1998 Long-Term Incentive Plan
Amendments to Long-Term Incentive Plan
 
 
AMCOL INTERNATIONAL CORPORATION 1998 LONG-TERM INCENTIVE PLAN
 
1.   Preamble.
 
     AMCOL International  Corporation,  a Delaware  corporation (the "Company"),
hereby establishes the AMCOL International  Corporation 1998 Long-Term Incentive
Plan (the  "Plan") as a means  whereby the Company  may,  through  awards of (i)
incentive stock options  ("ISOs") within the meaning of Section 422 of the Code,
(ii)  non-qualified  stock options  ("NSOs"),  (iii) stock  appreciation  rights
("SARs"), and (iv) restricted stock ("Restricted Stock"):
 
     (a)  provide  officers,   directors  and  employees  who  have  substantial
          responsibility  for the direction  and  management of the Company with
          additional incentive to promote the success of the Company's business;
 
     (b)  encourage such persons to remain in the service of the Company; and
 
     (c)  enable such persons to acquire proprietary interests in the Company.
 
     The  provisions  of this Plan do not apply to or affect any option,  stock,
stock  appreciation  right,  restricted  stock or phantom  stock  heretofore  or
hereafter  granted  under  any other  stock  plan of the  Company,  and all such
options,  stock,  stock appreciation  rights,  restricted stock or phantom stock
shall be governed by and subject to the applicable  provisions of the plan under
which they were or will be granted.
 
     2.   Definitions and Rules of Construction.
 
          2.01 "Award" means the grant of Options,  SARs and/or Restricted Stock
               to a Participant.
 
          2.02 "Award  Date"  means  the  date  upon  which  an  Option,  SAR or
               Restricted Stock is awarded to a Participant under the Plan.
 
          2.03 "Board" or "Board of  Directors"  means the board of directors of
               the Company.
 
          2.04 "Code" means the Internal  Revenue Code of 1986,  as amended from
               time to time or any successor thereto.
 
          2.05 "Committee"  means two (2) or more directors elected by the Board
               of Directors from time to time;  provided,  however,  that in the
               absence of an election by the Board, the Committee shall mean the
               Compensation Committee of the Board of Directors.
 
          2.06 "Common  Stock" means common sock of the Company,  par value $.01
               per share.
 
          2.07 "Company"  means  AMCOL  International  Corporation,  a  Delaware
               corporation, and any successor thereto.
 
          2.08 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
               it exists now or from time to time may hereafter be amended.
 
          2.09 "Fair  Market  Value" as of any date means the closing sale price
               for the Common  Stock as of the close of business on that day (as
               reported  by the Nasdaq  Stock  Market  System or any  securities
               exchange or automated quotation system of a registered securities
               association on which the Common Stock is then traded or quoted).
<PAGE>
 
          2.10 "ISO"  means an  incentive  stock  option  within the  meaning of
               Section 422 of the Code.
 
          2.11 "NSO" means a non-qualified  stock option,  which is not intended
               to qualify under Section 422 of the Code.
 
          2.12 "Option" means the right of a Participant,  whether granted as an
               ISO or an NSO, to purchase a specified number of shares of Common
               Stock, subject to the terms and conditions of the Plan.
 
          2.13 "Option Price" means the price per share of Common Stock at which
               an Option may be exercised.
 
          2.14 "Participant"  means  an  individual  to whom an  Award  has been
               granted under the Plan.
 
          2.15 "Plan" means the AMCOL  International  Corporation 1998 Long-Term
               Incentive  Plan,  as set  forth  herein  and  from  time  to time
               amended.
 
          2.16 "Restricted   Stock"  means  the  Common   Stock   awarded  to  a
               Participant pursuant to Section 8 of this Plan.
 
          2.17 "SAR" means a stock  appreciation  right issued to a  Participant
               pursuant to Section 9 of this Plan.
 
          2.18 "Subsidiary"  means  any  entity  of which  the  Company  owns or
               controls  more than 50  percent  of (i) the  outstanding  capital
               stock, or (ii) the combined voting power of all classes of stock.
 
          2.19 Rules of Construction:
 
               2.19.1 Governing Law. The construction and operation of this Plan
                    are governed by the laws of the State of Illinois.
 
