AGREEMENT

     WHEREAS,  AMCOL  International  Corporation  (the  "Company")  considers it
essential  and in the best  interests  of the  Company and its  shareholders  to
foster the continued employment of its key management personnel;

     WHEREAS,  Paul G.  Shelton  ("Employee")  is  considered  a key  management
employee, currently serving as Senior Vice President and Chief Financial Officer
of the Company.

     WHEREAS,  the Company desires to assure the future continuity of Employee's
services  in the event of any  actual or  threatened  "Change  in  Control"  (as
defined in Section 6 below) of the Company.

     IT IS THEREFORE AGREED AS FOLLOWS:

     1. Effect of  Agreement.  This  Agreement  shall be  effective  and binding
immediately upon its execution. However, except as specifically provided herein,
this Agreement shall not alter materially  Employee's  duties and obligations to
the Company and the  remuneration  and benefits  which  Employee may  reasonably
expect to receive from the Company in the absence of a Change in Control.

     2. Employment On and After Change in Control. Provided that the employee is
an employee of the Company immediately prior to a Change in Control, the Company
shall employ Employee, and Employee shall accept such employment, effective upon
such Change in Control for a period of thirty-six  (36) months after said Change
in Control subject to the terms and conditions stated herein.

     3. Duties After Change In Control.  Employee agrees that during the term of
his employment with the Company after a Change in Control,  he shall perform the
duties  described  in Section 12 below and such other duties for the Company and
its  subsidiaries  consistent  with his  experience and training as the Board of
Directors  of the Company  (the  "Board") or the Board's  representatives  shall
determine from time to time, which duties shall be at least  substantially equal
in status, dignity and character to his duties at the date hereof. He shall also
have the title of Senior  Vice  President  and Chief  Financial  Officer  of the
Company. Employee further agrees to devote his entire working time and attention
to the business of the Company and its  subsidiaries and use his best efforts to
promote such business.

     4.  Compensation  Prior to Change in Control.  Prior to a Change in Control
the Company agrees to pay Employee  compensation  for his services in an amount,
and to provide him with life insurance,  disability,  health and other benefits,
as set by the  Company  from  time to time.  For the  purpose  of this  Section,
compensation does not include any bonus or other incentive  compensation plan or
stock purchase  plan,  which may vary from year to year at the discretion of the
Company.

     5. Termination of Employment  Prior to a Change of Control.  Employee shall
be entitled to terminate his employment prior to a Change in Control at any time
upon  sixty (60) days'  prior  written  notice.  The  Company,  shall be able to
terminate Employee's employment at any time prior to a Change in Control with or
without  cause upon sixty (60) days'  prior  written  notice (or the  payment of
salary in lieu  thereof).  This  Section  shall not be  construed  to reduce any
accrued  benefits  payable in  connection  with any  termination  of  Employee's
employment  prior to a Change in Control.  Nothing  expressed or implied in this
Agreement  shall create any right or duty on the part of the Company or Employee
to have  Employee  remain in the  employment of the Company prior to a Change in
Control.
<PAGE>
     6. Termination of Employment On or After Change in Control.

          (a) For purposes of this  Agreement the term "Change in Control" means
     the change in the legal or beneficial  ownership of fifty-one percent (51%)
     of the shares of the Company's common stock within a six-month period other
     than by death or operation of law, or the sale of ninety  percent  (90%) or
     more of the Company's assets within a six-month period.

          (b)  Employee's  employment  on and after a Change in  Control  may be
     terminated  with just  cause by the  Company at any time upon not less than
     ten (10) days' prior written notice. Prior to termination for just cause on
     and after a Change in  Control,  the Board of  Directors  shall by majority
     vote  have  declared  that   Employee's   termination  is  for  just  cause
     specifically stating the basis for such determination.  In the event such a
     termination  occurs,  the  provisions  of Sections  9(a) and 12 below shall
     apply.

