Document:

NALCO HOLDING COMPANY

2004 STOCK INCENTIVE PLAN

RESTRICTED SHARES GRANT AGREEMENT

David Johnson

THIS AGREEMENT, is made effective as of June 7, 2007 (the “Grant Date”) (the fifth business date of the month following the month of Mr. Johnson’s promotion), between Nalco Holding Company (the “Company”) and David Johnson (the “Participant”).

RECITALS:

WHEREAS, the Company has adopted the Plan (as defined below), the terms of which are hereby incorporated by reference and made a part of this Agreement; and

WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “Committee”) has determined that the Participant be granted the Restricted Shares provided for herein pursuant to the Plan and the terms set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows:

1. Definitions. Whenever the following terms are used in this Agreement, they shall have the meanings set forth below. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan.

(a) “Plan” means the Nalco Holding Company 2004 Stock Incentive Plan, as the same may be amended, supplemented or modified from time to time.

(b) “Restricted Shares” means the shares of the Company’s common stock, par value $0.01 per share subject to the Time Restrictions.

(c) “Time Restrictions” means those restrictions described in Exhibit A to this Agreement.

(d) “Vested Shares” means those Restricted Shares that are no longer subject to Time Restrictions.

2. Grant of Restricted Shares. The Company hereby grants to the Participant, subject to the terms and conditions of this Agreement and the Plan, Restricted Shares with a value of $400,000 as determined by the closing date price of the Nalco Holding Company Stock on the fifth business day of the month following the date of this grant, June 7, 2007. The Restricted Shares shall be subject to the Time Restrictions and the other terms and conditions stated herein. The Closing Date Stock price for NLC on June 7, 2007 was $26.13, meaning that the size of this grant will be 15,308 Restricted Shares.

 

 

3. Delivery of Restricted Shares.

(a) In General. The Company shall issue a note in its electronic stock registry (without the issuance of certificates) the Restricted Shares in the name of the Participant which shall bear a legend which shall provide that:

The shares of Nalco Holding Company are subject to the terms and restrictions of the Nalco Holding Company 2004 Stock Incentive Plan and the Restricted Shares Agreement between the Participant and the Company (the “Grant Agreement”), such shares are subject to forfeiture or cancellation under the terms of such Plan and the terms of the Grant Agreement under which the shares were issued, and such shares shall not be sold, transferred, assigned, pledged, encumbered or otherwise alienated or hypothecated except pursuant to the provision of such Plan and the Grant Agreement, copies of which are available from the Secretary of Nalco Holding Company. 

(b) Change of Control. Notwithstanding the foregoing, upon a Change of Control, the Time Restrictions upon the Restricted Shares shall be lifted by the Company. 

(c) Termination of Service. If the Participant ceases to be an employee of the Company or its affiliates for reasons other than death or disability or retirement in accordance with the normal retirement programs at the Company, the Restricted Shares, other than Vested Shares, shall be immediately forfeited and canceled by the Company without any payment or other consideration. 

(d) Satisfaction of Time Restrictions. If the Time Restrictions are satisfied for the Restricted Shares, prior to their forfeiture and subject to the other terms and conditions stated herein, the Company shall release the legend on such Restricted Shares as related to the Time Restrictions.

 

 

(d) Registration or Qualification. Notwithstanding any other provision of the Plan or this Agreement to the contrary, absent an available exemption to registration or qualification, the Restricted Shares may not be delivered prior to the completion of any registration or qualification of the Restricted Stock Units or the Shares to which they relate under applicable state and federal securities or other laws, or under any ruling or regulation of any governmental body or national securities exchange that the Board or the Company’s Compensation Committee (“Committee”) shall in its sole reasonable discretion determine to be necessary or advisable.

4. Legend on Vested Shares. The Vested Shares issued to the Participant upon the vesting of the Restricted Shares shall be subject to such stop transfer orders and other restrictions as the Committee may deem reasonably advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Shares are listed, any applicable federal or state laws or the Company’s Certificate of Incorporation and Bylaws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

5. Transferability. Unless otherwise determined by the Committee, Restricted Shares may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant otherwise than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. 

6. Withholding. The Company or its Affiliate shall have the right to withhold from any payment due or transfer made with respect to the Restricted Shares or the Participant’s employment, any applicable withholding taxes in respect of the Restricted Shares or any payment or transfer with respect to the Restricted Shares or under the Plan and to take such action as may be necessary in the option of the Company to satisfy all obligations for the payment of such taxes.

7. Securities Laws. Upon the acquisition of any Vested Shares pursuant to the vesting of the Restricted Shares, the Participant will make or enter into such written representations, warranties and agreements as the Committee may reasonably request in order to comply with applicable securities laws or with this Agreement.

8. Notices. Any notice under this Agreement shall be addressed to the Company in care of its General Counsel at the principal executive office of the Company and to the Participant at the address appearing in the personnel records of the Company for the Participant or to either party at such other address as either party hereto may hereafter designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee.

9. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws.

