U. S. SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C. 20549
                              FORM 10-QSB

(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
     For the quarterly period ended JUNE 30, 1998

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
     For the transition      to
     period from:
                         ----  ----

        Commission file number       0-14937
                               ---------------------

                        PMC INTERNATIONAL, INC.
   (Exact name of small business issuer as specified in its charter)

                 COLORADO          84-0627374
     (State or other jurisdiction of (IRS Employer
      incorporation or organization) Identification No.)

          555 17th Street, 14th Floor, Denver, Colorado 80202
                (Address of principal executive offices)

                             (303) 292-1177
                      (Issuer's telephone number)

                             Not Applicable
 (Former name, former address and former fiscal year, if changed since
                              last report)

Check  whether the issuer (1) filed all  reports  required to be filed by
Section  13 or 15(d) of the  Exchange  Act  during the past 12 months (or
for such  shorter  period that the  registrant  was required to file such
reports),  and (2) has been subject to such filing  requirements  for the
past 90
days.Yes X  No
        ----    ---

As of August 13, 1998, the issuer had  outstanding  4,857,803  shares of
Common Stocks, par value $.01 per share.

Transitional Small Business Disclosure Format
Yes     No   X
    ----    ---
<PAGE>

                PMC INTERNATIONAL, INC. AND SUBSIDIARIES

                              FORM 10-QSB
                                 INDEX

                                           Page  #
PART I   Financial Information

     Item 1       Financial Statements (Unaudited)    3

         Condensed Consolidated Balance Sheets   3
         -- June 30, 1998 & December 31, 1997

         Condensed Consolidated Statements of Income  5
         -- Six months ended June 30, 1998 & June 30, 1997

         Condensed Consolidated Statements of Cash Flow    6
        -- Six months ended June 30, 1998 & June 30, 1997

         Notes to Unaudited Condensed Consolidated
         Financial Statements                    7

     Item 2Management's Discussion & Analysis of Financial Condition &
         Results of Operations                   9

PART II  Other Information

     Item 1                      Legal Proceedings    15

     Item 6         Exhibits & Reports on Form 8-K    15

Signatures                                            16

Exhibit Index                                         17



<PAGE>

   PART I. FINANCIAL INFORMATION

ITEM 1  FINANCIAL STATEMENTS (Notes 1 & 4)

          PMC INTERNATIONAL, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED BALANCE SHEETS

                           ASSETS


                                        (Unaudited)
                                        June 30,  December 31,
                                          1998        1997
                                        ---------   ---------

CURRENT ASSETS

    Cash and cash equivalents (Note 2) $2,099,557  $2,953,740

    RECEIVABLES:
       Investment management fees       1,050,688   1,041,390
       Other receivables                   92,587     166,221

FURNITURE AND EQUIPMENT, at cost,
    net of accumulated depreciation of
    $1,318,697 and $1,277,801 (Note 1)    769,186     965,168

SOFTWARE AND PRODUCT DEVELOPMENT
    at cost, net of accumulated
    amortization of
    $1,382,674 and $963,469 (Note 1)    1,090,023   1,208,713

PREPAID EXPENSES AND OTHER ASSETS       1,081,997   1,023,364

LONG TERM NOTE RECEIVABLE (Note 2)        319,948     623,115

GOODWILL, net of amortization
    of $418,492 and $146,096 (Note 1)   5,122,209   5,394,606
                                        ---------   ---------

    TOTAL ASSETS                       11,626,195  13,376,317
                                        =========   =========

<PAGE>

           PMC INTERNATIONAL, INC. AND SUBSIDIARIES
             CONDENSED CONSOLIDATED BALANCE SHEETS
                           (CONT'D)

             LIABILITIES AND SHAREHOLDERS' EQUITY

                                        (Unaudited)
                                        June 30,     December
                                                        31,
                                          1998          1997
                                        ----------   -----------

LIABILITIES
    Accounts payable                   $2,126,991    $1,687,967
    Accrued expenses                      772,404       644,012
    Other liabilities                     102,597       104,125
    Deferred revenue                    1,368,377     1,307,382
    Notes payable - current (Note 3)      724,696       166,158
    Obligations under capital lease       323,264       384,986
    Notes payable - long-term (Note 3)     40,000       200,000
                                        ----------   -----------

    TOTAL LIABILITIES                   5,458,329     4,494,630
                                        ----------   -----------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
    Preferred stock, no par value -
    authorized
       5,000,000 shares; issued and
       outstanding,
       138,182 shares and 138,182         345,455       345,455
       shares
    Common stock, $.01 par value -
    authorized
       50,000,000 shares; issued and
       outstanding,
       4,857,803 shares and 4,857,903      48,578        48,579
       shares
    Additional paid-in capital         22,969,211    22,977,526
    Accumulated deficit               (17,195,378)  (14,489,873)
                                        ----------   -----------

       TOTAL SHAREHOLDERS' EQUITY       6,167,866     8,881,687
                                        ----------   -----------
 
TOTAL LIABILITIES AND
    SHAREHOLDERS' EQUITY               $11,626,195  $13,376,317
                                        ==========   ===========

<PAGE>
                         PMC INTERNATIONAL, INC. AND SUBSIDIARIES
                       CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                       (Unaudited)

                       Three Months Ended         Six Months Ended
                            June 30,                  June 30,
REVENUE


                   1998         1997          1998          1997
                -----------   ----------   ------------  -----------
    Investment  $5,305,228    $2,944,643   $10,721,563   $5,733,145
    management  
    fees

    Other           95,620       45,442        149,733      118,062
    income
                -----------   ----------   ------------  -----------

       Total     5,400,848    2,990,085     10,871,296    5,851,207
       revenue
                -----------   ----------   ------------  -----------

DIRECT EXPENSES

    Investment   3,209,421    1,343,952      6,558,222    2,734,674
    manager
    and other
    fees
                -----------   ----------   ------------  -----------

GROSS MARGIN                                              
                $2,191,427    $1,646,133    $4,313,074   $3,116,533
                -----------   ----------   ------------  -----------

OPERATING
EXPENSES
    Salaries     1,711,755    1,248,211      3,558,824    2,216,660
    and
    benefits

    Clearing       154,758      120,447        309,242      277,655
    charges
    and user
    fees

    Advertising    224,247      203,281        488,248      416,729
    and
    promotion

    General        372,336      255,227        726,647      482,575
    and
    administrative

    Occupancy      553,216      331,509      1,152,828      607,754
    and
    equipment
    costs

    Professional   125,075      221,335        374,397      427,285
    fees

    Amortization   136,198            -        272,396            -
    of goodwill

    Amortization    89,612            -        135,997            -
    of software
    development
    costs
                -----------   ----------   ------------  -----------
       Total     3,367,197    2,380,010      7,018,579    4,428,658
       operating
       expenses
                -----------   ----------   ------------  -----------

NET LOSS       $(1,175,770)   $(733,877)   $(2,705,505) $(1,312,125)
BEFORE INCOME
TAXES

INCOME TAXES             -            -              -            -
                -----------   ----------   ------------  -----------

NET LOSS       $(1,175,770)   $(733,877)   $(2,705,505)  $(1,312,125)
                -----------   ----------   ------------  -----------

NET LOSS PER        $(0.25)      $(0.21)       $ (0.56)      $(0.37)
COMMON SHARE

WEIGHTED
AVERAGE NUMBER
OF COMMON
SHARES           4,857,804    3,630,673      4,857,804     3,630,805
OUTSTANDING
                -----------   ----------   ------------  -----------

<PAGE>

           PMC INTERNATIONAL, INC. AND SUBSIDIARIES
        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (Unaudited)

                                            Six Months Ended
                                                June 30,
                                          1998          1997
                                        ----------   -----------
CASH FLOWS FROM OPERATING ACTIVITIES
    Net Loss                            $(2,705,505) $(1,312,125)
    Adjustments to reconcile net loss
    to net cash used in operating
       activities

    Accretion of discount on notes       (19,111)      (32,610)
    receivable

    Depreciation and amortization         709,976       310,500

    Changes in operating assets and
    liabilities

       Investment management fees         (9,298)     (824,840)
       receivable

       Other receivables                   73,634        19,989
       Prepaid expenses and other        (58,633)     (373,114)
       assets

       Accounts payable                   439,024      (84,402)

       Accrued expenses                   128,392      (24,039)

       Other liabilities                  (1,528)      (21,625)

       SEC Settlement Distribution       (13,986)     (603,091)

       Deferred revenues                   60,995       (1,379)
                                        ----------   -----------

    Net cash used in operating          (1,396,040)  (2,946,736)
    activities
                                        ----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of furniture, and           (78,671)     (441,610)
    equipment

    Disposal of furniture & equipment     261,949             -
    - PMCIS

    Decrease of long term note            322,278        38,871
    receivable

    Cost of product development         (300,515)             -
                                        ----------   -----------

    Net cash provided by (used in)
    investing   activities                205,041     (402,739)
                                        ----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES
    Net proceeds from notes payable       600,000             -

    Principal payments on notes payable (201,462)       (4,075)

    Principal payments on obligations    (61,722)      (62,991)
    under capital     lease

    Proceeds from exercise of stock             -        26,875
    options
                                        ----------   -----------
    Net cash provided by financing        336,816      (40,191)
    activities
                                        ----------   -----------

NET INCREASE (DECREASE) IN CASH         (854,183)    (3,389,666)
                                        ==========   ===========

CASH, at beginning of period             2,953,740     6,499,390
                                        ----------   -----------
CASH, at end of period                  $2,099,557   $3,109,724
                                        ==========   ===========

 
<PAGE>
                PMC INTERNATIONAL, INC. AND SUBSIDIARIES

     NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
        FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND JUNE 30, 1997

NOTE 1 - BASIS OF PRESENTATION

The accompanying  unaudited condensed  consolidated financial statements
include the  historical  accounts of Portfolio  Management  Consultants,
Inc.  ("PMC") for all periods,  the accounts of PMCI since September 30,
1993, the accounts of Portfolio Brokerage Services,  Inc., and Portfolio
Technology Services, Inc. since inception,  and PMC Investment Services,
Inc.  (formerly  ADAM  Investment  Services,  Inc.) since  September 24,
1997.  These financial  statements have been prepared in accordance with
generally   accepted   accounting   principles  for  interim   financial
information  and pursuant to the rules and regulations of the Securities
and  Exchange  Commission.  Accordingly,  they do not include all of the
information  and  footnotes  required by generally  accepted  accounting
principles  for  complete  financial  statements.   In  the  opinion  of
Management,   all   adjustments   (consisting  of  normal  accruals  and
elimination  of  intercompany  accounts  and  transactions)   considered
necessary  for a fair  presentation  have been  included.  The unaudited
condensed   consolidated   financial   statements   should  be  read  in
conjunction  with the  consolidated  financial  statements and footnotes
thereto  included in the  Company's  Annual  Report on Form  10-KSB,  as
amended, for the year ended December 31, 1997.

NOTE 2 - CASH AND CASH EQUIVALENTS

The Company holds cash of  $2,100,000 of which  $1,750,000 is restricted
as a result of the following  transaction:  In January,  1997, a company
(the "LLC") owned and  controlled  by the  Company's  president and CEO,
borrowed  $1,750,000  from a bank with a due date of December  31, 1997.
The purpose of the loan was to finance  payment of the deferred  portion
of the  purchase  price of 410,961  shares of PMCI common stock owned by
the LLC that were  purchased from a former officer of the Company at the
time of his departure in July 1995. In connection  with this  borrowing,
the Company  agreed to  collateralize  the loan on behalf of the LLC and
the 410,961  shares of common stock owned by the LLC were pledged to the
Company.  Accordingly,  $1,890,000 of cash was originally restricted for
this  purpose.  In October  1997,  the Company and the LLC  renegotiated
the arrangement  with another bank resulting in a $1,400,000 loan to the
LLC due  and  payable  December  31,  1998,  and  collateralized  by the
Company,  and a $350,000  loan due March 31, 1998,  collateralized  with
87,500  shares of PMCI stock owned by the LLC and released from a pledge
to the  Company.  In April  1998,  the  $350,000  LLC loan due March 31,
1998,   was  again   restructured   with  the  Company   providing  cash
collateral,  the loan being  extended  until  December 31, 1998, and the
87,500  shares of PMCI stock owned by the LLC released  from a pledge to
the bank and pledged to the Company.  Accordingly,  as of June 30, 1998,
$1,750,000  included in Cash and Cash  Equivalents  in the  accompanying
balance sheet is  restricted  under this  arrangement.  The Company also
agreed to loan the LLC amounts  sufficient  to pay  interest on the loan
so long as the amount of loans made and bank  collateral  provided would
not exceed  $2,000,000.  As of June 30, 1998, the Company has loaned the
LLC  approximately  $195,000  designated to pay the interest on the bank
loan.  The LLC has agreed to reimburse  the Company for any amounts paid
by the Company  toward the loan or for  collateral  applied to the loan,
including  interest at an annual rate of 9%, and has granted the Company
a security  interest in the 410,961 shares of the Company's common stock
owned by it.



NOTE 3 - NOTES PAYABLE

Notes  payable  include a loan from a bank  with an  original  amount of
$600,000 which was  collateralized  by accounts  receivable and of which
$36,725  was  paid on  June  24,  1998.  Principal  payments  are due as
follows:  $363,725  on January 1, 1999,  and  $200,000 on April 1, 1999.
Interest on the note, 11%, is due and payable monthly.

NOTE 4 - SUBSEQUENT EVENTS

The  Company  is  reorganizing  its  executive   management  and  is  in
discussions  with its President and Chief  Executive  Officer  regarding
his departure from the Company.  In connection with the  reorganization,
the  Company  expects  that it would  become  obligated  to pay the loan
obligations  of the  LLC  (see  Note  2) with  cash  held in  restricted
accounts.  The  Company  also  expects it would  take into its  treasury
stock the  410,961  shares  of PMCI  common  stock  owned by the LLC and
pledged to the Company in support of its guarantee of the LLC loans.


<PAGE>


ITEM 2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  
       CONDITION  AND  RESULTS  OF  OPERATIONS.

The following  discussion provides information that the Company believes
is  relevant  to an  assessment  and  understanding  of its  results  of
operations.  It  should  be  read  in  conjunction  with  the  Financial
Statements and Notes included  elsewhere  herein and in the consolidated
financial  statements  and footnotes  included in the  Company's  Annual
Report on Form  10-KSB,  as  amended,  for the year ended  December  31,
1997.  The  discussion  below  contains  "forward  looking   statements"
within the meaning of the federal securities laws,  including statements
regarding the Company's prospects,  cash flows, liquidity, and potential
of  the  Company's   products  and  services  and  similar   expressions
concerning  matters that are not historical facts.  These statements are
subject to risks and  uncertainties  that could cause  results to differ
materially from those expressed in the statements.

