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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant: [X]
Filed by a Party other than the Registrant: [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
AMCOL INTERNATIONAL CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[X] No fee required
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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AMCOL INTERNATIONAL CORPORATION
One North Arlington
1500 West Shure Drive, Suite 500
Arlington Heights, Illinois 60004-7803
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On May 10, 2007
To Our Shareholders:
The annual meeting of shareholders of AMCOL International Corporation, the
Company or AMCOL, will take place on Thursday, May 10, 2007, at 11:00 AM,
Central Daylight Savings Time, at the Sheraton Chicago Northwest, 3400 W. Euclid
Avenue, Arlington Heights, Illinois, for the following purposes:
1. To elect three (3) directors for a three-year term or until their
successors are elected and qualified; and
2. To transact any other business which properly comes before the annual
meeting.
Only shareholders of record of AMCOL's common stock as of the close of
business on March 16, 2007 will be entitled to notice of and to vote at the
annual meeting and at any adjournments of the annual meeting.
The Board of Directors recommends that you vote "FOR" each of AMCOL's
nominees for director.
Whether or not you plan to attend the annual meeting, please complete,
sign, date and mail the proxy card in the enclosed self-addressed, postage-paid
envelope, or vote by telephone or the Internet in accordance with the
instructions provided. Please do not submit a proxy card if you have voted by
telephone or the Internet. If you attend the annual meeting, you may revoke your
proxy and, if you wish, vote your shares in person. Thank you for your interest
and cooperation.
By Order of the Board of Directors,
James W. Ashley, Jr.
Secretary
Arlington Heights, Illinois
April 9, 2007
2
AMCOL INTERNATIONAL CORPORATION
One North Arlington
1500 West Shure Drive, Suite 500
Arlington Heights, Illinois 60004-7803
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held On May 10, 2007
INTRODUCTION
We are furnishing this proxy statement to you in connection with the
solicitation of proxies by the Board of Directors of AMCOL International
Corporation, the Company or AMCOL, for use at our annual meeting of shareholders
to be held on Thursday, May 10, 2007, at 11:00 AM, Central Daylight Savings
Time, at the Sheraton Chicago Northwest, 3400 W. Euclid Avenue, Arlington
Heights, Illinois, and at any adjournment of the annual meeting. This proxy
statement and the accompanying proxy card are first being mailed or delivered to
shareholders of AMCOL on or about April 9, 2007.
At the annual meeting, you will be asked to consider and vote upon the
following matters:
1. The election of three (3) directors for a three-year term or until
their successors are elected and qualified; and
2. Any other business which properly comes before the annual meeting.
The Board of Directors recommends that you vote "FOR" each of AMCOL's
nominees for director.
Whether or not you plan to attend the annual meeting, please complete,
sign, date and mail the proxy card in the enclosed self-addressed, postage-paid
envelope, or vote by telephone or the Internet in accordance with the
instructions provided. Please do not submit a proxy card if you have voted by
telephone or the Internet. If you attend the annual meeting, you may revoke your
proxy and, if you wish, vote your shares in person.
The date of this proxy statement is April 9, 2007.
3
THE ANNUAL MEETING
General
This proxy statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of AMCOL for use at the annual meeting to
be held on Thursday, May 10, 2007, at 11:00 AM, Central Daylight Savings Time,
at the Sheraton Chicago Northwest, 3400 W. Euclid Avenue, Arlington Heights,
Illinois, and at any adjournment of the annual meeting.
Record Date
The Board of Directors has fixed the close of business on March 16, 2007 as
the record date for the determination of shareholders entitled to notice of, and
to vote at, the annual meeting or any adjournment. Accordingly, only holders of
record of AMCOL's common stock at the close of business on the record date will
be entitled to vote at the annual meeting, either by proxy or in person. As of
the record date, there were 30,060,811 shares of AMCOL's common stock issued and
outstanding.
Purpose of the Annual Meeting; Recommendation of the Board of Directors
At the annual meeting, AMCOL's shareholders will be asked to consider and
vote upon the election of three (3) directors and any other business which
properly comes before the annual meeting.
The Board of Directors recommends that you vote "FOR" each of AMCOL's
nominees for director.
Proxies; Vote Required
In deciding all questions, a holder of AMCOL's common stock is entitled to
one vote, in person or by proxy, for each share held in such holder's name on
the record date. The presence, in person or by proxy, of the holders of a
majority of the outstanding shares of AMCOL's common stock is necessary to
constitute a quorum at the annual meeting.
With respect to the election of directors, shareholders may vote (a) in
favor of all nominees, (b) to withhold votes as to all nominees, or (c) to
withhold votes for specific nominees. Directors are elected by a plurality vote,
so the three director nominees receiving the greatest number of votes will be
elected. Votes withheld will be counted as present for purposes of determining a
quorum. Withheld votes will not affect the outcome of the election.
Under New York Stock Exchange rules, the proposal to elect directors is
considered a "discretionary" item. Therefore, brokers may vote in their
discretion on this matter on behalf of clients who have not furnished voting
instructions to the broker.
All properly delivered proxies received by AMCOL prior to the annual
meeting and not revoked will be voted in accordance with the instructions
provided. Unless contrary instructions are marked, proxies will be voted "FOR"
each of AMCOL's nominees for director. The Board of Directors knows of no other
business that will be presented for consideration at the annual meeting. If any
other matter is properly presented, it is the intention of the persons named in
the enclosed proxy to vote in accordance with their best judgment.
4
Any shareholder may revoke his or her proxy at any time prior to or at the
annual meeting by doing any of the following:
o giving written notice to the Secretary of AMCOL at One North
Arlington, 1500 West Shure Drive, Suite 500, Arlington Heights,
Illinois, 60004-7803;
o submitting a duly executed proxy bearing a later date;
o voting by telephone or the Internet on a later date; or
o attending the annual meeting and voting in person.
Attendance at the annual meeting will not, in itself, constitute revocation
of a proxy.
Proxy Solicitation and Expenses
The accompanying proxy is being solicited on behalf of the Board of
Directors of AMCOL. All expenses of this solicitation, including the cost of
preparing and mailing this proxy statement, will be paid by AMCOL. Solicitation
of holders of AMCOL's common stock by mail, telephone, facsimile, e-mail or by
personal solicitation may be done by directors, officers and regular employees
of AMCOL, for which they will receive no additional compensation. Brokerage
houses and other nominees, fiduciaries and custodians nominally holding shares
of AMCOL's common stock as of the record date will be requested to forward proxy
soliciting material to the beneficial owners of such shares, and will be
reimbursed by AMCOL for their reasonable out-of-pocket expenses.
5
ELECTION OF DIRECTORS
AMCOL's Certificate of Incorporation divides the Board of Directors into
three classes, with the members of one class elected each year for a three-year
term. In February 2007, in connection with the retirement of Robert E. Driscoll,
III from the Board of Directors, the Board reduced the size of the Board of
Directors from ten (10) directors to nine (9) directors, with the resulting
nine-member Board being equally divided into three classes. Mr. Driscoll served
as a Class II Director and his term was scheduled to expire at the 2009 annual
meeting of shareholders. In order to balance the number of directors in each of
the three classes, the Board appointed Lawrence E. Washow, previously a Class I
Director and the Company's Chief Executive Officer, to serve as a Class II
Director.
The terms of the Class III directors will expire at the annual meeting. The
following tables set forth certain information regarding the director nominees
and the continuing members of the Board.
Information Concerning Nominees
Class III
(If elected, term to expire in 2010)
NAME AGE DIRECTOR SINCE PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
- ----------------------- ------- --------------- ---------------------------------------------------------------
Arthur Brown 66 1990 Retired Chairman and retired Chief Executive Officer of Hecla
Mining Company, a producer of precious metals.
Jay D. Proops 65 1995 Private investor since 1995; prior thereto, Vice Chairman and
co-founder of The Vigoro Corporation, a manufacturer and
distributor of fertilizers and related products. Also served
as a director of Chemtura Corporation, a producer of specialty
chemicals, through December 31, 2006.
Paul C. Weaver* 44 1995 Private investor since June 2006; prior thereto, Vice President
of Information Resources, Inc. since 2002; prior thereto
Managing Partner of Consumer Aptitudes, Inc. since July 1997
(both companies engage in marketing research).
* Paul C. Weaver and Audrey L. Weaver are first cousins.
The Board of Directors recommends that AMCOL's shareholders vote "FOR" each
of the nominees named above.
6
Information Concerning Continuing Members of the Board
Class I
(Term expiring in 2008)
NAME AGE DIRECTOR SINCE PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
- ----------------------- ------- --------------- ---------------------------------------------------------------
John Hughes 64 1984 Chairman of the Board; Chief Executive Officer of AMCOL from
1985 until May 2000.
Clarence O. Redman 64 1989 Retired. Previously, of counsel to Lord, Bissell & Brook LLP
from 1997 to February 2007, the law firm that serves
as corporate counsel to AMCOL. Secretary of AMCOL
from 1982 to February 2007.
Audrey L. Weaver* 52 1997 Private investor.
* Paul C. Weaver and Audrey L. Weaver are first cousins.
Class II
(Term expiring in 2009)
NAME AGE DIRECTOR SINCE PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
- ----------------------- ------- --------------- ---------------------------------------------------------------
Daniel P. Casey 64 2002 Private investor since April 2002. Retired Chief Financial
Officer and Vice Chairman of the Board of Gaylord Container
Corporation, a manufacturer and distributor of brown paper and
packaging products. Also a director of Caraustar Industries,
Inc., a recycled packaging company.
Dale E. Stahl 59 1995 Retired from Inland Paperboard and Packaging, Inc., a
manufacturer of containerboard and corrugated boxes, where
Mr. Stahl served as President, Chief Executive Officer and
Chief Operating Officer from June 2000 until September 2003.
Prior thereto, President and Chief Operating Officer of Gaylord
Container Corporation, a manufacturer and distributor of brown
paper and packaging products.
Lawrence E. Washow 53 1998 President and Chief Executive Officer of AMCOL since May 2000
and Chief Operating Officer of AMCOL since August 1997.
7
SECURITY OWNERSHIP
Security Ownership of Five Percent Beneficial Owners
The following table sets forth all persons known to be the beneficial owner
of more than five percent of AMCOL's common stock as of February 28, 2007.
NUMBER OF SHARES AND
NATURE OF BENEFICIAL PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP (1) OF CLASS
- ------------------------------------------- ---------------------- ----------
Harris Financial Corp. 3,370,151 11.26%
111 West Monroe Street (2)(3)
Chicago, Illinois 60690
Annamarie Weaver 3,478,288 11.60%
c/o AMCOL International Corporation (3)(4)
1500 West Shure Drive, Suite 500
Arlington Heights, Illinois 60004-7803
Leslie Weaver 4,458,729 14.90%
c/o AMCOL International Corporation (3)(5)
1500 West Shure Drive, Suite 500
Arlington Heights, Illinois 60004-7803
Lord, Abbett & Co. LLC 2,409,006 8.05%
90 Hudson Street (6)
Jersey City, New Jersey 07302
(1) Nature of beneficial ownership is direct unless otherwise indicated by
footnote. Beneficial ownership as shown in the table arises from sole
voting and investment power unless otherwise indicated by footnote.
(2) Based on an amendment to Schedule 13G filed with the Securities and
Exchange Commission on January 12, 2007.
(3) Includes 3,151,751 shares held in the Paul Bechtner Trust as to which
Harris Financial Corp., Ms. Annamarie Weaver and Ms. Leslie Weaver are
co-trustees and share voting and investment power.
(4) Includes 31,929 shares held by Ms. A. Weaver's husband.
(5) Based on an amendment to Schedule 13G filed with the Securities and
Exchange Commission on February 12, 2007. Includes 37,895 shares held by
Ms. L. Weaver's husband, 121,220 shares held by Ms. L. Weaver's children,
473,421 shares held in trusts for which Ms. L. Weaver serves as co-trustee
and shares voting and investment power, and 30,000 shares held in a
foundation for which Ms. L. Weaver serves as a director and shares voting
and investment power.
(6) Based on an amendment to Schedule 13G filed with the Securities and
Exchange Commission on February 14, 2007. Includes 2,256,350 shares for
which Lord, Abbett has sole voting power and 2,409,006 shares for which
Lord, Abbett has sole dispositive power, in each case as an investment
adviser.
8
Security Ownership of Directors and Executive Officers
The following table sets forth, as of February 28, 2007, shares of AMCOL
common stock beneficially owned by: (i) each director and nominee; (ii) the
executive officers; and (iii) all directors and executive officers.