               2.19.2  Undefined  Terms.  Unless the  context  requires  another
                    meaning,  any term not specifically  defined in this Plan is
                    used in the sense given to it by the Code.
 
               2.19.3 Headings. All headings in this Plan are for reference only
                    and are not to be utilized in construing the Plan.
 
               2.19.4  Conformity  with  Section 422. Any ISOs issued under this
                    Plan are  intended  to qualify as  incentive  stock  options
                    described in Section 422 of the Code,  and all provisions of
                    the Plan  relating to ISOs shall be construed in  conformity
                    with this intention. Any NSOs issued under this Plan are not
                    intended to qualify as incentive stock options  described in
                    Section  422 of the  Code,  and all  provisions  of the Plan
                    relating to NSOs shall be construed in conformity  with this
                    intention.
 
               2.19.5  Gender.  Unless  clearly  inappropriate,   all  nouns  of
                    whatever gender refer indifferently to persons or objects of
                    any gender.
 
               2.19.6  Singular  and  Plural.   Unless  clearly   inappropriate,
                    singular terms refer also to the plural and vice versa.
 
               2.19.7 Severability.  If any provision of this Plan is determined
                    to be illegal  or  invalid  for any  reason,  the  remaining
                    provisions  are to  continue in full force and effect and to
                    be  construed  and  enforced  as if the  illegal  or invalid
                    provision did not exist,  unless the continuance of the Plan
                    in such circumstances is not consistent with its purposes.
<PAGE>
 
3.   Stock Subject to the Plan.
 
     Except as otherwise  provided in Section 12, the aggregate number of shares
of Common Stock with  respect to which  Awards may be granted  through this Plan
may not exceed 1,900,000  shares.  If any Awards shall terminate or expire as to
any number of shares,  new Awards may thereafter be awarded with respect to such
shares.  The  aggregate  number of shares of Common  Stock with respect to which
Awards may be granted to any  Participant  in any  calendar  year may not exceed
100,000 shares.
 
4.   Administration.
 
     The  Committee  shall  administer  the  Plan.  All  determinations  of  the
Committee  are  made  by  a  majority  vote  of  its  members.  The  Committee's
determinations  are final and  binding on all  Participants.  In addition to any
other powers set forth in this Plan, the Committee has the following powers:
 
     (a)  to construe and interpret the Plan;
 
     (b)  to  establish,  amend and rescind  appropriate  rules and  regulations
          relating to the Plan;
 
     (c)  subject to the terms of the Plan, to select the  individuals  who will
          receive  Awards,  the times when they will receive them, the number of
          Options, Restricted Stock and/or SARs to be subject to each Award, the
          Option Price, the vesting schedule  (including any performance targets
          to be achieved  in  connection  with the  vesting of any  Award),  the
          expiration   date  applicable  to  each  Award  and  other  terms  and
          provisions  and   restrictions  of  the  Awards  (which  need  not  be
          identical)  and to amend or  modify  any of the  terms of  outstanding
          Awards;
 
     (d)  to contest on behalf of the Company or Participants, at the expense of
          the Company, any ruling or decision on any matter relating to the Plan
          or to any Awards;
 
     (e)  generally, to administer the Plan, and to take all such steps and make
          all such  determinations  in  connection  with the Plan and the Awards
          granted thereunder as it may deem necessary or advisable; and
 
     (f)  to determine  the form in which tax  withholding  under  Section 15 of
          this Plan will be made  (i.e.,  cash,  Common  Stock or a  combination
          thereof).
 
5.   Eligible Participants.
 
     Present and future  directors,  officers and employees of the Company shall
be eligible to  participate  in the Plan.  The Committee from time to time shall
select those officers, directors and employees of the Company and any Subsidiary
or affiliate of the Company who shall be  designated as  Participants  and shall
designate in accordance with the terms of the Plan the number,  if any, of ISOs,
NSOs,  SARs and shares of Restricted  Stock or any  combination  thereof,  to be
awarded to each Participant.
 