          Employee's  employment  may be  terminated  on or  after a  Change  in
     Control  without  just  cause  pursuant  to  the  constructive  termination
     procedures  described  in  the  next  paragraph  or by the  Company  giving
     Employee not less than thirty (30) days' prior written notice. In the event
     Employee's employment is terminated pursuant to the preceding sentence:

          (i)  the provisions of Section 9(b) below shall apply; and

          (ii) although Employee's employment term shall be deemed terminated at
               the end of such notice period (or, in the case of a  constructive
               termination  described  in the  next  paragraph,  as of the  date
               Employee  notifies  the  Company  of  such   termination),   such
               termination  shall in no way affect the term of this Agreement or
               Employee's duties and obligations under Section 12 below.

          For purposes of this Section  6(b),  Employee  shall be  considered as
     having been  terminated  by the Company on or after a Change in Control for
     other than just cause  provided  that he has notified the Company of any of
     the following within ten (10) days of the occurrence thereof:

          (i)  the assignment to Employee of any duties of substantially  lesser
               status,  dignity and  character  than the duties as a Senior Vice
               President and Chief Financial Officer of the Company  immediately
               prior to the effective date of the Change in Control;
<PAGE>
          (ii) a post-Change  in Control  reduction by the Company in Employee's
               annual  base  salary  or bonus or  incentive  plan (as in  effect
               immediately  prior  to  the  effective  date  of  the  Change  in
               Control);

          (iii)relocation of Employee's  office to a location which is more than
               35 miles from the location in which  Employee  principally  works
               for the Company  immediately  prior to the effective  date of the
               Change in Control;  the relocation of the  appropriate  principal
               executive  office  of  the  Company  or the  Company's  operating
               division or subsidiary for which Employee  performed the majority
               of his  services  for the  Company  during  the year prior to the
               effective  date of the Change in  Control to a location  which is
               more than 35 miles from the  location of such office  immediately
               prior to such date; or his being required by the Company in order
               to perform  duties of  substantially  equal  status,  dignity and
               character to those duties he performed  immediately  prior to the
               effective  date  of  the  Change  in  Control  to  travel  on the
               Company's  business  to a  substantially  greater  extent than is
               consistent with his business travel  obligations as of such date;
               or

          (iv) the failure of the Company to continue to provide  Employee  with
               benefits  substantially  equivalent to those enjoyed by him under
               any of the Company's life insurance, medical, health and accident
               or  disability  plans in which he was  participating  immediately
               prior to the effective date of the Change in Control,  the taking
               of any action by the Company  which would  directly or indirectly
               materially  reduce any of such  benefits  or  deprive  him of any
               material  fringe  benefit  enjoyed  by him  immediately  prior to
               effective  date of the Change in  Control,  or the failure of the
               Company to provide him with at least the number of paid  vacation
               days to which he is  entitled  on the  basis of years of  service
               under the Company's normal vacation policy in effect  immediately
               prior to the effective date of the Change in Control.

          (c) In the event  Employee's  employment  is  terminated on or after a
     Change in Control in any manner not described in Section 6(b) above:

          (i)  the provisions of Section 9(b) shall not apply and Employee shall
               instead receive the sums and benefits  described in Section 9(a);
               and

          (ii) such  termination  shall  in no  way  affect  the  term  of  this
               Agreement or Employee's  duties or  obligations  under Section 12
               below.

          (d)  Any   termination   of  employment  of  Employee   following  the
     commencement  of any  discussions by a shareholder or group of shareholders
     owning  legally or  beneficially  more than 20% of the  common  stock or an
     officially designated representative of the Board of Directors with a third
     party that  results  within 180 days in a Change in Control  shall  (unless
     such termination is for cause or wholly  unrelated to
<PAGE>
     such  discussions) be deemed to be a termination of Employee on and after a
     Change in Control for purposes of this Agreement.