NUMBER OF SHARES AND
NATURE OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP (1) CLASS
- ------------------------------------------- ---------------------- ----------
Arthur Brown 47,461 *
Daniel P. Casey 25,000 *
John Hughes 625,439 2.1%
Jay D. Proops 91,908 *
Clarence O. Redman 78,762 *
Dale E. Stahl 47,295 *
Lawrence E. Washow 704,124 2.3%
Audrey L. Weaver 1,175,651 3.9%
Paul C. Weaver 399,610 1.3%
Gary L. Castagna 207,865 *
Ryan F. McKendrick 83,461 *
Gary D. Morrison 170,588 *
All directors and executive officers 3,496,864 11.6%
* Percentage represents less than 1% of the total shares of common stock
outstanding as of February 28, 2007.
(1) Nature of beneficial ownership is set forth on the next page.
9
NATURE OF BENEFICIAL OWNERSHIP AS OF FEBRUARY 28, 2007
- ------------------------------------------------------------------------------------------------------------------------
IN IN AS TRUSTEE SUBJECT TO
DIRECTLY RETIREMENT FAMILY LIMITED AS BY OF AMCOL'S OPTIONS
OR WITH SAVINGS PARTNERSHIP TRUSTEE OR FAMILY PENSION EXERCISABLE
BENEFICIAL OWNER SPOUSE (1) PLANS (2) (3) CO-TRUSTEE MEMBERS PLAN (4) IN 60 DAYS
- -------------------- ------------ ---------- --------------- ---------- ---------- ---------- ------------
Arthur Brown 9,505 -- -- -- -- -- 37,956
Daniel P. Casey 12,000 -- -- -- -- -- 13,000
John Hughes -- -- 54,211 413,613 55,838 80,000 21,777
Jay D. Proops 35,043 -- 10,000 -- -- -- 46,565
Clarence O. Redman 15,670 25,136 -- -- -- -- 37,956
Dale E. Stahl 30,000 -- -- -- -- -- 17,295
Lawrence E. Washow 391,126 20,079 -- -- --- 80,000 212,919
Audrey L. Weaver 639,647 -- -- 503,421 25,783 -- 6,800
Paul C. Weaver 300,185 -- -- 30,638 30,831 -- 37,956
Gary L. Castagna 38,100 5,764 -- -- -- 80,000 84,001
Ryan F. McKendrick 35,898 22,363 -- -- -- -- 25,200
Gary D. Morrison 23,816 40,502 -- -- -- -- 106,270
All Directors and
Executive Officers 1,530,990 113,844 64,211 947,672 112,452 80,000 647,695
(1) Includes shares held with spouses for which voting rights may be shared.
For Mr. Washow, includes 130,569 shares held in the Deferred Compensation
Plan.
(2) Shares are held in AMCOL's Savings Plan, with the exception of Mr. Redman's
shares, which are held in the Clarence O. Redman PC Savings Plan.
(3) The named director is a general partner.
(4) Messrs. Hughes, Washow and Castagna share voting rights.
10
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
Overview
- --------
This compensation discussion and analysis describes the material elements
of compensation earned by, awarded to or paid to each of our executive officers
during AMCOL's 2006 fiscal year. This discussion focuses primarily on 2006
executive compensation and the information contained in the following tables,
footnotes and narratives. In order to provide perspective and a thorough
explanation of 2006 executive compensation, we sometimes describe actions taken
before or after 2006 as warranted.
AMCOL's Compensation Committee oversees the design and administration of
the executive compensation program. The Compensation Committee has designed a
program that rewards performance and aligns executives' interests with those of
AMCOL's shareholders, with the ultimate goal of improving shareholder value. The
principal elements of AMCOL's executive compensation program are base salary,
annual performance-based cash bonuses, long-term equity incentives in the form
of stock options, other customary benefits and limited perquisites, and, in
certain circumstances, severance and other benefits upon termination and/or a
change in control. AMCOL's executive compensation program provides both
short-term and long-term compensation. In the short-term, annual bonuses are
directly linked to improving growth in earnings per share and return on capital
employed. Executive compensation is linked to the long-term performance of AMCOL
stock through our stock option program.
AMCOL Compensation Committee
- ----------------------------
Compensation Committee Authority. The Compensation Committee operates
pursuant to a charter adopted by the Board, which may be found on our website at
www.amcol.com. The Compensation Committee conducts an annual self-evaluation of
its overall effectiveness. As part of this evaluation, the Compensation
Committee reviews the adequacy of its charter, and whether any amendments are
necessary. In 2007, the Charter was amended to reflect the new requirements of
the executive compensation rules of the Securities and Exchange Commission.
Pursuant to the charter, the Compensation Committee is responsible for
reviewing and approving the compensation of all executive officers. Also, the
Compensation Committee makes all grants of awards under AMCOL's 2006 Long-Term
Incentive Plan and Cash Incentive Plan. The Compensation Committee also makes
recommendations to the Board regarding succession planning and director
compensation. The Compensation Committee has sole authority to retain
compensation consultants to assist the Compensation Committee in carrying out
its responsibilities.
Compensation Committee Meetings. AMCOL's Compensation Committee meets as
often as necessary to perform its duties. The Compensation Committee generally
meets between two and four times each year. In 2006, the Compensation Committee
met in February and November. The Compensation Committee typically meets with
Larry Washow, Chief Executive Officer, and, where appropriate, Gary Castagna,
Chief Financial Officer, and, from time to time, with outside advisors. The
Compensation Committee also meets in executive session without management. The
Compensation Committee reviews pertinent materials in advance of each meeting.
These materials include information provided by management, as well as
information specifically requested by the Compensation Committee. These
materials may include financial reports comparing AMCOL's current performance to
budget and prior-year periods, reports on individual and corporate performance
objectives, and information regarding the financial performance and compensation
programs of comparable companies.
11
The Compensation Committee Process
- ----------------------------------
Although most decisions regarding executive compensation are made in the
first quarter of our fiscal year, management and the Compensation Committee
continue to monitor developments during the year.
Management's Role in the Process. AMCOL's Chief Executive Officer, Larry
Washow, and, where appropriate, Chief Financial Officer, Gary Castagna, play an
advisory role in designing our executive compensation program. The most
significant contributions by these officers are evaluating the performance of
the company, the employees and the various business units and making
recommendations regarding performance targets and objectives, salary levels and
equity awards for executive officers (other than themselves). Mr. Washow
performs the evaluations and makes the recommendations regarding Mr. Castagna.
Engagement of Compensation Consultants. From time to time, the Compensation
Committee engages compensation consultants to review AMCOL's executive
compensation programs. In 2004, the Compensation Committee engaged Deloitte
Consulting to conduct a competitive assessment of AMCOL's executive officers'
direct compensation program (base salary, annual bonus and long-term
incentives), as well as existing perquisites. For purposes of comparison, the
Deloitte Consulting study used compensation data for comparable executives based
on two sources. The first source relied on data from three published
compensation surveys for industry and revenue groupings similar to AMCOL. The
second source examined data at a peer group of eleven companies. Due to the wide
range of industrial and consumer applications for AMCOL's products, AMCOL's
sustained performance and the scope of its international operations, it is
difficult to identify peer companies that have performed similarly and provide a
comparable broad array of products and services. For this reason, compensation
comparisons consider both the peer group as well as comparisons to other
companies in different industries with similar size revenues.
Deloitte Consulting, AMCOL management and the Compensation Committee worked
together to identify the companies to be included in the compensation peer
group. The Compensation Peer Group consisted of the following eleven companies:
Ameron International Corporation; Arch Chemicals, Inc.; Brush Engineered
Materials Inc.; Calgon Carbon Corporation; Compass Minerals International, Inc.;
Eagle Materials Inc.; Material Sciences Corporation; Minerals Technologies Inc.;
Quaker Chemical Corporation; Stillwater Mining Company; and SunOpta Inc.
In 2007, the Compensation Committee engaged Towers Perrin to assess AMCOL's
executive compensation program. Such assessment did not impact the compensation
earned by, awarded to or paid to the executive officers for fiscal 2006.
Benchmarking of Compensation. One component of the Compensation Committee's
process for establishing executive compensation involves reviewing compensation
levels for our executive officers as compared to compensation levels for
executives at certain peer companies within AMCOL's industries, and other
companies with similar revenues. The Compensation Committee also considers the
collective experience of its members, as well as the other independent board
members, in benchmarking compensation. Any targeted compensation levels are
subject to upward or downward adjustment in the following year in the discretion
of the Compensation Committee. In any year, such adjustments may be made for one
or more of our executive officers, and adjustments are made based on a variety
of factors, including AMCOL's performance, historical compensation levels,
internal equity and consistency, tenure and industry conditions.
12
In connection with setting 2005 compensation, the Compensation Committee
reviewed the above referenced Deloitte Consulting executive compensation
competitive assessment. With respect to 2006 compensation and in order to update
the Deloitte Consulting materials, AMCOL management and the Compensation
Committee informally reviewed summary published compensation surveys and
published articles regarding recent compensation trends.
For base salary, AMCOL's compensation program generally targets the median
pay level, considering both the Compensation Peer Group and published survey
data. For total cash compensation, consisting of base salary and annual bonus,
the minimum target performance goals for the annual bonus are structured to
generally provide for total cash compensation around the median pay level. Due
to AMCOL's recent strong financial performance, the executive officers have
generally exceeded all target performance goals and have been paid near the
maximum performance bonus. As such, recently, total cash compensation has
averaged between the 50th and the 75th percentile. AMCOL does not establish a
target level for long-term equity incentives or total executive officer
compensation, but reviews these elements as compared to the Compensation Peer
Group and the published survey data to insure that AMCOL remains competitive.
Compensation Program Philosophy and Policies
- --------------------------------------------
Compensation Philosophy. AMCOL's success requires a management team that is
able to develop and execute a worldwide business plan for the complex mix of
slow-growth and high-growth, basic and sophisticated businesses operated by
AMCOL. Historically, a significant portion of our senior management team has
been promoted from within the company and its subsidiaries. In addition to
possessing valuable knowledge about AMCOL and a diverse skill set, our executive
officers are often recognized as industry leaders.
AMCOL's compensation program is designed to attract, as needed, individuals
with the skills necessary for us to achieve important business objectives, to
reward those individuals fairly over time, to retain those individuals who
continue to perform at high levels, and to closely align the compensation of
those individuals with AMCOL's performance on both a short-term and a long-term
basis.
The Compensation Committee has designed a compensation program that rewards
performance and aligns executives' interests with those of AMCOL's shareholders,
with the ultimate goal of improving shareholder value. As such, a substantial
portion of pay for AMCOL's executive officers is comprised of at risk, variable
compensation whose payout is dependent on the achievement of specific corporate
and individual performance objectives. The annual performance-based cash bonuses
represent this type of "pay for performance" compensation. In setting the
performance objectives for the annual bonuses, the Compensation Committee
consults with management and considers market conditions, the prior-year
performance and various elements of AMCOL's strategic plan, such as significant
acquisitions. For 2006, the performance measures required growth in earnings per
share and return on capital employed. Considering the complex mix of slow-growth
and high-growth, basic and sophisticated businesses operated by AMCOL, the
Compensation Committee believes that these performance measures were
challenging.
The awards of stock options also constitute at-risk compensation and are
designed to provide appropriate linkage between executive behavior and
shareholder interests. In keeping with AMCOL's commitment to provide a
compensation package that focuses on "pay for performance" components, the
executive officers are awarded stock options with an exercise price equal to the
fair market value on the date of grant and these options will have value to our
executive officers only if the market price of our common stock increases.
13
At AMCOL, the components of executive compensation are related but exist
for different purposes, and are evaluated separately for effectiveness.
Significant compensation derived from success in one component of the
compensation program does not offset or reduce compensation from other
components. Although the Compensation Committee reviews total compensation of
the executive officers relative to peer companies and general compensation
surveys, total compensation is determined by the financial performance of AMCOL
and its subsidiaries, the price of AMCOL common stock and each individual
executive's performance.
The lengthy tenure of AMCOL's executives and the recent growth in AMCOL's
stock price, earnings per share and other financial measures has resulted in the
executive officers being paid significant performance based annual bonuses and
accumulating valuable stock options and retirement benefits. Some of our
executive officers have also elected to commit significant amounts of their
salary and/or earned bonus into our deferred compensation program.