6.   Terms and Conditions of Non-Qualified Stock Options.
 
     Subject to the terms of the Plan, the  Committee,  in its  discretion,  may
award an NSO to any Participant. Each NSO shall be evidenced by an agreement, in
such form as is approved by the Committee,  and except as otherwise  provided by
the  Committee  in such  agreement,  each NSO shall be subject to the  following
express  terms and  conditions,  and to such  other  terms and  conditions,  not
inconsistent with the Plan, as the Committee may deem appropriate:
<PAGE>
 
     6.01 Option Period. Each NSO will expire as of the earliest of:
 
          (i)  the date on which it is forfeited under the provisions of Section
               11.1;
 
          (ii) ten (10) years from the Award Date;
 
          (iii)three  (3)  months  after  the   Participant's   termination   of
               employment  with the Company and its parent and  Subsidiaries  or
               service on the Board for any reason other than for cause,  death,
               total and permanent disability or retirement;
 
          (iv) immediately upon the Participant's termination of employment with
               the  Company  and its parent and  Subsidiaries  or service on the
               Board for cause;
 
          (v)  twelve (12)  months  after the  Participant's  death or total and
               permanent disability;
 
          (vi) sixty  (60)  months  after  the   Participant's   termination  of
               employment  with the Company and its parent and  Subsidiaries  or
               service  on the Board on account  of  retirement  on or after age
               sixty-five (65); or
 
          (vii)any  other  date  specified  by the  Committee  when  the  NSO is
               granted.
 
     6.02 Option Price.  At the time granted,  the Committee shall determine the
Option Price of any NSO, which shall not be less than eighty-five  percent (85%)
of the Fair  Market  Value of the Common  Stock  subject to the NSO on the Award
Date and in the  absence of such  determination,  the Option  Price shall be one
hundred  percent  (100%) of the Fair Market Value of the Common Stock subject to
the NSO on the Award Date.
 
     6.03 Vesting. Unless otherwise determined by the Committee and set forth in
the Award  agreement,  NSO Awards shall vest in  accordance  with Section  11.1;
provided,  that in no event shall an NSO granted to a Participant who is subject
to Section 16 of the  Exchange  Act be  exercisable  earlier than six (6) months
from the Award Date.
 
     6.04 Other Option  Provisions.  The form of NSO  authorized by the Plan may
contain such other provisions as the Committee may from time to time determine.
 
7.   Terms and Conditions of Incentive Stock Options
 
     Subject to the terms of the Plan, the  Committee,  in its  discretion,  may
award an ISO to any employee Participant. The aggregate fair market value of the
Common Stock  covered by ISOs  granted  under the Plan or any other stock option
plan of the  Company or any  subsidiary  or parent of the  Company  that  become
exercisable  for the first time by any employee in any  calendar  year shall not
exceed $100,000. The aggregate fair market value will be determined at the Award
Date.  Each ISO shall be evidenced by an agreement,  in such form as is approved
by the Committee,  and except as otherwise  provided by the Committee,  each ISO
shall be subject to the following express terms and conditions and to such other
terms and conditions,  not inconsistent with the Plan, as the Committee may deem
appropriate:
 
     7.01 Option Period. Each ISO will expire as of the earliest of:
 
          (i)  the date on which it is forfeited under the provisions of Section
               11.1;
 
          (ii) ten (10)  years  from the  Award  Date,  except  as set  forth in
               Section 7.02 below;
<PAGE>
          (iii)immediately  upon the  Participant's  termination  of  employment
               with the Company and any parent and Subsidiary of the Company for
               cause;
 
          (iv) three  (3)  months  after  the   Participant's   termination   of
               employment  with the Company and any parent and Subsidiary of the
               Company for any reason other than for cause or death or total and
               permanent disability;
 
          (v)  twelve (12)  months  after the  Participant's  death or total and
               permanent disability; or
 
          (vi) any other date  (within the limits of the Code)  specified by the
               Committee when the ISO is granted.
 
Notwithstanding the foregoing provisions granting discretion to the Committee to
determine the terms and conditions of ISOs, such terms and conditions shall meet
the requirements set forth in Section 422 of the Code or any successor thereto.
 
