Document:

Exhibit 4.3

 

SECOND AMENDED AND RESTATED NALCO HOLDING COMPANY 2004 
 STOCK INCENTIVE PLAN

 

The Second Amended and Restated Nalco Holding Company 2004 Stock Incentive Plan is effective as of December 1, 2011.

 

1.                                      The Merger

 

Nalco Holding Company, a Delaware corporation (“Nalco”), previously adopted the Amended and Restated Nalco Holding Company 2004 Stock Incentive Plan (the “Nalco Plan”).

 

On December 1, 2011, pursuant to the Agreement and Plan of Merger dated as of July 19, 2011 (the “Merger Agreement”) by and among the Ecolab Inc., a Delaware corporation (the “Company”),  Sustainability Partners Corporation, a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), and Nalco, Nalco merged with and into Merger Sub (the “Merger”), with Merger Sub surviving the Merger as a wholly-owned subsidiary of the Company.

 

At the effective time of the Merger, in accordance with the Merger Agreement, the Company assumed all the obligations of Nalco under the Nalco Plan, each outstanding award under the Nalco Plan and all agreements evidencing the grants thereof, and it approved certain amendments to the Nalco Plan as set forth herein. All Awards (as defined below) outstanding under the Nalco Plan as of immediately prior to the effective time of the Merger will, from and after the effective time of the Merger, be subject to the terms of this Second Amended and Restated Nalco Holding Company 2004 Stock Incentive Plan (the “Plan”).

 

2.                                      Purpose of the Plan

 

The purpose of the Plan is to aid the Company and its Affiliates (as defined below) in recruiting and retaining key employees, directors or consultants of outstanding ability and to motivate such employees, directors or consultants to exert their best efforts on behalf of the Company and its Affiliates by providing incentives through the granting of Awards.  The Company expects that it will benefit from the added interest which such key employees, directors or consultants will have in the welfare of the Company as a result of their proprietary interest in the Company’s success.

 

3.                                      Definitions

 

The following capitalized terms used in the Plan have the respective meanings set forth in this Section:

 

(a)                                 Act:  The Securities Exchange Act of 1934, as amended, or any successor thereto.

 

(b)                                 Affiliate:  With respect to any Person, any other Person, directly or indirectly, controlling, controlled by or under common control with such Person or any other Person designated by the Committee in which any Person has an interest.

 

(c)                                  Award:  Any Option, Stock Appreciation Right, or Other Stock-Based Award granted pursuant to the Plan.

 

(d)                                 Award Agreement:  Any written agreement, contract, or other instrument or document evidencing any Award, which may, but need not, be executed or acknowledged by a Participant.

 

 

(e)                                  Board:  The Board of Directors of the Company.

 

(f)                                   Change in Control:  Shall mean the consummation of any transaction in one or a series of transactions, including, without limitation, any mergers or consolidations, the results of which is that any Person, becomes the beneficial owner, directly or indirectly, of (i) more than 50% of the voting stock of the Company or (ii) all or substantially all of the assets of the Company.   The Merger shall not be considered a Change in Control for purposes of the Plan except as may be reflected in contractual obligations existing before the Effective Date..

 

(g)                                  Code:  The Internal Revenue Code of 1986, as amended, or any successor thereto.

 

(h)                                 Committee:  The Compensation Committee of the Board or any other committee designated by the Board.

 

(i)                                     Company:  Ecolab Inc., a Delaware corporation.

 

(j)                                    Effective Date:  The date on which the effective time of the Merger occurs as provided in the Merger Agreement.

 

(k)                                 Employment:  (i) a Participant’s employment if the Participant is an employee of the Company or any of its Affiliates, (ii) a Participant’s services as a consultant, if the Participant is a consultant to the Company or any of its Affiliates and (iii) a Participant’s services as an non-employee director, if the Participant is a non-employee member of the Board or the board of directors of an Affiliate; provided that unless otherwise determined by the Committee, a change in a Participant’s status from employee to non-employee (other than a director of the Company or an Affiliate) shall constitute a termination of employment hereunder.

 

(l)                                     Fair Market Value:  On a given date, (a) if there is a public market for the Shares on such date, the closing price of the Shares on such stock exchange on which the Shares are principally trading on the date in question, or, if there were no such other price as determined in good faith and disclosed by the Compensation Committee.

 

(m)                             ISO:  An Option that is also an incentive stock option granted pursuant to Section 7(d) of the Plan.

 

(n)                                 Merger:  The merger contemplated by the Merger Agreement.

 

(o)                                 Merger Agreement:   The Agreement and Plan of Merger dated as of July 19, 2011 by and among the Company, Sustainability Partners Corporation, a Delaware corporation and a wholly-owned subsidiary of the Company, and Nalco Holding Company, a Delaware corporation.

 

(p)                                 Nalco: Nalco Holding Company, a Delaware corporation.

 

(q)                                 Nalco Plan: The Amended and Restated Nalco Holding Company 2004 Stock Incentive Plan previously adopted by Nalco.

 

(r)                                    Option:  A stock option granted pursuant to Section 7 of the Plan.