Stock Ownership Policy. The Compensation Committee considers stock
ownership by management to be an important means of linking management's
interests with those of shareholders. AMCOL maintains stock ownership guidelines
for its corporate and subsidiary officers. The amount of stock required to be
owned increases with the level of responsibility of each executive, with the
Chief Executive Officer expected to own stock with a value at least equal to
four times base salary, Senior Vice Presidents expected to own stock with a
value at least equal to three times base salary and Vice Presidents expected to
own stock with a value at least equal to two times base salary. Shares that the
executive officers have the right to acquire through the exercise of stock
options are not included in the calculation of stock ownership for purposes of
these guidelines. Executive officers are prohibited from hedging their stock
positions. All of our executive officers were in compliance with our Stock
Ownership Policy for 2006.
Option Granting Practices. The Compensation Committee approves all annual
awards of stock options at its February meeting each year. These option grants
are generally made more than two weeks after AMCOL issues its annual earnings
press release. The grant date for the stock options is the date the Compensation
Committee approves the grants, and the exercise price is the closing price of
the common stock on the New York Stock Exchange on the grant date.
Policy Regarding Internal Revenue Code Section 162(m). Under Section 162(m)
of the Internal Revenue Code, AMCOL may not deduct annual compensation in excess
of $1 million paid to certain employees, generally the Chief Executive Officer
and four other most highly compensated executive officers, unless that
compensation qualifies as performance-based compensation under a shareholder
approved plan and meets certain other technical requirements. In the event that
AMCOL would not be entitled to a tax deduction, the Compensation Committee has
in place a policy that AMCOL will defer payment of a portion of salary and bonus
payments equal to such excess until such time or times as AMCOL is entitled to a
tax deduction. The restricted stock awards granted to the executive officers in
2003 do not qualify as performance-based compensation under Section 162(m).
These awards were fully vested on February 28, 2006 and the shares held by Mr.
Washow were valued at $1,104,400 as of such date. The Compensation Committee has
decided to waive this policy to require deferral of excess amounts for the 2006
fiscal year with respect to the 2003 restricted stock awards. Awards under both
the 2006 Long-Term Incentive Plan and the Cash Incentive Plan are expected to
qualify as performance-based compensation under Section 162(m). Any awards made
under the Annual Discretionary Cash Incentive Plan would not qualify as
performance-based compensation under Section 162(m).
While the Compensation Committee considers the impact of Section 162(m) in
structuring AMCOL's compensation plans and programs, the Compensation Committee
has, and may continue to, approve awards which would not qualify as
performance-based compensation under Section 162(m). Such awards may include
discretionary cash bonuses under the Annual Discretionary Cash Incentive Plan.
The Compensation Committee reserves the flexibility and authority to make
decisions that are in the best interest of AMCOL and its shareholders, even if
those decisions do not result in full deductibility under Section 162(m).
14
Elements of Compensation
- ------------------------
The principal elements of our executive compensation program are base
salary, annual performance-based cash bonuses, long-term equity incentives in
the form of stock options, other customary benefits and limited perquisites,
and, in certain circumstances, severance and other benefits upon termination
and/or a change in control. Our Compensation Committee believes that these
elements of compensation are generally typical in our industry, and they are
provided by AMCOL in order to remain competitive with our peer companies in
attracting, motivating and retaining superior executive talent.
Base Salary. The 2006 base salaries for the executive officers were
established in their respective 2006 employment agreements. In setting these
initial base salaries, the Compensation Committee considered levels of
responsibility, prior experience and breadth of knowledge, past performance,
internal equity issues and external pay practices. These base salaries will be
reviewed annually by the Compensation Committee and are subject to increase. Any
such increase is expected to be made based primarily upon individual performance
and market pay practices. The 2006 base salaries of the executive officers
reflect, on average, an increase of approximately 5% over 2005 base salaries.
For 2006, base salary accounted for approximately 28% of total compensation for
Mr. Washow and approximately 36% on average for our other executive officers.
Annual Performance-Based Cash Bonus. Pursuant to the terms of their
respective employment agreements, each of the executive officers are eligible
for an annual cash bonus in an amount equal to at least their annual base salary
based on the achievement of performance goals established annually by the
Compensation Committee. These awards are made pursuant to the Cash Incentive
Plan. The Compensation Committee determines the performance measures and other
terms and conditions of these cash bonuses for executive officers. The awards
generally reflect a threshold payment, a target payment and a maximum payment,
depending on the level of performance measure achieved. The Compensation
Committee does not have authority to grant a waiver if the established
performance measures are not achieved, or to increase any amounts payable under
the Cash Incentive Plan. However, AMCOL may grant discretionary cash bonus
awards that are not subject to satisfaction of any performance criteria under
the Annual Discretionary Cash Incentive Plan. No awards were made to the
executive officers in 2006 under the Annual Discretionary Cash Incentive Plan.
For 2006, the performance measures for each of the executive officers
includes earnings per share and return on capital employed. The performance
measures for Messrs. McKendrick and Morrison also includes environmental segment
operating profit and minerals segment operating profit, respectively. In setting
the measures, the Compensation Committee considered, among other matters, each
individual's and AMCOL's past performance, the 2006 operating plan, and general
economic conditions. No amounts are payable unless a specified "threshold"
performance level is reached. All bonus amounts are subject to the following
limits: Mr. Washow, 150% of 2006 base salary and Messrs. Castagna, McKendrick
and Morrison, 100% of 2006 base salary. For 2006, based on company performance,
Messrs. Washow, Castagna and McKendrick each received the maximum bonus. For
2006, performance-based bonus awards accounted for approximately 42% of total
compensation for Mr. Washow and 32% on average for our other executive officers.
15
Equity Based Compensation -- Long-Term Incentive. The Compensation
Committee believes that equity-based compensation is the most effective means of
ensuring that our executive officers have a continuing stake in AMCOL's
long-term success. We currently utilize stock options as our equity compensation
component. The Compensation Committee believes that stock options serve the
following purposes: (i) reward executive officers for long-term shareholder
value creation; (ii) provide competitive long-term incentive award
opportunities; (iii) retain employees through wealth accumulation opportunities;
and (iv) focus executive officers on long-term, sustained performance.
In structuring equity awards, the Compensation Committee targets an annual
share utilization of up to 1.5% of our outstanding shares. In keeping with
AMCOL's commitment to provide a compensation package that focuses on at-risk pay
components, the executive officers are awarded stock options with an exercise
price equal to the fair market value of AMCOL's common stock on the date of
grant and these options will have value to our executive officers only if the
market price of our common stock increases after the date of grant. Typically,
our stock options vest 33% after one year, 66% after two years, and 100% after
three years. In determining the size of stock option grants to executive
officers, our Compensation Committee considers AMCOL's performance, relative
shareholder return, individual performance against the individual's objectives,
comparative share ownership and equity award data, competitive compensation
practices, historical awards to the individual and the recommendations of Mr.
Washow and Mr. Castagna. For 2006, options granted in 2006 accounted for
approximately 14% of total compensation for Mr. Washow and 21% on average for
our other executive officers, based on the total fair value of the options under
SFAS No. 123(R) as reported in AMCOL's audited financial statements. The value
of such options will ultimately depend on the increase, if any, in the price of
AMCOL's common stock.
Other Benefits and Perquisites. Executive officers are eligible to
participate in all of our employee benefit plans, such as medical, dental,
vision, group life, disability, and our 401(k) savings plan (with a company
match), in each case on the same basis as other employees, subject to applicable
law. AMCOL sponsors two defined benefit pension plans in which our executive
officers participate. Our Pension Plan is available to employees hired on or
before January 1, 2004. Our executive officers also participate in our
Supplementary Pension Plan which provides benefits to certain participants in
our Pension Plan whose accrued benefit is restricted by provisions of the
Internal Revenue Code. Our executive officers are also provided deferred
compensation opportunities through a non-qualified Deferred Compensation Plan.
In addition to employee directed deferrals, AMCOL annually credits each
participant's Deferred Compensation Plan account with an amount equal to the
amount that would have been contributed to the 401(k) savings plan, without
regard to any qualified plan limits, if the amount had not been deferred. For a
description of the Pension Plan, the Supplementary Pension Plan and the Deferred
Compensation Plan, please see the sections entitled "Executive Compensation --
Pension Benefits" and "--Nonqualified Deferred Compensation" below,
respectively.
Consistent with the philosophy and culture of AMCOL, a few modest
perquisites are provided to the executive officers. Perquisites include a
company car allowance, excess private liability insurance coverage and executive
life insurance coverage.
Severance and Change of Control Payments. AMCOL has entered into employment
agreements with the executive officers. These agreements contain severance and
change in control provisions. These agreements are designed to promote stability
and continuity of senior management, both of which are in the best interest of
AMCOL and its shareholders. Our severance and change in control provisions for
the executive officers are summarized below under "Executive Compensation --
Potential Payments Upon Termination or Change of Control."
16
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation
Discussion and Analysis with management and, based on such review and
discussions, the Compensation Committee recommended to the Board of Directors
that the Compensation Discussion and Analysis be included in this Proxy
Statement.
THE COMPENSATION COMMITTEE
Dale E. Stahl, Chariman
Arthur Brown
Daniel P. Casey
Audrey L. Weaver
17
SUMMARY COMPENSATION TABLE
The following table sets forth certain summary information regarding the
compensation awarded to, earned by or paid by AMCOL to or for the account of our
Chief Executive Officer, our Chief Financial Officer and our two (2) other
executive officers during the fiscal year ended December 31, 2006.
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------------------------
CHANGE IN
PENSION
VALUE AND
NONQUALIFIED
NON-EQUITY DEFERRED
STOCK OPTION INCENTIVE PLAN COMPENSATION ALL OTHER
AWARDS AWARDS COMPENSATION EARNINGS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) ($)(1) ($)(1) ($)(2) ($)(3) ($)(4) TOTAL ($)
- --------------------------- ---- ---------- --------- ---------- -------------- ------------ ------------ -----------
Lawrence E. Washow 2006 $ 525,000 $ 29,022 $ 259,566 $ 788,000 $ 216,401 $ 67,657 $ 1,885,646
President and Chief
Executive Officer
Gary L. Castagna 2006 $ 278,000 $ 18,139 $ 170,593 $ 278,000 $ 1,542 $ 27,900 $ 774,174
Senior Vice
President, Chief
Financial Officer and
Treasurer
Ryan F. McKendrick 2006 $ 268,000 $ 18,139 $ 168,960 $ 268,000 $ 154,859 $ 22,173 $ 900,131
Vice President;
President of Colloid
Environmental
Technologies
Company and Volclay
International Corp.
Gary D. Morrison 2006 $ 223,000 $ 13,060 $ 103,886 $ 161,350 $ 26,210 $ 12,415 $ 539,921
Vice President;
President of American
Colloid Company
(1) These amounts reflect the dollar amount recognized for financial
statement reporting purposes for the fiscal year ended December 31,
2006, in accordance with SFAS No. 123(R) and include amounts from
awards granted in and prior to 2006. Under SFAS No. 123(R), the fair
value of these awards is recognized ratably over the vesting period.
Details of the assumptions used in valuing these awards are set forth
in Note 14 to our audited financial statements included in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2006.
(2) These performance-based cash bonuses were made pursuant to our Annual
Cash Incentive Plan. These performance-based incentive awards are
earned based on 2006 performance. These amounts were paid to the
executive officers in February 2007.
(3) Amounts reflect the aggregate change in actuarial present value of
accumulated benefits under the Pension Plan and the Supplemental
Pension Plan from December 31, 2005 to December 31, 2006.
(4) Amounts reflect the following for each executive officer: matching
contributions allocated by AMCOL pursuant to AMCOL's 401(k) Savings
Plan; the value attributable to personal use of company-provided
automobiles; premiums paid for excess personal liability insurance
coverage; and premiums paid for life insurance coverage. For Messrs.
Washow and Castagna, also includes $39,181 and $7,556, respectively,
reflecting a credit to AMCOL's Deferred Compensation Plan in amounts
equal to the amount that would have been contributed by AMCOL to the
executive officer's account in the 401(k) Savings Plan with respect to
the compensation deferred, without regard to any qualified plan
limits.
18
Employment Agreements
- ---------------------
Each of Messrs. Castagna, McKendrick, Morrison and Washow are parties to
employment agreements with AMCOL. The initial employment term under each
agreement is three years (expiring in March 2009), with a rolling six-month
extension (unless either party gives notice of expiration six months prior to
the extension). Each agreement provides for an annual salary and a performance
based annual bonus, both of which are subject to deferral in AMCOL's discretion
in the event payments to such executive are not deductible by AMCOL under the
tax laws. Such amounts, if any, are subject to deferral by AMCOL until they are
deductible by AMCOL. The agreements also include a non-competition /
non-solicitation covenant effective during employment and for one year
thereafter.
