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 11, 1999
As a shareholder of AMCOL International Corporation, I acknowledge receipt
of Notice of Annual Meeting and accompanying Proxy Statement and appoint John
Hughes, Lawrence E. Washow and Paul C. 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 11, 1999, at
11:00 a.m., Central Daylight Savings Time, and at any adjournments thereof, at
Wyndham Hotel, 400 Park Boulevard, Itasca, Illinois, 60143.
<PAGE>
1. The election of Clarence O. Redman, Paul G. Shelton and Audrey L. Weaver as
Class I Directors;
FOR ALL NOMINEES EXCEPT NOMINEE(S) WRITTEN IN THE SPACE BELOW:
______________________________________________________________
WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES
2. The proposal ratifying the appointment of KPMG LLP as independent auditors
for 1999;
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 ITEM (2). 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 _________________________________________, 1999
______________________________________________________________________
SIGNATURE OF SHAREHOLDER
______________________________________________________________________
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>
CONTROL NUMBER
VOTE BY TELEPHONE
Call * * Toll Free * * On a Touch Tone Telephone
1-888-297-9637
There is NO CHARGE to you for this call.
The Board of Directors encourages you to use this inexpensive,
time saving method to vote.
Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card.
You will be asked to enter a Control Number, which is located in the box on the
left side of this form.
OPTION #1: To vote as the Board of Directors recommends on ALL proposals:
Press 1
_________WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1-THANK YOU FOR VOTING
OPTION #2: If you choose to vote on each proposal separately, press 0. You will
hear these instructions:
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
nominees, press 9.
_________ To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and listen to the
instructions.
Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0
_________WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1-THANK YOU FOR
VOTING.
If you vote by telephone, DO NOT mail back your proxy.
<PAGE>
AMCOL INTERNATIONAL CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 11, 1999
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 11, 1999, at 11:00 a.m.,
Central Daylight Savings Time, for the following purposes:
1. To elect three (3) directors for a three-year term or until their
successors are elected and qualified;
2. To ratify the appointment of KPMG LLP as independent auditors for 1999; and
3. To transact such other business as may properly come before the meeting.
Only shareholders of record as of the close of business on March 19, 1999,
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, or vote by telephone in accordance with
the instructions provided. 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
March 29, 1999
<PAGE>
TABLE OF CONTENTS
Introduction..................................................................1
Questions and Answers About Voting............................................1
Beneficial Owners of More Than 5% of AMCOL's Stock............................3
Directors' and Executive Officers' Ownership of AMCOL Stock...................4
Nominees for the Board of Directors...........................................6
Proposed Ratification of Independent Auditors.................................7
Named Officer Compensation
Summary Compensation Table...............................................8
Option Grants in Last Fiscal Year........................................9
Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values...10
Pension Plans............................................................10
Change in Control Arrangements...........................................11
Information About Continuing Members of the Board.............................13
Board Committee Membership Roster and Meetings...........................14
Director Compensation....................................................15
Compensation Committee Report on Executive Compensation.......................15
Stock Performance Graph.......................................................18
Section 16(a) Beneficial Ownership Reporting Compliance.......................19
<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 11, 1999
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 11, 1999, 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 solicit by facsimile, telephone or in person.
This proxy statement was first mailed or delivered to shareholders on or
about March 29, 1999.
QUESTIONS AND ANSWERS ABOUT VOTING
Who Has the Right to Vote?
The holders of the Company's Common Stock at the close of business on March
19, 1999, are entitled to vote at the Annual Meeting. Each shareholder is
entitled to one vote for each share of common stock held on the record date. The
vote can be made in person or by proxy, using the enclosed proxy card or by
telephone.
What am I voting on?
You are voting to elect three directors (Clarence O. Redman, Paul G.
Shelton and Audrey L. Weaver) and to ratify the appointment of KPMG LLP as
independent auditor for 1999.
What constitutes a quorum?
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.
As of March 19, 1999, the Company had 26,751,877 shares of Common Stock
outstanding. 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.
<PAGE>
How do I vote?