     7.02  Option  Price and  Expiration.  The Option  Price of any ISO shall be
determined by the Committee at the time an ISO is granted,  and shall be no less
than one hundred  percent  (100%) of the Fair Market  Value of the Common  Stock
subject  to the ISO on the  Award  Date;  provided,  however,  that if an ISO is
granted  to a  Participant  who,  immediately  before  the  grant  of  the  ISO,
beneficially  owns stock  representing  more than ten percent (10%) of the total
combined  voting  power of all  classes of stock of the Company or its parent or
subsidiary  corporations,  the Option  Price  shall be at least one  hundred ten
percent  (110%) of the Fair Market Value of the Common Stock  subject to the ISO
on the Award Date and in such cases, the exercise period specified in the Option
agreement shall not exceed five (5) years from the Award Date.
 
     7.03 Vesting. Unless otherwise determined by the Committee and set forth in
the Award  agreement,  ISO Awards shall vest in  accordance  with Section  11.1;
provided that in no event shall an ISO granted to a  Participant  who is subject
to Section 16 of the  Exchange  Act be  exercisable  earlier than six (6) months
from the Award Date.
 
     7.04 Other Option  Provisions.  The form of ISO  authorized by the Plan may
contain  such  other  provisions  as the  Committee  may,  from  time  to  time,
determine; provided, however, that such other provisions may not be inconsistent
with any requirements  imposed on incentive stock options under Code Section 422
and related Treasury regulations.
 
8.   Terms and Conditions of Restricted Stock Awards.
 
     Subject to the terms of the Plan, the  Committee,  in its  discretion,  may
award  Restricted  Stock  to  any  Participant  at no  additional  cost  to  the
Participant.  Each Restricted Stock Award shall be evidenced by an agreement, in
such form as is  approved  by the  Committee,  and all  shares  of Common  Stock
awarded to Participants  under the Plan as Restricted  Stock shall be subject to
the  following  express  terms  and  conditions  and to  such  other  terms  and
conditions,  not  inconsistent  with  the  Plan,  as the  Committee  shall  deem
appropriate:
 
     (a)  Restricted  Period.  Shares of  Restricted  Stock  awarded  under this
          Section 8 may not be sold, assigned, transferred, pledged or otherwise
          encumbered before they vest.
 
     (b)  Vesting.  Restricted  Stock  Awards under this Section 8 shall vest in
          accordance with Section 11.2.
<PAGE>
     (c)  Certificate  Legend.  Each certificate  issued in respect of shares of
          Restricted  Stock  awarded under this Section 8 shall be registered in
          the  name of the  Participant  and  shall  bear  the  following  (or a
          similar) legend until such shares have vested:
 
               "The  transferability of this certificate and the shares of stock
               represented  hereby  are  subject  to the  terms  and  conditions
               (including  forfeiture) relating to Restricted Stock contained in
               Section 8 of the AMCOL  International  Corporation 1998 Long-Term
               Incentive  Plan  and  an  Agreement   entered  into  between  the
               registered owner and AMCOL International  Corporation.  Copies of
               such Plan and Agreement  are on file at the  principal  office of
               AMCOL International Corporation."
 
9.   Terms and Conditions of Stock Appreciation Rights.
 
     The Committee may, in its discretion,  grant a SAR to any Participant under
the Plan.  Each SAR shall be evidenced  by an agreement  between the Company and
the  Participant,  and may relate to and be associated with all or any part of a
specific ISO or NSO. A SAR shall entitle the  Participant  to whom it is granted
the right, so long as such SAR is exercisable and subject to such limitations as
the Committee shall have imposed,  to surrender any then exercisable  portion of
his SAR and, if  applicable,  the  related ISO or NSO, in whole or in part,  and
receive  from the Company in  exchange,  without any payment of cash (except for
applicable  employee  withholding  taxes), that number of shares of Common Stock
having an  aggregate  Fair Market  Value on the date of  surrender  equal to the
product of (i) the excess of the Fair Market Value of a share of Common Stock on
the date of surrender over the Fair Market Value of the Common Stock on the date
the SARs were  issued,  or, if the SARs are related to an ISO or an NSO, the per
share Option Price under such ISO or NSO on the Award Date,  and (ii) the number
of shares of Common Stock subject to such SAR, and, if  applicable,  the related
ISO or NSO or portion thereof which is surrendered.
 