Prior to a Change of Control (as defined below), if AMCOL terminates an
officer without cause or the officer terminates his employment for Good Reason
(as defined below), the officer is entitled to receive: (1) his accrued salary
and bonus; (2) a pro-rata annualized bonus; (3) his base salary for 18 months
(in the case of Messrs. Castagna, McKendrick and Morrison) or 24 months (in the
case of Mr. Washow); and (4) continued employee benefits during a transition
period.
After a Change of Control, if an officer is terminated without cause or the
officer terminates his employment for Good Reason, the officer is entitled to
receive: (1) his accrued salary and bonus; (2) a pro-rata annualized bonus; (3)
a lump sum equal to three times (in the case of Messrs. Castagna, McKendrick and
Washow) or two times (in the case of Mr. Morrison) the sum of his salary and
Annualized Bonus (defined as the greater of (i) the target annual bonus for such
year and (ii) the average of the annual bonuses paid to the executive in the
three previous fiscal years); (4) continued employee benefits until the earlier
of three years (in the case of Messrs. Castagna, McKendrick and Washow) or two
years (in the case of Mr. Morrison) or the date the officer commences a new job;
and (5) a lump sum of any amount then payable to him pursuant to the tax
gross-up provision. Also, the officers would be entitled to receive these
amounts in the event a Change of Control becomes imminent (as defined in the
employment agreements) within thirty days following their termination and the
Change of Control occurs within the following six months.
If the officer's employment terminates due to his death or disability prior
to a Change of Control or more than seven months after a Change of Control, the
officer or his beneficiaries are entitled to the officer's accrued salary and
bonus and the officer's pro-rata annualized bonus. If the officer's employment
terminates due to his death or disability within seven months after a Change of
Control, the officer or his beneficiaries are entitled to receive the
compensation and benefits described above with respect to termination without
cause after a Change of Control, except that the employee benefits are limited
to welfare benefits.
If, at any time, AMCOL terminates an officer for cause or, except as
described above, the officer terminates his employment without Good Reason, the
officer is entitled to his accrued salary and bonus, but would not be entitled
to any severance pay.
A Change of Control is defined as any change of control under the tax laws
and any one or more of the following, subject to certain exemptions: (1) any
person (other than certain AMCOL affiliates, an AMCOL subsidiary or an AMCOL
employee benefit plan) acquires 50.1% or more of AMCOL's common stock; (2) the
incumbent directors cease to constitute at least one-half of the AMCOL
directors; (3) 50.1% of AMCOL's assets are sold; (4) the shareholders approve a
plan of liquidation; and (5) with respect to Messrs. McKendrick and Morrison,
the sale of the stock or assets of the subsidiaries for which they serve as
president, provided such subsidiaries represent a significant portion of AMCOL's
net sales.
Good Reason is defined as the occurrence of any one of the following
events: (1) any material breach of the employment agreement by AMCOL which has
not been cured as required; or (2) AMCOL's failure to assign the employment
agreement to a successor or the successor's failure to expressly assume and
agree to be bound by the employment agreement.
19
GRANTS OF PLAN-BASED AWARDS
The following table sets forth certain information regarding grants of
plan-based awards to our executive officers during the fiscal year ended
December 31, 2006.
ALL OTHER
OPTION
AWARDS:
NUMBER OF EXERCISE OR GRANT DATE
ESTIMATED FUTURE PAYOUTS UNDER SECURITIES BASE PRICE OF FAIR VALUE OF
NON-EQUITY INCENTIVE PLAN AWARDS (1) UNDERLYING OPTION STOCK AND
GRANT ------------------------------------------- OPTIONS AWARDS OPTION
NAME DATE THRESHOLD ($) TARGET ($) MAXIMUM ($) (#)(2) ($/Sh)(3) AWARDS (4)
- ------------------ ---------- ------------- ------------- ------------- ------------- ------------- -------------
Lawrence E. Washow 2/7/06 $ 150,000 $ 525,000 $ 788,000 30,000 $ 26.02 $ 269,643
Gary L. Castagna 2/7/06 $ 42,000 $ 167,000 $ 278,000 20,000 $ 26.02 $ 179,761
Ryan F. McKendrick 2/7/06 $ 47,000 $ 161,000 $ 268,000 20,000 $ 26.02 $ 179,761
Gary D. Morrison 2/7/06 $ 17,000 $ 134,000 $ 223,000 12,000 $ 26.02 $ 107,857
(1) These incentive awards were granted under the Annual Cash Incentive Plan.
These are cash incentive awards for the 2006 fiscal year, payable for 2006
performance if certain performance goals are achieved. See the column
titled "Non-Equity Incentive Plan Compensation" in the "Summary
Compensation Table" for amounts earned in 2006 by the executive officers
under this plan.
(2) These options vest as a rate of 33% after one year, 66% after two years and
100% after three years. The options have a six-year term.
(3) The exercise price of these options is the closing price of our common
stock on the New York Stock Exchange on the grant date.
(4) Amounts represent the total fair value of stock options granted in 2006
under SFAS No. 123(R). Details of the assumptions used in valuing these
stock options are set forth in Note 14 to our audited financial statements
included in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2006.
20
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table sets forth certain information regarding the
outstanding equity awards at December 31, 2006 of our executive officers.
NUMBER OF
NUMBER OF SECURITIES
SECURITIES UNDERLYING
UNDERLYING UNEXERCISED
UNEXERCISED OPTIONS (#) OPTION OPTION
OPTIONS (#) UNEXERCISABLE EXERCISE EXPIRATION
NAME EXERCISABLE (1) PRICE ($) DATE
- ------------------------- ------------- ------------- ------------- -------------
Lawrence E. Washow 39,919 -- $ 1.56818 2/3/2009
21,500 -- $ 3.875 7/17/2010
31,500 -- $ 5.00 5/17/2011
24,000 6,000 $ 6.65 2/4/2012
30,000 -- $ 5.67 2/3/2009
20,000 10,000 $ 18.10 2/9/2010
10,000 20,000 $ 20.90 2/10/2011
-- 30,000 $ 26.02 2/7/2012
Gary L. Castagna 10,000 -- $ 5.00 5/17/2011
14,400 3,600 $ 6.65 2/4/2012
18,000 -- $ 5.67 2/3/2009
12,000 6,000 $ 18.10 2/9/2010
6,667 13,333 $ 20.90 2/10/2011
0 20,000 $ 26.02 2/7/2012
Ryan F. McKendrick 2,800 -- $ 5.00 5/17/2011
-- 3,400 $ 6.65 2/4/2012
-- 5,666 $ 18.10 2/9/2010
-- 13,333 $ 20.90 2/10/2011
-- 20,000 $ 26.02 2/7/2012
Gary D. Morrison 1,587 -- $ 2.06186 2/13/2007
27,261 -- $ 2.28693 2/10/2008
35,009 -- $ 1.56818 2/3/2009
12,000 -- $ 3.875 7/17/2010
14,000 -- $ 5.00 5/17/2011
9,600 2,400 $ 6.65 2/4/2012
12,000 -- $ 5.67 2/3/2009
8,000 4,000 $ 18.10 2/9/2010
4,000 8,000 $ 20.90 2/10/2011
0 12,000 $ 26.02 2/7/2012
(1) All options granted prior to 2003 vest at a rate of 20% per year over five
years. All options granted in 2003 and subsequently vest at a rate of 33% after
one year, 66% after two years and 100% after three years.
21
OPTION EXERCISES AND STOCK VESTED
The following table sets forth certain information regarding option
exercises and the vesting of restricted stock of our executive officers during
the fiscal year ended December 31, 2006.
OPTION AWARDS STOCK AWARDS
------------------------------- -------------------------------
NUMBER OF NUMBER OF
SHARES SHARES
ACQUIRED VALUE REALIZED ACQUIRED VALUE REALIZED
ON EXERCISE ON EXERCISE ON VESTING ON VESTING
NAME (#) ($) (#) ($)
- ------------------------- -------------- -------------- -------------- --------------
Lawrence E. Washow 12,000 $ 333,240 40,000 $ 1,104,400
Gary L. Castagna 7,000 $ 195,370 25,000 $ 690,250
Ryan F. McKendrick 27,067 $ 693,371 25,000 $ 690,250
Gary D. Morrison 37,117 $ 940,652 18,000 $ 496,980
PENSION BENEFITS
The following table sets forth certain information regarding the pension
benefits of our executive officers.
NUMBER
OF YEARS PRESENT
CREDITED VALUE OF PAYMENTS DURING
SERVICE ACCUMULATED LAST FISCAL YEAR
NAME PLAN NAME (#) BENEFIT ($) ($)
- ------------------------- ------------------------- ---------- ----------- ----------------
Lawrence E. Washow Pension Plan 28.3 $ 360,035 --
Supplemental Retirement 28.3 $ 1,629,023 --
Gary L. Castagna Pension Plan 5.1 $ 36,741 --
Supplemental Retirement 5.1 $ 53,157 --
Ryan F. McKendrick Pension Plan 22.7 $ 321,848 --
Supplemental Retirement 22.7 $ 501,677 --
Gary D. Morrison Pension Plan 25.6 $ 262,340 --
Supplemental Retirement 25.6 $ 220,924 --
AMCOL calculates the present values shown in the table above using (i) the
30-year Treasury rate; (ii) each plan's normal retirement age (age 65, 66, or 67
depending on the executive officer's date of birth); and (iii) a single life
annuity payment form. The present values shown in the table reflect
postretirement mortality, based on the 1994 GAR Table per Internal Revenue
Service Revenue Ruling 2001-62, but do not include a factor for preretirement
termination, mortality, or disability. The calculations are based on a
calculation date of December 31 instead of the measurement date of September 30.
22
Our executive officers participate in two defined benefit pension plans.
The AMCOL International Pension Plan (the "Pension Plan") is a defined benefit
pension plan available to employees hired on or before January 1, 2004. The
Pension Plan is qualified under Section 401 (a) of the Internal Revenue Code
(the "Code"). The Supplementary Pension Plan for Employees of AMCOL
International Corporation (the "SERP") is a nonqualified defined benefit pension
plan that provides benefits to certain employees who participate in the Pension
Plan and whose accrued benefit under such plan is restricted by the Code.
The Pension Plan
- ----------------
All of our employees hired prior to January 1, 2004 are eligible to
participate in the Pension Plan. All of our executive officers participate in
the Pension Plan. The Pension Plan provides a life annuity benefit at normal
retirement age equal to the larger of (1) and (2) below:
(1) The sum of (A) and (B) below:
(A) 0.75 percent of Final Average Monthly Compensation (defined below)
multiplied by years and months of Credited Service (defined below);
(B) 0.75 percent of Final Average Monthly Compensation in excess of Social
Security Covered Compensation Level (defined below) multiplied by years and
months of Credited Service (maximum of 35 years).
(2) $15.00 multiplied by years and months of Credited Service.
Normal retirement age varies based on the executive officer's date of birth
(age 65 if born before 1938; age 66 if born between 1938-1954; age 67 if born
after 1954). Final Average Monthly Compensation is computed as the average of
the five consecutive years of compensation over the entire period of employment
which produce the highest monthly average. Compensation includes base salary and
bonuses before these are reduced by contributions to tax-deferred or tax-exempt
plans under the Code. Compensation recognized under the Pension Plan is limited
under the Code. Credited Service is determined in years and months from the date
of hire, excluding certain periods of absence. Social Security Covered
Compensation Level is the average (without indexing) of the Social Security Wage
Bases in effect for each calendar year during the 35-year period ending with the
last day of the calendar year in which the participant attains (or will attain)
his social security normal retirement age.
A participant's right to an accrued benefit under the Pension Plan becomes
nonforfeitable after five years of vesting service or when the participant
attains normal retirement age. The accrued benefit is payable on an unreduced
basis on or after normal retirement age. Participants who terminate with the sum
of their age and service greater than or equal to 70 (early retirement age) may
commence benefits at any time. Except for Mr. Castagna, all of our executive
officers are currently eligible for early retirement benefits under the Pension
Plan. Such benefits are reduced by 6-2/3% per year for each of the first five
years by which benefit commencement precedes the social security normal
retirement age and 3-1/3% per year for each of the next five years by which
benefit commencement precedes the social security normal retirement age. For
benefits commencing more then ten years prior to attaining the social security
normal retirement age, the monthly benefit will be actuarially reduced.
23
The standard form of payment for a single participant is the single life
annuity. The standard form of payment for a married participant is the qualified
50% joint and survivor annuity. Several optional forms of payment are offered.
These include: 50% and 100% joint and contingent annuities, 10 year certain and
life annuity, and the single life annuity. Benefits paid under any of these
optional forms are actuarially equivalent to the single life annuity benefit
available at commencement age.