General

The  Company  and  its   subsidiaries   develop,   market,   and  manage
sophisticated  investment management products and services.  The Company
provides  products  and  services to  facilitate  the  selection  and/or
monitoring of unaffiliated  money managers or mutual funds for customers
of  the  Company's   distribution  channels  depending  upon  the  size,
sophistication  and  requirements  of  such  customers.   The  Company's
products   and   services    address    investment    suitability    and
diversification,  asset allocation  recommendations,  portfolio modeling
and  rebalancing,  comprehensive  accounting  and portfolio  performance
reporting.  The  Company's  revenues  are realized  primarily  from fees
charged  to clients  based on a  percentage  of managed  assets and to a
lesser extent from  consulting  fees for certain  advisory  services and
licensing  fees from its  software  products.  Fees based  upon  managed
assets  typically range from 10 to 250 basis points per year, based upon
a number of factors  such as the size of account  and scope of  services
provided.  At the present  time,  the  principal  factors  affecting the
Company's  revenues  are whether the Company  adds or loses  clients for
its investment management services,  the performance of equity and fixed
income  markets,  and the  type  and  size of  accounts  managed  by the
Company and related differences in fees charged.

Corporate Restructuring

During the second  quarter of 1998,  the Company  committed  substantial
resources  and efforts in seeking to find a strategic  partner to assist
the Company with its capital needs as well as  strengthen  its positions
in the financial  services  arena.  To this end, the Company engaged the
investment banking firm of Putnam,  Lovell, de Guardiola & Thornton.  On
July 7,  1998,  after  an  extensive  negotiation  period,  the  Company
entered into a Letter of Intent with Dundee Bancorp Inc.  ("Dundee"),  a
Canadian  investment  management firm, for a proposed equity  investment
in the Company of $24 million.  In connection  with the execution of the
Letter of Intent,  Dundee provided a loan to the Company of $1.5 million
for working capital  purposes.  However,  on August 7, 1998, the Company
and  Dundee   mutually   agreed  to  terminate  the  Letter  of  Intent,
principally  as a result of an internal  change in Dundee's  priorities.
Dundee  concluded  that a license for the use of the Company's  products
and services in Canada, or other similar  arrangements,  may better suit
its  business  plan and  strategic  goals.  The  Company  and Dundee are
currently in discussions  regarding such an  arrangement,  however there
can be no  assurance  that an  agreement  will be reached.  The Company,
along with its investment  banking firm,  continue to seek out strategic
relationships  and  sources  of capital  to meet the  Company's  working
capital needs.

In order to address its working capital  deficit and capital needs,  the
Company is  implementing a wide reaching  corporate  restructuring.  The
Company is reorganizing  its executive  management and is in discussions
with  its  President  and  Chief  Executive  Officer,   Mr.  Kenneth  S.
Phillips,   regarding  his  departure  from  the  Company.  The  Company
intends to resolve  this matter in the near term.  The  Company  intends
to name Mr. Scott A. MacKillop,  the Company's  Executive Vice President
and Chief Operating  Officer,  as President and to name Mr. C.R. (Sonny)
Tucker,  currently  a  consultant  for the  Company,  as  Interim  Chief
Executive  Officer.  Mr.  Tucker has held  positions as Chief  Executive
Officer of Shell Middle East and  CFO/Controller  of Shell Offshore Inc.
He also worked as Managing  Director for  Westridge  Capital  Management
and  Director  Investment  Planning  of the  Shell  Oil  Retirement  and
Savings plans.

The Company has  established an executive  management team consisting of
Mssrs. Tucker,  MacKillop and Mr. Robert Brown, Executive Vice President
of the  Company's  subsidiary  Portfolio  Management  Consultants,  Inc.
("PMC"),  to implement the Company's  restructuring  plans.  An internal
leadership  team of  approximately  20 employees,  including  senior and
middle  managers,  has  been  created  to  make  recommendations  to the
executive   management  team  and  implement  tactical  changes  to  the
Company's  method  of  operations.   The  goal  of  these  teams  is  to
restructure and refocus the Company's efforts and to achieve  profitable
operations.  The Company  intends to achieve  this result by focusing on
and increasing  profitable business channels,  eliminating  unprofitable
business  channels,  gaining  efficiencies  in  operations  and reducing
expenses.

As a result of this  restructuring,  the  Company  anticipates  one-time
charges and  write-offs  in the third  quarter of 1998 of  approximately
$2,500,000.

In addition, the Company has taken or intends to take the following
actions:

    Due to the PMCIS integration and related corporate  reorganizations,
   20  non-critical  employees have departed the Company or are expected
   to depart in the second  half of 1998.  The  Company  does not intend
   to replace those employees.

    In the second quarter of 1998, the Company  outsourced the portfolio
   accounting  function for its separate account  business.  The Company
   believes this  outsourcing will allow it to deploy capital into other
   areas and into  supporting new business.  This  outsourcing  decision
   is expected to create  annual  savings by  reducing  system  support,
   payroll,  licensing  and  maintenance  fees,  telecommunications  and
   pricing feeds.

    The Company has  implemented  measures to control costs in all areas
   and has made  strategic  improvements  in promotion  and  advertising
   spending.

    The  reorganization  of its executive  management  and executive pay
   cuts  it  intends  to  implement  will  reduce  payroll  and  related
   expenses.

    The Company's Atlanta lease  obligation  terminates  in April 1999.  
   The Company believes that all staff
   will have  relocated  to Denver or will have left the Company at that
   time.  The  Company  expects  there will be a  reduction  in one-time
   relocation, training and employment agency fees and expenses.

    The Company's sales and marketing  group has been  strategically  
   reorganized.
   The customer  service area has been  reengineered  and customers will
   benefit  from more timely and  efficient  support.  The Company  expects to
   benefit  from a  re-energized  sales  effort  and lower  payroll  and
   travel  costs as a result  of the  reorganization.  The  Company  has
   also gained capacity as a result of process flow improvements.

    In connection with head count reductions,  the Company is evaluating its
   Denver office space options in order to further reduce overhead costs.

While Management  believes that the  implementation of the restructuring
plans   will   move  the   Company   towards   its  goal  of  near  term
profitability,  there is no assurance  that the plan will be  successful
or that the Company will achieve profitable operations.

Results of Operations

The Quarter in Review

During   the   second   quarter  of  1998,   the   Company   experienced
disappointing  operating results primarily from the Company's activities
in  non-core   business  and  initiated   the  corporate   restructuring
described  above.  Salaries,  advertising  and  promotion,  general  and
administrative,  occupancy and equipment,  and professional fees are all
lower than the  previous  quarter.  Operating  expenses  decreased  from
$3,700,000 in the first  quarter to  $3,400,000  in the second  quarter.
Management  expects economies of scale and other benefits of the ongoing
integration  of PMC and PMCIS to  continue  to emerge over the third and
fourth quarters.  (See "Corporate  Restructuring"  above.) The Company's
relationship  with  Ernst & Young LLP  ("E&Y")  continues  to  progress.
Assets under  management  in the E&Y program  increased  $150 million in
the second quarter and E&Y added another $93 million in July.

Three Months Ended June 30, 1998 Compared to Three Months Ended June
30, 1997
Six Months Ended June 30, 1998 Compared to Six Months Ended June 30,
1997

Revenues
Gross  revenues  were  $5,400,000  for the quarter  ended June 30, 1998,
compared  to  $3,000,000  for  the  corresponding  period  in  1997,  an
increase of 80%.  Revenues  were  $10,900,000  for the six months  ended
June 30, 1998,  compared to $5,900,000 for the  corresponding  period in
1997, an increase of 85%. The increases were  attributable  primarily to
the PMCIS  contribution  to investment fees of $2,000,000 and $4,300,000
respectively.  PMCIS was acquired in September  1997,  and  consequently
no  contribution  from PMCIS is reflected  through the second quarter of
1997.  In  addition,  revenues  in PMC's  core wrap  business  increased
$750,000  (25%) for the  quarter  ended June 30,  1998,  and  $1,300,000
(22%)  for the six  months  ended  June  30,  1998.  This  increase  was
attributable  to both growth in new assets under  management  and market
appreciation.  Negative  impact  on  revenue  for  the  quarter  and six
months ended June 30, 1998,  versus the prior periods were  attributable
to not  going  forward  with  the  Republic  National  Bank of New  York
("Republic")  relationship  and a decrease of  revenues of $100,000  and
$200,000  respectively,  due to the lowered minimum  guaranteed fee from
E&Y.

Investment Management and Other Fees
Investment  Management  and Other Fees were  $3,300,000  for the quarter
ended  June 30,  1998,  compared  to  $1,400,000  for the  corresponding
period in 1997,  an increase of 136%.  Investment  management  and other
fees were  $6,600,000  for the six months ended June 30, 1998,  compared
to $2,800,000 for the corresponding  period in 1997, also an increase of
136%.  These fee increases of $1,900,000  and $3,800,000 for the quarter
and six months ended June 30, 1998,  respectively,  were principally the
result of $1,300,000 and $2,900,000 increases  attributable to the PMCIS
acquisition.  Investment  management  and other  fees  related  to PMC's
core wrap fee business  increased  $600,000 (43%) and $900,000 (32%) for
the  quarter and six months  ended June 30,  1998,  respectively.  These
increases  are  directly  related to the  increase  in PMC core wrap fee
business as discussed above.

Net Revenues after Investment Manager and Other Fees
Net Revenues  after  Investment  Manager and Other Fees were  $2,200,000
for the quarter  ended June 30,  1998,  compared to  $1,600,000  for the
corresponding  period in 1997,  an increase of 38%. Net  revenues  after
investment  manager  and other fees were  $4,300,000  for the six months
ended  June 30,  1998,  compared  to  $3,100,000  for the  corresponding
period  in  1997,  an  increase  of  39%.  The  increase  was  primarily
attributable to the PMCIS  acquisition and increase in PMC core wrap fee
business as discussed above.

Operating Expenses
Operating  expenses were $3,400,000 for the quarter ended June 30, 1998,
compared  to  $2,400,000  for the  corresponding  quarter  in  1997,  an
increase of 42%.  Operating  expenses were $7,000,000 for the six months
ended  June 30,  1998,  compared  to  $4,400,000  for the  corresponding
period in 1997,  an increase of 59%.  The  increases of  $1,000,000  for
the quarter and $2,600,000 for the six months ended June 30, 1998,  were
primarily  due to increases  in salaries and benefits of $500,000  (37%)
for the quarter and  $1,300,000  (61%) for the six months ended June 30,
1998, as a result of the PMCIS  acquisition and the increase in business
related to the E&Y  relationship.  Eighteen people were added to payroll
in conjunction with the PMCIS  acquisition.  Four people have been added
to support the E&Y program.  General &  administrative  and  occupancy &
equipment   expenses  increased  $300,000  (58%)  for  the  quarter  and
$800,000  (73%) for the six months ended June 30,  1998,  as a result of
the PMCIS  acquisition  and overlapping  costs of maintaining  duplicate
facilities.  Amortization  expense  increased  $200,000  (100%)  for the
quarter  and  $300,000  (100%) for the six months  ended June 30,  1998,
directly related to the PMCIS acquisition.

Income Taxes
The Company's effective tax rate for 1997 is 0 (zero).

Net Loss
The Company  recorded a net loss of  $1,200,000  for the  quarter  ended
June 30, 1998,  as compared to $700,000 for the same period in 1997,  an
increase of 71%.  The net loss was  $2,700,000  for the six months ended
June 30, 1998, as compared to $1,300,000  for the  corresponding  period
in 1997,  an increase of 108%.  The increase in net loss for the quarter
ended June 30, 1998, is directly related to:
1.  decrease  in  revenues  compared  to the same  period last year as a
   result  of  not  going   forward  with  the   Republic   relationship
   ($250,000)  and a  reduction  in  revenues  recognized  from  the E&Y
   relationship ($100,000).
2.  one-time expenses related to the PMCIS acquisition (e.g.  relocation
   costs,  placement  fees and duplicate  facilities  of  $125,000).  In
   addition,  the Company  recognized  amortization  of $225,000 in 1998
   with no corresponding amount in 1997.

The increase in loss for the six month period ended June 30, 1998, is
primarily related to:
1.  Republic revenue decrease    $400,000
2.  reduction in E&Y minimum fee guarantee   $200,000
3.  relocation costs associated with PMCIS   $100,000
4.  maintenance of Atlanta office$100,000
5.  PMCIS goodwill amortization  $300,000
6.  increase in depreciation/amortization$300,000
7.  severance payments/employment agency fees$100,000
                                                  TOTAL    $1,500,000


Liquidity and Capital Resources
The  Company is  actively  investigating  sources of capital in order to
support  its  working  capital   requirements.   The  Company's   future
liquidity  needs are dependent  upon the  Company's  ability to generate
additional  equity,  to reduce expenses  associated with its operations,
to achieve  higher levels of cash flows or a  combination  of the above.
There  can be no  assurance  that  financing  will be  available  to the
Company or that the  Company  will  otherwise  find  sources to meet its
cash flow requirements.

The  Company  has  historically  incurred  net  losses  and  accordingly
experienced  cash  flow  problems.  As a result  of the  acquisition  of
PMCIS,  the Company is obligated to make a deferred  purchase payment on
September 24, 1998,  currently  estimated at  approximately  $2,000,000.
On  September  30,  1998,  the  Company  will be  required  to set aside
$500,000  to meet  increased  regulatory  capital  requirements  for its
broker/dealer   operations.   On  December  31,  1998,  the  Company  is
obligated to repay the Dundee note  obligation of  $1,500,000.  However,
the Company is in  negotiations  with Dundee  concerning an  arrangement
whereby  Dundee would  license  certain of the  Company's  products with
proceeds  applied  toward the loan.  Also,  the Company will be required
to use cash of approximately  $1,750,000 to repay the obligation of KP3,
LLC, and write-off  approximately  $230,000 in notes receivable from the
LLC, in conjunction  with the  Separation and Consulting  Agreement with
Mr.  Phillips.  In  addition,  continuing  losses from  operations  have
resulted  in  the  Company's  cash  balances  decreasing  further.   The
Company's  current working capital deficit is approximately  $1,500,000.
The  Company  is  continuing  its  efforts  to  reduce  expenses.   (See
"Corporate   Restructuring"   above.)  Management  believes  that  these
efforts,  along with deferral of expenses and liabilities,  should allow
the  Company to  continue  operations  while it seeks  further  capital.
While the Company is seeking out sources of short and long term  capital
to meet its  obligations,  there is no  assurance  that  sources of such
funds will be available to the Company.  Should  additional  capital not
be raised,  the Company will look to further reduce expenses  associated
with its  operations,  sell  non-core  business or assets and  otherwise
downsize  its  overhead,  or a  combination  of the  above.  There is no
assurance that the Company's  restructuring  efforts will be successful.
If the Company is not able to raise  additional  capital or successfully
restructure  its  obligations,  the business and financial  condition of
the Company will be materially adversely affected.