     A SAR granted in conjunction with an ISO or NSO shall terminate on the same
date as the related ISO or NSO and shall be exercisable  only if the Fair Market
Value of a share of Common Stock exceeds the Option Price for the related ISO or
NSO, and then shall be exercisable to the extent,  and only to the extent,  that
the related ISO or NSO is exercisable. The Committee may at the time of granting
any SAR add such  additional  conditions and  limitations to the SAR as it shall
deem  advisable,  including,  but not limited to,  limitations  on the period or
periods  within  which the SAR shall be  exercisable  and the maximum  amount of
appreciation  to be  recognized  with  regard to such SAR. If a  Participant  is
subject to Section  16(a) and Section  16(b) of the Exchange  Act, the Committee
may at any time add  such  additional  conditions  and  limitations  to such SAR
which, in its  discretion,  the Committee deems necessary or desirable to comply
with such Section  16(a) or Section 16(b) and the rules and  regulations  issued
thereunder,  or to obtain  any  exemption  therefrom.  Any ISO or NSO or portion
thereof which is surrendered with an SAR shall no longer be exercisable.  An SAR
that is not granted in  conjunction  with an ISO or NSO shall  terminate on such
date as is specified by the  Committee  in the SAR  agreement  and shall vest in
accordance with Section 11.2. The Committee,  in its sole discretion,  may allow
the Company to settle all or part of the Company's obligation arising out of the
exercise  of an SAR by the  payment of cash equal to the  aggregate  Fair Market
Value of the  shares of  Common  Stock  which the  Company  would  otherwise  be
obligated to deliver.
 
10.  Manner of Exercise of Options.
 
     To exercise an Option in whole or in part,  a  Participant  (or,  after his
death, his executor or administrator) must give written notice to the Committee,
stating  the number of shares with  respect to which he intends to exercise  the
Option.  The Company  will issue the shares with  respect to which the Option is
exercised upon payment in full of the Option Price. The Committee may permit the
Option  Price  to be  paid  in  cash  or  shares  of  Common  Stock  held by the
Participant  having an aggregate Fair Market Value, as determined on the date of
delivery,  equal to the Option Price.  The Committee may permit a Participant to
elect to pay the Option  Price upon the exercise of an Option by  authorizing  a
third  party to sell  shares of Common  Stock (or a  sufficient  portion  of the
shares)  acquired  upon  exercise  of
<PAGE>
the Option and remit to the Company a sufficient portion of the sale proceeds to
pay the  entire  Option  Price  and  any tax  withholding  resulting  from  such
exercise. The Committee may also permit the Option Price to be paid by any other
method  permitted  by law,  including  by  delivery  to the  Committee  from the
Participant  of an election  directing  the  Company to  withhold  the number of
shares of Common Stock from the Common Stock  otherwise due upon exercise of the
Option  having an  aggregate  Fair Market Value on that date equal to the Option
Price. If a Participant  pays the Option Price with shares of Common Stock which
were received by the  Participant  upon  exercise of one or more ISOs,  and such
Common Stock has not been held by the Participant for at least the greater of:
 
     (a)  two (2) years from the date the ISOs were granted; or
 
     (b)  one (1) year after the  transfer of the shares of Common  Stock to the
          Participant;
 
the use of the shares shall  constitute a disqualifying  disposition and the ISO
underlying  the shares used to pay the Option Price shall no longer  satisfy all
of the requirements of Code Section 422.
 
11.  Vesting.
 
     11.1 Options.  A Participant may not exercise an Option until it has become
vested.  The  portion of an Award of  Options  that is vested  depends  upon the
period that has elapsed since the Award Date. The following  schedule applies to
any Award of  Options  under  this  Plan  unless  the  Committee  establishes  a
different vesting schedule on the Award Date:
 
          Number of Years Since Award Date            Vested Percentage
 
          Fewer than two                                     None
          Two but fewer than three                            40%
          Three but fewer than four                           60%
          Four but fewer than five                            80%
          Five or more                                       100%
 
     Notwithstanding  anything herein to the contrary,  however, all Awards will
become vested and  exercisable  upon the effective date of a "change in control"
and will remain  exercisable  during the 30 days following the effective date of
the change in control.  As used in this paragraph,  the term "change in control"
means the change in the legal or beneficial  ownership of 51% of the outstanding
shares of Common Stock of the Company within a six-month  period,  other than by
death  or  operation  of law,  or the sale of 90% or more of the  assets  of the
Company within the six-month period.
 
