EXHIBIT 10.1

AMCOL INTERNATIONAL CORPORATION
2006 LONG-TERM INCENTIVE PLAN

             1.            Preamble.

             AMCOL International Corporation, a Delaware corporation (the
“Company”), hereby establishes the AMCOL International Corporation 2006
Long-Term Incentive Plan (the “Plan”) as a means whereby the Company may,
through awards of (i) incentive stock options (“ISOs”) within the meaning of
section 422 of the Code, (ii) non-qualified stock options (“NSOs”), (iii) stock
appreciation rights (“SARs”), (iv) restricted stock (“Restricted Stock”) and (v)
restricted stock units (“Restricted Stock Units”):

 

(a)

provide selected officers, directors and employees with additional incentive to
promote the success of the Company’s business;

 

 

 

 

(b)

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

 

 

 

 

(c)

enable such persons to acquire proprietary interests in the Company.

             2.          Definitions and Rules of Construction.

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

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

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

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

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

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

 

(a)

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

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(b)

the Incumbent Directors (determined using the Effective Date of this Plan as the
baseline) cease for any reason to constitute at least one-half of the directors
of the Company then serving; or

 

 

 

 

(c)

immediately prior to the consummation by the Company of a merger,
reorganization, consolidation, or similar transaction, or a plan or agreement
for the sale or other disposition of 50.1% of the consolidated assets of the
Company or a plan of liquidation of the Company (any of the foregoing
transactions, a “Reorganization Transaction”) which is not an Exempt
Reorganization Transaction (provided however, there shall be no Change of
Control unless the Reorganization Transaction is actually consummated); or

 

 

 

 

(d)

the approval by the stockholders of the Company of a plan of liquidation of the
Company which, based on information included in the proxy and other written
materials distributed to the Company’s stockholders in connection with the
solicitation by the Company of such stockholder approval, is not expected to
qualify as an Exempt Reorganization Transaction.

 

 

 

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

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

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

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

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

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

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

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

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

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

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

 

(a)

any significant diminution in the Participant’s title, authority, or
responsibilities from and after a Change of Control;

 

 

 

 

(b)

any reduction in the base compensation payable to the Participant from and after
a Change of Control; or

 

 

 

 

(c)

the relocation after a Change of Control of the Company’s place of business at
which the Participant is principally located to a location that is greater than
50 miles from the site immediately prior to the Change of Control.

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

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

             2.21     “Option” means an ISO or an NSO.

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

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

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

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

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

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

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

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

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

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

             2.32     “SEC” means the Securities and Exchange Commission.

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

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

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

             2.36       Rules of Construction:

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

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

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

             3.         Stock Subject to the Plan.

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

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

 

(a)

the maximum number of shares of Common Stock with respect to which Awards may be
granted to any individual during any one calendar year is 200,000 shares; and

 

 

 

 

(b)

the maximum number of shares of Common Stock with respect to Qualified
Performance-Based Awards that can be paid to any Covered Employee under the Plan
for a Performance Period is 100,000 shares.

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

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

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             4.          Administration.

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

 

(a)

to construe and interpret the Plan;

 

 

 

 

(b)

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

 

 

 

 

(c)

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

 

 

 

 

(d)

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

 

 

 

 

(e)

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

 

 

 

 

(f)

to determine the form in which tax withholding under Section 16 of this Plan
will be made (i.e., cash, Common Stock or a combination thereof).

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

             5.          Eligible Participants.

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

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

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

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

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(i)

the date on which it is forfeited under the provisions of Section 11.01;

 

 

 

 

(ii)

10 years from the Award Date;

 

 

 

 

(iii)

in the case of a Participant who is an employee of the Company, a Subsidiary or
an Affiliate, three months after the Participant’s termination of employment
with the Company and its Subsidiaries and Affiliates for any reason other than
for Cause, death, total and permanent disability or retirement on or after age
65;

 

 

 

 

(iv)

in the case of a Participant who is a member of the board of directors of the
Company or a Subsidiary or Affiliate, but not an employee of the Company, a
Subsidiary or an Affiliate, three months after the Participant’s termination as
a member of the board for any reason other than for Cause, death, total and
permanent disability or retirement on or after age 65;

 

 

 

 

(v)

immediately upon the Participant’s termination of employment with the Company
and its Subsidiaries and Affiliates or service on a board of directors of the
Company or a Subsidiary or Affiliate for Cause;

 