At June 30,  1998,  the Company had cash of  $2,100,000,  a  substantial
portion  of which  was held in  short-term  interest  bearing  accounts,
including restricted cash of $1,800,000.

For the Quarter Ended June 30, 1998:
Cash  used  in  operating  activities  was  $1,400,000.   This  was  due
primarily to the net loss from operations.

Cash provided by investing  activities  was  $200,000.  Cash provided by
investing  activities  was the  result of  payments  received  on a note
receivable.

Cash provided by financing activities of $340,000 was primarily related
to the borrowings to finance accounts receivable.

The Company  anticipates  that it will continue to experience  operating
losses   until  such  time  as  it  can  realize  the  benefits  of  the
restructuring and growth in assets under management and administration.

Year 2000.
Many  existing  computer  programs  use only two  digits to  identify  a
specific year and therefore  may not  accurately  recognize the upcoming
change in the century.  If not  corrected,  many  computer  applications
could fail or create  erroneous  results by or at the year 2000.  Due to
the  Company's   dependence  on  computer   technology  to  operate  its
business,  and the  dependence  of the  financial  services  industry on
computer  technology,  the  nature  and  impact of Year 2000  processing
failures on the  Company's  business  could be material.  The Company is
currently  modifying its computer systems in order to enable its systems
to process data and transactions  incorporating  year 2000 dates without
material errors or interruptions.

The  success of the  Company's  plan  depends in large part on  parallel
efforts  being  undertaken  by other  entities,  including  third  party
vendors,  with which the Company's  systems interact and therefore,  the
Company  is  taking  steps  to  determine  the  status  of  these  other
entities' Year 2000 compliance.  The Company is formulating  contingency
plans to be  implemented  in the event that any other  entity with which
the Company's systems interact,  or the Company itself, fails to achieve
timely and adequate Year 2000 compliance.

The  Company  currently  expects  that  costs  to  comply  will  be born
substantially by outside entities,  and the Company anticipates that its
costs to achieve Year 2000  compliance will not exceed $250,000 over the
next 18  months.  These  costs  exclude  the  time  that may be spent by
management  and  administrative  staff  in  guiding  and  assisting  the
information  technology  effort described above or for bringing internal
systems into Year 2000 compliance.

<PAGE>

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In early June 1997,  the  Company  received  a letter  from an  attorney
representing a former employee which threatened  litigation  relating to
a dispute  over  such  former  employee's  remuneration  by the  Company
unless the Company  agreed to settle with him by a specified  date.  The
Company  responded to the letter and stated its position that no amounts
are owed. By  correspondence  from The National  Association of Security
Dealers  ("NASD")  dated  December 19, 1997,  PMC was notified  that the
matter was  submitted by the employee to the NASD for  arbitration.  The
employee is seeking  damages for lost earnings from his prior  employer,
lost commissions from PMC and other damages,  totaling  $1,190,000.  PMC
has  responded to the NASD  Arbitration  demand by denying that the NASD
has  jurisdiction  over  the  matter  and  seeking  to have  the  matter
dismissed.  The  matter  has been  transferred  to the  NASD's  regional
office  in  Denver.  On May 13,  1998,  the  Company  filed  a  verified
Application  for Stay of Arbitration in Denver  District  Court,  asking
for an  order  staying  arbitration  due to the  fact  that  there is no
agreement  for  arbitration  between the parties.  The Company  believes
that the claims  described  in the NASD  Arbitration  notice are without
basis and intends to defend the matter vigorously.
 
In August 1998, the Company settled a dispute with its former Executive
Vice President, Mr. David Andrus, concerning his entitlement to
severance under his Employment Agreement.

The Company is not aware of any other material legal proceedings or
investigations currently pending or threatened against the Company.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

A.   Exhibits

     10.1Change in Control Agreement between the Company and Kenneth S.
         Phillips, dated May 15, 1998.
     10.2Change in Control Agreement between the Company and Scott A.
         MacKillop, dated May 15, 1998
     10.3Change in Control Agreement between the Company and Stephen A.
         Ash, dated May 15, 1998
     10.4Change in Control Agreement between the Company and Maureen E.
         Dobel, dated May 21, 1998

B.   Reports on Form 8-K
         None


<PAGE>


                PMC INTERNATIONAL, INC. AND SUBSIDIARIES


SIGNATURES

In  accordance   with  the   requirements   of  the  Exchange  Act,  the
registrant  has  caused  this  report to be signed on its  behalf by the
undersigned, thereunto duly authorized.

                                  PMC INTERNATIONAL, INC.
                                  REGISTRANT



Date:  August 19, 1998            /s/      Scott A. MacKillop  
                                           Scott A. MacKillop
                                           Executive Vice President 
                                           and Chief Operating Officer



Date: August 19, 1998             /s/      Stephen M. Ash      
               Stephen M. Ash
               Chief Financial Officer
<PAGE>
               PMC INTERNATIONAL, INC. AND SUBSIDIARIES 

                             EXHIBIT INDEX

A.   Number    Exhibit

     10.1Change in Control Agreement between the Company and Kenneth S.
         Phillips, dated May 15, 1998.
     10.2Change in Control Agreement between the Company and Scott A.
         MacKillop, dated May 15, 1998
     10.3Change in Control Agreement between the Company and Stephen A.
         Ash, dated May 15, 1998
     10.4Change in Control Agreement between the Company and Maureen E.
         Dobel, dated May 21, 1998
<PAGE>
EXHIBIT 10.1
                CHANGE IN CONTROL SEVERANCE AGREEMENT


    THIS  CHANGE IN  CONTROL  SEVERANCE  AGREEMENT  (this  "Agreement"),
dated  as of May 15,  1998,  is made  and  entered  by and  between  PMC
International,   Inc.,  a  Colorado  corporation  (the  "Company"),  and
Kenneth S. Phillips (the "Executive").

                                RECITALS

    WHEREAS,  the  Executive is a senior  executive  and key employee of
the  Company  or one or more of its  Subsidiaries  and has  made  and is
expected to continue to make major  contributions  to the short-term and
long-term growth and financial strength of the Company;

    WHEREAS,  the  Company  recognizes  that,  as is the  case  for most
publicly  held  companies,  the  possibility  of a Change in Control (as
defined below) exists; and

    WHEREAS,  the Board (as defined below) has determined  that it is in
the best  interests  of the Company and its  stockholders  to secure the
Executive's  continued services and to ensure the Executive's  continued
dedication and  objectivity in the event of any threat or occurrence of,
or  negotiation  or other  action  that  could  lead to, or  create  the
possibility  of, a Change in Control of the Company,  without concern as
to  whether  Executive  might be  hindered  or  distracted  by  personal
uncertainties  and risks created by any such possible Change in Control,
and to  encourage  Executive's  full  attention  and  dedication  to the
Company.

    NOW, THEREFORE,  in consideration of the foregoing and of the mutual
promises,  covenants and agreements  contained  herein,  the Company and
Executive hereby agree as follows:

                                 AGREEMENT

1.  Certain  Defined  Terms.  In  addition  to terms  defined  elsewhere
    herein,  the following terms have the respective  meanings set forth
    below:

    (a)"Base Pay" means the  Executive's  annual  base  salary at a rate
       not less than the Executive's  annual fixed or base  compensation
       as in effect for Executive  immediately  prior to the  occurrence
       of a Change in Control or such higher  rate as may be  determined
       from time to time by the  Board or a committee thereof.

    (b)"Board" means the Board of Directors of the Company.

    (c)"Cause" means that the Executive shall have:

       (i)     committed a breach of this  Agreement  or any  employment
         agreement  between the Company or Subsidiary  and the Executive
         and  either:  (A) such breach is not cured  within  thirty (30)
         days after notice from the Company  specifying the action which
         constitutes  the breach and  demanding its  discontinuance,  or
         (B) such breach is cured and the breach  recurs during or after
         such 30-day period,

       (ii)    exhibited willful  disobedience of or repeated failure to
         perform reasonable directions of the Board,

       (iii)   committed gross  malfeasance in performance of his duties
         hereunder,

       (iv)    committed  acts  resulting in an indictment  charging the
         Executive with the commission of a felony,

       (v)     engaged in fraud, misappropriation, or embezzlement,

       (vi)    disclosed  confidential  information  in violation of any
         agreement  between the Company or Subsidiary and the Executive,
         or

       (vii)   willfully engaged in conduct materially  injurious to the
         Company.

    (d)    "Change in Control"  occurs when any of the following  events
      occur during the Term of this Agreement:

       (i)     any person or entity other than the  Executive or Bedford
         Capital Financial  Corporation becomes the record or beneficial
         owner,  directly  or  indirectly,  of more than  fifty  percent
         (50%) of the then outstanding voting stock of the Company,

       (ii)    the  shareholders  of the  Company  approve  a merger  or
         consolidation of the Company with any other entity,  other than
         a merger or  consolidation  which  would  result in the  voting
         securities  of  the  Company   outstanding   immediately  prior
         thereto  continuing to represent at least eighty  percent (80%)
         of the combined  voting power of the voting  securities  of the
         Company or such surviving entity outstanding  immediately after
         such merger or consolidation, or

       (iii)   the  shareholders  approve an  agreement  for the sale or
         disposition by the Company of all or  substantially  all of the
         Company's assets.

    (e)   "Incentive  Pay" means an annual  amount  equal to the average
      of the  annual  bonus  paid  or  payable  in  regard  to  services
      rendered  in  any  fiscal  year  during  the  three  fiscal  years
      immediately  preceding  the  fiscal  year in which  the  Change in
      Control  occurs  pursuant  to any annual  bonus  plan,  program or
      arrangement  (whether or not funded) of the Company or Subsidiary,
      or any successor  thereto.  The computation of Incentive Pay shall
      include any fiscal  years or  portions  thereof in which no annual
      bonus was paid or  payable.  If the  Executive  has been  employed
      for less  than  three  (3)  years  at the  Termination  Date,  the
      denominator   used  to  compute  such  average   shall  equal  the
      Executive's length of employment.

    (f)   "Severance  Period" means the period of time commencing on the
      date  of  the  first   occurrence  of  a  Change  in  Control  and
      continuing  until the  earliest of (i) the second  anniversary  of
      the  occurrence  of the Change in  Control,  (ii) the  Executive's
      death or  termination  by  disability,  or (iii)  the  Executive's
      attainment of age 65.

    (g)   "Subsidiary" means a corporation, company or other entity

       (i)     more than 50% of whose  outstanding  shares or securities
         (representing  the right to vote for the  election of directors
         or other managing authority are, or

       (ii)    which does not have outstanding  shares or securities (as
         may  be  the  case  in  a   partnership,   joint   venture   or
         unincorporated  association),   but  more  than  50%  of  whose
         ownership  interest  representing  the right  generally to make
         decisions for such other entity is,

      owned or controlled, directly or indirectly, by the Company.

    (h)   "Term" means the period  commencing  as of the date hereof and
      expiring  as of the later of (i) the close of business on December
      31,  2000,  or  (ii)  the  expiration  of  the  Severance  Period;
      provided,  however,  that (A)  commencing  on  January 1, 2000 and
      each  January  1  thereafter,  the  term  of this  Agreement  will
      automatically  be extended  for an  additional  year  unless,  not
      later than  September 30 of the  immediately  preceding  year, the
      Company or the  Executive  shall have given  notice that it or the
      Executive,  as the  case  may be,  does  not wish to have the Term
      extended and (B) if, prior to a Change in Control,  the  Executive
      ceases  for any  reason to be an  employee  of the  Company or any
      Subsidiary,  thereupon  without  further  action the Term shall be
      deemed  to  have  expired  and  this  Agreement  will  immediately
      terminate  and be of no  further  effect.  For  purposes  of  this
      Section 1(h), the Executive  shall not be deemed to have ceased to
      be an employee of the Company or any  Subsidiary  by reason of the
      transfer  of  Executive's  employment  between the Company and any
      Subsidiary, or among any Subsidiaries.

    (i)   "Termination Date" means the date on which the Executive's
      employment is terminated (the effective date of which shall be
      the date of termination, or such other date that may be specified
      by the Executive if the termination is pursuant to Section 3(b)
      or Section 3(c)).

2.  Operation  of  Agreement.  This  Agreement  will  be  effective  and
    binding  immediately  upon  its  execution,  but,  anything  in this
    Agreement to the contrary  notwithstanding,  this Agreement will not
    be operative  unless and until a Change in Control occurs.  Upon the
    occurrence  of a Change  in  Control  at any time  during  the Term,
    without  further  action,  this Agreement  shall become  immediately
    operative.

3.  Termination  Following a Change in Control.  (a) If the  Executive's
    employment  is terminated  by the Company or any  Subsidiary  during
    the  Severance  Period,  the  Executive  shall  receive the benefits
    described in Section 4 unless such  termination is the result of the
    occurrence of one or more of the following events:

       (i)    The Executive's death,

       (ii)    If the Executive becomes permanently  disabled within the
         meaning of, and begins actually to receive disability  benefits
         pursuant to, the  long-term  disability  plan in effect for, or
         applicable  to,  Executive  immediately  prior to the Change in
         Control,

       (iii)   Retirement of the Executive on or after age 65, or

       (iv)   Cause.