The SERP
- --------
The SERP provides the portion of the Pension Plan benefit which cannot be
paid to participants due to certain compensation limitations or benefit amount
limitations of the Code. All of our executive officers participate in the SERP.
The provisions of the SERP are the same as the Pension Plan. A participant who
retires and becomes eligible to receive a benefit under the Pension Plan,
whether a normal, early, or late retirement benefit, would receive a benefit
from the SERP equal to the excess, if any, of the amount the participant would
have received from the Pension Plan if the limiting Code provisions applied to
the participant's actual Pension Plan benefit. The amount of the benefit the
participant would have received under the Pension Plan would be determined on
the same basis as the participant's actual Pension Plan benefit, taking into
account the participant's age, compensation history, service, and form of
benefit elected under the Pension Plan.
24
NONQUALIFED DEFERRED COMPENSATION
The following table sets forth certain information regarding deferred
compensation with respect to the executive officers with respect to the fiscal
year ended December 31, 2006.
EXECUTIVE REGISTRANT AGGREGATE AGGREGATE AGGREGATE
CONTRIBUTIONS CONTRIBUTIONS EARNINGS IN WITHDRAWALS/ BALANCE AT
IN LAST FY IN LAST FY LAST FY DISTRIBUTIONS LAST FYE
NAME ($)(1) ($)(2) ($) ($) ($)(1)
- ------------------------- ------------- ------------- ------------- ------------- -------------
Lawrence E. Washow $ 210,000 $ 39,181 $ 1,153,817 -- $ 5,027,776
Gary L. Castagna $ 24,636 $ 7,556 $ 25,129 -- $ 245,695
Ryan F. McKendrick -- -- $ 19,759 -- $ 257,275
Gary D. Morrison -- -- $ 8,212 -- $ 60,492
(1) All executive contributions were reported as compensation in the Summary
Compensation Table under the salary and/or bonus columns, depending on the
source of the executive contribution. Executive contributions which are
shown as amounts in the balance column were also reported in the Summary
Compensation Table for prior years under the salary and/or bonus column,
depending on the source of the contribution, in the year in which the
deferral occurred.
(2) The Company contributes an Annual Company Matching Amount to participant
accounts equal to what the Company would have credited to their 401(k)
Savings Plan accounts had those deferrals not been reduced because of
limits under the 401(k) plan. Participants must be employed at the end of
the Plan year and must actually defer Base Annual Salary and/or Annual
Bonus into this nonqualified plan.
Deferred Compensation Plan
- --------------------------
The AMCOL International Corporation Nonqualified Deferred Compensation Plan
(the "Deferred Compensation Plan") allows a select group of management and
highly compensated employees to defer up to 75% of their annual base salary
and/or 100% of their annual bonus, with an aggregate minimum deferral of $3,000.
The minimum period for a deferral election is three years. All of our executive
officers participate in the Deferred Compensation Plan.
In addition to employee directed deferrals, AMCOL annually credits each
participant's Deferred Compensation Plan account with an amount equal to the
amount that would have been contributed to the AMCOL International Corporation
401(k) Savings Plan, without regard to any qualified plan limits, if the amount
had not been deferred. Participants are 100% vested in employee and matching
amounts. AMCOL, at its sole discretion, may also make discretionary and/or
profit sharing contributions to the Deferred Compensation Plan, which would be
subject to a vesting schedule.
Participants may elect from a list of certain mutual funds to determine any
amounts credited or debited from their accounts, although AMCOL is under no
obligation to invest the deferred amounts in any specified fund. This list is
made available to all participants and account balances are credited or debited
based on the current market rates for these funds. Participants may reallocate
account balances and/or future deferrals on a daily basis.
Participants are entitled to receive a distribution from their account
balances at the earlier of the end of the elected deferral period or retirement,
disability or termination of employment. Accounts are distributed in a lump sum
or, in certain circumstances, in installments over a 15 year period. Withdrawal
elections can be made, subject to a withdrawal penalty and forfeiture of
participation for the current and subsequent year. Participants can also
petition the Compensation Committee to receive a full or partial payout from the
Deferred Compensation Plan in the event of an unforeseeable financial emergency.
25
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
The following summaries set forth potential payments payable to our
executive officers upon termination of their employment or a change of control
of AMCOL. Our executive officers are entitled to these payments under their
employment agreements, our stock plans and certain other benefit plans. The
amounts shown assume that such termination was effective as of December 29, 2006
(the last business day of our 2006 fiscal year), and reflect the price of our
common stock on such date ($27.74). The tables below do not reflect amounts
payable to our executive officers pursuant to plans or arrangements that are
available generally to all of AMCOL's salaried employees, such as payments under
the pension plan, the 401(k) Plan, the life insurance plan, the disability
insurance plan and the vacation pay policy, and payment of accrued base salary
and accrued bonuses.
PAYMENTS MADE UPON RESIGNATION FOR GOOD REASON OR TERMINATION BY AMCOL WITHOUT
CAUSE
In the event an executive officer resigns for good reason or AMCOL
terminates the executive officer without cause, each as defined in the
employment agreements, the executive officer is entitled to the following:
o severance in the form of his base salary payable for the following 18
months (in the case of Messrs. Castagna, McKendrick and Morrison) or 24
months (in the case of Mr. Washow);
o a prorated portion of any bonus he would have received with respect to the
2006 fiscal year under the Annual Cash Incentive Plan;
o any equity awards outstanding under AMCOL's equity compensation plans will
continue to vest during the 18 or 24 month transition period during which
his base salary continues to be paid;
o continued coverage under any employee medical, health and life insurance
plans for the applicable transition period;
o his account balance in the Deferred Compensation Plan; and
o his account balance in the SERP.
If a change of control becomes imminent within thirty days following the
termination and the change of control occurs within the following six months,
the executive officer is also entitled to the benefits described below under
"Payments Made In Connection with a Change of Control" to the extent not
previously provided.
PAYMENTS MADE UPON RETIREMENT
In the event of the retirement of an executive officer, the executive
officer is entitled to the following:
o in certain cases, immediate vesting of all stock options held by the
executive officer (pursuant to the o terms of the 1998 Long-Term Incentive
Plan, immediate vesting occurs if retirement occurs at or after 65, or
after 55 with the consent of AMCOL, at the discretion of the Compensation
Committee);
o his account balance in the Deferred Compensation Plan; and
o his account balance in the SERP.
26
PAYMENTS MADE UPON DEATH OR DISABILITY
In the event of the death or disability of an executive officer, the
executive officer is entitled to the following:
o a prorated portion of any bonus he would have received with respect to the
2006 fiscal year under the Annual Cash Incentive Plan;
o with the consent of the Compensation Committee, immediate vesting of all
stock options held by the executive officer;
o his account balance in the Deferred Compensation Plan; and
o his account balance in the SERP.
If the death or disability occurs at such time as a change in control is
imminent, as defined in the employment agreement, or at any time within seven
months after a change in control, the executive officer is also entitled to the
benefits described below under "Payments Made In Connection with a Change of
Control" to the extent not previously provided.
PAYMENTS MADE IN CONNECTION WITH A CHANGE OF CONTROL
If an executive's employment is terminated following a change of control,
or if following such event the executive terminates his employment in certain
circumstances defined in the employment agreements which constitute "good
reason," the executive officer is entitled to the following:
o severance in the form of a lump sum payment in an amount equal to three
times his base salary and annualized bonus (in the case of Messrs.
Castagna, McKendrick and Washow) and two times his base salary and
annualized bonus (in the case of Mr. Morrison). For this purpose,
annualized bonus is defined as the greater of (i) the target annual bonus
for such year and (ii) the average of the annual bonuses paid to the
executive in the three previous fiscal years;
o a prorated portion of any bonus he would have received with respect to the
2006 fiscal year under the Annual Cash Incentive Plan;
o immediate vesting of all stock options held by the executive officer;
a gross-up payment to provide the executive officer with an amount, on an
after-tax basis, equal to any excise taxes payable by the executive officer
under the tax laws in connection with the payments described above;
o continued coverage under any employee medical, health and life insurance
plans for the applicable transition period;
o his account balance in the Deferred Compensation Plan; and
o his account balance in the SERP.
27
LAWRENCE E. WASHOW
The following table shows the potential payments upon termination or a
change of control of the Company for Lawrence E. Washow.
RESIGNATION FOR CHANGE OF
GOOD REASON OR CONTROL
VOLUNTARY FOR CAUSE TERMINATION (EMPLOYMENT
BENEFITS AND PAYMENTS UPON TERMINATION ON TERMINATION ON WITHOUT CAUSE CONTINUES) ON
TERMINATION 12/29/2006 12/29/2006 ON 12/29/2006 12/29/2006
- ------------------------------- ---------------- ---------------- ---------------- ----------------
Cash Severance $ -- $ -- $ 1,050,000(2) $ --
Prorated Bonus $ -- $ -- $ 788,000 $ --
Option Vesting Acceleration (3) $ -- $ -- $ 394,140(4) $ 411,340
SERP (5) $ 1,629,023 $ 1,629,023 $ 1,629,023 $ --
Deferred Compensation Plan (6) $ 5,027,776 $ 5,027,776 $ 5,027,776 $ --
Health and Welfare Benefits (7) $ -- $ -- $ 22,420 $ --
Life Insurance Benefits (8) $ -- $ -- $ 4,320 $ --
Excise Tax & Gross-Up $ -- $ -- $ -- $ --
RESIGNATION
FOR GOOD
REASON OR
TERMINATION
WITHOUT CAUSE
FOLLOWING A
CHANGE-IN-
CONTROL, OR
DEATH OR
DISABILITY
WITHIN 7
MONTHS OF A
CHANGE OF RETIREMENT DISABILITY
BENEFITS AND PAYMENTS UPON CONTROL ON ON ON DEATH ON
TERMINATION 12/29/2006(1) 12/29/2006 12/29/2006 12/29/2006
- ------------------------------- ---------------- ------------ ------------ ------------
Cash Severance $ 3,705,000 $ -- $ -- $ --
Prorated Bonus $ 788,000 $ -- $ 788,000 $ 788,000
Option Vesting Acceleration (3) $ -- $ 411,340 $ 411,340 $ 411,340
SERP (5) $ 1,629,023 $ 1,629,023 $ 1,629,023 $ 1,629,023
Deferred Compensation Plan (6) $ 5,027,776 $ 5,027,776 $ 5,027,776 $ 5,027,776
Health and Welfare Benefits (7) $ 33,630 $ -- $ -- $ --
Life Insurance Benefits (8) $ 6,480 $ -- $ -- $ --
Excise Tax & Gross-Up $ 1,370,017 $ -- $ -- $ --
(1) These amounts are in addition to amounts payable under the preceding column
"Change of Control (employment continues)." Such amounts are also payable
if a change of control becomes imminent within thirty days following
termination of employment and the change of control occurs within the
following six months.
(2) This severance payment is paid out over a period of 24 months.
(3) For purposes of this table, AMCOL has assumed that the Compensation
Committee has elected to accelerate all options in each instance in which
the acceleration is subject to the discretion of the Compensation
Committee.
(4) Reflects the value of the equity awards outstanding under AMCOL's equity
compensation plans which would continue to vest during the 24 month
transition period based on the difference between the exercise price and
$27.74.
(5) Reflects the present value of the accumulated benefit under the SERP. The
payment schedule depends on the form of payment for the executive officer
under the Pension Plan. Under the Pension Plan, forms of payment include
qualified 50% joint and survivor annuity, 50% and 100% joint and contingent
annuities, 10 year certain and life annuity, and the single life annuity.
(6) Participants are entitled to receive a distribution at the earlier of the
end of the elected deferral period or retirement, disability or termination
of employment. Accounts are distributed in a lump sum or, in certain
circumstances, in installments over a period of up to 15 years.
(7) Reflects the estimated lump-sum present value of all future premiums which
will be paid on behalf of Mr. Washow under AMCOL's health and welfare
benefit plans.
(8) Reflects the estimated lump-sum present value of the cost of coverage for
life insurance provided by AMCOL to Mr. Washow.
28
GARY L. CASTAGNA
The following table shows the potential payments upon termination or a
change of control of the Company for Gary L. Castagna.