You can vote by telephone. The phone number is on the proxy voting
instructions. Otherwise, you can return your signed proxy card to us before the
Annual Meeting, and your shares will be voted as you indicate. Please vote by
telephone or in writing, but only vote once. 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 and "FOR" ratification of KPMG 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.
Who will vote my proxy?
Mr. John Hughes, Mr. Lawrence E. Washow and Mr. Paul C. Weaver will vote
your shares in accordance with your instructions.
Who counts the votes?
A representative of Harris Trust and Savings Bank, the Company's transfer
agent, will count the votes. This representative, plus one of the directors of
the Company, will act as inspectors of election.
When are shareholder proposals for the 2000 annual meeting due?
To make a proposal to be included in the proxy statement for the 2000
Annual Meeting, you must submit your written request to the Company by December
1, 1999.
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 11, 2000, and March
12, 2000. For a free copy of the Company by-laws, shareholders should write to
the Corporate Secretary.
<PAGE>
BENEFICIAL OWNERS OF MORE THAN 5% OF AMCOL'S STOCK
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 22, 1999.
<TABLE>
<CAPTION>
Name and Address of Number of Percent
Beneficial Owner Shares and of Class
Nature of
Beneficial
Ownership (1)
<S> <C> <C> <C>
Harris Trust and Savings Bank................................................ 3,101,751 (2) 11.60%
Paul Bechtner Trust
111 West Monroe Street
Chicago, Illinois 60690
Everett P. Weaver............................................................ 3,119,751 (3)(4) 11.66%
c/o AMCOL International Corporation
1500 West Shure Drive, Suite 500
Arlington Heights, Illinois 60004-7803
William D. Weaver............................................................ 4,164,539 (3)(5) 15.57%
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 615,570 shares held in a living trust and 43,300 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 60,860 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>
DIRECTORS' AND EXECUTIVE OFFICERS' OWNERSHIP OF AMCOL STOCK
The following table sets forth, as of February 22, 1999, 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.............................................................. 26,946 *
Robert E. Driscoll, III................................................... 405,295 1.48%
Raymond A. Foos........................................................... 76,282 *
John Hughes............................................................... 758,033 2.77%
James A. McClung.......................................................... 1,000 *
Jay D. Proops............................................................. 40,000 *
C. Eugene Ray............................................................. 108,346 *
Clarence O. Redman........................................................ 63,088 *
Paul G. Shelton........................................................... 459,551 1.68%
Dale E. Stahl............................................................. 25,500 *
Lawrence E. Washow........................................................ 476,047 1.74%
Audrey L. Weaver.......................................................... 648,916 2.37%
Paul C. Weaver............................................................ 382,720 1.40%
Frank B. Wright, Jr....................................................... 27,064 *
Gary L. Castagna.......................................................... 55,097 *
All of the above and other executive
officers as a group (19 persons)..................................... 3,248,201 11.86%
<FN>
* Percentage represents less than 1% of the total shares of Common Stock
outstanding as of February 22, 1999.
(1) Nature of beneficial ownership is set forth on Page 5.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Nature of Beneficial Ownership (Shares Held) as of February 22, 1999
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 23,400 - - - - - - - 3,546 26,946
Robert E. Driscoll, III 30,000 - 371,295 (3) 4,000 - - - - - 405,295
Raymond A. Foos 67,736 - - - - 5,000 - - 3,546 76,282
John Hughes 266,230 11,102 - - - 42,278 217,500 56,010 164,463 758,033
James A. McClung 1,000 - - - - - - - - 1,000
Jay D. Proops 24,000 - 10,000 - - - - - 6,000 40,000
C. Eugene Ray 61,150 - - - - 20,250 - - 26,946 108,346
Clarence O. Redman 25,374 14,314 - - - - - - 23,400 63,088
Paul G. Shelton 60,535 20,473 - - 14,492 935 217,500 56,010 89,606 459,551
Dale E. Stahl 19,500 - - - - - - - 6,000 25,500
Lawrence E. Washow 70,143 13,165 - - 7,500 - 217,500 56,010 111,729 476,047
Audrey L. Weaver 644,970 - - - - 3,946 - - - 648,916
Paul C. Weaver 318,876 - - 30,638 - 31,706 - - 1,500 382,720
Frank B. Wright, Jr. 1,350 18,079 - - - - - - 7,635 27,064
Gary L. Castagna 2,733 3,914 - - - - - - 48,450 55,097
All Directors 1,651,374 145,449 381,295 34,638 21,992 104,565 217,500 56,010 635,378 3,248,201
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
NOMINEES FOR THE BOARD 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 three (3) 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
<TABLE>
<CAPTION>
CLASS I
(Term expiring in 2002)
Name Director
Age Since Principal Occupation for Last Five Years
<S> <C> <C> <C>
Clarence O. Redman.............. 56 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................. 49 1988 Senior Vice President and Chief Financial Officer of
the Company.