    (b)If the Executive  terminates his  employment  with the Company or
       its  Subsidiaries  during the Severance  Period while having Good
       Reason (as  defined  below),  the  Executive  shall  receive  the
       benefits  described in Section 4. The  Executive  shall have Good
       Reason if such  termination  is not made in  connection  with any
       reason  described in Section 3(a) above,  and if such termination
       follows the occurrence of:

       (i)    a reduction in the  Executive's  Base Pay or Incentive Pay
         as in  effect  immediately  prior  to  the  Change  in  Control
         (including  a change  in  performance  criteria  which  impacts
         negatively  on the  Executive's  ability to  achieve  Incentive
         Pay)  under  the  Executive's  employment  agreement  with  the
         Company or Subsidiary,  the failure to continue the Executive's
         participation  in any incentive  compensation  plan in which he
         was a  participant  immediately  prior to the Change in Control
         unless a plan providing a substantially  similar opportunity is
         substituted,  or the  termination or material  reduction of any
         employee  benefit  or  perquisite  enjoyed  by him  immediately
         prior to the Change in Control,  unless comparable  benefits or
         perquisites (determined in the aggregate) are substituted,

       (ii)    material  diminution  in  the  Executive's  duties  as in
         effect   immediately   prior  to  the   Change  in  Control  or
         assignment to the Executive of duties  materially  inconsistent
         with his  duties as in effect  immediately  prior to the Change
         in Control,

       (iii)   the loss of any of the  Executive's  titles or  positions
         (in  his   capacity  as  an  officer  of  the   Company)   held
         immediately prior to the Change in Control,

       (iv)    the  failure of the Company to obtain the  assumption  in
         writing of its  obligation  to perform  this  Agreement  by any
         successor  after  a  merger,  consolidation,  sale  or  similar
         transaction, or

       (v)     the Company  relocates its principal  executive  offices,
         or requires  the  Executive to have his  principal  location of
         work  changed,  to any location that is in excess of fifty (50)
         miles  from  the  location  thereof  immediately  prior  to the
         Change in Control,

       (vi)    Notwithstanding  anything  contained in this Agreement to
         the  contrary,   any  circumstance  described  in  clauses  (i)
         through  (v) of this  Section  3(b) shall not  constitute  Good
         Reason unless the Executive  gives  written  notice  thereof to
         the  Company in  accordance  with  Section  13 and the  Company
         fails to remedy such circumstance  within fifteen (15) business
         days following receipt of such notice.

    (c)Notwithstanding  anything  contained  in  this  Agreement  to the
       contrary,  in the event of a Change in Control, the Executive may
       terminate  employment with the Company and any Subsidiary for any
       reason,   or  without   reason,   during  the  sixty-day   period
       immediately   following   the  date  one  year  after  the  first
       occurrence  of a Change in  Control  with the right to  severance
       compensation as described in Section 4.

    (d)Except as otherwise  described in Section 4, a termination by the
       Company pursuant to Section 3(a) or by the Executive  pursuant to
       Section  3(b) or Section 3(c) will not affect any rights that the
       Executive  may have  pursuant  to any  agreement,  policy,  plan,
       program or arrangement of the Company providing  benefits,  which
       rights shall be governed by the terms thereof.

4.   Severance  Compensation.  Any  amounts  and  benefits  to which the
    Executive  is  entitled  under  this  Agreement  shall be offset and
    reduced by any other amount of severance  benefits to be received by
    the Executive upon  termination  of employment  under any employment
    agreement  between the Executive and the Company (or  Subsidiary) or
    any other  severance plan,  policy,  agreement or arrangement of the
    Company  or  Subsidiary.  The  amounts  and  benefits  to which  the
    Executive is entitled pursuant to Section 3 of this Agreement are:

     (a)  A cash payment  payable during each month of the  Continuation
       Period (as defined  below) in an amount  equal to 1/12 of the sum
       of Base Pay and  Incentive  Pay, and  commencing on the first day
       of the month following the Termination Date,

     (b)  A lump-sum  cash payment which the Company will pay within ten
       (10)  business  days  after the  expiration  of the  Continuation
       Period  (as  defined   below)  equal  to  the  Company   matching
       contributions  that  would  have  been made  under the  Company's
       401(k) savings  plan(s) on the amounts  described in Section 4(a)
       if the Executive had continued in employment and  participated to
       the fullest  extent under such  plan(s).  For this  purpose,  the
       Company matching  contribution rate shall be determined using the
       rate of Company matching  contribution in effect at the Change in
       Control,  or the  rate  in  effect  on the  Termination  Date  if
       greater.

     (c)  For  a  period  of  twenty-seven  (27)  months  following  the
       Termination Date (the  "Continuation  Period"),  the Company will
       arrange to provide the Executive  with continued  medical,  group
       life, and dental benefits  substantially  similar, and subject to
       the same  employee  contribution  requirement,  to those that the
       Executive was receiving or entitled to receive  immediately prior
       to the  Termination  Date (or, if greater,  immediately  prior to
       the Change in  Control).  If and to the extent  that the  Company
       determines  that  any  benefit  described  in this  Section  4(c)
       cannot be paid or provided under any policy,  plan, or program or
       arrangement  of the  Company or any  Subsidiary,  as the case may
       be, then the Company  will itself make a lump-sum  payment to the
       Executive  equal to the actuarial  value of the Company's cost of
       providing such  benefits.  Benefits  otherwise  receivable by the
       Executive  pursuant to this  Section  4(c) will be reduced to the
       extent  comparable  welfare benefits are actually received by the
       Executive from another  employer during the  Continuation  Period
       following the Executive's  Termination Date, and any such welfare
       benefits  actually received by the Executive shall be reported by
       the Executive to the Company.

     Provided, however,  notwithstanding any other agreement between the
     Company  or  Subsidiary  and the  Executive  to the  contrary,  any
     payments due under this Section 4 that are rendered  non-deductible
     by  the  Company  (or  any  Subsidiary)  solely  by  virtue  of the
     $1,000,000 limit on applicable  employee  remuneration  established
     under  162(m) of the  Internal  Revenue  Code of 1986,  as amended,
     during the tax year of the Change in Control,  shall not be payable
     until  the  next   following   tax  year  of  the  Company  or  its
     successor.  Such  payment  shall  then  be  made  within  ten  (10)
     business days following the start of such tax year.

5.   Excess  Parachute  Payment  Limitations.  In  the  event  that  the
    Executive  would be subject to a tax pursuant to Section 4999 of the
    Internal Revenue Code, as amended,  (the "Code"),  as a result of an
    excess  parachute  payment,  or a deduction  would not be allowed to
    the Company or any  Subsidiary  for all or any part of such  payment
    by  reason  of  Section  280G of the  Code,  such  payment  shall be
    reduced.  In the event  such  reduction  is  required,  the  amounts
    payable  to  the  Executive  under  this  Agreement,  or  any  other
    agreement, plan or program, of the Company or any Subsidiary,  shall
    be reduced to an amount such that the present  value of all payments
    in the nature of compensation  which are contingent upon a Change in
    Control  total an  amount  not  greater  than  three  (3)  times the
    Executive's  base  amount  less one  dollar,  as any such  terms are
    defined  or applied  in  Section  280G of the Code and the  proposed
    regulations  thereunder.  The determinations to be made with respect
    to this Section 5 shall be made by the public  accounting  firm that
    is retained by the Company as of the date  immediately  prior to the
    Change in  Control  (the  "Accounting  Firm")  which  shall  provide
    detailed  supporting  calculations  both  to  the  Company  and  the
    Executive  within  fifteen (15) business days of being  requested to
    do so by the Company.  All fees and expenses of the Accounting  Firm
    shall be borne solely by the Company.

6.   No Mitigation  Obligation.  The  Executive  will not be required to
    mitigate the amount of any payment  provided  for in this  Agreement
    by seeking other employment,  nor will any profits, income, earnings
    or other benefits from any source  whatsoever create any mitigation,
    offset,  reduction  or  any  other  obligation  on the  part  of the
    Executive  hereunder or otherwise,  except as expressly  provided in
    Section 4 and Section 8 of this Agreement.

7.   Legal Fees and  Expenses.  If any  contest or dispute  shall  arise
    under  this  Agreement  involving  the  failure  or  refusal  of the
    Company to perform  fully in accordance  with the terms hereof,  the
    Company shall reimburse the Executive,  on a current basis,  for all
    legal  fees and  expenses,  if any,  incurred  by the  Executive  in
    connection  with such  contest or dispute  regardless  of the result
    thereof.

8.   Competitive Activity.

    (a)  Notwithstanding  any other  provision of this  Agreement or any
       other  agreement  between the Company  and the  Executive  to the
       contrary,  during  the  continuance  of  his  employment  by  the
       Company  and  for a  period  of  twenty-four  (24)  months  after
       termination of his employment  (the  "Non-Compete  Period"),  the
       Executive shall not (i) anywhere in the United States,  engage in
       any  business  which  competes  directly or  indirectly  with the
       Company or (ii)  directly or  indirectly,  use,  disseminate,  or
       disclose  for any  purpose  other  than for the  purposes  of the
       Company's   business,   any   of   the   Company's   confidential
       information   or  trade  secrets,   unless  such   disclosure  is
       compelled  in a  judicial  proceeding.  Upon  termination  of his
       employment,  all  documents,   records,  notebooks,  and  similar
       repositories of records  containing  information  relating to any
       trade   secrets   or   confidential   information   then  in  the
       Executive's possession or control,  whether prepared by him or by
       others,  shall  be left  with  the  Company  or  returned  to the
       Company upon its  request.  In the event the  Executive  violates
       this  Section 8, the  remaining  monthly  payments  provided  for
       under Section 4(a) and Section 4(c) shall cease.

    (b)During  the  Non-Compete  Period,  the  Executive  will  not  (i)
       directly or indirectly  cause,  or attempt to cause, to leave the
       employ of the  Company any  employee  of the  Company  that is an
       employee of the  Company at any time during the period  beginning
       six months  before the date of this  Agreement  and ending at the
       end  of the  Non-Compete  Period,  (ii)  directly  or  indirectly
       solicit any  customer  of the  Company as to which the  Executive
       obtained  knowledge  during his affiliation with the Company as a
       member  of  the  leadership  team  of the  Company  or  with  any
       affiliate  of  the  Company,   (iii)   knowingly  or   recklessly
       interfere or attempt to interfere  with any  transaction in which
       the Company was involved  during the term of this  Agreement,  or
       (iv) in any other way knowingly or recklessly  interfere with the
       relationship  between  the  Company  and  any of  its  employees,
       customers or suppliers.

9.  Employment  Rights.  Nothing  expressed or implied in this Agreement
    will  create  any  right or duty on the part of the  Company  or the
    Executive  to have the  Executive  remain in the  employment  of the
    Company  or any  Subsidiary  prior to or  following  any  Change  in
    Control.

10. Release.   Payment  of  the  severance  compensation  set  forth  in
    Section 4 hereto is  conditioned  upon the  Executive  executing and
    delivering  to the  Company a general  release to be provided by the
    Company.

11. Withholding  of Taxes.  The  Company may  withhold  from any amounts
    payable  under this  Agreement  all  federal,  state,  city or other
    taxes as the Company is required to withhold  pursuant to any law or
    government regulation or ruling.

12.   Successors  and  Binding  Effect.  This  Agreement  is a  personal
    service  agreement  and may not be  assigned  by the  Company or the
    Executive,  except that the Company may assign this  Agreement  to a
    successor  by  merger,  consolidation,   sale  of  assets  or  other
    reorganization.  Subject to the foregoing,  this Agreement  shall be
    binding  upon and inure to the  benefit  of the  parties  hereto and
    their respective successors, assigns, and legal representatives.

13.   Notices.  Any notice  required or permitted to be given under this
    Agreement shall be directed to the appropriate  party in writing and
    mailed or delivered,  if to the Company,  to 555 Seventeenth Street,
    14th  Floor,  Denver,  Colorado  80202  or  to  the  Company's  then
    principal  office,  if  different,  and  if  to  the  Executive,  to
    766 16th Street, Boulder, Colorado 80302.

14.   Applicable  Law.  This  Agreement  is entered into in the State of
    Colorado and for all  purposes  shall be governed by the laws of the
    State of Colorado.

15.   Validity.  If any provision of this  Agreement or the  application
    of any  provision  hereof  to any  person or  circumstances  is held
    invalid,  unenforceable or otherwise illegal,  the remainder of this
    Agreement and the  application of such provision to any other person
    or circumstances will not be affected,  and the provision so held to
    be invalid,  unenforceable or otherwise  illegal will be reformed to
    the  extent  (and  only  to  the  extent)   necessary   to  make  it
    enforceable, valid or legal.

16.   Representation  by Counsel.  The parties hereto  acknowledge  that
    they have had the  opportunity to consult with counsel and have done
    so to the extent they  deemed  appropriate  during the  negotiation,
    preparation and execution of this Agreement.

17.   Counterparts.  This  instrument  may be  executed  in one or  more
    counterparts, each of which shall be deemed an original.

18.   Amendment.  This  Agreement  may  not  be  amended  except  by  an
    instrument in writing executed by each of the parties hereto.

IN WITNESS  WHEREOF,  the parties have caused this  Agreement to be duly
executed and delivered as of the date first above written.

                           PMC INTERNATIONAL, INC.

                           By:  /s/ Scott A. MacKillop

                           Title:   Executive Vice President and Chief
                           Operating Officer





                           /s/ Kenneth S. Phillips

                           KENNETH S. PHILLIPS

                           ______________________________




<PAGE>

EXHIBIT 10.2 
                     CHANGE IN CONTROL SEVERANCE AGREEMENT


    THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (this "Agreement"),  dated as of
May 15,  1998,  is made and  entered  by and  between  PMC  International,
Inc., a Colorado  corporation  (the  "Company"),  and Scott A.  MacKillop  (the
"Executive").

                                   RECITALS

    WHEREAS,  the  Executive  is a senior  executive  and key  employee  of the
Company  or one or more of its  Subsidiaries  and has made and is  expected  to
continue to make major  contributions  to the short-term  and long-term  growth
and financial strength of the Company;

    WHEREAS,  the Company  recognizes  that,  as is the case for most  publicly
held  companies,  the  possibility  of a Change in Control (as  defined  below)
exists; and

    WHEREAS,  the Board (as  defined  below) has  determined  that it is in the
best interests of the Company and its  stockholders  to secure the  Executive's
continued  services  and to ensure the  Executive's  continued  dedication  and
objectivity  in the event of any threat or  occurrence  of, or  negotiation  or
other  action  that could lead to, or create  the  possibility  of, a Change in
Control  of the  Company,  without  concern as to  whether  Executive  might be
hindered or  distracted  by  personal  uncertainties  and risks  created by any
such possible Change in Control,  and to encourage  Executive's  full attention
and dedication to the Company.

    NOW,  THEREFORE,  in  consideration  of the  foregoing  and  of the  mutual
promises,   covenants  and  agreements   contained  herein,   the  Company  and
Executive hereby agree as follows:

                                     AGREEMENT

1.  Certain Defined Terms. In addition to terms defined elsewhere  herein,  the
    following terms have the respective meanings set forth below:

    (a) "Base Pay" means the Executive's  annual base salary at a rate not less
        than the  Executive's  annual fixed or base  compensation  as in effect
        for  Executive  immediately  prior to the  occurrence  of a  Change  in
        Control or such higher rate as may be  determined  from time to time by
        the  Board or a committee thereof.

    (b) "Board" means the Board of Directors of the Company.