     7. Notice of  Termination.  Any  termination by the Company or assertion of
termination by Employee shall be  communicated  by written notice of termination
to the other party at the following address:

                  AMCOL International Corporation
                  One North Arlington
                  1500 West Shure Drive
                  Arlington Heights, IL 60004
                  Attn: Chief Executive Officer

                  Mr. Paul G. Shelton
                  AMCOL International Corporation
                  One North Arlington
                  1500 West Shure Drive
                  Arlington Heights, IL 60004

     8. Disability.  If as a result of Employee's  incapacity due to physical or
mental  illness,  he shall have been absent from his duties with the Company for
one hundred  eighty (180) days within any  twelve-(l2)-consecutive-month  period
and within thirty (30) days after written  notice of the Company's  intention to
terminate  his  employment  is given,  Employee  shall not have  returned to the
performance of his duties with the Company  substantially  on a full-time basis,
the  Company  may  terminate  his  employment  for  disability.  This  shall not
constitute a  termination  for the purposes of  obtaining  benefits  pursuant to
Section 9.

     9. Benefits Upon  Termination And Leave Of Employment On or After Change in
the Control.

          (a) If Employee is  terminated  for just cause on or after a Change in
     Control, he shall only receive the accrued sums and benefits payable to him
     through the date he is  terminated;  the  provisions  of Section 9(b) below
     shall not be  applicable  in such case and  Employee  shall not receive (or
     shall cease receiving) the payments and benefits described in Section 9(b).

          (b) Subject to Employee's  compliance  with the  provisions of Section
     12(a) below,  if Employee is terminated  during the  thirty-six  (36) month
     period beginning on and continuing after a Change in Control other than for
     just  cause  (either  at the  discretion  of the  Company's  management  or
     constructively  by the  operation  of  Section  6),  he shall  receive  the
     following  payments  and  benefits  in lieu of any other  sums or  benefits
     otherwise payable to him by the Company:

          (i)  all then accrued pay, benefits, executive compensation and fringe
               benefits,  including  (but not  limited  to) pro rata  bonus  and
               incentive plan earnings;
<PAGE>
          (ii) medical,  health and disability  benefits which are substantially
               similar to the benefits  the Company is  providing  him as of the
               date of his  employment is terminated  for a period of thirty-six
               (36) months thereafter; and

          (iii) one dollar less than three times his base period compensation.

          The  foregoing  payments  and  benefits  shall be deemed  compensation
     payable for the duties to be performed  by Employee  pursuant to Section 12
     below.  For  purposes  of  this  Agreement,  (A)  Employee's  "base  period
     compensation" is the average annual "compensation" (as defined below) which
     was  includable  in his gross  income for his base period  (i.e.,  his most
     recent five taxable years ending before the date of the Change in Control);
     and (B) if  Employee's  base period  includes a short  taxable year or less
     than all of a  taxable  year,  compensation  for such  short or  incomplete
     taxable year shall be  annualized  before  determining  his average  annual
     compensation  for  the  base  period.  (In  annualizing  compensation,  the
     frequency with which payments are expected to be made over an annual period
     shall be taken into account.  Thus, any amount of  compensation  for such a
     short or incomplete  taxable year that  represents a payment that would not
     be made more than once per year shall not be  annualized).  The sum payable
     to  Employee  pursuant to Section  9(b)(iii)  shall in any and all cases be
     reduced by any compensation which Employee receives, excluding stock option
     or other  stock  incentive  bonus  plan  compensation  from the date of the
     Change in Control  until the  termination  date.  For  purposes  of Section
     9(iii)  and  the  definitions   pertaining  to  said  Section,   Employee's
     "compensation" is the compensation  which was payable to him by the Company
     or a related entity determined  without regard to the following Sections of
     the Internal Revenue Code of 1986, as amended (the "Code"):  125 (cafeteria
     plans), 402(a)(8) (cash or deferred arrangements),  402(h)(1 )(B) (elective
     contributions  to  simplified  employee  pensions),  and,  in the  case  of
     employer  contributions  made  pursuant  to a salary  reduction  agreement,
     403(b) (tax sheltered annuities).