 

 

10. Restricted Shares Subject to the Plan. By entering into this Agreement the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan. The Restricted Shares the Vested Shares received upon vesting are subject to the Plan. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

11. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Any counterpart or other signature hereupon delivered by facsimile shall be deemed for all purposes as constituting good and valid execution and delivery of this Agreement by such party.

IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto.

  

	
                         
 	
                         
 	
                        NALCO HOLDING COMPANY
 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        By 
 	
                        /S/ Mary Manupella
 
	
                         
 	
                         
 	
                        Its: Vice President – Human Resources
 

 

 

	
                         
 	
                         
 	
                         
 	
                        /S/ David Johnson
 
	
                         
 	
                         
 	
                         
 	
                        Participant
 

 

 

Exhibit A

Time Restrictions

The Participant’s Restricted Shares under this grant shall vest in the following four equal installments:

On December 31, 2007, subject to all other terms and conditions in this Agreement and the Plan, the time restriction on one-fourth of the Restricted Shares shall be lifted and they shall become Vested Shares.

On December 31, 2008, subject to all other terms and conditions in this Agreement and the Plan, the time restriction on one-fourth of the Restricted Shares shall be lifted and they shall become Vested Shares.

On December 31, 2009, subject to all other terms and conditions in this Agreement and the Plan, the time restriction on one-fourth of the Restricted Shares shall be lifted and they shall become Vested Shares.

On December 31, 2010, subject to all other terms and conditions in this Agreement and the Plan, the time restriction on one-fourth of the Restricted Shares shall be lifted and they shall become Vested Shares.DEATH BENEFIT AGREEMENT

 David Johnson

 THIS AGREEMENT, effective December 2, 2007 between Nalco Company (hereinafter “Nalco”), a corporation organized and existing under the laws of Delaware, and David Johnson (hereinafter “Executive”).

 WHEREAS, the Executive is employed by Nalco as a corporate officer; and

 WHEREAS, in consideration of Executive’s future services to Nalco, Nalco will agree to pay to the Executive or the Executive’s designees certain benefits in accordance with the provisions and conditions hereinafter set forth; and

 NOW, THEREFORE, for value received and in consideration of the mutual covenants contained herein, the parties covenant and agree as follows:

 ARTICLE I

 DEATH BENEFIT

If the termination of the Executive’s employment is on account of the Executive’s death during employment with Nalco while eligible under this Agreement, Nalco will pay a benefit under this Agreement, in an amount equal to Two Hundred Percent (200%) of the Executive’s base annual salary as of the date of the Executive’s last day of work, to such beneficiary or beneficiaries as the Executive may have designated by filing with Nalco a notice in writing in a form attached hereto as Exhibit A.

If the Executive dies at any time after retirement (meaning he qualifies for retiree health and welfare benefits i.e. - has ten or more years of service with Nalco after age 45) with this Agreement having been in effect at the time of such qualification, Nalco will pay a benefit under this Agreement in an amount equal to one hundred and fifty percent (150%) of the Executive’s base annual salary as of the date of the Executive’s last day of work, to such beneficiary or beneficiaries as the Executive may have designated by filing with Nalco a notice in writing in a form attached hereto as Exhibit A. 

This benefit shall not be payable if the Executive was terminated from his Nalco employment for cause or if he has violated any Nalco agreements (as determined by Nalco in its reasonable discretion).

In the absence of any such designation of beneficiaries, such benefit which is payable will be paid to the Executive’s estate. Such benefit which is payable will be paid by Nalco in a lump sum within thirty (30) days following the date of Executive’s death, or within thirty (30) days following the settlement date with the insurance company if a policy is taken out by Nalco, whichever is later. If the termination of the Executive’s employment is on 

 

 

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account of any occurrence or circumstances other than the Executive’s death or retirement after qualifying for retiree health and welfare benefits, no benefit will be payable under this Agreement.

 ARTICLE II

 MISCELLANEOUS PROVISIONS

2.1 Satisfaction of Claim

The Executive agrees that the Executive’s rights and interests under this Agreement, and rights and interests under this Agreement of any persons taking under or through the Executive, will be completely satisfied upon compliance by Nalco with the provisions of this Agreement.

2.2 Amendments/Entire Agreement

This Agreement may be altered, amended or revoked only by a written instrument signed by Nalco and the Executive. This Agreement represents the entire agreement of the parties with respect to the subject matter hereof. 

2.3 Governing Law

This Agreement will be governed by the laws of the State of Illinois.

2.4 Non-Assignable Rights

It is agreed that neither the Executive nor the Executive’s spouse, nor other beneficiary, will have any right to commute, sell, assign, transfer or otherwise convey the right to receive any payments hereunder without having the written consent of Nalco to do so. Such payments and the right thereto are expressly declared to be non-assignable and non-transferable.

2.5 No Contract of Employment Created

This Agreement will not be deemed to constitute a contract of employment between the parties hereto, nor will any provision hereof restrict the right of Nalco to discharge the Executive, or restrict the right of the Executive to terminate the Executive’s employment.