    (c) "Cause" means that the Executive shall have:
<PAGE>

        (i)      committed  a  breach  of  this  Agreement  or  any  employment
           agreement  between the Company or  Subsidiary  and the Executive and
           either:  (A) such breach is not cured within  thirty (30) days after
           notice from the Company  specifying the action which constitutes the
           breach  and  demanding  its  discontinuance,  or (B) such  breach is
           cured and the breach recurs during or after such 30-day period,

        (ii)     exhibited  willful  disobedience  of or  repeated  failure  to
           perform reasonable directions of the Board,

        (iii)    committed  gross  malfeasance  in  performance  of his  duties
           hereunder,

        (iv)     committed  acts  resulting  in  an  indictment   charging  the
           Executive with the commission of a felony,

        (v)      engaged in fraud, misappropriation, or embezzlement,

        (vi)     disclosed   confidential   information  in  violation  of  any
           agreement between the Company or Subsidiary and the Executive, or

        (vii)    willfully  engaged  in  conduct  materially  injurious  to the
           Company.

    (d)      "Change in Control" occurs when any of the following  events occur
       during the Term of this Agreement:

        (i)      any  person or entity  other  than the  Executive  or  Bedford
           Capital  Financial  Corporation  becomes  the  record or  beneficial
           owner,  directly or indirectly,  of more than fifty percent (50%) of
           the then outstanding voting stock of the Company,

        (ii)     the   shareholders   of  the  Company   approve  a  merger  or
           consolidation  of the Company  with any other  entity,  other than a
           merger or consolidation  which would result in the voting securities
           of the Company  outstanding  immediately prior thereto continuing to
           represent  at least  eighty  percent  (80%) of the  combined  voting
           power of the voting  securities  of the  Company  or such  surviving
           entity  outstanding  immediately after such merger or consolidation,
           or

        (iii)    the  shareholders   approve  an  agreement  for  the  sale  or
           disposition  by  the  Company  of all  or  substantially  all of the
           Company's assets.

    (e)     "Incentive  Pay" means an annual amount equal to the average of the
       annual  bonus  paid or  payable in regard to  services  rendered  in any
       fiscal year during the three  fiscal  years  immediately  preceding  the
       fiscal  year in which  the  Change in  Control  occurs  pursuant  to any
       annual  bonus  plan,  program  or  arrangement  <PAGE>  
       (whether  or not
       funded) of the Company or  Subsidiary,  or any  successor  thereto.  The
       computation  of Incentive Pay shall include any fiscal years or portions
       thereof in which no annual bonus was paid or payable.  If the  Executive
       has been  employed  for less than  three  (3)  years at the  Termination
       Date,  the  denominator  used to compute  such  average  shall equal the
       Executive's length of employment.

    (f)     "Severance  Period" means the period of time commencing on the date
       of the first  occurrence of a Change in Control and continuing until the
       earliest of (i) the second  anniversary  of the occurrence of the Change
       in Control,  (ii) the  Executive's  death or  termination by disability,
       or (iii) the Executive's attainment of age 65.

    (g)     "Subsidiary" means a corporation, company or other entity

        (i)      more  than  50% of  whose  outstanding  shares  or  securities
           (representing  the right to vote for the  election of  directors  or
           other managing authority are, or

        (ii)     which does not have  outstanding  shares or securities (as may
           be the  case  in a  partnership,  joint  venture  or  unincorporated
           association),   but  more  than  50%  of  whose  ownership  interest
           representing  the right  generally to make  decisions for such other
           entity is,

       owned or controlled, directly or indirectly, by the Company.

    (h)     "Term"  means  the  period  commencing  as of the date  hereof  and
       expiring as of the later of (i) the close of  business  on December  31,
       2000,  or  (ii)  the  expiration  of  the  Severance  Period;  provided,
       however,  that (A)  commencing  on  January  1, 2000 and each  January 1
       thereafter,  the term of this Agreement will  automatically  be extended
       for an  additional  year  unless,  not later  than  September  30 of the
       immediately  preceding  year,  the Company or the  Executive  shall have
       given  notice  that it or the  Executive,  as the case may be,  does not
       wish  to have  the  Term  extended  and (B) if,  prior  to a  Change  in
       Control,  the  Executive  ceases for any reason to be an employee of the
       Company or any  Subsidiary,  thereupon  without  further action the Term
       shall be deemed to have  expired  and this  Agreement  will  immediately
       terminate  and be of no further  effect.  For  purposes of this  Section
       1(h),  the  Executive  shall  not be  deemed  to  have  ceased  to be an
       employee of the Company or any  Subsidiary  by reason of the transfer of
       Executive's employment between the Company and any Subsidiary,  or among
       any Subsidiaries.

    (i)     "Termination Date" means the date on which the Executive's
       employment is terminated (the effective date of which shall be the date
       of termination, or such 
<PAGE>
       other date that may be specified by the
       Executive if the termination is pursuant to Section 3(b) or Section
       3(c)).

2.  Operation  of  Agreement.  This  Agreement  will be  effective  and binding
    immediately  upon its  execution,  but,  anything in this  Agreement to the
    contrary  notwithstanding,  this Agreement will not be operative unless and
    until a Change  in  Control  occurs.  Upon the  occurrence  of a Change  in
    Control  at  any  time  during  the  Term,  without  further  action,  this
    Agreement shall become immediately operative.

3.  Termination   Following  a  Change  in  Control.  (a)  If  the  Executive's
    employment  is  terminated  by the  Company  or any  Subsidiary  during the
    Severance  Period,  the Executive  shall receive the benefits  described in
    Section 4 unless such  termination  is the result of the  occurrence of one
    or more of the following events:

        (i)     The Executive's death,

        (ii)     If the  Executive  becomes  permanently  disabled  within  the
           meaning  of, and begins  actually  to  receive  disability  benefits
           pursuant  to,  the  long-term  disability  plan in  effect  for,  or
           applicable to, Executive immediately prior to the Change in Control,

        (iii)    Retirement of the Executive on or after age 65, or

        (iv)    Cause.

    (b) If the  Executive  terminates  his  employment  with the Company or its
        Subsidiaries  during the Severance  Period while having Good Reason (as
        defined below),  the Executive shall receive the benefits  described in
        Section 4. The  Executive  shall have Good  Reason if such  termination
        is not made in  connection  with any reason  described  in Section 3(a)
        above, and if such termination follows the occurrence of:

        (i)     a reduction in the Executive's  Base Pay or Incentive Pay as in
           effect  immediately  prior to the  Change in  Control  (including  a
           change in  performance  criteria  which  impacts  negatively  on the
           Executive's  ability to achieve Incentive Pay) under the Executive's
           employment agreement with the Company or Subsidiary,  the failure to
           continue   the   Executive's    participation   in   any   incentive
           compensation  plan in which he was a participant  immediately  prior
           to the Change in Control  unless a plan  providing  a  substantially
           similar  opportunity is substituted,  or the termination or material
           reduction  of any  employee  benefit  or  perquisite  enjoyed by him
           immediately  prior  to the  Change  in  Control,  unless  comparable
           benefits  or   perquisites   (determined   in  the   aggregate)  are
           substituted,

        (ii)     material  diminution  in the  Executive's  duties as in effect
           immediately  prior to the  Change in Control  or  assignment  to the
           Executive of duties  materially  inconsistent  with his duties as in
           effect immediately prior to the Change in Control,

        (iii)    the loss of any of the  Executive's  titles or  positions  (in
           his capacity as an officer of the Company)  held  immediately  prior
           to the Change in Control,

        (iv)     the  failure  of the  Company  to  obtain  the  assumption  in
           writing  of  its   obligation  to  perform  this  Agreement  by  any
           successor   after  a   merger,   consolidation,   sale  or   similar
           transaction, or

        (v)      the Company  relocates its  principal  executive  offices,  or
           requires  the  Executive  to have  his  principal  location  of work
           changed,  to any location that is in excess of fifty (50) miles from
           the location thereof immediately prior to the Change in Control,

        (vi)     Notwithstanding  anything  contained in this  Agreement to the
           contrary,  any circumstance  described in clauses (i) through (v) of
           this  Section  3(b)  shall not  constitute  Good  Reason  unless the
           Executive  gives written notice thereof to the Company in accordance
           with  Section 13 and the Company  fails to remedy such  circumstance
           within fifteen (15) business days following receipt of such notice.

    (c) Notwithstanding  anything  contained in this Agreement to the contrary,
        in the  event of a Change  in  Control,  the  Executive  may  terminate
        employment  with the Company  and any  Subsidiary  for any  reason,  or
        without reason,  during the sixty-day period immediately  following the
        date one year after the first  occurrence  of a Change in Control  with
        the right to severance compensation as described in Section 4.

    (d) Except as  otherwise  described  in  Section  4, a  termination  by the
        Company  pursuant  to  Section  3(a) or by the  Executive  pursuant  to
        Section  3(b) or  Section  3(c) will not  affect  any  rights  that the
        Executive may have pursuant to any agreement,  policy, plan, program or
        arrangement of the Company  providing  benefits,  which rights shall be
        governed by the terms thereof.

4.   Severance  Compensation.  Any amounts and benefits to which the  Executive
    is entitled under this  Agreement  shall be offset and reduced by any other
    amount  of  severance  benefits  to  be  received  by  the  Executive  upon
    termination  of  employment  under any  employment  agreement  between  the
    Executive  and the Company (or  Subsidiary)  or any other  severance  plan,
    policy,  agreement  or  arrangement  of  the  Company  or  Subsidiary.  The
    amounts  and  benefits  to which the  Executive  is  entitled  pursuant  to
    Section 3 of this Agreement are:
<PAGE>

      (a)   A cash  payment  payable  during  each  month  of the  Continuation
        Period  (as  defined  below) in an  amount  equal to 1/12 of the sum of
        Base Pay and  Incentive  Pay,  and  commencing  on the first day of the
        month following the Termination Date,

      (b)   A lump-sum  cash payment which the Company will pay within ten (10)
        business  days  after the  expiration  of the  Continuation  Period (as
        defined below) equal to the Company matching  contributions  that would
        have been made  under  the  Company's  401(k)  savings  plan(s)  on the
        amounts  described in Section 4(a) if the  Executive  had  continued in
        employment and  participated  to the fullest extent under such plan(s).
        For this  purpose,  the  Company  matching  contribution  rate shall be
        determined  using the rate of Company  matching  contribution in effect
        at the  Change in  Control,  or the rate in  effect on the  Termination
        Date if greater.

      (c)   For a period of twenty-seven  (27) months following the Termination
        Date (the "Continuation  Period"),  the Company will arrange to provide
        the Executive with continued  medical,  group life, and dental benefits
        substantially  similar,  and subject to the same employee  contribution
        requirement,  to those that the  Executive was receiving or entitled to
        receive  immediately  prior to the  Termination  Date (or,  if greater,
        immediately  prior to the  Change  in  Control).  If and to the  extent
        that the Company  determines that any benefit described in this Section
        4(c) cannot be paid or provided  under any policy,  plan, or program or
        arrangement of the Company or any Subsidiary,  as the case may be, then
        the Company will itself make a lump-sum  payment to the Executive equal
        to the  actuarial  value  of  the  Company's  cost  of  providing  such
        benefits.  Benefits  otherwise  receivable by the Executive pursuant to
        this  Section  4(c) will be reduced to the  extent  comparable  welfare
        benefits are actually  received by the Executive from another  employer
        during the Continuation  Period  following the Executive's  Termination
        Date, and any such welfare benefits  actually received by the Executive
        shall be reported by the Executive to the Company.

      Provided,  however,  notwithstanding  any  other  agreement  between  the
      Company or Subsidiary  and the  Executive to the  contrary,  any payments
      due under this Section 4 that are rendered  non-deductible by the Company
      (or  any  Subsidiary)  solely  by  virtue  of  the  $1,000,000  limit  on
      applicable  employee   remuneration   established  under  162(m)  of  the
      Internal  Revenue  Code of 1986,  as amended,  during the tax year of the
      Change in  Control,  shall not be payable  until the next  following  tax
      year of the Company or its  successor.  Such  payment  shall then be made
      within ten (10) business days following the start of such tax year.

5.   Excess  Parachute  Payment  Limitations.  In the event that the  Executive
    would be subject to a tax pursuant to Section 4999 of the Internal  Revenue
    Code,  as  amended,  (the  "Code"),  as a  result  of an  excess  parachute
    payment,  or a deduction  would not 
<PAGE>
    be  allowed to the Company or any
    Subsidiary  for all or any part of such  payment by reason of Section  280G
    of the Code,  such payment  shall be reduced.  In the event such  reduction
    is required, the amounts payable to the Executive under this Agreement,  or
    any other  agreement,  plan or program,  of the Company or any  Subsidiary,
    shall be reduced to an amount such that the present  value of all  payments
    in the  nature  of  compensation  which  are  contingent  upon a Change  in
    Control  total an amount not greater  than three (3) times the  Executive's
    base amount  less one  dollar,  as any such terms are defined or applied in
    Section  280G of the  Code and the  proposed  regulations  thereunder.  The
    determinations  to be made with  respect to this Section 5 shall be made by
    the public  accounting  firm that is retained by the Company as of the date
    immediately  prior to the Change in Control (the  "Accounting  Firm") which
    shall provide detailed supporting  calculations both to the Company and the
    Executive  within fifteen (15) business days of being requested to do so by
    the Company.  All fees and expenses of the  Accounting  Firm shall be borne
    solely by the Company.

6.   No Mitigation  Obligation.  The Executive will not be required to mitigate
    the amount of any payment  provided for in this  Agreement by seeking other
    employment,  nor will any profits,  income, earnings or other benefits from
    any source  whatsoever  create any  mitigation,  offset,  reduction  or any
    other  obligation  on the part of the  Executive  hereunder  or  otherwise,
    except as expressly provided in Section 4 and Section 8 of this Agreement.

7.   Legal Fees and  Expenses.  If any  contest or dispute  shall  arise  under
    this  Agreement  involving the failure or refusal of the Company to perform
    fully in accordance with the terms hereof,  the Company shall reimburse the
    Executive,  on a current  basis,  for all legal fees and expenses,  if any,
    incurred  by the  Executive  in  connection  with such  contest  or dispute
    regardless of the result thereof.

8.   Competitive Activity.

    (a)    Notwithstanding  any other  provision of this Agreement or any other
        agreement  between  the  Company  and the  Executive  to the  contrary,
        during the  continuance  of his  employment  by the  Company  and for a
        period of twenty-four  (24) months after  termination of his employment
        (the  "Non-Compete  Period"),  the Executive  shall not (i) anywhere in
        the United States,  engage in any business  which competes  directly or
        indirectly  with the  Company  or (ii)  directly  or  indirectly,  use,
        disseminate,  or disclose  for any purpose  other than for the purposes
        of  the  Company's   business,   any  of  the  Company's   confidential
        information or trade secrets,  unless such disclosure is compelled in a
        judicial   proceeding.   Upon   termination  of  his  employment,   all
        documents,  records,  notebooks,  and similar  repositories  of records
        containing  information  relating to any trade secrets or  confidential
        information  then in the  Executive's  possession  or control,  whether
        prepared  by him or by  others,  shall  be left  with  the  Company  or
        returned  to  the  Company   upon  its   request.   In  the  event  the
<PAGE>
        Executive   violates  this  Section  8,  the  remaining   monthly
        payments provided for under Section 4(a) and Section 4(c) shall cease.