 

 

 

(vi)

12 months after the Participant’s death or total and permanent disability;

 

 

 

 

(vii)

60 months after the Participant’s termination of employment  with the Company
and its parent and Subsidiaries or service on the Board on account of retirement
on or after age 65; or

 

 

 

 

(viii)

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

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

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

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

             7.          Terms and Conditions of Incentive Stock Options

             Subject to the terms of the Plan, the Committee, in its discretion,
may award an ISO to any employee of the Company or a Subsidiary.  Each ISO shall
be evidenced by an agreement, in such form as is approved by the Committee, and
except as otherwise provided by the Committee, each ISO shall be subject to the
following express terms and conditions and to such other terms and conditions,
not inconsistent with the Plan, as the Committee may deem appropriate:

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

 

(i)

the date on which it is forfeited under the provisions of Section 11.01;

 

 

 

 

(ii)

10 years from the Award Date, except as set forth in Section 7.02 below;

 

 

 

 

(iii)

immediately upon the Participant’s termination of employment with the Company
and its Subsidiaries for Cause;

 

 

 

 

(iv)

three months after the Participant’s termination of employment with the Company
and its Subsidiaries for any reason other than for Cause or death or total and
permanent disability;

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(v)

12 months after the Participant’s death or total and permanent disability;

 

 

 

 

(vi)

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

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

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

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

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

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

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

             Subject to the terms of the Plan, the Committee, in its discretion,
may award Restricted Stock or Restricted Stock Units to any Participant.  Each
Award of Restricted Stock or Restricted Stock Units shall be evidenced by an
agreement, in such form as is approved by the Committee, and, except as
otherwise provided by the Committee, all shares of Common Stock awarded to
Participants under the Plan as Restricted Stock and all Restricted Stock Units
shall be subject to the following express terms and conditions and to such other
terms and conditions, not inconsistent with the Plan, as the Committee shall
deem appropriate:

 

(a)

Restricted Period.  Restricted Stock Units and shares of Restricted Stock
awarded under this Section 8 may not be sold, assigned, transferred, pledged or
otherwise encumbered before they vest, other than as permitted by Section 13
hereof. 

 

 

 

 

(b)

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

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(c)

Certificate Legend for Restricted Stock Awards.  Each certificate issued in
respect of shares of Restricted Stock awarded under this Section 8 shall be
registered in the name of the Participant and shall bear the following (or a
similar) legend until such shares have vested:

 

 

 

 

 

“The transferability of this certificate and the shares of stock represented
hereby are subject to the terms and conditions (including forfeiture) relating
to Restricted Stock contained in Section 8 of the AMCOL International
Corporation 2006 Long-Term Incentive Plan and an Agreement entered into between
the registered owner and AMCOL International Corporation.  Copies of such Plan
and Agreement are on file at the principal office of AMCOL International
Corporation.”

 

 

 

 

(d)

Restricted Stock Units.  In the case of an Award of Restricted Stock Units, no
shares of Common Stock or other property shall be issued at the time such Award
is granted.  Upon the lapse or waiver of restrictions and the restricted period
relating to Restricted Stock Units, shares of Common Stock shall be issued to
the holder of the Restricted Stock Units and evidenced in such manner as the
Committee may deem appropriate. 

             9.         Terms and Conditions of Stock Appreciation Rights.

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

             Except as otherwise determined by the Committee and set forth in
the Agreement, a SAR granted in conjunction with an ISO or NSO shall terminate
on the same date as the related ISO or NSO and shall be exercisable only if the
Fair Market Value of a share of Common Stock exceeds the Option Price for the
related ISO or NSO, and then shall be exercisable to the extent, and only to the
extent, that the related ISO or NSO is exercisable.  The Committee may at the
time of granting any SAR add such additional conditions and limitations to the
SAR as it shall deem advisable, including, but not limited to, limitations on
the period or periods within which the SAR shall be exercisable and the maximum
amount of appreciation to be recognized with regard to such SAR.  Any ISO or NSO
or portion thereof which is surrendered with a SAR shall no longer be
exercisable.  A SAR that is not granted in conjunction with an ISO or NSO shall
terminate on such date as is specified by the Committee in the SAR agreement and
shall vest in accordance with Section 11.02.  The Committee, in its sole
discretion, may allow the Company to settle all or part of the Company’s
obligation arising out of the exercise of a SAR by the payment of cash equal to
the aggregate Fair Market Value of the shares of Common Stock which the Company
would otherwise be obligated to deliver.