          Except for the benefits  described in Section 9(b)(ii) above, the sums
     due  pursuant  to this  Section  9(b) shall be paid in up to two (2) annual
     installments  commencing  thirty (30) days after the sums  become due.  All
     sums  due  shall  be  subject  to  appropriate  withholding  and  statutory
     requirements.  Employee shall not be required to mitigate the amount of any
     payment  provided for in this Section 9(b) by seeking  other  employment or
     otherwise.  Notwithstanding  anything  stated in this  Section  9(b) to the
     contrary,  however,  the amount of any payment or benefit  provided  for in
     this Section 9(b) shall be reduced by no more than 50% by any  compensation
     earned by Employee as a result of  employment  by another  employer and the
     Company shall not be required to provide medical,  health and/or disability
     benefits to the extent such benefits would duplicate  benefits  received by
     Employee in connection with his employment with any new employer.
<PAGE>
          Notwithstanding  anything stated in this Agreement to the contrary, if
     the  amounts  which are  payable  and the  benefits  which are  provided to
     Employee under this Agreement, either alone or together with other payments
     which  Employee  has a right  to  receive  from the  Company  or any of its
     affiliates,  would  constitute  a  "parachute  payment" (as defined in Code
     Section 280G), such amounts and benefits shall be reduced, as necessary, to
     the  largest  amount  as will  result in no  portion  of said  amounts  and
     benefits  being either not  deductible  as a result of Code Section 280G or
     subject to the excise tax imposed by Code Section 4999.  The  determination
     of any  reduction in said amounts and  benefits  pursuant to the  foregoing
     proviso shall be made by the Company in good faith, and such  determination
     shall be  conclusive  and  binding on  Employee.  The  amounts  provided to
     Employee  under this Agreement in connection  with a Change in Control,  if
     any, shall be deemed  allocated to such amounts and/or  benefits to be paid
     and/or  provided as the Company's Board of Directors in its sole discretion
     shall determine.

     10.  Special   Situations.   The  parties   recognize  that  under  certain
circumstances  a Change in  Control  may occur  under  conditions  which make it
inappropriate for Employee to receive the termination benefits or protection set
forth in this Agreement. Therefore, in the event that a Change in Control occurs
for any one of the  following  reasons,  the  provisions  of Sections 2, 6 and 9
shall not apply:

          (a) the purchase of more than fifty  percent (50%) of the stock of the
     Company by an employee  stock  ownership plan or similar  employee  benefit
     plan of which Employee is a participant; or

          (b) the  purchase  of more than  fifty  percent  (50%) of the stock or
     ninety percent (90%) of the assets of the Company by a group of individuals
     or entities  including  Employee as a member or participant,  including but
     not limited to those  transactions  commonly  known as a leveraged or other
     forms of management buy-outs.

     11. Dispute.  Any dispute arising under this Agreement  (except Section 12)
shall be  promptly  submitted  to  arbitration  under the Rules of the  American
Arbitration  Association.  An  arbitrator  is to be mutually  agreed upon by the
parties or upon failure of  agreement,  designated  by the American  Arbitration
Association.

     12. Non-Competition, Non-Solicitation, and Confidentiality

          (a) In  consideration  of this  Agreement  and other good and valuable
     consideration,  Employee  agrees  that for so long as he is employed by the
     Company and for thirty-six (36) months  thereafter he shall not own manage,
     operate,  control,  be employed by or otherwise  engage in any  competitive
     business.  Employee's agreement pursuant to the preceding sentence shall be
     in addition to any other agreement or legal  obligation he may have with or
     to the Company.  For purposes of the  preceding  sentence,  a  "competitive
     business" is any business engaged in the production,  refinement or sale of
     Bentonite and/or any business  conducted by the Company,  its affiliates or
     any  subsidiaries   thereof  as  of  the  date  Employee's   employment  is
     terminated. A business
<PAGE>
     which is conducted by the Company, its affiliates or any subsidiaries which
     is subsequently sold by the Company is not a competitive business as of the
     date such business is sold. An  "affiliate"  of the Company' is any company
     which either controls, is controlled by or is under common control with the
     Company. The phrase "any business conducted by the Company, its affiliates,
     joint  ventures or any  subsidiaries  thereof'  includes  not only  current
     businesses  but also any new  products,  product  lines or use of processes
     under  development,  consideration  or investigation on the date Employee's
     employment with the Company is terminated.