    (b) During the Non-Compete  Period,  the Executive will not (i) directly or
        indirectly  cause,  or  attempt  to cause,  to leave the  employ of the
        Company any  employee of the Company that is an employee of the Company
        at any time during the period  beginning  six months before the date of
        this Agreement and ending at the end of the  Non-Compete  Period,  (ii)
        directly or indirectly  solicit any customer of the Company as to which
        the  Executive  obtained  knowledge  during  his  affiliation  with the
        Company as a member of the  leadership  team of the Company or with any
        affiliate of the Company,  (iii)  knowingly or recklessly  interfere or
        attempt to  interfere  with any  transaction  in which the  Company was
        involved  during the term of this  Agreement,  or (iv) in any other way
        knowingly or recklessly  interfere  with the  relationship  between the
        Company and any of its employees, customers or suppliers.

9.  Employment  Rights.  Nothing  expressed or implied in this  Agreement  will
    create  any right or duty on the part of the  Company or the  Executive  to
    have  the  Executive  remain  in  the  employment  of  the  Company  or any
    Subsidiary prior to or following any Change in Control.

10. Release.  Payment  of the  severance  compensation  set forth in  Section 4
    hereto is  conditioned  upon the Executive  executing and delivering to the
    Company a general release to be provided by the Company.

11. Withholding  of Taxes.  The Company may withhold  from any amounts  payable
    under  this  Agreement  all  federal,  state,  city or  other  taxes as the
    Company  is  required  to  withhold  pursuant  to  any  law  or  government
    regulation or ruling.

12.    Successors  and Binding  Effect.  This  Agreement is a personal  service
    agreement and may not be assigned by the Company or the  Executive,  except
    that the  Company  may assign  this  Agreement  to a  successor  by merger,
    consolidation,  sale of  assets  or other  reorganization.  Subject  to the
    foregoing,  this  Agreement  shall be binding upon and inure to the benefit
    of the parties hereto and their respective  successors,  assigns, and legal
    representatives.

13.    Notices.  Any  notice  required  or  permitted  to be given  under  this
    Agreement shall be directed to the appropriate  party in writing and mailed
    or delivered,  if to the Company,  to 555 Seventeenth  Street,  14th Floor,
    Denver,  Colorado  80202 or to the  Company's  then  principal  office,  if
    different,        and       if       to       the       Executive,       to
    2648 S. Kittridge Park Road, Evergreen, Colorado 80437.

14.    Applicable  Law.  This  Agreement  is  entered  into  in  the  State  of
    Colorado  and for all  purposes  shall be governed by the laws of the State
    of Colorado. 
<PAGE>

15.    Validity.  If any provision of this Agreement or the  application of any
    provision   hereof  to  any  person  or   circumstances  is  held  invalid,
    unenforceable  or otherwise  illegal,  the remainder of this  Agreement and
    the  application  of such  provision to any other  person or  circumstances
    will  not  be  affected,   and  the   provision  so  held  to  be  invalid,
    unenforceable  or  otherwise  illegal  will be  reformed to the extent (and
    only to the extent) necessary to make it enforceable, valid or legal.

16.    Representation  by Counsel.  The parties  hereto  acknowledge  that they
    have had the  opportunity  to consult  with counsel and have done so to the
    extent they deemed  appropriate  during the  negotiation,  preparation  and
    execution of this Agreement.

17.    Counterparts.   This   instrument   may  be  executed  in  one  or  more
    counterparts, each of which shall be deemed an original.

18.    Amendment.  This  Agreement  may not be amended  except by an instrument
    in writing executed by each of the parties hereto.

IN  WITNESS  WHEREOF,  the  parties  have  caused  this  Agreement  to be  duly
executed and delivered as of the date first above written.

                               PMC INTERNATIONAL, INC.

                               By:  /s/ Kenneth S. Phillips
                                        Kenneth S. Phillips
                               Title:   President & CEO



                               SCOTT A. MacKILLOP

                               /s/ Scott A. MacKillop



<PAGE>

EXHIBIT 10.3
                     CHANGE IN CONTROL SEVERANCE AGREEMENT


    THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (this "Agreement"),  dated as of
May 15,  1998,  is made and  entered  by and  between  PMC  International,
Inc.,  a  Colorado  corporation  (the  "Company"),  and  Stephen  M.  Ash  (the
"Executive").

                                   RECITALS

    WHEREAS,  the  Executive  is a senior  executive  and key  employee  of the
Company  or one or more of its  Subsidiaries  and has made and is  expected  to
continue to make major  contributions  to the short-term  and long-term  growth
and financial strength of the Company;

    WHEREAS,  the Company  recognizes  that,  as is the case for most  publicly
held  companies,  the  possibility  of a Change in Control (as  defined  below)
exists; and

    WHEREAS,  the Board (as  defined  below) has  determined  that it is in the
best interests of the Company and its  stockholders  to secure the  Executive's
continued  services  and to ensure the  Executive's  continued  dedication  and
objectivity  in the event of any threat or  occurrence  of, or  negotiation  or
other  action  that could lead to, or create  the  possibility  of, a Change in
Control  of the  Company,  without  concern as to  whether  Executive  might be
hindered or  distracted  by  personal  uncertainties  and risks  created by any
such possible Change in Control,  and to encourage  Executive's  full attention
and dedication to the Company.

    NOW,  THEREFORE,  in  consideration  of the  foregoing  and  of the  mutual
promises,   covenants  and  agreements   contained  herein,   the  Company  and
Executive hereby agree as follows:

                                     AGREEMENT

1.  Certain Defined Terms. In addition to terms defined elsewhere  herein,  the
    following terms have the respective meanings set forth below:

    (a) "Base Pay" means the Executive's  annual base salary at a rate not less
        than the  Executive's  annual fixed or base  compensation  as in effect
        for  Executive  immediately  prior to the  occurrence  of a  Change  in
        Control or such higher rate as may be  determined  from time to time by
        the  Board or a committee thereof.

    (b) "Board" means the Board of Directors of the Company.

    (c) "Cause" means that the Executive shall have:
<PAGE>

        (i)      committed  a  breach  of  this  Agreement  or  any  employment
           agreement  between the Company or  Subsidiary  and the Executive and
           either:  (A) such breach is not cured within  thirty (30) days after
           notice from the Company  specifying the action which constitutes the
           breach  and  demanding  its  discontinuance,  or (B) such  breach is
           cured and the breach recurs during or after such 30-day period,

        (ii)     exhibited  willful  disobedience  of or  repeated  failure  to
           perform reasonable directions of the Board,

        (iii)    committed  gross  malfeasance  in  performance  of his  duties
           hereunder,

        (iv)     committed  acts  resulting  in  an  indictment   charging  the
           Executive with the commission of a felony,

        (v)      engaged in fraud, misappropriation, or embezzlement,

        (vi)     disclosed   confidential   information  in  violation  of  any
           agreement between the Company or Subsidiary and the Executive, or

        (vii)    willfully  engaged  in  conduct  materially  injurious  to the
           Company.

    (d)      "Change in Control" occurs when any of the following  events occur
       during the Term of this Agreement:

        (i)      any  person or entity  other  than the  Executive  or  Bedford
           Capital  Financial  Corporation  becomes  the  record or  beneficial
           owner,  directly or indirectly,  of more than fifty percent (50%) of
           the then outstanding voting stock of the Company,

        (ii)     the   shareholders   of  the  Company   approve  a  merger  or
           consolidation  of the Company  with any other  entity,  other than a
           merger or consolidation  which would result in the voting securities
           of the Company  outstanding  immediately prior thereto continuing to
           represent  at least  eighty  percent  (80%) of the  combined  voting
           power of the voting  securities  of the  Company  or such  surviving
           entity  outstanding  immediately after such merger or consolidation,
           or

        (iii)    the  shareholders   approve  an  agreement  for  the  sale  or
           disposition  by  the  Company  of all  or  substantially  all of the
           Company's assets.

    (e)     "Incentive  Pay" means an annual amount equal to the average of the
       annual  bonus  paid or  payable in regard to  services  rendered  in any
       fiscal year during the three  fiscal  years  immediately  preceding  the
       fiscal  year in which  the  Change in  Control  occurs  pursuant  to any
       annual  bonus plan,  program or  arrangement  
<PAGE>

       (whether or not funded) of
       the Company or Subsidiary,  or any successor thereto. The computation of
       Incentive  Pay shall  include any fiscal  years or  portions  thereof in
       which no annual  bonus was paid or payable.  If the  Executive  has been
       employed  for less than  three (3) years at the  Termination  Date,  the
       denominator  used to compute  such average  shall equal the  Executive's
       length of employment.

    (f)     "Severance  Period" means the period of time commencing on the date
       of the first  occurrence of a Change in Control and continuing until the
       earliest of (i) the second  anniversary  of the occurrence of the Change
       in Control,  (ii) the  Executive's  death or  termination by disability,
       or (iii) the Executive's attainment of age 65.

    (g)     "Subsidiary" means a corporation, company or other entity

        (i)      more  than  50% of  whose  outstanding  shares  or  securities
           (representing  the right to vote for the  election of  directors  or
           other managing authority are, or

        (ii)     which does not have  outstanding  shares or securities (as may
           be the  case  in a  partnership,  joint  venture  or  unincorporated
           association),   but  more  than  50%  of  whose  ownership  interest
           representing  the right  generally to make  decisions for such other
           entity is,

       owned or controlled, directly or indirectly, by the Company.

    (h)     "Term"  means  the  period  commencing  as of the date  hereof  and
       expiring as of the later of (i) the close of  business  on December  31,
       2000,  or  (ii)  the  expiration  of  the  Severance  Period;  provided,
       however,  that (A)  commencing  on  January  1, 2000 and each  January 1
       thereafter,  the term of this Agreement will  automatically  be extended
       for an  additional  year  unless,  not later  than  September  30 of the
       immediately  preceding  year,  the Company or the  Executive  shall have
       given  notice  that it or the  Executive,  as the case may be,  does not
       wish  to have  the  Term  extended  and (B) if,  prior  to a  Change  in
       Control,  the  Executive  ceases for any reason to be an employee of the
       Company or any  Subsidiary,  thereupon  without  further action the Term
       shall be deemed to have  expired  and this  Agreement  will  immediately
       terminate  and be of no further  effect.  For  purposes of this  Section
       1(h),  the  Executive  shall  not be  deemed  to  have  ceased  to be an
       employee of the Company or any  Subsidiary  by reason of the transfer of
       Executive's employment between the Company and any Subsidiary,  or among
       any Subsidiaries.

    (i)     "Termination Date" means the date on which the Executive's
       employment is terminated (the effective date of which shall be the date
       of termination, or such 
<PAGE>

       other date that may be specified by the
       Executive if the termination is pursuant to Section 3(b)).

2.  Operation  of  Agreement.  This  Agreement  will be  effective  and binding
    immediately  upon its  execution,  but,  anything in this  Agreement to the
    contrary  notwithstanding,  this Agreement will not be operative unless and
    until a Change  in  Control  occurs.  Upon the  occurrence  of a Change  in
    Control  at  any  time  during  the  Term,  without  further  action,  this
    Agreement shall become immediately operative.

3.  Termination   Following  a  Change  in  Control.  (a)  If  the  Executive's
    employment  is  terminated  by the  Company  or any  Subsidiary  during the
    Severance  Period,  the Executive  shall receive the benefits  described in
    Section 4 unless such  termination  is the result of the  occurrence of one
    or more of the following events:

        (i)     The Executive's death,

        (ii)     If the  Executive  becomes  permanently  disabled  within  the
           meaning  of, and begins  actually  to  receive  disability  benefits
           pursuant  to,  the  long-term  disability  plan in  effect  for,  or
           applicable to, Executive immediately prior to the Change in Control,

        (iii)    Retirement of the Executive on or after age 65, or

        (iv)    Cause.

    (b) If the  Executive  terminates  his  employment  with the Company or its
        Subsidiaries  during the Severance  Period while having Good Reason (as
        defined below),  the Executive shall receive the benefits  described in
        Section 4. The  Executive  shall have Good  Reason if such  termination
        is not made in  connection  with any reason  described  in Section 3(a)
        above, and if such termination follows the occurrence of:

        (i)     a reduction in the Executive's  Base Pay or Incentive Pay as in
           effect  immediately  prior to the  Change in  Control  (including  a
           change in  performance  criteria  which  impacts  negatively  on the
           Executive's  ability to achieve Incentive Pay) under the Executive's
           employment agreement with the Company or Subsidiary,  the failure to
           continue   the   Executive's    participation   in   any   incentive
           compensation  plan in which he was a participant  immediately  prior
           to the Change in Control  unless a plan  providing  a  substantially
           similar  opportunity is substituted,  or the termination or material
           reduction  of any  employee  benefit  or  perquisite  enjoyed by him
           immediately  prior  to the  Change  in  Control,  unless  comparable
           benefits  or   perquisites   (determined   in  the   aggregate)  are
           substituted,
<PAGE>

        (ii)     material  diminution  in the  Executive's  duties as in effect
           immediately  prior to the  Change in Control  or  assignment  to the
           Executive of duties  materially  inconsistent  with his duties as in
           effect immediately prior to the Change in Control,

        (iii)    the loss of any of the  Executive's  titles or  positions  (in
           his capacity as an officer of the Company)  held  immediately  prior
           to the Change in Control,

        (iv)     the  failure  of the  Company  to  obtain  the  assumption  in
           writing  of  its   obligation  to  perform  this  Agreement  by  any
           successor   after  a   merger,   consolidation,   sale  or   similar
           transaction, or

        (v)      the Company  relocates its  principal  executive  offices,  or
           requires  the  Executive  to have  his  principal  location  of work
           changed,  to any location that is in excess of fifty (50) miles from
           the location thereof immediately prior to the Change in Control,

        (vi)     Notwithstanding  anything  contained in this  Agreement to the
           contrary,  any circumstance  described in clauses (i) through (v) of
           this  Section  3(b)  shall not  constitute  Good  Reason  unless the
           Executive  gives written notice thereof to the Company in accordance
           with  Section 13 and the Company  fails to remedy such  circumstance
           within fifteen (15) business days following receipt of such notice.