Audrey L. Weaver *.............. 44 1997 Private investor.
<FN>
* Audrey L. Weaver and Paul C. Weaver are first cousins.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR EACH OF THE
NOMINEES NAMED ABOVE.
</FN>
</TABLE>
<PAGE>
ITEM 2
PROPOSED RATIFICATION OF INDEPENDENT AUDITORS
The Audit Committee has recommended the appointment of KPMG LLP as
independent auditors for the Company to audit its consolidated financial
statements for 1999 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 LLP. If
the shareholders should not approve, the Audit Committee and the Board will
reconsider the appointment.
A representative of KPMG LLP will be at the Annual Meeting to answer
questions or comment, where appropriate.
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 LLP AS INDEPENDENT ACCOUNTANTS.
<PAGE>
NAMED OFFICERS' COMPENSATION
Summary Compensation Table
The Summary Compensation Table below includes, for each of the fiscal years
ended December 31, 1998, 1997 and 1996, individual compensation for services to
the Company and its subsidiaries of those persons who were at December 31, 1998:
(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 All Other
Compensation Compensation
Name & Principal Position Annual Compensation (1)(2) ($) (4)
Awards
Securities
Bonus Underlying
Year Salary ($) ($)(3) Options (#)
<S> <C> <C> <C> <C> <C>
John Hughes......................... 1998 450,000 257,792 25,000 19,386
Chairman and 1997 400,000 244,650 25,500 24,400
Chief Executive Officer 1996 380,000 - 18,900 6,000
Lawrence E. Washow.................. 1998 316,667 137,600 18,750 16,578
President 1997 229,256 114,449 12,750 8,740
and Chief Operating Officer 1996 200,077 - 14,321 6,360
Paul G. Shelton..................... 1998 240,000 92,800 12,500 13,694
Senior Vice President and 1997 215,000 102,354 12,750 8,600
Chief Financial Officer of 1996 200,000 - 9,450 6,000
the Company and President
of Ameri-Co Carriers, Inc.
and Nationwide Freight
Service, Inc.
Frank B. Wright, Jr................. 1998 195,000 101,010 10,750 10,600
Vice President of the 1997 175,000 70,000 9,563 3,500
Company and President of 1996 121,221 80,000 8,850 -
American Colloid Company
Gary L. Castagna.................... 1998 160,000 109,874 10,750 8,599
Vice President of 1997 142,645 54,976 6,375 5,706
the Company and President 1996 123,046 43,400 8,250 22,730
of Chemdal International
Corporation
<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.
<PAGE>
(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. The 1996 figures include $16,730 in
connection with an overseas cost of living allowance for Mr. Castagna.
</FN>
</TABLE>
Option Grants in Last Fiscal Year
Shown below is information on grants of incentive stock options during the
fiscal year ended December 31, 1998 to the Named Officers, which are reflected
in the Summary Compensation Table on Page 8.
