (ii) the impact, if any, of any such leave of
absence on Awards granted to such Participant. Unless otherwise determined by
the Committee in its sole discretion, a Participant shall be considered to have
terminated employment if his or her employer ceases to be an affiliate of the
Company, even if he or she continues to be employed by such employer.
<PAGE>
11.2 Restricted Stock and SARs. The Committee shall establish the vesting
schedule to apply to any Award of Restricted Stock or SAR that is not associated
with an ISO or NSO granted under the Plan to a Participant, and in the absence
of such a vesting schedule, such Award shall vest according to the vesting
schedule set forth in Section 11.1. In no event, however, will a SAR or
Restricted Stock Award granted to a Participant who is subject to Section 16 of
the Exchange Act be exercisable until at least six (6) months from its Award
Date.

12. Adjustments to Reflect Changes in Capital Structure.

If there is any change in the corporate structure or shares of the Company,
the Committee may make any adjustments necessary to prevent accretion, or to
protect against dilution, in the number and kind of shares authorized by the
Plan and, with respect to outstanding Awards, in the number and kind of shares
covered thereby and in the applicable Option Price. For the purpose of this
Section 12, a change in the corporate structure or shares of the Company
includes, without limitation, any change resulting from a recapitalization,
stock split, stock dividend, consolidation, rights offering, separation,
reorganization, or liquidation and any transaction in which shares of Common
Stock are changed into or exchanged for a different number or kind of shares of
stock or other securities of the Company or another corporation.

13. Nontransferability of Awards.

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

14. Rights as Shareholder.

No Common Stock may be delivered upon the exercise of any Option until full
payment has been made. A Participant has no rights whatsoever as a shareholder
with respect to any shares covered by an Option until the date of the issuance
of a stock certificate for the shares.

15. Withholding Tax.

The Committee may, in its discretion and subject to such rules as it may
adopt, permit or require a Participant to pay all or a portion of the federal,
state and local taxes, including FICA and Medicare withholding tax, arising in
connection with any Awards by (i) having the Company withhold shares of Common
Stock, (ii) tendering back shares of Common Stock received in connection with
such Award or (iii) delivering other previously acquired shares of Common Stock
having a Fair Market Value approximately equal to the amount to be withheld.
<PAGE>
16. No Right to Employment.

Participation in the Plan will not give any Participant a right to be
retained as an employee or director of the Company or its parent or
Subsidiaries, or any right or claim to any benefit under the Plan, unless the
right or claim has specifically accrued under the Plan. Nothing contained in the
Plan, or in any Award granted pursuant to the Plan, nor in any Agreement made
pursuant to the Plan, shall interfere in any way with the right of the Company
or its parent or Subsidiaries to terminate the Participant's employment at will
or change the Participant's compensation at any time.

17. Amendment of the Plan.

The Board of Directors may from time to time amend or revise the terms of
this Plan in whole or in part and may, without limitation, adopt any amendment
deemed necessary; provided, however, that no change in any Award previously
granted to a Participant may be made that would impair the rights of the
Participant without the Participant's consent.

18. Shareholder Approval.

Operation of the Plan shall be subject to approval by the shareholders of
the Company within twelve months before or after the date the Plan is adopted by
the Board of Directors. If such shareholder approval is obtained at a duly held
shareholders' meeting, it may be obtained by the affirmative vote of the holders
of a majority of the shares of the Company present at the meeting or represented
and entitled to vote thereon. The approval of such shareholders of the Company
shall be solicited substantially in accordance with Section 14(a) of the
Exchange Act and the rules and regulations promulgated thereunder.

19. Conditions Upon Issuance of Shares.

An Option shall not be exercisable and a share of Common Stock shall not be
issued pursuant to the exercise of an Option, and Restricted Stock shall not be
awarded until such time as the Plan has been approved by the shareholders of the
Company and unless the award of Restricted Stock, exercise of such Option and
the issuance and delivery of such share pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange or national securities
association upon which the shares of Common Stock may then be listed or quoted,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the shares of Common Stock are being purchased only for investment
and without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.

20. Assumption of Awards by the Company.

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

21. Effective Date and Termination of Plan.

21.01Effective Date. This Plan is effective as of the date of its adoption
by the Board of Directors; provided, however, that the Plan and any
Awards granted hereunder shall be null and void if shareholder
approval is not obtained within twelve months of the date of such
adoption.

21.02Termination of the Plan. The Plan will terminate ten (10) years after
the date it is approved by the Board of Directors; provided, however,
that the Board of Directors may terminate the Plan at any time prior
thereto with respect to any shares that are not then subject to
Awards. Termination of the Plan will not affect the rights and
obligations of any Participant with respect to Awards granted before
termination.