RESIGNATION FOR CHANGE OF
GOOD REASON OR CONTROL
VOLUNTARY FOR CAUSE TERMINATION (EMPLOYMENT
BENEFITS AND PAYMENTS UPON TERMINATION ON TERMINATION ON WITHOUT CAUSE CONTINUES) ON
TERMINATION 12/29/2006 12/29/2006 ON 12/29/2006 12/29/2006
- ------------------------------- ---------------- ---------------- ---------------- ----------------
Cash Severance $ -- $ -- $ 417,000(2) $ --
Prorated Bonus $ -- $ -- $ 278,000 $ --
Option Vesting Acceleration (3) $ -- $ -- $ 247,896(4) $ 259,362
SERP (5) $ 53,157 $ 53,157 $ 53,157 $ --
Deferred Compensation Plan (6) $ 245,695 $ 245,695 $ 245,695 $ --
Health and Welfare Benefits (7) $ -- $ -- $ 16,815 $ --
Life Insurance Benefits (8) $ -- $ -- $ 1,355 $ --
Excise Tax & Gross-Up $ -- $ -- $ -- $ --
RESIGNATION
FOR GOOD
REASON OR
TERMINATION
WITHOUT CAUSE
FOLLOWING A
CHANGE-IN-
CONTROL, OR
DEATH OR
DISABILITY
WITHIN 7
MONTHS OF A
CHANGE OF RETIREMENT DISABILITY
BENEFITS AND PAYMENTS UPON CONTROL ON ON ON DEATH ON
TERMINATION 12/29/2006(1) 12/29/2006 12/29/2006 12/29/2006
- ------------------------------- ---------------- ------------ ------------ ------------
Cash Severance $ 1,592,510 $ -- $ -- $ --
Prorated Bonus $ 278,000 $ -- $ 278,000 $ 278,000
Option Vesting Acceleration (3) $ -- $ 259,362 $ 259,362 $ 259,362
SERP (5) $ 53,157 $ 53,157 $ 53,157 $ 53,157
Deferred Compensation Plan (6) $ 245,695 $ 245,695 $ 245,695 $ 245,695
Health and Welfare Benefits (7) $ 22,420 $ -- $ -- $ --
Life Insurance Benefits (8) $ 1,806 $ -- $ -- $ --
Excise Tax & Gross-Up $ 647,721 $ -- $ -- $ --
(1) These amounts are in addition to amounts payable under the preceding column
"Change of Control (employment continues)." Such amounts are also payable
if a change of control becomes imminent within thirty days following
termination of employment and the change of control occurs within the
following six months.
(2) This severance payment is paid out over a period of 18 months.
(3) For purposes of this table, AMCOL has assumed that the Compensation
Committee has elected to accelerate all options in each instance in which
the acceleration is subject to the discretion of the Compensation
Committee.
(4) Reflects the value of the equity awards outstanding under AMCOL's equity
compensation plans which would continue to vest during the 18 month
transition period based on the difference between the exercise price and
$27.74.
(5) Reflects the present value of the accumulated benefit under the SERP. The
payment schedule depends on the form of payment for the executive officer
under the Pension Plan. Under the Pension Plan, forms of payment include
qualified 50% joint and survivor annuity, 50% and 100% joint and contingent
annuities, 10 year certain and life annuity, and the single life annuity.
(6) Participants are entitled to receive a distribution at the earlier of the
end of the elected deferral period or retirement, disability or termination
of employment. Accounts are distributed in a lump sum or, in certain
circumstances, in installments over a period of up to 15 years.
(7) Reflects the estimated lump-sum present value of all future premiums which
will be paid on behalf of Mr. Castagna under AMCOL's health and welfare
benefit plans.
(8) Reflects the estimated lump-sum present value of the cost of coverage for
life insurance provided by AMCOL to Mr. Castagna.
29
RYAN F. MCKENDRICK
The following table shows the potential payments upon termination or a
change of control of the Company for Ryan F. McKendrick.
RESIGNATION FOR CHANGE OF
GOOD REASON OR CONTROL
VOLUNTARY FOR CAUSE TERMINATION (EMPLOYMENT
BENEFITS AND PAYMENTS UPON TERMINATION ON TERMINATION ON WITHOUT CAUSE CONTINUES) ON
TERMINATION 12/29/2006 12/29/2006 ON 12/29/2006 12/29/2006
- ------------------------------- ---------------- ---------------- ---------------- ----------------
Cash Severance $ -- $ -- $ 402,000(2) $ --
Prorated Bonus $ -- $ -- $ 268,000 $ --
Option Vesting Acceleration (3) $ -- $ -- $ 240,458(4) $ 251,924
SERP (5) $ 501,677 $ 501,677 $ 501,677 $ --
Deferred Compensation Plan (6) $ 257,275 $ 257,275 $ 257,275 $ --
Health and Welfare Benefits (7) $ -- $ -- $ 16,815 $ --
Life Insurance Benefits (8) $ -- $ -- $ 1,305 $ --
Excise Tax & Gross-Up $ -- $ -- $ -- $ --
RESIGNATION
FOR GOOD
REASON OR
TERMINATION
WITHOUT CAUSE
FOLLOWING A
CHANGE-IN-
CONTROL, OR
DEATH OR
DISABILITY
WITHIN 7
MONTHS OF A
CHANGE OF RETIREMENT DISABILITY
BENEFITS AND PAYMENTS UPON CONTROL ON ON ON DEATH ON
TERMINATION 12/29/2006(1) 12/29/2006 12/29/2006 12/29/2006
- ------------------------------- ---------------- ------------ ------------ ------------
Cash Severance $ 1,533,450 $ -- $ -- $ --
Prorated Bonus $ 268,000 $ -- $ 268,000 $ 268,000
Option Vesting Acceleration (3) $ -- $ 251,924 $ 251,924 $ 251,924
SERP (5) $ 501,677 $ 501,677 $ 501,677 $ 501,677
Deferred Compensation Plan (6) $ 257,275 $ 257,275 $ 257,275 $ 257,275
Health and Welfare Benefits (7) $ 22,420 $ -- $ -- $ --
Life Insurance Benefits (8) $ 1,740 $ -- $ -- $ --
Excise Tax & Gross-Up $ -- $ -- $ -- $ --
(1) These amounts are in addition to amounts payable under the preceding column
"Change of Control (employment continues)." Such amounts are also payable
if a change of control becomes imminent within thirty days following
termination of employment and the change of control occurs within the
following six months.
(2) This severance payment is paid out over a period of 18 months.
(3) For purposes of this table, AMCOL has assumed that the Compensation
Committee has elected to accelerate all options in each instance in which
the acceleration is subject to the discretion of the Compensation
Committee.
(4) Reflects the value of the equity awards outstanding under AMCOL's equity
compensation plans which would continue to vest during the 18 month
transition period based on the difference between the exercise price and
$27.74.
(5) Reflects the present value of the accumulated benefit under the SERP. The
payment schedule depends on the form of payment for the executive officer
under the Pension Plan. Under the Pension Plan, forms of payment include
qualified 50% joint and survivor annuity, 50% and 100% joint and contingent
annuities, 10 year certain and life annuity, and the single life annuity.
(6) Participants are entitled to receive a distribution at the earlier of the
end of the elected deferral period or retirement, disability or termination
of employment. Accounts are distributed in a lump sum or, in certain
circumstances, in installments over a period of up to 15 years.
(7) Reflects the estimated lump-sum present value of all future premiums which
will be paid on behalf of Mr. McKendrick under AMCOL's health and welfare
benefit plans.
(8) Reflects the estimated lump-sum present value of the cost of coverage for
life insurance provided by AMCOL to Mr. McKendrick.
30
GARY D. MORRISON
The following table shows the potential payments upon termination or a
change of control of the Company for Gary D. Morrison.
RESIGNATION FOR CHANGE OF
GOOD REASON OR CONTROL
VOLUNTARY FOR CAUSE TERMINATION (EMPLOYMENT
BENEFITS AND PAYMENTS UPON TERMINATION ON TERMINATION ON WITHOUT CAUSE CONTINUES) ON
TERMINATION 12/29/2006 12/29/2006 ON 12/29/2006 12/29/2006
- ------------------------------- ---------------- ---------------- ---------------- ----------------
Cash Severance $ -- $ -- $ 334,500(2) $ --
Prorated Bonus $ -- $ -- $ 161,350 $ --
Option Vesting Acceleration (3) $ -- $ -- $ 157,656(4) $ 164,536
SERP (5) $ 220,924 $ 220,924 $ 220,924 $ --
Deferred Compensation Plan (6) $ 60,492 $ 60,492 $ 60,492 $ --
Health and Welfare Benefits (7) $ -- $ -- $ 16,815 $ --
Life Insurance Benefits (8) $ -- $ -- $ 1,086 $ --
Excise Tax & Gross-Up $ -- $ -- $ -- $ --
RESIGNATION
FOR GOOD
REASON OR
TERMINATION
WITHOUT CAUSE
FOLLOWING A
CHANGE-IN-
CONTROL, OR
DEATH OR
DISABILITY
WITHIN 7
MONTHS OF A
CHANGE OF RETIREMENT DISABILITY
BENEFITS AND PAYMENTS UPON CONTROL ON ON ON DEATH ON
TERMINATION 12/29/2006(1) 12/29/2006 12/29/2006 12/29/2006
- ------------------------------- ---------------- ------------ ------------ ------------
Cash Severance $ 848,413 $ -- $ -- $ --
Prorated Bonus $ 161,350 $ -- $ 161,350 $ 161,350
Option Vesting Acceleration (3) $ -- $ 164,536 $ 164,536 $ 164,536
SERP (5) $ 220,924 $ 220,924 $ 220,924 $ 220,924
Deferred Compensation Plan (6) $ 60,492 $ 60,492 $ 60,492 $ 60,492
Health and Welfare Benefits (7) $ 22,420 $ -- $ -- $ --
Life Insurance Benefits (8) $ 1,448 $ -- $ -- $ --
Excise Tax & Gross-Up $ -- $ -- $ -- $ --
(1) These amounts are in addition to amounts payable under the preceding column
"Change of Control (employment continues)." Such amounts are also payable
if a change of control becomes imminent within thirty days following
termination of employment and the change of control occurs within the
following six months.
(2) This severance payment is paid out over a period of 18 months.
(3) For purposes of this table, AMCOL has assumed that the Compensation
Committee has elected to accelerate all options in each instance in which
the acceleration is subject to the discretion of the Compensation
Committee.
(4) Reflects the value of the equity awards outstanding under AMCOL's equity
compensation plans which would continue to vest during the 18 month
transition period based on the difference between the exercise price and
$27.74.
(5) Reflects the present value of the accumulated benefit under the SERP. The
payment schedule depends on the form of payment for the executive officer
under the Pension Plan. Under the Pension Plan, forms of payment include
qualified 50% joint and survivor annuity, 50% and 100% joint and contingent
annuities, 10 year certain and life annuity, and the single life annuity.
(6) Participants are entitled to receive a distribution at the earlier of the
end of the elected deferral period or retirement, disability or termination
of employment. Accounts are distributed in a lump sum or, in certain
circumstances, in installments over a period of up to 15 years.
(7) Reflects the estimated lump-sum present value of all future premiums which
will be paid on behalf of Mr. Morrison under AMCOL's health and welfare
benefit plans.
(8) Reflects the estimated lump-sum present value of the cost of coverage for
life insurance provided by AMCOL to Mr. Morrison.
31
DIRECTOR COMPENSATION
AMCOL uses a combination of cash and stock options to compensate our
non-employee directors. Directors who are also full-time employees of AMCOL are
not paid for their services as directors or for attendance at meetings. For the
fiscal year ended December 31, 2006, directors who are not employees of AMCOL
are entitled to receive an annual cash retainer of $40,000 and an attendance fee
of $2,000 per meeting. The Chairman of the Board and the Chairman of each of our
board committees received supplemental annual retainers in the following
amounts: Chairman of the Board, $15,000; Chairman of the Audit Committee,
$7,500; Chairman of the Compensation Committee, $3,000; and Chairman of each of
the Executive Committee and the Nominating and Governance Committee, $2,000.
Members of each of the Compensation Committee, the Executive Committee and the
Nominating and Governance Committee received an attendance fee of $1,500 per
meeting. Members of the Audit Committee received an attendance fee of $3,000 per
meeting. In February 2006, each non-employee director received a grant of 3,000
options at an exercise price of $26.02 per share, the fair market value on the
date of the grant.
AMCOL provides excess personal liability insurance coverage for its
non-employee directors. Non-employee directors are eligible to participate in
AMCOL's health insurance plan at the directors' cost. Pursuant to AMCOL's
Deferred Compensation Plan, the directors may elect to defer up to 100% of their
retainers and attendance fees per year. Additional information regarding the
Deferred Compensation Plan is described under the Nonqualified Deferred
Compensation Table in this proxy statement.
The following table sets forth certain information regarding compensation
to our non-employee directors during the fiscal year ended December 31, 2006.