<TABLE>
<CAPTION>
Individual Grants in 1998 Grant Date
Value
Name Number of % of Total Exercise Expiration Grant
Securities Options Price (3) Date Date
Underlying Granted To Present
Options Employees (2) Value (4)
Granted (1)
<S> <C> <C> <C> <C> <C>
John Hughes 25,000 8.77% $13.125 02/10/08 $130,922
Lawrence E. Washow 18,750 6.58 13.125 02/10/08 98,192
Paul G. Shelton 12,500 4.39 13.125 02/10/08 65,461
Frank Wright, Jr. 10,750 3.77 13.125 02/10/08 56,296
Gary L. Castagna 10,750 3.77 13.125 02/10/08 56,296
<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 285,065 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 $13.125, equal to the fair market value of
the underlying stock on the date of grant; an option term of 6 years;
interest rate of 5.56% 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 39.56% and dividends at the rate of
$0.22 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>
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 1998 and (ii)
unexercised options granted in fiscal 1998 and prior years under the 1983 and
1993 Plans to the Named Officers and held by them at December 31, 1998.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Shares 12/31/98 12/31/98
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable (1)
<S> <C> <C> <C> <C> <C> <C>
John Hughes .............. 34,788 $351,779 172,367 / 79,271 $582,897 / $18,086
Lawrence E. Washow........ 17,000 152,524 116,544 / 40,678 413,775 / 7,576
Paul G. Shelton........... 10,750 112,273 89,831 / 38,393 392,345 / 7,753
Frank B. Wright, Jr....... - - 3,540 / 25,623 2,625 / 3,938
Gary L. Castagna.......... - - 45,510 / 22,466 39,826 / 4,370
<FN>
(1) Based on the closing sale price as quoted on The New York Stock Exchange on
that date.
</FN>
</TABLE>
Pension Plans
<TABLE>
<CAPTION>
Remuneration Estimated Annual Retirement Benefits
15 Years 20 Years 25 Years 30 Years 35 Years 40 Years
<S> <C> <C> <C> <C> <C> <C> <C>
$150,000 $33,750 $45,000 $56,250 $67,500 $78,750 $84,375
200,000 45,000 60,000 75,000 90,000 105,000 112,500
250,000 56,250 75,000 93,750 112,500 131,250 140,625
300,000 67,500 90,000 112,500 135,000 157,500 168,750
350,000 78,750 105,000 131,250 157,500 183,750 196,875
400,000 90,000 120,000 150,000 180,000 210,000 225,000
450,000 101,250 135,000 168,750 202,500 236,250 253,125
500,000 112,500 150,000 187,500 225,000 262,500 281,250
550,000 123,750 165,000 206,250 247,500 288,750 309,375
</TABLE>
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.
<PAGE>
<TABLE>
<CAPTION>
Name Years of Average Pension
Service Compensation Benefit
<S> <C> <C> <C>
John Hughes 34 $477,161 $244,881
Lawrence E. Washow 20 260,473 80,240
Paul G. Shelton 17 236,943 63,429
Frank B. Wright, Jr. 3 151,402 -
Gary L. Castagna 9 170,094 23,242
</TABLE>
The above table indicates the average earnings for the highest five
consecutive calendar years and the number of years of credited service under the
pension plans as of March 15, 1999, for each of the Named Officers. Covered
compensation includes a participant's base salary, commissions, bonuses and
salary reductions under the Company's Savings Plan and Deferred Compensation
Plan. Mr. Wright has only been employed by the Company for three years, and does
not have a vested pension benefit. The average compensation for Mr. Wright
represents the average paid during his employ with the Company.
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, 1998, was
$635,683.
Change In Control Arrangements
Each of the Named Officers 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
Castagna), unless there is just cause for his termination. 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, or the sale of 90% or more of the
Company's assets.
If termination occurs within the specified period for other than just
cause, through either actual termination or constructive termination, the Named
Officer will receive compensation equal to his current annual salary plus an
average of his incentive bonus payments for prior periods, less any compensation
received from the date of the change in control. These payments may not exceed
an amount equal to two times, in the case of Messrs. Wright and Castagna, and
three times, in the case of Messrs. Hughes, Washow and Shelton, the respective
Named Officer's average annual compensation during the prior five calendar
years. Each Named Officer will also receive continued medical, health and
disability benefits for one year after termination.
<PAGE>
The table below indicates the maximum amount that would have been paid had
a change of control occurred and the Named Executives were terminated without
cause prior to December 31, 1998.