 

 

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2.6 Non-Secured Promise

2.6.1 The rights of the Executive under this Agreement and of any beneficiary of the Executive will be solely those of an unsecured creditor of the Corporation. Any insurance policy or any other asset acquired or held by Nalco in connection with the liabilities assumed by it hereunder, will not be deemed to be held under any trust for the benefit of the Executive or the Executive’s beneficiaries or to be security for the performance of the obligations of Nalco, but will be, and remain, a general, unpledged, unrestricted asset of Nalco.

2.6.2 The benefits under this Agreement will be paid by Nalco from its general assets. To cover all or part of its potential liabilities under the plan, Nalco may, but need not, purchase life insurance policies on the life of the Executive, but the Executive will not have any preferred claim against the policies or any beneficial ownership in the policies under this Agreement. Nalco makes no representation that it will use any life insurance policies acquired by it and insuring the life of the Executive only to provide benefits under this Agreement or that any such policies will, in any way, represent security for the payment of the benefits provided for in this Agreement. An Executive’s right to a benefit under this Agreement will not, except as may be provided for in paragraph 2.7, be limited or governed in any way by the amount of insurance proceeds received by Nalco.

2.7 Limitations on Benefits

2.7.1 If Nalco does deem it appropriate to insure all or any part of its obligation, in accordance with Section 2.6.2 Nalco will so notify the Executive. The Executive agrees to take whatever actions may be necessary to enable Nalco to timely apply for and acquire such insurance and to fulfill the requirements of the insurance company relative to the insurance thereof.

2.7.2 If the Executive is required by this Agreement to submit information to the insurance company and if the Executive has made a material misrepresentation in an application for any insurance that is used to insure its obligations under this Agreement, and if as a result of that material misrepresentation the insurance company is not required to pay all or any part of the benefit provided under that insurance, the Executive’s right to a benefit under this Agreement will be reduced by the amount of the benefit that is not paid by the insurance company because of such material misrepresentation.

2.7.3 No benefit will be payable under this Agreement if the Executive dies by suicide within two years after the effective date of this Agreement. No increase in the amount of any benefit provided in this Agreement will be payable under this Agreement if the Executive dies by suicide within two years after the effective date of such increase.

2.8 Administrator

Nalco’s Employee Benefit Plan Administration Committee (EBPAC) will be the Administrator under this Agreement. EBPAC may authorize or designate a person or 

 

 

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group of persons to fulfill the responsibilities of EBPAC as Administrator. The Administrator (or designee(s)) may employ others to render advice with regard to its responsibilities under this Agreement. 

2.9 Claims Procedure

2.9.1 Filing Claims. Any insured, beneficiary or other individual (hereinafter “Claimant”) entitled to benefits under the Agreement will file a claim request with the Administrator. The Administrator will, upon written request of a Claimant, make available copies of any claim forms or instructions or advise the Claimant where such forms or instructions may be obtained. The Administrator shall notify Claimant in writing of its decision within thirty (30) days of its receipt of Claimant’s claim request. If the Administrator fails to notify Claimant of its decision with such thirty (30) day period, the claim shall be deemed denied upon the expiration of the thirty (30) day period.

2.9.2 Review Procedure. Within thirty (30) days after receipt of a denial of a claim (or within thirty (30) days after date of deemed denial) a Claimant may file a written request for review with the Administrator. The Administrator will then make available copies of any pertinent forms or instructions or advise Claimant where such forms or instructions may be obtained.

EBPAC (or its designee(s)) will have the sole responsibility for the review of any denied claim and will take all steps appropriate in the light of its findings. EBPAC shall notify Claimant, in writing, of its decision on appeal within thirty (30) days following receipt of Claimant’s written request for review of the denied claim.

 IN WITNESS WHEREOF, the parties have hereunto set their hands and seals, Nalco by its duly authorized officer, on the day and year first written above.

 

	
                        Executive
 	
                         
 	
                         
 
	 	 	 	 
	
                          
 	
                         
 	
                         
 	
                          
 
	
                        David Johnson
 	
                         
 	
                         
 	
                         
 

 

 

	
                        Nalco Company
 	
                         
 	
                         
 
	 	 	 	 
	
                          
 	
                         
 	
                         
 	
                          
 

 

 

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 EXHIBIT A

 DESIGNATION OF BENEFICIARY

 DEATH BENEFIT AGREEMENT

 Nalco Company

Name __________________________________________________________________

I hereby designate ________________________________________________________

 

	
                        of 
 	
                        ___________________________________________________________________
 
	
                         
 	
                        Address
 
			

	
                        Who is my
 	
                        ____________________________________________________________
 
	
                         
 	
                        Relationship
 

as the beneficiary(ies) under the Death Benefit Agreement between Nalco and me, to whom benefits that are payable shall be paid at the time of my death. (Unless otherwise stated if more than one beneficiary is designated, it is understood that distribution shall be made in equal shares to the designated beneficiaries but only to such of them as shall survive me.) I reserve the right to change my beneficiary(ies).

 

	
                        Witness:
 	 	
                        Executive:
 
	 	 	 
	
                          
 	 	
                         
 
	
                        Witness should not be a beneficiary
 	 	
                         
 
	
                         
 	 	
                         
 

Dated: ____________________________

 

 

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