FEES EARNED
OR PAID IN OPTION ALL OTHER
CASH AWARDS COMPENSATION TOTAL
NAME ($) ($)(1)(2) ($)(3) ($)
- --------------------------- ----------- ----------- ------------ -----------
Arthur Brown $ 73,500 $ 25,755 $ 753 $ 100,008
Daniel P. Casey $ 72,000 $ 26,728 $ 753 $ 99,481
Robert E. Driscoll, III (4) $ 57,000 $ 25,755 $ 753 $ 83,508
John Hughes $ 69,000 $ 25,256 $ 753 $ 95,009
Jay D. Proops $ 72,500 $ 25,755 $ 753 $ 99,008
Clarence O. Redman $ 54,000 $ 25,755 $ 753 $ 80,508
Dale E. Stahl $ 61,500 $ 25,755 $ 753 $ 88,008
Audrey L. Weaver $ 51,000 $ 25,755 $ 753 $ 77,508
Paul C. Weaver $ 57,500 $ 25,755 $ 753 $ 84,008
(1) These amounts reflect the dollar amount recognized for financial statement
reporting purposes for the fiscal year ended December 31, 2006, in
accordance with SFAS No. 123(R) and include amounts from awards granted in
and prior to 2006. Under SFAS No. 123(R), the fair value of these awards is
recognized ratably over the vesting period. Details of the assumptions used
in valuing these awards are set forth in Note 14 to our audited financial
statements included in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2006.
(2) As of December 31, 2006, each director has the following number of options
outstanding: Arthur Brown, 40,956; Daniel P. Casey, 17,000; Robert E.
Driscoll, 29,478; John Hughes, 24,777; Jay D. Proops, 49,565; Clarence O.
Redman, 40,956; Dale E. Stahl, 20,295; Lawrence E. Washow, 242,919; Audrey
L. Weaver, 9,800; and Paul C. Weaver, 40,956.
(3) These amounts reflect the premiums for excess personal liability insurance
coverage.
(4) Mr. Driscoll retired from the Board of Directors on February 13, 2007.
32
CORPORATE GOVERNANCE MATTERS
2006 Board Committee Membership and Meetings
NOMINATING
AND
NAME AUDIT COMPENSATION EXECUTIVE GOVERNANCE
- --------------------------- ----------- ------------ ------------ -----------
Arthur Brown X* X
Daniel P. Casey X X X
Robert E. Driscoll, III (1) X X
John Hughes X
Jay D. Proops X X X*
Clarence O. Redman X
Dale E. Stahl X* X X
Lawrence E. Washow X
Audrey L. Weaver X
Paul C. Weaver X* X
Number of Meetings in 2006 5 2 4 2
* Chairperson.
(1) Mr. Driscoll retired from the Board of Directors on February 13, 2007.
During 2006, the Board of Directors held five (5) meetings. Each director
attended at least 75% of the aggregate of the total number of meetings of the
Board of Directors and the total number of meetings held by all committees of
the Board on which such director served. Pursuant to our Corporate Governance
Guidelines, which may be found on our website at www.amcol.com, directors are
expected to resign from the Board effective as of the annual shareholders
meeting following the date on which they reach the age of 70.
Director Independence
As of February 2007, AMCOL's Board of Directors has determined that the
following directors are independent as defined in the applicable standards of
the New York Stock Exchange: Messrs. Brown, Casey, Hughes, Proops, Redman, Stahl
and Weaver, and Ms. Weaver. These independent directors constitute a majority of
the directors of AMCOL. The Board has also determined that each member of the
Audit Committee, the Compensation Committee and the Nominating and Governance
Committee is independent as defined in the applicable standards of the New York
Stock Exchange. In making the independence determinations, our Board of
Directors reviewed all of our directors' relationships with AMCOL, including
business, familial and other types of relationships. In addition, the Board has
determined that each member of the Audit Committee is independent as defined in
the applicable rules and regulations of the Securities and Exchange Commission.
The Audit Committee
The Audit Committee is responsible for providing assistance to the Board of
Directors in fulfilling the Board's oversight responsibility by monitoring the
integrity of the financial statements of AMCOL, the independent registered
public accounting firm's qualifications and independence, AMCOL's compliance
with legal and regulatory requirements pertaining to its financial statements,
and the performance of AMCOL's internal audit function and independent
registered public accounting firm. The Committee is also responsible for
appointing the independent registered public accounting firm for each fiscal
year.
33
The Board of Directors has determined that each member of the Audit
Committee is an "audit committee financial expert" as defined in the
Sarbanes-Oxley Act of 2002 and the applicable rules and regulations of the
Securities and Exchange Commission. The Audit Committee operates pursuant to a
charter adopted by the Board, which may be found on our website at
www.amcol.com.
The Compensation Committee
AMCOL's Compensation Committee oversees the design and administration of
AMCOL's executive compensation program. The Compensation Committee operates
pursuant to a charter adopted by the Board, which may be found on our website at
www.amcol.com. Pursuant to the charter, the Compensation Committee is
responsible for reviewing and approving the compensation of all executive
officers, including a review and assessment of the Chief Executive Officer's
performance. This review may involve consultations from time to time with the
Chief Executive Officer, the Chief Financial Officer and the other independent
directors. Also, the Compensation Committee makes all grants of awards under
AMCOL's 2006 Long-Term Incentive Plan and Cash Incentive Plan. The Compensation
Committee also makes recommendations to the Board regarding succession planning
and director compensation. The Compensation Committee has sole authority to
retain compensation consultants to assist the Compensation Committee in carrying
out its responsibilities. In 2004, the Compensation Committee engaged Deloitte
Consulting to conduct a competitive assessment of AMCOL's executive officers'
direct compensation program (base salary, annual bonus and long-term
incentives), as well as existing perquisites. In 2007, the Compensation
Committee engaged Towers Perrin to assess AMCOL's executive compensation and
director compensation programs. For additional information regarding the
processes and procedures for the determination of executive compensation and the
engagement of compensation consultants, please see the section entitled
"Executive Compensation -- Compensation Discussion and Analysis" above.
The Nominating and Governance Committee
The Nominating and Governance Committee is responsible for identifying,
seeking and recommending to the Board of Directors individuals qualified to
become directors consistent with criteria approved by the Board. In considering
potential candidates for the Board, including with respect to incumbent
directors, the Committee considers the potential candidate's integrity and
business ethics; strength of character, judgment and experience, consistent with
the needs of AMCOL; specific areas of expertise and leadership roles; and the
ability to bring diversity to the Board, including whether the potential
candidate brings complementary skills and viewpoints. The Committee also
considers the ability of the individual to allocate the time necessary to carry
out the tasks of board membership, including membership on appropriate
committees.
The Committee identifies potential nominees by asking current directors and
others to notify the Committee if they become aware of persons meeting the
criteria described above who may be available to serve on the Board. The
Committee has sole authority to retain and terminate any search firm to be used
to identify director candidates and has sole authority to approve the search
firm's fees and other retention terms. Historically, AMCOL has not engaged third
parties to assist in identifying and evaluating potential nominees, but would do
so in those situations where particular qualifications are required to fill a
vacancy and the Board's contacts are not sufficient to identify an appropriate
candidate. Pursuant to its charter, the Nominating and Governance Committee's
policy is to not consider nominees recommended by shareholders of AMCOL.
34
Other responsibilities of the Committee include developing and recommending
to the Board the Corporate Governance Guidelines applicable to AMCOL, overseeing
the evaluations of the Board and management, recommending to the Board director
nominees for each committee, and recommending to the Board the size of the Board
and its committee structure. The Nominating and Governance Committee operates
pursuant to a charter adopted by the Board, which may be found on our website at
www.amcol.com.
Executive Sessions of Non-Management Directors
Pursuant to our Corporate Governance Guidelines, our non-management
directors met one time in 2006 in a regularly scheduled executive session
without management. The directors who preside at such meetings rotate among the
chairmen of our Audit, Compensation, Nominating and Governance and Executive
Committees. If these sessions include one of our non-independent directors, our
independent directors meet alone at least once a year.
Shareholder Communications with the Board of Directors
AMCOL's annual meeting of shareholders provides an opportunity each year
for shareholders to ask questions of or otherwise communicate directly with
members of our Board of Directors on appropriate matters. Our directors are
expected to attend shareholders meetings pursuant to our Corporate Governance
Guidelines. All of our directors attended the 2006 annual meeting, and we
anticipate that all of our directors will attend the 2007 annual meeting.
In addition, shareholders may, at any time, communicate in writing with the
Audit Committee, the Board of Directors, any particular director, or the
independent directors as a group, by sending written communication to AMCOL
International Corporation, Attention: Board of Directors, Audit Committee,
Presiding Independent Director of the Board of Directors, or the name of a
particular board member, as applicable, One North Arlington, 1500 West Shure
Drive, Suite 500, Arlington Heights, Illinois 60004-7803. Copies of written
communications received at such address will be provided to the named addressee.
Shareholders may also reach the Audit Committee by calling AMCOL's alert line at
(877) 862-6265. Shareholders may report their concerns anonymously or
confidentially.
35
REPORT OF THE AUDIT COMMITTEE
Management is responsible for AMCOL's financial reporting process,
including its system of internal control, and for the preparation of
consolidated financial statements in accordance with generally accepted
accounting principles. AMCOL's independent registered public accounting firm is
responsible for auditing those financial statements. The Audit Committee's
responsibility is to monitor and review these processes on behalf of the Board
of Directors. It is not our duty or our responsibility to conduct reviews of
auditing or accounting procedures. Therefore, we have relied, without
independent verification, on management's representation that the financial
statements have been prepared with integrity and objectivity and in conformity
with accounting principles generally accepted in the United States of America
and on the representations of the independent registered public accounting firm
included in its report on AMCOL's financial statements. Our oversight does not
provide us with an independent basis to determine that management has maintained
appropriate accounting and financial reporting principles or policies, or
appropriate internal controls and procedures designed to assure compliance with
accounting standards and applicable laws and regulations. Furthermore, our
considerations and discussions with management and the independent registered
public accounting firm do not assure that AMCOL's financial statements are
presented in accordance with generally accepted accounting principles or that
the audit of AMCOL's financial statements has been carried out in accordance
with generally accepted auditing standards.
Review with Management
The Audit Committee has reviewed and discussed AMCOL's audited financial
statements as of and for the year ended December 31, 2006 with management.
Review and Discussions with Independent Registered Public Accounting Firm
The Audit Committee has discussed with Ernst & Young LLP, AMCOL's
independent registered public accounting firm for the fiscal year ended December
31, 2006, the audited financial statements as of and for the year ended December
31, 2006 and the matters required to be discussed under auditing standards
generally accepted in the United States, including those matters set forth in
Statement on Auditing Standards No. 61 (Communication with Audit Committees).
The Audit Committee has also received the written disclosures and the
letter from Ernst & Young LLP required by Independence Standards Board Standard
No. 1, which relates to the independent registered public accounting firm's
independence from AMCOL and its related entities, and has discussed with Ernst &
Young LLP their independence from AMCOL. The Audit Committee has also considered
whether Ernst & Young LLP's provision of non-audit services to AMCOL, if any, is
compatible with maintaining the independent registered public accounting firm's
independence.
36
Conclusion and Recommendation
The Audit Committee has concluded that Ernst & Young LLP is independent
from AMCOL and its management. Based on the review and discussions referred to
above, the Audit Committee recommended to AMCOL's Board of Directors that
AMCOL's audited financial statements be included in AMCOL's Annual Report on
Form 10-K for the year ended December 31, 2006 filed with the Securities and
Exchange Commission.
THE AUDIT COMMITTEE
Arthur Brown, Chairman
Daniel P. Casey
Jay D. Proops
Clarence O. Redman
37
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The firm of Ernst & Young LLP served as AMCOL's independent registered
public accounting firm for the fiscal year ended December 31, 2006. The firm of
KPMG LLP served as AMCOL's independent registered public accounting firm for the
fiscal year ended December 31, 2005. During 2005 and 2006, the Audit Committee
appointed KPMG LLP and Ernst & Young LLP, respectively, to audit AMCOL's
consolidated financial statements. During 2005, the Audit Committee also
appointed KPMG LLP to audit benefit plans and to perform certain other auditing
and tax services. Fees paid to AMCOL's independent registered public accounting
firms for these services were as follows:
2005 ACTUAL 2006 ACTUAL
------------ ------------
Audit Fees (1) $ 1,281,261 $ 1,668,873
Audit-Related Fees (2) $ 40,212 $ --
Tax Fees (3) $ 87,964 $ --
All Other Fees (4) $ 74,182 $ --
Total $ 1,483,620 $ 1,668,873
(1) Audit fees represent fees for professional services provided in connection
with the audit of our financial statements and review of our quarterly
financial statements and audit services provided in connection with other
statutory or regulatory filings.