          Employee  also  agrees that during the  thirty-six  (36) month  period
     described in the first  sentence of this Section 12(a) he will not directly
     or indirectly,  on behalf of himself or any other person or entity,  make a
     solicitation or conduct business,  with any customer or potential  customer
     of the Company with which he had contact while employed by the Company, its
     affiliates and/or any subsidiaries thereof, with respect to any products or
     services which are competitive with any business  conducted by the Company,
     its affiliates or any subsidiaries  thereof.  For purposes of the preceding
     sentence,  a "customer" is any person or entity that has purchased goods or
     services  from the Company,  its  affiliates  or any  subsidiaries  thereof
     within the  twenty-four  (24) month  period  ending on the date  Employee's
     employment is  terminated.  A "potential  customer" is any person or entity
     that the Company  solicited for business within twelve (12) months prior to
     the date Employee's employment with the Company is terminated.

          The Company and  Employee  recognize  that his  responsibilities  have
     included  product  development,  sales and  marketing  of  bentonite  clay,
     fuller's  earth,  nanocomposites  and related  products to various  markets
     including without  limitation the foundry,  agricultural,  plastic and well
     drilling industries and establishing contacts and business relationships on
     behalf of the Company in the domestic and international markets. Employee's
     contacts  on  behalf of the  Company  represent  substantial  assets of the
     Company which are entitled to protection. In recognition of this situation,
     the  covenants  set forth in this  Section  12 shall  apply to  competitive
     businesses and solicitation in the United States, Australia,  Japan, China,
     India, Thailand, Egypt, Canada, Mexico and those other countries of Europe,
     North America, South America and Asia in which the Company, its affiliates,
     joint ventures and subsidiaries  are located or have conducted  $500,000 or
     more  of  business  during  the  twelve-month  period  ending  on the  date
     Employee's employment with the Company terminated.

          (i)  the United States,

          (ii) the United Kingdom,

          (iii) Germany,

          (iv) Japan, and

          (v)  Canada.
<PAGE>
          Before and forever  after his  termination  or  resignation,  Employee
     shall keep  confidential  and refrain from utilizing or  disseminating  any
     confidential,  proprietary  or trade secret  information of the Company for
     any purpose other than furthering the business interests of the Company.

          (b) During Employee's  employment  hereunder and during three (3) year
     following his  resignation or the  termination of his employment  hereunder
     for any  reason,  Employee  will not  induce or attempt  to  influence  any
     present  or  future  employee  of  the  Company,   its  affiliates  or  any
     subsidiaries thereof to leave its employ.

     13. Other Agreements. Except to the extent expressly set forth herein, this
Agreement  shall not  modify or lessen  any  benefit  or  compensation  to which
Employee is entitled  under any  agreement  between  Employee and the Company or
under  any  plan   maintained  by  the  Company  in  which  he  participates  or
participated.  Benefits or compensation shall be payable thereunder,  if at all,
according to the terms of the applicable  plan(s) or agreement(s).  The terms of
this Agreement shall supersede any existing  agreement  between Employee and the
Company  executed  prior to the date hereof to the extent any such  Agreement is
inconsistent with the terms hereof.

     14. Successors:  Binding Agreement.  The Company will require any successor
(whether direct or indirect by purchase, merger,  consolidation or otherwise, to
all or  substantially  all of the  business  and/or  assets of the  Company)  to
expressly  assume and agree to perform this  Agreement in the same manner and to
the same  extent  that the  Company  would be  required to perform it if no such
succession had taken place.

     This  Agreement  shall  inure  to the  benefit  of and  be  enforceable  by
Employee's  personal  or  legal  representatives,   executors,   administrators,
successors, heirs, distributees, devisees and legatees.