<TABLE>
<CAPTION>
Name Date of Agreement Payment
<S> <C> <C>
John Hughes April 1, 1997 $1,431,483
Lawrence E. Washow February 16, 1998 781,419
Paul G. Shelton April 1, 1997 710,829
Frank B. Wright, Jr. August 21, 1996 302,804
Gary L. Castagna February 17, 1998 340,188
</TABLE>
The Agreements do not require the Named Officers to seek other employment,
but any payments or benefits will 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 Castagna) from the date of termination of employment with or without cause,
before or after a change in control, each of the Named Officers is prohibited
from engaging in any business that competes with the Company and from soliciting
any employee of the Company.
<PAGE>
INFORMATION ABOUT CONTINUING MEMBERS OF THE BOARD
CLASS II
(Term expiring in 2000)
<TABLE>
<CAPTION>
Name Director
Age Since Principal Occupation for Last Five Years
<S> <C> <C> <C>
Robert E. Driscoll, III......... 60 1985 Retired Dean and Professor of Law, University of South
Dakota.
James A. McClung ............... 61 1997 Vice President and Executive Officer of FMC
Corporation, a diversified producer of chemicals,
machinery and other products for industry, government
and agriculture.
C. Eugene Ray................... 66 1981 Retired Executive Vice President - Finance of Signode
Industries, Inc., a manufacturer of industrial
strapping products.
Dale E. Stahl................... 51 1995 President and Chief Operating Officer of Gaylord
Container Corporation, a manufacturer and distributor
of brown paper and packaging products.
</TABLE>
CLASS III
(Term expiring in 2001)
<TABLE>
<CAPTION>
Director
Name Age Since Principal Occupation for Last Five Years
<S> <C> <C> <C>
Arthur Brown.................... 58 1990 Chairman, President and Chief Executive Officer of
Hecla Mining Company.
John Hughes..................... 56 1984 Chairman of the Board and Chief Executive Officer of
the Company.
Jay D. Proops................... 57 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 ............. 46 1998 President of the Company since February, 1998; 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 *................ 36 1995 Managing partner of Consumer Aptitudes, Inc. since July
1997, a marketing research firm; prior thereto, various
sales and account management positions for AC Nielsen
Company, a provider of marketing information services.
<FN>
* Paul C. Weaver and Audrey L. Weaver are first cousins.
</FN>
</TABLE>
<PAGE>
Board Committee Membership Roster and Meetings
<TABLE>
<CAPTION>
Name Audit Compensation Executive Nominating
<S> <C> <C> <C> <C>
Arthur Brown X X
Robert E. Driscoll, III X X
Raymond A. Foos X* X
John Hughes X
James A. McClung X X
Jay D. Proops X* X X
C. Eugene Ray X X X* X*
Clarence O. Redman X X
Paul G. Shelton X
Dale E. Stahl X X X
Lawrence E. Washow X
Audrey L. Weaver X
Paul C. Weaver X X
Number of Meetings 4 3 3 1
in 1998
<FN>
*Chairperson
</FN>
</TABLE>
The Board of Directors held seven meetings during the 1998 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,
except for Mr. Brown who missed two board meetings. The mandatory retirement age
for directors is 70.
The Audit Committee, comprised of independent, non-employee directors, 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.
The Compensation Committee, comprised of non-employee directors, 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 stock 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. Clarence O.
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.
The Nominating 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.
<PAGE>
Director Compensation
<TABLE>
<CAPTION>
Type of Compensation Cash Stock Options
<S> <C> <C>
Annual Retainer $14,700 2,000 shares
Board Meeting Attendance Fee $1,470
Annual Retainer for Committee Chairman $1,969
Committee Meeting Attendance Fee $525
</TABLE>
Directors who are also full-time officers of the Company are not paid for
their services as directors or for attendance at meetings.
Pursuant to the 1998 Long-Term Incentive Plan, each of the non-executive
directors was granted 2,000 options at $14.06 per share in 1998.