             10.     Manner of Exercise of Options.

To exercise an Option in whole or in part, a Participant (or, after his death,
his executor or administrator) must give written notice to the Committee,
stating the number of shares with respect to which he intends to exercise the
Option.  The Company will issue the shares with respect to which the Option is
exercised upon payment in full of the Option Price.  The Committee may permit
the Option Price to be paid in cash or shares of Common Stock held by the
Participant having an aggregate Fair Market Value, as determined on the date of
delivery, equal to the Option Price, provided such shares of Common Stock meet
such criteria as the Committee shall from time to time establish (e.g. that such
shares are “mature” shares under generally accepted accounting principles).

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The Committee may permit a Participant to elect to pay the Option Price upon the
exercise of an Option by authorizing a third party to sell shares of Common
Stock (or a sufficient portion of the shares) acquired upon exercise of the
Option and remit to the Company a sufficient portion of the sale proceeds to pay
the entire Option Price and any tax withholding resulting from such exercise. 
The Committee may also permit the Option Price to be paid by any other method
permitted by law, including by delivery to the Committee from the Participant of
an election directing the Company to withhold the number of shares of Common
Stock from the Common Stock otherwise due upon exercise of the Option having an
aggregate Fair Market Value on that date equal to the Option Price.  If a
Participant pays the Option Price with shares of Common Stock which were
received by the Participant upon exercise of one or more ISOs, and such Common
Stock has not been held by the Participant for at least the greater of:

 

(a)

two years from the date the ISOs were granted; or

 

 

 

 

(b)

one year after the transfer of the shares of Common Stock to the Participant,

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

             11.      Vesting.

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

Number of Years Since Award Date

 

Vested Percentage

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Fewer than one

 

0%

One but fewer than two

 

33%

Two but fewer than three

 

66%

Three or more

 

100%

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

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

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

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

             12.         Adjustments to Reflect Changes in Capital Structure.

             12.01     Adjustments.  If there is any change in the corporate
structure or shares of the Company, the Committee may make any appropriate
adjustments, including, but not limited to, such adjustments deemed necessary to
prevent accretion, or to protect against dilution, in the number and kind of
shares of Common Stock with respect to which Awards may be granted under this
Plan (including the maximum number of shares of Common Stock with respect to
which Awards may be granted under this Plan in the aggregate and individually to
any Participant during any calendar year as specified in Section 3) and, with
respect to outstanding Awards, in the number and kind of shares covered thereby
and in the applicable Option Price.  For the purposes of this Section 12, a
change in the corporate structure or shares of the Company includes, without
limitation, any change resulting from a recapitalization, stock split, stock
dividend, consolidation, rights offering, separation, reorganization, or
liquidation (including a partial liquidation) and any transaction in which
shares of Common Stock are changed into or exchanged for a different number or
kind of shares of stock or other securities of the Company or another
corporation.

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

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

             13.         Nontransferability of Awards.

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

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

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             14.         PERFORMANCE-BASED AWARDS

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

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

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

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

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

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

             14.         Rights as Stockholder.

             No Common Stock may be delivered upon the exercise of any Option
until full payment has been made.  A Participant has no rights whatsoever as a
stockholder with respect to any shares covered by an Option until the date of
the issuance of a stock certificate for the shares except as otherwise
determined by the Committee and set forth in the Agreement.

             16.       Withholding Taxes.

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

             17.        No Right to Employment.

             Participation in the Plan will not give any Participant a right to
be retained as an employee or director of the Company or its Subsidiaries or
Affiliates, or any right or claim to any benefit under the Plan, unless the
right or claim has specifically accrued under the Plan.

             18.        Amendment of the Plan.

             The Board of Directors may from time to time amend or revise the
terms of this Plan in whole or in part, subject to the following limitations:

 

(a)

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

 

 

 

 

(b)

no amendment may increase the limitations on the number of shares set forth in
Section 3, unless any such amendment is approved by the Company’s stockholders;
and

 

 

 

 

(c)

no amendment may be made to the provisions of Section 4(c) relating to repricing
unless such amendment is approved by the Company’s stockholders;

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

             19.        Conditions Upon Issuance of Shares.

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

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

             20.        Substitution or Assumption of Awards by the Company.

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

             21.        Section 409A.

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

             22.     Effective Date and Termination of Plan.

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

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

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