     If a  Participant's  employment with the Company or service on the Board is
terminated due to: (i) retirement on or after his sixty-fifth  (65th)  birthday;
(ii) retirement on or after his fifty-fifth  (55th) birthday with consent of the
Company; (iii) total and permanent disability as determined by the Company; (iv)
death;  or  (v) a  change  in  control  of the  Company  (as  determined  by the
Committee), the Committee may, in its discretion, accelerate vesting. Unless the
Committee  otherwise  provides  in  the  Award  agreement,  if  a  Participant's
employment with or service to the Company  terminates for any other reason,  any
Awards that are not yet vested are  forfeited.  A transfer from the Company to a
Subsidiary or affiliate,  or vice versa,  is not a termination of employment for
purposes  of this Plan.  The  Committee  shall be  entitled  to make such rules,
regulations and  determinations  as it deems appropriate in respect of any leave
of absence  taken by a  Participant.  Without  limiting  the  generality  of the
foregoing,  the  Committee  shall be entitled to determine  (i) whether or not a
Participant's  leave of absence  shall  constitute a  termination  of employment
within the meaning of the Plan and (ii) the impact, if any, of any such leave of
absence on Awards granted to such  Participant.  Unless otherwise  determined by
the Committee in its sole discretion,  a Participant shall be considered to have
terminated  employment  if his or her employer  ceases to be an affiliate of the
Company, even if he or she continues to be employed by such employer.
<PAGE>
     11.2  Restricted  Stock and SARs. The Committee shall establish the vesting
schedule to apply to any Award of Restricted Stock or SAR that is not associated
with an ISO or NSO granted under the Plan to a  Participant,  and in the absence
of such a vesting  schedule,  such Award  shall vest  according  to the  vesting
schedule  set  forth  in  Section  11.1.  In no  event,  however,  will a SAR or
Restricted  Stock Award granted to a Participant who is subject to Section 16 of
the  Exchange  Act be  exercisable  until at least six (6) months from its Award
Date.
 
     If a  Participant's  employment with the Company or service on the Board is
terminated due to: (i) retirement on or after his sixty-fifth  (65th)  birthday;
(ii) retirement on or after his fifty-fifth  (55th) birthday with consent of the
Company; (iii) total and permanent disability as determined by the Company; (iv)
death;  or  (v) a  change  in  control  of the  Company  (as  determined  by the
Committee), the Committee may, in its discretion, accelerate vesting. Unless the
Committee  otherwise  provides  in  the  Award  agreement,  if  a  Participant's
employment  with or service to the Company is  terminated  for any other reason,
any Awards that are not yet vested are forfeited. A transfer from the Company to
a Subsidiary or affiliate, or vice versa, is not a termination of employment for
purposes of this Plan.
 
12.  Adjustments to Reflect Changes in Capital Structure.
 
     If there is any change in the corporate structure or shares of the Company,
the Committee may make any  adjustments  necessary to prevent  accretion,  or to
protect  against  dilution,  in the number and kind of shares  authorized by the
Plan and, with respect to outstanding  Awards,  in the number and kind of shares
covered  thereby and in the  applicable  Option  Price.  For the purpose of this
Section  12, a change  in the  corporate  structure  or  shares  of the  Company
includes,  without  limitation,  any change  resulting from a  recapitalization,
stock  split,  stock  dividend,  consolidation,   rights  offering,  separation,
reorganization,  or  liquidation  and any  transaction in which shares of Common
Stock are changed into or exchanged for a different  number or kind of shares of
stock or other securities of the Company or another corporation.
 
13.  Nontransferability of Awards.
 
     ISOs are not transferable, voluntarily or involuntarily, other than by will
or by the laws of descent and  distribution or pursuant to a qualified  domestic
relations  order as defined by the Code.  During a Participant's  lifetime,  his
ISOs may be exercised  only by him. All other  Awards  granted  pursuant to this
Plan are  transferable  by will or by the laws of descent  and  distribution  or
pursuant to a qualified  domestic  relations order as defined by the Code, or in
the Committee's discretion after vesting.
 