    (c) Except as  otherwise  described  in  Section  4, a  termination  by the
        Company  pursuant  to  Section  3(a) or by the  Executive  pursuant  to
        Section  3(b) will not affect any rights  that the  Executive  may have
        pursuant to any agreement,  policy, plan, program or arrangement of the
        Company  providing  benefits,  which  rights  shall be  governed by the
        terms thereof.

4.   Severance  Compensation.  Any amounts and benefits to which the  Executive
    is entitled under this  Agreement  shall be offset and reduced by any other
    amount  of  severance  benefits  to  be  received  by  the  Executive  upon
    termination  of  employment  under any  employment  agreement  between  the
    Executive  and the Company (or  Subsidiary)  or any other  severance  plan,
    policy,  agreement  or  arrangement  of  the  Company  or  Subsidiary.  The
    amounts  and  benefits  to which the  Executive  is  entitled  pursuant  to
    Section 3 of this Agreement are:

      (a)   A cash  payment  payable  during  each  month  of the  Continuation
        Period  (as  defined  below) in an  amount  equal to 1/12 of the sum of
        Base Pay and  Incentive  Pay,  and  commencing  on the first day of the
        month following the Termination Date,

<PAGE>


      (b)   A lump-sum  cash payment which the Company will pay within ten (10)
        business  days  after the  expiration  of the  Continuation  Period (as
        defined below) equal to the Company matching  contributions  that would
        have been made  under  the  Company's  401(k)  savings  plan(s)  on the
        amounts  described in Section 4(a) if the  Executive  had  continued in
        employment and  participated  to the fullest extent under such plan(s).
        For this  purpose,  the  Company  matching  contribution  rate shall be
        determined  using the rate of Company  matching  contribution in effect
        at the  Change in  Control,  or the rate in  effect on the  Termination
        Date if greater.

      (c)   For a period of twenty-seven  (27) months following the Termination
        Date (the "Continuation  Period"),  the Company will arrange to provide
        the Executive with continued  medical,  group life, and dental benefits
        substantially  similar,  and subject to the same employee  contribution
        requirement,  to those that the  Executive was receiving or entitled to
        receive  immediately  prior to the  Termination  Date (or,  if greater,
        immediately  prior to the  Change  in  Control).  If and to the  extent
        that the Company  determines that any benefit described in this Section
        4(c) cannot be paid or provided  under any policy,  plan, or program or
        arrangement of the Company or any Subsidiary,  as the case may be, then
        the Company will itself make a lump-sum  payment to the Executive equal
        to the  actuarial  value  of  the  Company's  cost  of  providing  such
        benefits.  Benefits  otherwise  receivable by the Executive pursuant to
        this  Section  4(c) will be reduced to the  extent  comparable  welfare
        benefits are actually  received by the Executive from another  employer
        during the Continuation  Period  following the Executive's  Termination
        Date, and any such welfare benefits  actually received by the Executive
        shall be reported by the Executive to the Company.

      Provided,  however,  notwithstanding  any  other  agreement  between  the
      Company or Subsidiary  and the  Executive to the  contrary,  any payments
      due under this Section 4 that are rendered  non-deductible by the Company
      (or  any  Subsidiary)  solely  by  virtue  of  the  $1,000,000  limit  on
      applicable  employee   remuneration   established  under  162(m)  of  the
      Internal  Revenue  Code of 1986,  as amended,  during the tax year of the
      Change in  Control,  shall not be payable  until the next  following  tax
      year of the Company or its  successor.  Such  payment  shall then be made
      within ten (10) business days following the start of such tax year.

5.   Excess  Parachute  Payment  Limitations.  In the event that the  Executive
    would be subject to a tax pursuant to Section 4999 of the Internal  Revenue
    Code,  as  amended,  (the  "Code"),  as a  result  of an  excess  parachute
    payment,  or a  deduction  would  not  be  allowed  to the  Company  or any
    Subsidiary  for all or any part of such  payment by reason of Section  280G
    of the Code,  such payment  shall be reduced.  In the event such  reduction
    is required, the amounts payable to the Executive under this Agreement,  or
    any other  agreement,  plan or program,  of the Company or any  Subsidiary,
    shall be reduced to an amount such that the present  value of all  
<PAGE>

    payments
    in the  nature  of  compensation  which  are  contingent  upon a Change  in
    Control  total an amount not greater  than three (3) times the  Executive's
    base amount  less one  dollar,  as any such terms are defined or applied in
    Section  280G of the  Code and the  proposed  regulations  thereunder.  The
    determinations  to be made with  respect to this Section 5 shall be made by
    the public  accounting  firm that is retained by the Company as of the date
    immediately  prior to the Change in Control (the  "Accounting  Firm") which
    shall provide detailed supporting  calculations both to the Company and the
    Executive  within fifteen (15) business days of being requested to do so by
    the Company.  All fees and expenses of the  Accounting  Firm shall be borne
    solely by the Company.

6.   No Mitigation  Obligation.  The Executive will not be required to mitigate
    the amount of any payment  provided for in this  Agreement by seeking other
    employment,  nor will any profits,  income, earnings or other benefits from
    any source  whatsoever  create any  mitigation,  offset,  reduction  or any
    other  obligation  on the part of the  Executive  hereunder  or  otherwise,
    except as expressly provided in Section 4 of this Agreement.

7.   Legal Fees and  Expenses.  If any  contest or dispute  shall  arise  under
    this  Agreement  involving the failure or refusal of the Company to perform
    fully in accordance with the terms hereof,  the Company shall reimburse the
    Executive,  on a current  basis,  for all legal fees and expenses,  if any,
    incurred  by the  Executive  in  connection  with such  contest  or dispute
    regardless of the result thereof.

8.   Non-Solicitation.   During  the  continuance  of  his  employment  by  the
    Company and for a period of  twenty-four  (24) months after  termination of
    his employment (the "Non-Solicitation  Period"), the Executive will not (i)
    directly or indirectly  cause,  or attempt to cause, to leave the employ of
    the Company any  employee of the Company that is an employee of the Company
    at any time during the period  beginning six months before the date of this
    Agreement  and  ending  at the  end of the  Non-Solicitation  Period,  (ii)
    directly or indirectly  solicit any customer of the Company as to which the
    Executive  obtained  knowledge during his affiliation with the Company as a
    member of the  leadership  team of the Company or with any affiliate of the
    Company,  (iii)  knowingly or recklessly  interfere or attempt to interfere
    with any  transaction in which the Company was involved  during the term of
    this Agreement,  or (iv) in any other way knowingly or recklessly interfere
    with  the  relationship  between  the  Company  and  any of its  employees,
    customers or suppliers.

9.  Employment  Rights.  Nothing  expressed or implied in this  Agreement  will
    create  any right or duty on the part of the  Company or the  Executive  to
    have  the  Executive  remain  in  the  employment  of  the  Company  or any
    Subsidiary prior to or following any Change in Control.
<PAGE>

10. Release.  Payment  of the  severance  compensation  set forth in  Section 4
    hereto is  conditioned  upon the Executive  executing and delivering to the
    Company a general release to be provided by the Company.

11. Withholding  of Taxes.  The Company may withhold  from any amounts  payable
    under  this  Agreement  all  federal,  state,  city or  other  taxes as the
    Company  is  required  to  withhold  pursuant  to  any  law  or  government
    regulation or ruling.

12.    Successors  and Binding  Effect.  This  Agreement is a personal  service
    agreement and may not be assigned by the Company or the  Executive,  except
    that the  Company  may assign  this  Agreement  to a  successor  by merger,
    consolidation,  sale of  assets  or other  reorganization.  Subject  to the
    foregoing,  this  Agreement  shall be binding upon and inure to the benefit
    of the parties hereto and their respective  successors,  assigns, and legal
    representatives.

13.    Notices.  Any  notice  required  or  permitted  to be given  under  this
    Agreement shall be directed to the appropriate  party in writing and mailed
    or delivered,  if to the Company,  to 555 Seventeenth  Street,  14th Floor,
    Denver,  Colorado  80202 or to the  Company's  then  principal  office,  if
    different,        and       if       to       the       Executive,       to
    10746 E. Maplewood Dr., Englewood, Colorado 80111.

14.    Applicable  Law.  This  Agreement  is  entered  into  in  the  State  of
    Colorado  and for all  purposes  shall be governed by the laws of the State
    of Colorado.

15.    Validity.  If any provision of this Agreement or the  application of any
    provision   hereof  to  any  person  or   circumstances  is  held  invalid,
    unenforceable  or otherwise  illegal,  the remainder of this  Agreement and
    the  application  of such  provision to any other  person or  circumstances
    will  not  be  affected,   and  the   provision  so  held  to  be  invalid,
    unenforceable  or  otherwise  illegal  will be  reformed to the extent (and
    only to the extent) necessary to make it enforceable, valid or legal.

16.    Representation  by Counsel.  The parties  hereto  acknowledge  that they
    have had the  opportunity  to consult  with counsel and have done so to the
    extent they deemed  appropriate  during the  negotiation,  preparation  and
    execution of this Agreement.

17.    Counterparts.   This   instrument   may  be  executed  in  one  or  more
    counterparts, each of which shall be deemed an original.

18.    Amendment.  This  Agreement  may not be amended  except by an instrument
    in writing executed by each of the parties hereto.

<PAGE>

IN  WITNESS  WHEREOF,  the  parties  have  caused  this  Agreement  to be  duly
executed and delivered as of the date first above written.

                               PMC INTERNATIONAL, INC.

                               By:  /s/ Kenneth S. Phillips
                                        Kenneth S. Phillips
                               Title:   President & CEO

                               STEPHEN M. ASH

                               /s/ Stephen M. Ash

<PAGE>
                     CHANGE IN CONTROL SEVERANCE AGREEMENT


    THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (this "Agreement"),  dated as of
May 21,  1998,  is made and entered by and between PMC  International,  Inc., a
Colorado corporation (the "Company"), and Maureen Dobel (the "Executive").

                                   RECITALS

    WHEREAS,  the  Executive  is a senior  executive  and key  employee  of the
Company  or one or more of its  Subsidiaries  and has made and is  expected  to
continue to make major  contributions  to the short-term  and long-term  growth
and financial strength of the Company;

    WHEREAS,  the Company  recognizes  that,  as is the case for most  publicly
held  companies,  the  possibility  of a Change in Control (as  defined  below)
exists; and

    WHEREAS,  the Board (as  defined  below) has  determined  that it is in the
best interests of the Company and its  stockholders  to secure the  Executive's
continued  services  and to ensure the  Executive's  continued  dedication  and
objectivity  in the event of any threat or  occurrence  of, or  negotiation  or
other  action  that could lead to, or create  the  possibility  of, a Change in
Control  of the  Company,  without  concern as to  whether  Executive  might be
hindered or  distracted  by  personal  uncertainties  and risks  created by any
such possible Change in Control,  and to encourage  Executive's  full attention
and dedication to the Company.

    NOW,  THEREFORE,  in  consideration  of the  foregoing  and  of the  mutual
promises,   covenants  and  agreements   contained  herein,   the  Company  and
Executive hereby agree as follows:

                                     AGREEMENT

1.  Certain Defined Terms. In addition to terms defined elsewhere  herein,  the
    following terms have the respective meanings set forth below:

    (a) "Base Pay" means the Executive's  annual base salary at a rate not less
        than the  Executive's  annual fixed or base  compensation  as in effect
        for  Executive  immediately  prior to the  occurrence  of a  Change  in
        Control or such higher rate as may be  determined  from time to time by
        the  Board or a committee thereof.

    (b) "Board" means the Board of Directors of the Company.

    (c) "Cause" means that the Executive shall have:
<PAGE>

        (i)      committed  a  breach  of  this  Agreement  or  any  employment
           agreement  between the Company or  Subsidiary  and the Executive and
           either:  (A) such breach is not cured within  thirty (30) days after
           notice from the Company  specifying the action which constitutes the
           breach  and  demanding  its  discontinuance,  or (B) such  breach is
           cured and the breach recurs during or after such 30-day period,

        (ii)     exhibited  willful  disobedience  of or  repeated  failure  to
           perform reasonable directions of the Board,

        (iii)    committed  gross  malfeasance  in  performance  of his  duties
           hereunder,

        (iv)     committed  acts  resulting  in  an  indictment   charging  the
           Executive with the commission of a felony,

        (v)      engaged in fraud, misappropriation, or embezzlement,

        (vi)     disclosed   confidential   information  in  violation  of  any
           agreement between the Company or Subsidiary and the Executive, or

        (vii)    willfully  engaged  in  conduct  materially  injurious  to the
           Company.

    (d)      "Change in Control" occurs when any of the following  events occur
       during the Term of this Agreement:

        (i)      any  person or entity  other  than the  Executive  or  Bedford
           Capital  Financial  Corporation  becomes  the  record or  beneficial
           owner,  directly or indirectly,  of more than fifty percent (50%) of
           the then outstanding voting stock of the Company,

        (ii)     the   shareholders   of  the  Company   approve  a  merger  or
           consolidation  of the Company  with any other  entity,  other than a
           merger or consolidation  which would result in the voting securities
           of the Company  outstanding  immediately prior thereto continuing to
           represent  at least  eighty  percent  (80%) of the  combined  voting
           power of the voting  securities  of the  Company  or such  surviving
           entity  outstanding  immediately after such merger or consolidation,
           or

        (iii)    the  shareholders   approve  an  agreement  for  the  sale  or
           disposition  by  the  Company  of all  or  substantially  all of the
           Company's assets.

    (e)     "Incentive  Pay" means an annual amount equal to the average of the
       annual  bonus  paid or  payable in regard to  services  rendered  in any
       fiscal year during the three  fiscal  years  immediately  preceding  the
       fiscal  year in which  the  Change in  Control  occurs  pursuant  to any
       annual  bonus plan,  program or  arrangement  

<PAGE>

       (whether or not funded) of
       the Company or Subsidiary,  or any successor thereto. The computation of
       Incentive  Pay shall  include any fiscal  years or  portions  thereof in
       which no annual  bonus was paid or payable.  If the  Executive  has been
       employed  for less than  three (3) years at the  Termination  Date,  the
       denominator  used to compute  such average  shall equal the  Executive's
       length of employment.

    (f)     "Severance  Period" means the period of time commencing on the date
       of the first  occurrence of a Change in Control and continuing until the
       earliest of (i) the second  anniversary  of the occurrence of the Change
       in Control,  (ii) the  Executive's  death or  termination by disability,
       or (iii) the Executive's attainment of age 65.