(2) Audit-Related fees consist primarily of accounting consultations, employee
benefit plan audits, services related to business acquisitions and
divestitures and other attestation services.
(3) For 2005, tax fees principally included tax compliance fees of $51,148 and
tax advice and planning fees of $36,817.
(4) All other fees principally includes preparation of expatriate employee tax
returns, and pension plan administration.
Pre-Approval Policies
The Audit Committee is responsible for reviewing and pre-approving all
audit and non-audit services provided by the independent registered public
accounting firm and shall not engage the independent registered public
accounting firm to perform non-audit services proscribed by law or regulation.
The Audit Committee may delegate pre-approval authority to a member of the Audit
Committee. The Audit Committee has delegated pre-approval authority to the
Chairman of the Audit Committee for purposes of pre-approving management's
engagement of the independent registered public accounting firm to perform
non-audit services when the fees for the engagement do not exceed $25,000. When
the fees for non-audit services reach a threshold of $75,000 for any fiscal
year, management must obtain specific pre-approval from the entire Audit
Committee. The decisions of any Audit Committee member to whom pre-approval
authority is delegated must be presented to the full Audit Committee at its next
scheduled meeting. In fiscal 2006, 100% of non-audit services were approved by
the Audit Committee.
38
Dismissal of Independent Registered Public Accounting Firm
On March 24, 2006, the Audit Committee of the Board of Directors of AMCOL
approved the dismissal of KPMG LLP as AMCOL's independent registered public
accounting firm, effective immediately.
The audit reports of KPMG LLP on the consolidated financial statements of
AMCOL and subsidiaries as of and for the years ended December 31, 2005 and 2004
did not contain an adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope or accounting principles,
except that the audit reports for 2005 and 2004 contained an explanatory
paragraph with respect to the Company changing its method of accounting for
stock-based compensation effective January 1, 2003.
The audit report of KPMG LLP on management's assessment of the
effectiveness of internal control over financial reporting and the effectiveness
of internal control over financial reporting as of December 31, 2005 did not
contain an adverse opinion or disclaimer of opinion, and was not qualified or
modified as to uncertainty, audit scope or accounting principles.
The audit report of KPMG LLP on management's assessment of the
effectiveness of internal control over financial reporting as of December 31,
2004 was unqualified and its audit report on the effectiveness of internal
control over financial reporting as of December 31, 2004 contained an adverse
opinion indicating that AMCOL did not maintain effective internal control over
financial reporting as of December 31, 2004 because of the effect of a material
weakness in the design of internal controls, which did not address the financial
statement accounting considerations arising from income tax matters, or the
timing of recording of changes in accounting estimates relating to income taxes
of foreign subsidiaries. The effect was further explained in the report as
follows:
"This control weakness resulted in material errors in the accounting
for income taxes, which were identified during the course of the 2004
audit. The material errors led to (i) a restatement of the financial
results for the interim periods ended September 30, 2004 in order to both
recognize the expected federal income tax refunds relating to certain
deductions and credits claimed in amended tax returns filed in September
2004 as well as correct the deferred income tax assets and income taxes
payable recorded by a wholly-owned Company subsidiary in the United Kingdom
and (ii) a restatement of beginning retained earnings for the year ended
December 31, 2001 to reflect the estimate of the refund resulting from
certain state tax deductions claimed in amended tax returns filed in
September 2004."
In connection with the audits of the two fiscal years ended December 31,
2005, and through March 24, 2006, there were no disagreements with KPMG LLP on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope of procedures, which disagreements, if not
resolved to the satisfaction of KPMG LLP, would have caused KPMG LLP to make
reference to the subject matter of the disagreements in its reports for such
periods.
In connection with the audits of the two fiscal years ended December 31,
2005 and through March 24, 2006, there have been no reportable events (as
defined in Item 304(a)(1)(v)) of Regulation S-K) except that KPMG advised AMCOL
of the material weakness as explained in KPMG's report on management's
assessment of the effectiveness of internal control over financial reporting and
the effectiveness of internal control over financial reporting as of December
31, 2004 as described above. The subject matter of the material weakness was
discussed by AMCOL's management and the Audit Committee of the Board of
Directors of AMCOL with KPMG. AMCOL has authorized KPMG to respond fully to the
inquiries of AMCOL's successor accountant, Ernst & Young LLP, concerning the
subject matter of the material weakness.
39
AMCOL provided KPMG LLP with a copy of the above disclosure prior to filing
a Current Report on Form 8-K with the Securities and Exchange Commission and
requested that KPMG LLP furnish it with a letter addressed to the Securities and
Exchange Commission stating whether it agrees with the above statements and, if
not, stating the respects in which it does not agree. A copy of KPMG LLP's
letter stating that it agrees with the above statements is attached as an
Exhibit to AMCOL's Form 8-K.
Engagement of Independent Registered Public Accounting Firm
Also on March 24, 2006, the Audit Committee approved the engagement of
Ernst & Young LLP to serve as its independent registered public accounting firm,
effective immediately. During the two years ended December 31, 2005 and 2004 and
through March 24, 2006, neither the Company nor anyone on its behalf consulted
with Ernst & Young LLP with respect to any of the matters or reportable events
set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.
Representatives from Ernst & Young LLP will be present at the annual
meeting, will be afforded the opportunity to make a statement, and will be
available to respond to appropriate questions.
40
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Clarence O. Redman, a director and Secretary of AMCOL during 2006, was of
counsel to Lord, Bissell & Brook LLP in 2006, the principal law firm engaged by
AMCOL.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, AMCOL's directors, its
executive officers and any persons holding more than 10% of AMCOL's common stock
are required to report their initial ownership of AMCOL's common stock and any
subsequent changes in that ownership to the Securities and Exchange Commission.
Specific due dates for these reports have been established and AMCOL is required
to disclose in this proxy statement if a director or executive officer filed a
late report. During 2006 there were no delinquent reports. In making these
disclosures, AMCOL has relied solely on written representations of its directors
and executive officers and copies of the reports filed with the Securities and
Exchange Commission.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be included in AMCOL's proxy statement
and form of proxy relating to, and to be presented at, the annual meeting of
shareholders of AMCOL to be held in 2008 must be received by AMCOL on or before
November 30, 2007.
If a shareholder intends to present a proposal at the 2008 annual meeting
of shareholders but does not seek inclusion of that proposal in AMCOL's proxy
statement for that meeting, such shareholder must deliver written notice of the
proposal to AMCOL in accordance with the requirements of AMCOL's By-Laws.
Generally, such proposals must be delivered to AMCOL between February 9, 2008
and March 11, 2008. All proposals or notices should be directed to the Secretary
of AMCOL at One North Arlington, 1500 West Shure Drive, Suite 500, Arlington
Heights, Illinois 60004-7803.
COMMITTEE CHARTERS, GOVERNANCE GUIDELINES AND CODE OF CONDUCT
Copies of our Audit Committee Charter, Compensation Committee Charter,
Nominating and Governance Committee Charter, Corporate Governance Guidelines and
Code of Business Conduct and Ethics may be found on our website at
www.amcol.com. Copies of these documents are also available to shareholders upon
written request. Requests should be directed to the Secretary of AMCOL at One
North Arlington, 1500 West Shure Drive, Suite 500, Arlington Heights, Illinois
60004-7803.
OTHER MATTERS
As of the date of this proxy statement, AMCOL's management knows of no
matter not specifically referred to above as to which any action is expected to
be taken at the annual meeting. It is intended, however, that the persons named
as proxies will vote the proxies regarding such other matters and the
transaction of such other business as may be properly brought before the meeting
in accordance with their best judgment.
By Order of the Board of Directors,
James W. Ashley, Jr.
Secretary
Arlington Heights, Illinois
April 9, 2007
ANNUAL MEETING OF SHAREHOLDERS OF
AMCOL INTERNATIONAL CORPORATION
May 10, 2007
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
[ ]
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
- --------------------------------------------------------------------------------
1. The election of Class III directors for three-year terms.
NOMINEES:
[ ] FOR ALL NOMINEES [ ] Arthur Brown
[ ] Jay D. Proops
[ ] Paul C. Weaver
[ ] WITHHOLD AUTHORITY
FOR ALL NOMINEES
[ ] FOR ALL EXCEPT
(See instructions below)
INSTRUCTIONS: To withhold to vote for any individual nominee(s),
- ------------ mark "FOR ALL EXCEPT" AND FILL IN THE CIRCLE NEXT
TO EACH NOMINEE YOU WISH TO WITHHOLD, AS SHOWN
HERE: [ ]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
To change the address on your account, please check the box at right
and indicate your new address in the address space above. Please note
that changes to the registered name(s) on the account may not be [ ]
submitted via this method.
- --------------------------------------------------------------------------------
THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN, AND IN THE
ABSENCE OF SUCH INSTRUCTIONS, SHALL BE VOTED FOR ALL OF THE NOMINEES FOR
DIRECTOR. IF OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY SHALL BE
VOTED IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PROXIES ON THOSE MATTERS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
You are urged to mark, sign and return your proxy promptly in the enclosed
self-addressed, postage paid (if mailed in the United States) envelope.
- --------------------------------------------------------------------------------
Signature of Shareholder ______________________ Date ___________
Signature of Shareholder ______________________ Date ___________
NOTE: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full corporate
name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.
ANNUAL MEETING OF SHAREHOLDERS OF
AMCOL INTERNATIONAL CORPORATION
May 10, 2007
---------------------------
PROXY VOTING INSTRUCTIONS
---------------------------
MAIL - Date, sign and mail your proxy card in the envelope provided as soon as
- ----
possible.
-or-
TELEPHONE - Call toll-free 1-800-PROXIES (1-800-776-9437) from any touch-tone
- ---------
telephone and follow the instructions. Have your proxy card available when you
call.
-or-
INTERNET - Access "www.voteproxy.com" and follow the on-screen instructions.
- --------
Have your proxy card available when you access the web page.
COMPANY NUMBER
ACCOUNT NUMBER
- --------------------------------------------------------------------------------
You may enter your voting instructions at 1-800-PROXIES or www.voteproxy.com up
until 11:59 PM Eastern Time the day before the cut-off or meeting date.
- --------------------------------------------------------------------------------
Please detach along perforated line and mail in the envelope provided.
IF you are not voting via telephone or the Internet.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
- --------------------------------------------------------------------------------
1. The election of Class III directors for three-year
terms.
NOMINEES:
[ ] FOR ALL NOMINEES [ ] Arthur Brown
[ ] Jay D. Proops
[ ] Paul C. Weaver
[ ] WITHHOLD AUTHORITY
FOR ALL NOMINEES
[ ] FOR ALL EXCEPT
(See instructions below)
INSTRUCTIONS: To withhold to vote for any individual nominee(s), mark "FOR ALL
- ------------ EXCEPT" AND FILL IN THE CIRCLE NEXT TO EACH NOMINEE YOU WISH TO
WITHHOLD, AS SHOWN HERE: [ ]
- --------------------------------------------------------------------------------
THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN, AND IN THE
ABSENCE OF SUCH INSTRUCTIONS, SHALL BE VOTED FOR ALL OF THE NOMINEES FOR
DIRECTOR. IF OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY SHALL BE
VOTED IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PROXIES ON THOSE MATTERS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
You are urged to mark, sign and return your proxy promptly in the enclosed
self-addressed, postage paid (if mailed in the United States) envelope.
To change the address on your account, please check the box at right
and indicate your new address in the address space above. Please note
that changes to the registered name(s) on the account may not be [ ]
submitted via this method.
- --------------------------------------------------------------------------------
Signature of Shareholder ______________________ Date ___________
Signature of Shareholder ______________________ Date ___________
NOTE: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full corporate
name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.
[ ] [X]
AMCOL INTERNATIONAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 10, 2007
As a shareholder of AMCOL International Corporation (the "Company"), I
acknowledge receipt of the Notice of Annual Meeting and accompanying Proxy
Statement and appoint John Hughes, Lawrence E. Washow and Dale E. Stahl, or any
one of them, with full power of substitution as proxies, to vote all shares of
stock of the Company that I am entitled to vote, at the annual meeting of
shareholders to be held on Thursday, May 10, 2007, 11:00 a.m., Central Daylight
Savings time, and at any adjournment thereof, at the Sheraton Chicago Northwest,
3400 W. Euclid Avenue, Arlington Heights, Illinois.
(Continued and to be signed on the reverse side)