14.  Rights as Shareholder.
 
     No Common Stock may be delivered upon the exercise of any Option until full
payment has been made. A Participant  has no rights  whatsoever as a shareholder
with  respect to any shares  covered by an Option until the date of the issuance
of a stock certificate for the shares.
 
15.  Withholding Tax.
 
     The Committee  may, in its  discretion  and subject to such rules as it may
adopt,  permit or require a Participant  to pay all or a portion of the federal,
state and local taxes,  including FICA and Medicare  withholding tax, arising in
connection  with any Awards by (i) having the Company  withhold shares of Common
Stock,  (ii) tendering  back shares of Common Stock received in connection  with
such Award or (iii) delivering other previously  acquired shares of Common Stock
having a Fair Market Value approximately equal to the amount to be withheld.
<PAGE>
16.  No Right to Employment.
 
     Participation  in the Plan  will not  give  any  Participant  a right to be
retained   as  an  employee  or  director  of  the  Company  or  its  parent  or
Subsidiaries,  or any right or claim to any benefit  under the Plan,  unless the
right or claim has specifically accrued under the Plan. Nothing contained in the
Plan, or in any Award granted  pursuant to the Plan,  nor in any Agreement  made
pursuant to the Plan,  shall  interfere in any way with the right of the Company
or its parent or Subsidiaries to terminate the Participant's  employment at will
or change the Participant's compensation at any time.
 
17.  Amendment of the Plan.
 
     The Board of  Directors  may from time to time amend or revise the terms of
this Plan in whole or in part and may, without  limitation,  adopt any amendment
deemed  necessary;  provided,  however,  that no change in any Award  previously
granted  to a  Participant  may be made  that  would  impair  the  rights of the
Participant without the Participant's consent.
 
18.  Shareholder Approval.
 
     Operation of the Plan shall be subject to approval by the  shareholders  of
the Company within twelve months before or after the date the Plan is adopted by
the Board of Directors.  If such shareholder approval is obtained at a duly held
shareholders' meeting, it may be obtained by the affirmative vote of the holders
of a majority of the shares of the Company present at the meeting or represented
and entitled to vote thereon.  The approval of such  shareholders of the Company
shall  be  solicited  substantially  in  accordance  with  Section  14(a) of the
Exchange Act and the rules and regulations promulgated thereunder.
 
19.  Conditions Upon Issuance of Shares.
 
     An Option shall not be exercisable and a share of Common Stock shall not be
issued pursuant to the exercise of an Option,  and Restricted Stock shall not be
awarded until such time as the Plan has been approved by the shareholders of the
Company and unless the award of  Restricted  Stock,  exercise of such Option and
the issuance and delivery of such share  pursuant  thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933,  as amended,  the  Exchange  Act,  the rules and  regulations  promulgated
thereunder,  and the  requirements of any stock exchange or national  securities
association  upon which the shares of Common Stock may then be listed or quoted,
and shall be further  subject to the  approval of counsel  for the Company  with
respect to such compliance.
 
     As a condition  to the  exercise of an Option,  the Company may require the
person  exercising  such Option to represent and warrant at the time of any such
exercise that the shares of Common Stock are being purchased only for investment
and without any present  intention to sell or distribute  such shares if, in the
opinion of counsel for the Company,  such a representation is required by any of
the aforementioned relevant provisions of law.
 
20.  Assumption of Awards by the Company.
 
     The Company,  from time to time, also may substitute or assume  outstanding
awards granted by another company,  whether in connection with an acquisition of
such other company or otherwise,  by either (a) granting an Award under the Plan
in substitution of such other company's  award, or (b) assuming such award as if
it had been granted  under the Plan if the terms of such assumed  award could be
applied to an Award  granted  under the Plan.  Such  substitution  or assumption
shall be  permissible  if the holder of the  substituted  or assumed award would
have been  eligible to be granted an Award  under the Plan if the other  company
had  applied  the rules of the Plan to such  grant.  In the  event  the  Company
assumes an award granted by another company, the terms and conditions of
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such award shall remain unchanged (except that the exercise price and the number
and nature of Shares  issuable upon exercise of any such option will be adjusted
appropriately  pursuant to Section 424(a) of the Code). In the event the Company
elects to grant a new Award rather than  assuming an existing  option,  such new
Award may be granted with a similarly adjusted exercise price.
 