     15.  Injunction.  The  remedy at law for any  breach of  Section 12 will be
inadequate and the Company,  its affiliates and any  subsidiaries  thereof would
suffer continuing and irreparable injury to their business as a direct result of
any  such  breach.  Accordingly,  notwithstanding  anything  stated  herein,  if
Employee  shall breach or fail to perform any term,  condition or duty contained
in Section 12 hereof,  then,  in such event,  the  Company  shall be entitled to
institute  and  prosecute  proceedings  in any court of competent  jurisdiction,
either in law or in  equity,  to obtain  the  specific  performance  thereof  by
Employee or to seek a temporary restraining order or injunctive relief,  without
any' requirement to show actual damages or post bond, to restrict  Employee from
violating  the  provisions  of Section  12;  however,  nothing  herein  shall be
construed  to prevent the Company'  seeking such other remedy in the courts,  in
case of any breach of this  Agreement by  Employee,  as the Company may elect or
invoke. If court proceedings are instituted by the Company to enforce Section 12
hereof,  and the Company is the prevailing party, the Company shall receive,  in
addition to any damages  awarded,  reasonable  attorneys'  fees, court costs and
ancillary expenses.

     16. Miscellaneous.  This Agreement may not be modified or discharged unless
such  waiver,  modification  or  discharge is agreed to in writing and signed by
Employee and such officers of the Company as may be  specifically  designated by
its Board for that  purpose.  Except  for any  failure  to give the ten (10) day
notice  described  in Section  6(b) above,  the failure of either  party to this
Agreement  to object  to any  breach  by the  other  party or the  non-breaching
party's  conduct or conduct  forbearance
<PAGE>
shall not constitute a waiver of that party's rights to enforce this  Agreement.
No waiver by either  party  hereto at any time of any breach by the other  party
hereto of, or compliance  with,  any condition or provision of this Agreement to
be  performed  by such other  party  shall be deemed a waiver of any  subsequent
breach by such other party or any similar or dissimilar provisions or conditions
at the same or any prior or subsequent  time. No agreements or  representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have  been  made by  either  party  which  are not  expressly  set forth in this
Agreement.  The validity,  interpretation,  construction and performance of this
Agreement shall be governed by the laws of the State of Illinois.

     17.  Severability.  The parties hereto intend this Agreement to be enforced
to the  maximum  extent  permitted  by law. In the event any  provision  of this
Agreement  is deemed to be invalid or  unenforceable  by any court of  competent
jurisdiction,  such  provisions  shall be  deemed to be  restricted  in scope or
otherwise  modified  to the  extent  necessary  to  render  the same  valid  and
enforceable.  In the event the  provisions  of Section 12 cannot be  modified or
restricted  so as to be  valid  and  enforceable,  then  the same as well as the
Company's  obligation to make any payment or transfer any benefit to Employee in
connection with any termination of Employee's employment shall be deemed excised
from this  Agreement,  and this Agreement  shall be construed and enforced as if
such  provisions had  originally  been  incorporated  herein as so restricted or
modified or as if such provisions had not originally been contained  herein,  as
the case may be. The  invalidity  or  unenforceability  of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement which shall remain in full force and effect.

     18.  Survival.  The  obligations of the parties under this Agreement  shall
survive the term of this Agreement.

     19.  Term of  Agreement.  The  term of this  Agreement  shall  commence  on
April 1, 2000 and end on March 31, 2003;  provided,  however,  that in the event
Employee's  employment  is  terminated  while this  Agreement is in force,  this
Agreement  shall  terminate  when the Company has made all  payments to Employee
required  by  Section 9 hereof and  Employee  has  complied  with the duties and
obligations  described in Section 12 hereof (all of which duties and obligations
shall specifically survive the termination of the Employee's employment). To the
extent  necessary for the Company's  enforcement of the provisions of Section 12
above (but only for such purpose), Employee's employment term shall be deemed to
continue through the end of the Agreement term.

Date: April 1, 2000


EMPLOYEE                                    AMCOL INTERNATIONAL CORPORATION


/s/ Paul G. Shelton                                  By       /s/ Larry Washow
Paul G. Shelton                             Its:     President