COMPENSATION 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 eight
non-employee directors whose objectives are to approve the design, assess the
effectiveness and administer compensation programs in support of the
compensation policies. The Compensation Committee also evaluates executive
performance and reviews and approves all salary arrangements and other
remuneration for the officer group.
Compensation Committee Philosophy
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.
<PAGE>
The committee considers stock ownership by management to be an important
means of linking management's interests with those of shareholders.
Effective February 1999, AMCOL adopted stock ownership guidelines for its
corporate and subsidiary officers. The amount of stock required to be owned
increases with the level of responsibility of each executive, with the
Chief Executive Officer expected to own stock with a value of at least
equal to four times base salary. Shares that the executives have the right
to acquire through the exercise of stock options are not included in the
calculation of stock ownership for purposes of these guidelines. Executives
are expected to reach their respective stock ownership goals over a
three-year period.
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 1998 by $50,000 (12.5%). 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 for the Chief Executive Officer, Chief Operating
Officer and Chief Financial Officer is based upon performance of the Company, as
a whole, compared to targets for return on capital and earnings per share. These
executives do not receive bonuses until the Company achieves a designated level
of return on capital and earnings per share. In the case of the other
executives, their bonus is determined pursuant to formulas tailored for each
business segment with an emphasis on the return on capital and earnings of the
particular business segment to which the executive devotes the majority of his
time.
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 $257,792 for the 1998 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 1998, the Chief Executive Officer received options to purchase 25,000
shares with an exercise price of $13.125, as provided in the Option Grant Table
on Page 9. The Compensation Committee believes the equity incentive program
provides a strong link between management behavior and shareholder interests.
<PAGE>
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
Arthur Brown
Robert E. Driscoll, III
Raymond A. Foos
C. Eugene Ray
Clarence O. Redman
Dale E. Stahl
Audrey L. Weaver
STOCK PERFORMANCE GRAPH
The following graph sets forth a five-year comparison of cumulative total
returns for: (i) the Company (which trades on The New York Stock Exchange); (ii)
S&P SmallCap 600 Index; (iii) a custom peer group of publicly traded companies
(the "Peer Group"); and a custom peer group of publicly traded companies that
were used in previous proxy performance graphs ("Former Peers").
In identifying the Former Peers, 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 companies, it was determined that many of the
selected companies no longer matched the Company's current operations. Using the
assistance of consultants, the Company selected the Peer Group that consists of
companies whose businesses, sales sizes, market capitalization and stock trading
volumes 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 and Former Peers have been
weighted according to market capitalization.
The Peer Group consists of the following companies: Calgon Carbon
Corporation, ChemFirst, Inc., Lawter International, Inc., Lilly Industries,
Inc., McWhorter Technologies, Inc., Mississippi Chemical Corporation, Oil-Dri
Corporation of America and Zemex Corporation.
The Former Peers consist of the following companies: The Dexter
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.
<PAGE>
Comparison of Five-Year Cumulative Total Return*
AMCOL International Corporation, S&P SmallCap 600, Peer Group and Former Peers
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
Dec-94 Dec-95 Dec-96 Dec-97 Dec-98
<S> <C> <C> <C> <C> <C>
AMCOL INTERNATIONAL 62.8 64.5 72.7 111.6 70.8
S&P SmallCap 95.3 123.8 150.1 188.5 186.0
Peer Group 89.5 99.9 114.3 113.0 95.8
Former Peers 100.2 119.7 126.0 157.8 139.5
</TABLE>
Assumes $100 invested on December 31, 1993, in AMCOL International Corporation
Common Stock, S&P SmallCap 600, Peer Group and Former Peers.
* Total return assumes reinvestment of dividends on a quarterly basis.
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 Audrey L.
Weaver, a director, filed a late report covering a transaction involving a total
of 3,000 shares, Clarence O. Redman, a director, filed a late report involving
5,000 shares and Ryan F. McKendrick, an executive officer, filed a late initial
beneficial ownership report following his election to an 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.
By Order of the Board of Directors,
Clarence O. Redman
Secretary
Arlington Heights, Illinois
March 29, 1999