21.  Effective Date and Termination of Plan.
 
     21.01Effective  Date. This Plan is effective as of the date of its adoption
          by the Board of Directors;  provided,  however,  that the Plan and any
          Awards  granted  hereunder  shall  be null  and  void  if  shareholder
          approval  is not  obtained  within  twelve  months of the date of such
          adoption.
 
     21.02Termination  of the Plan. The Plan will terminate ten (10) years after
          the date it is approved by the Board of Directors;  provided, however,
          that the Board of Directors  may  terminate the Plan at any time prior
          thereto  with  respect  to any  shares  that are not then  subject  to
          Awards.  Termination  of the  Plan  will not  affect  the  rights  and
          obligations of any  Participant  with respect to Awards granted before
          termination.
 
 
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                                 AMENDMENTS TO
                         1998 LONG-TERM INCENTIVE PLAN
 
Section 3 shall be amended to read as follows:
 
     3.  Stock Subject to the Plan.  Except as otherwise provided in Section 12,
         -------------------------
     the aggregate number of shares of Common Stock with respect to which Awards
     may be granted through this Plan may not exceed 2,900,000 shares.  If any
     Awards shall terminate or expire as to any number of shares, new Awards may
     thereafter be awarded with respect to such shares.  The aggregate number of
     shares of Common Stock with respect to which Awards may be granted to any
     Participant in any calendar year may not exceed 100,000 shares.
 
The following sentences shall be removed in their entirety from Section 7:
 
     "The aggregate fair market value of the common stock covered by ISOs
     granted under the Plan or any other stock option plan of AMCOL or any
     subsidiary or parent of AMCOL that become exercisable for the first time by
     any employee in any calendar year shall not exceed $100,000.  The aggregate
     fair market value will be determined at the Award Date."
 
The following shall be added to the end of Section 11:
 
     "Notwithstanding anything herein to the contrary, all nonvested options
     held by employees who are to become employees of BASF or any subsidiary
     thereof (the "Chemdal Employees"), pursuant to the Asset and Stock Purchase
     Agreement dated November 22, 1999, between AMCOL International Corporation,
     a Delaware corporation, and BASF Aktiengesellschaft, a corporation
     organized under the laws of Germany, shall be immediately fully vested and
     exercisable, except that any nonvested options held by any Chemdal
     Employees whose options were issued under a scheme approved by United
     Kingdom Inland Revenue will not be vested."
 
Section 12 shall be amended to read as follows:
 
     12.  Adjustments.
          -----------
 
          (a) If there is any change in the corporate structure or shares of the
     Company, the Committee may make any adjustments necessary to prevent
     accretion, or to protect against dilution, in the number and kind of shares
     of Common Stock with respect to which Awards may be granted under this Plan
     (including the maximum number of shares of Common Stock with respect to
     which Awards may be granted under this Plan in the aggregate and
     individually to any Participant during any calendar year as specified in
     Section 3) and, with respect to outstanding Awards, in the number and kind
     of shares covered thereby and in the applicable Option Price.  For the
     purpose of this Section 12, a change in the corporate structure or shares
     of the Company includes, without limitation, any change resulting from a
     recapitalization, stock split, stock dividend, consolidation, rights
     offering, separation, reorganization, or liquidation and any transaction in
     which shares of Common Stock are changed into or exchanged for a different
     number or kind of shares of stock or other securities of the Company or
     another corporation.
 
          (b) In the event of an extraordinary dividend or other distribution,
     merger, reorganization, consolidation, combination, sale of assets, split
     up, exchange, or spin off, or other extraordinary corporate transaction,
     the Committee may, in such manner and to such extent (if any) as it deems
     appropriate and equitable make provision for a cash payment or for the
     substitution or exchange of any or all outstanding Awards or the cash,
     securities or property deliverable to the holder of any or all outstanding
     Awards based upon the distribution or consideration payable to holders of
     Common Stock upon or in respect of such event; provided, however, in each
     case, that with respect to any ISO no such adjustment may be made that
     would cause the Plan to violate section 422 of the Code (or any successor
     provision).
 
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