    (g)     "Subsidiary" means a corporation, company or other entity

        (i)      more  than  50% of  whose  outstanding  shares  or  securities
           (representing  the right to vote for the  election of  directors  or
           other managing authority are, or

        (ii)     which does not have  outstanding  shares or securities (as may
           be the  case  in a  partnership,  joint  venture  or  unincorporated
           association),   but  more  than  50%  of  whose  ownership  interest
           representing  the right  generally to make  decisions for such other
           entity is,

       owned or controlled, directly or indirectly, by the Company.

    (h)     "Term"  means  the  period  commencing  as of the date  hereof  and
       expiring as of the later of (i) the close of  business  on December  31,
       2000,  or  (ii)  the  expiration  of  the  Severance  Period;  provided,
       however,  that (A)  commencing  on  January  1, 2000 and each  January 1
       thereafter,  the term of this Agreement will  automatically  be extended
       for an  additional  year  unless,  not later  than  September  30 of the
       immediately  preceding  year,  the Company or the  Executive  shall have
       given  notice  that it or the  Executive,  as the case may be,  does not
       wish  to have  the  Term  extended  and (B) if,  prior  to a  Change  in
       Control,  the  Executive  ceases for any reason to be an employee of the
       Company or any  Subsidiary,  thereupon  without  further action the Term
       shall be deemed to have  expired  and this  Agreement  will  immediately
       terminate  and be of no further  effect.  For  purposes of this  Section
       1(h),  the  Executive  shall  not be  deemed  to  have  ceased  to be an
       employee of the Company or any  Subsidiary  by reason of the transfer of
       Executive's employment between the Company and any Subsidiary,  or among
       any Subsidiaries.

    (i)     "Termination Date" means the date on which the Executive's
       employment is terminated (the effective date of which shall be the date
       of termination, or such 

<PAGE>

       other date that may be specified by the
       Executive if the termination is pursuant to Section 3(b)).

2.  Operation  of  Agreement.  This  Agreement  will be  effective  and binding
    immediately  upon its  execution,  but,  anything in this  Agreement to the
    contrary  notwithstanding,  this Agreement will not be operative unless and
    until a Change  in  Control  occurs.  Upon the  occurrence  of a Change  in
    Control  at  any  time  during  the  Term,  without  further  action,  this
    Agreement shall become immediately operative.

3.  Termination   Following  a  Change  in  Control.  (a)  If  the  Executive's
    employment  is  terminated  by the  Company  or any  Subsidiary  during the
    Severance  Period,  the Executive  shall receive the benefits  described in
    Section 4 unless such  termination  is the result of the  occurrence of one
    or more of the following events:

        (i)     The Executive's death,

        (ii)     If the  Executive  becomes  permanently  disabled  within  the
           meaning  of, and begins  actually  to  receive  disability  benefits
           pursuant  to,  the  long-term  disability  plan in  effect  for,  or
           applicable to, Executive immediately prior to the Change in Control,

        (iii)    Retirement of the Executive on or after age 65, or

        (iv)    Cause.

    (b) If the  Executive  terminates  his  employment  with the Company or its
        Subsidiaries  during the Severance  Period while having Good Reason (as
        defined below),  the Executive shall receive the benefits  described in
        Section 4. The  Executive  shall have Good  Reason if such  termination
        is not made in  connection  with any reason  described  in Section 3(a)
        above, and if such termination follows the occurrence of:

        (i)     a reduction in the Executive's  Base Pay or Incentive Pay as in
           effect  immediately  prior to the  Change in  Control  (including  a
           change in  performance  criteria  which  impacts  negatively  on the
           Executive's  ability to achieve Incentive Pay) under the Executive's
           employment agreement with the Company or Subsidiary,  the failure to
           continue   the   Executive's    participation   in   any   incentive
           compensation  plan in which he was a participant  immediately  prior
           to the Change in Control  unless a plan  providing  a  substantially
           similar  opportunity is substituted,  or the termination or material
           reduction  of any  employee  benefit  or  perquisite  enjoyed by him
           immediately  prior  to the  Change  in  Control,  unless  comparable
           benefits  or   perquisites   (determined   in  the   aggregate)  are
           substituted,
<PAGE>

        (ii)     material  diminution  in the  Executive's  duties as in effect
           immediately  prior to the  Change in Control  or  assignment  to the
           Executive of duties  materially  inconsistent  with his duties as in
           effect immediately prior to the Change in Control,

        (iii)    the loss of any of the  Executive's  titles or  positions  (in
           his capacity as an officer of the Company)  held  immediately  prior
           to the Change in Control,

        (iv)     the  failure  of the  Company  to  obtain  the  assumption  in
           writing  of  its   obligation  to  perform  this  Agreement  by  any
           successor   after  a   merger,   consolidation,   sale  or   similar
           transaction, or

        (v)      the Company  relocates its  principal  executive  offices,  or
           requires  the  Executive  to have  his  principal  location  of work
           changed,  to any location that is in excess of fifty (50) miles from
           the location thereof immediately prior to the Change in Control,

        (vi)     Notwithstanding  anything  contained in this  Agreement to the
           contrary,  any circumstance  described in clauses (i) through (v) of
           this  Section  3(b)  shall not  constitute  Good  Reason  unless the
           Executive  gives written notice thereof to the Company in accordance
           with  Section 13 and the Company  fails to remedy such  circumstance
           within fifteen (15) business days following receipt of such notice.

    (c) Except as  otherwise  described  in  Section  4, a  termination  by the
        Company  pursuant  to  Section  3(a) or by the  Executive  pursuant  to
        Section  3(b) will not affect any rights  that the  Executive  may have
        pursuant to any agreement,  policy, plan, program or arrangement of the
        Company  providing  benefits,  which  rights  shall be  governed by the
        terms thereof.

4.   Severance  Compensation.  Any amounts and benefits to which the  Executive
    is entitled under this  Agreement  shall be offset and reduced by any other
    amount  of  severance  benefits  to  be  received  by  the  Executive  upon
    termination  of  employment  under any  employment  agreement  between  the
    Executive  and the Company (or  Subsidiary)  or any other  severance  plan,
    policy,  agreement  or  arrangement  of  the  Company  or  Subsidiary.  The
    amounts  and  benefits  to which the  Executive  is  entitled  pursuant  to
    Section 3 of this Agreement are:

      (a)   A cash  payment  payable  during  each  month  of the  Continuation
        Period  (as  defined  below) in an  amount  equal to 1/12 of the sum of
        Base Pay and  Incentive  Pay,  and  commencing  on the first day of the
        month following the Termination Date,

<PAGE>


      (b)   A lump-sum  cash payment which the Company will pay within ten (10)
        business  days  after the  expiration  of the  Continuation  Period (as
        defined below) equal to the Company matching  contributions  that would
        have been made  under  the  Company's  401(k)  savings  plan(s)  on the
        amounts  described in Section 4(a) if the  Executive  had  continued in
        employment and  participated  to the fullest extent under such plan(s).
        For this  purpose,  the  Company  matching  contribution  rate shall be
        determined  using the rate of Company  matching  contribution in effect
        at the  Change in  Control,  or the rate in  effect on the  Termination
        Date if greater.

      (c)   For a period of twelve (12) months  following the Termination  Date
        (the  "Continuation  Period"),  the Company will arrange to provide the
        Executive  with  continued  medical,  group life,  and dental  benefits
        substantially  similar,  and subject to the same employee  contribution
        requirement,  to those that the  Executive was receiving or entitled to
        receive  immediately  prior to the  Termination  Date (or,  if greater,
        immediately  prior to the  Change  in  Control).  If and to the  extent
        that the Company  determines that any benefit described in this Section
        4(c) cannot be paid or provided  under any policy,  plan, or program or
        arrangement of the Company or any Subsidiary,  as the case may be, then
        the Company will itself make a lump-sum  payment to the Executive equal
        to the  actuarial  value  of  the  Company's  cost  of  providing  such
        benefits.  Benefits  otherwise  receivable by the Executive pursuant to
        this  Section  4(c) will be reduced to the  extent  comparable  welfare
        benefits are actually  received by the Executive from another  employer
        during the Continuation  Period  following the Executive's  Termination
        Date, and any such welfare benefits  actually received by the Executive
        shall be reported by the Executive to the Company.

      Provided,  however,  notwithstanding  any  other  agreement  between  the
      Company or Subsidiary  and the  Executive to the  contrary,  any payments
      due under this Section 4 that are rendered  non-deductible by the Company
      (or  any  Subsidiary)  solely  by  virtue  of  the  $1,000,000  limit  on
      applicable  employee   remuneration   established  under  162(m)  of  the
      Internal  Revenue  Code of 1986,  as amended,  during the tax year of the
      Change in  Control,  shall not be payable  until the next  following  tax
      year of the Company or its  successor.  Such  payment  shall then be made
      within ten (10) business days following the start of such tax year.

5.   Excess  Parachute  Payment  Limitations.  In the event that the  Executive
    would be subject to a tax pursuant to Section 4999 of the Internal  Revenue
    Code,  as  amended,  (the  "Code"),  as a  result  of an  excess  parachute
    payment,  or a  deduction  would  not  be  allowed  to the  Company  or any
    Subsidiary  for all or any part of such  payment by reason of Section  280G
    of the Code,  such payment  shall be reduced.  In the event such  reduction
    is required, the amounts payable to the Executive under this Agreement,  or
    any other  agreement,  plan or program,  of the Company or any  Subsidiary,
    shall be reduced to an amount such that the present  value of all 


<PAGE>

    payments
    in the  nature  of  compensation  which  are  contingent  upon a Change  in
    Control  total an amount not greater  than three (3) times the  Executive's
    base amount  less one  dollar,  as any such terms are defined or applied in
    Section  280G of the  Code and the  proposed  regulations  thereunder.  The
    determinations  to be made with  respect to this Section 5 shall be made by
    the public  accounting  firm that is retained by the Company as of the date
    immediately  prior to the Change in Control (the  "Accounting  Firm") which
    shall provide detailed supporting  calculations both to the Company and the
    Executive  within fifteen (15) business days of being requested to do so by
    the Company.  All fees and expenses of the  Accounting  Firm shall be borne
    solely by the Company.

6.   No Mitigation  Obligation.  The Executive will not be required to mitigate
    the amount of any payment  provided for in this  Agreement by seeking other
    employment,  nor will any profits,  income, earnings or other benefits from
    any source  whatsoever  create any  mitigation,  offset,  reduction  or any
    other  obligation  on the part of the  Executive  hereunder  or  otherwise,
    except as expressly provided in Section 4 of this Agreement.

7.   Legal Fees and  Expenses.  If any  contest or dispute  shall  arise  under
    this  Agreement  involving the failure or refusal of the Company to perform
    fully in accordance with the terms hereof,  the Company shall reimburse the
    Executive,  on a current  basis,  for all legal fees and expenses,  if any,
    incurred  by the  Executive  in  connection  with such  contest  or dispute
    regardless of the result thereof.

8.   Non-Solicitation.   During  the  continuance  of  his  employment  by  the
    Company and for a period of  twenty-four  (24) months after  termination of
    his employment (the "Non-Solicitation  Period"), the Executive will not (i)
    directly or indirectly  cause,  or attempt to cause, to leave the employ of
    the Company any  employee of the Company that is an employee of the Company
    at any time during the period  beginning six months before the date of this
    Agreement  and  ending  at the  end of the  Non-Solicitation  Period,  (ii)
    directly or indirectly  solicit any customer of the Company as to which the
    Executive  obtained  knowledge during his affiliation with the Company as a
    member of the  leadership  team of the Company or with any affiliate of the
    Company,  (iii)  knowingly or recklessly  interfere or attempt to interfere
    with any  transaction in which the Company was involved  during the term of
    this Agreement,  or (iv) in any other way knowingly or recklessly interfere
    with  the  relationship  between  the  Company  and  any of its  employees,
    customers or suppliers.

9.  Employment  Rights.  Nothing  expressed or implied in this  Agreement  will
    create  any right or duty on the part of the  Company or the  Executive  to
    have  the  Executive  remain  in  the  employment  of  the  Company  or any
    Subsidiary prior to or following any Change in Control.
<PAGE>

10. Release.  Payment  of the  severance  compensation  set forth in  Section 4
    hereto is  conditioned  upon the Executive  executing and delivering to the
    Company a general release to be provided by the Company.

11. Withholding  of Taxes.  The Company may withhold  from any amounts  payable
    under  this  Agreement  all  federal,  state,  city or  other  taxes as the
    Company  is  required  to  withhold  pursuant  to  any  law  or  government
    regulation or ruling.

12.    Successors  and Binding  Effect.  This  Agreement is a personal  service
    agreement and may not be assigned by the Company or the  Executive,  except
    that the  Company  may assign  this  Agreement  to a  successor  by merger,
    consolidation,  sale of  assets  or other  reorganization.  Subject  to the
    foregoing,  this  Agreement  shall be binding upon and inure to the benefit
    of the parties hereto and their respective  successors,  assigns, and legal
    representatives.

13.    Notices.  Any  notice  required  or  permitted  to be given  under  this
    Agreement shall be directed to the appropriate  party in writing and mailed
    or delivered,  if to the Company,  to 555 Seventeenth  Street,  14th Floor,
    Denver,  Colorado  80202 or to the  Company's  then  principal  office,  if
    different,        and       if       to       the       Executive,       to
    1542 Mayfield Lane, Longmont, COlorado 80501.

14.    Applicable  Law.  This  Agreement  is  entered  into  in  the  State  of
    Colorado  and for all  purposes  shall be governed by the laws of the State
    of Colorado.

15.    Validity.  If any provision of this Agreement or the  application of any
    provision   hereof  to  any  person  or   circumstances  is  held  invalid,
    unenforceable  or otherwise  illegal,  the remainder of this  Agreement and
    the  application  of such  provision to any other  person or  circumstances
    will  not  be  affected,   and  the   provision  so  held  to  be  invalid,
    unenforceable  or  otherwise  illegal  will be  reformed to the extent (and
    only to the extent) necessary to make it enforceable, valid or legal.

16.    Representation  by Counsel.  The parties  hereto  acknowledge  that they
    have had the  opportunity  to consult  with counsel and have done so to the
    extent they deemed  appropriate  during the  negotiation,  preparation  and
    execution of this Agreement.

17.    Counterparts.   This   instrument   may  be  executed  in  one  or  more
    counterparts, each of which shall be deemed an original.

18.    Amendment.  This  Agreement  may not be amended  except by an instrument
    in writing executed by each of the parties hereto.

<PAGE>
IN  WITNESS  WHEREOF,  the  parties  have  caused  this  Agreement  to be  duly
executed and delivered as of the date first above written.

                               PMC INTERNATIONAL, INC.

                               By:  /s/ Scott A. MacKillop
                                        Scott A. MacKillop
                               Title:   Executive Vice President/Chief 
                                        Operating Officer

                               MAUREEN  DOBEL

                              /s/ Maureen E. Dobel