 

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(s)                                   Option Price:  The purchase price per Share of an Option, as determined pursuant to Section 7(a) of the Plan.

 

(t)                                    Other Stock-Based Award:  Any award granted under Section 9 of the Plan.

 

(u)                                 Participant:  An employee, director or consultant of the Company or its Affiliates who is selected by the Committee to participate in the Plan.

 

(v)                                 Performance-Based Awards.  Certain other Stock-Based Awards granted pursuant to Section 9(b) of the Plan.

 

(w)                               Person:  Any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind.

 

(x)                                 Plan:  The Second Amended and Restated Nalco Holding Company 2004 Stock Incentive Plan.  The Plan supersedes and replaces in its entirety the Nalco Plan.

 

(y)                                 Shares:  Shares of common stock of the Company, par value $1.00 per share, together with the rights distributed to holders of common stock pursuant to the Rights Agreement dated as of February 24, 2006, as amended, between the Company and Computershare Investor Services, LLC, as rights agent, attached thereto or associated therewith.

 

(z)                                  Stock Appreciation Right:  Any right granted under Section 8 of the Plan.

 

(aa)                          Subsidiary:  A subsidiary corporation, as defined in Section 424(f) of the Code.

 

4.                                      Shares Subject to the Plan

 

The total number of Shares which may be issued under the Plan is [ · ].  The Shares may consist, in whole or in part, of unissued Shares or treasury Shares.  The maximum number of Shares for which Options and Stock Appreciation Rights may be granted during a calendar year to any Participant shall be 500,000.  The issuance of Shares or the payment of cash upon the exercise of an Award shall reduce the total number of Shares available under the Plan, as applicable.  Shares which are subject to Awards (or portion thereof) that terminate or lapse may be granted again under the Plan.

 

5.                                      Administration

 

(a)                                 The Plan shall be administered by the Committee, which may delegate its duties and powers in whole or in part to any subcommittee thereof consisting solely of at least two individuals who are intended to qualify as “Non-Employee Directors” within the meaning of Rule 16b-3 under the Act and “outside directors” within the meaning of Section 162(m) of the Code (or any successor section thereto).  Without limiting the foregoing, the Board may, in its sole discretion, take any action designated to the Committee under this Plan as it may deem necessary.

 

(b)                                 The Committee shall have the full power and authority to make, and establish the terms and conditions of, any Award to any person eligible to be a Participant, consistent with the provisions of the Plan and to waive any such terms and conditions at any time (including, without limitation, accelerating or waiving any vesting conditions).  Awards may, in the discretion of the Committee, be made under the Plan in assumption of, or in

 

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substitution for, outstanding awards previously granted by the Company or its Affiliates or a company acquired by the Company or with which the Company combines.  The number of Shares underlying such substitute awards shall be counted against the aggregate number of Shares available for Awards under the Plan.

 

(c)                                  The Committee is authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make any other determinations that it deems necessary or desirable for the administration of the Plan, and may delegate such authority, as it deems appropriate.  The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent the Committee deems necessary or desirable.  Any decision of the Committee in the interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned (including, but not limited to, Participants and their beneficiaries or successors).

 

(d)                                 The Committee shall require payment of any amount it may determine to be necessary to withhold for federal, state, local, or other taxes as a result of the exercise, grant or vesting of an Award.  Unless the Committee specifies otherwise, the Participant may elect to pay a portion or all of such withholding taxes by having Shares withheld by the Company with a Fair Market Value equal to the minimum statutory withholding rate from any Shares that would have otherwise been received by the Participant in connection with the exercise of an Option.

 

(e)                                  The Committee may provide, in an Award agreement or otherwise, that an Award shall be forfeited in the event that the Participant breaches (i) any confidentiality, noncompetition, nonsolicitation, inventions or other similar provision under which the Participant is subject, (ii) any provision in an employment agreement or (iii) any Company policy.

 

6.                                      Limitations

 

No Awards may be granted under the Plan after the Effective Date, but Awards theretofore granted may extend beyond that date.

 

7.                                      Options

 

Options granted under the Plan shall be, as determined by the Committee, non-qualified stock options or ISOs for federal income tax purposes, as evidenced by the related Award Agreements, and shall be subject to the foregoing and the following terms and conditions as set forth in the applicable Award Agreement:

 

(a)                                 Option Price.  The Option Price shall be determined by the Committee, and, shall not be less than 100% of the Fair Market Value of the Shares on the date an Option is granted.

 

(b)                                 Exercisability.  Options granted under the Plan shall be exercisable at such time and upon such terms and conditions as may be determined by the Committee, but in no event shall an Option be exercisable more than ten years after the date it is granted.

 

(c)                                  Exercise of Options.  Except as otherwise provided in the Plan or in an Award Agreement, an Option may be exercised for all, or from time to time any part, of the Shares for which it is then exercisable.  For purposes of this Section 7, the exercise date of an Option shall

 

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be the date a notice of exercise is received by the Company, together with payment (or to the extent permitted by applicable law, provision for payment) of the full purchase price in accordance with this Section 7(c).  The purchase price for the Shares as to which an Option is exercised shall be paid to the Company as designated by the Committee, pursuant to one or more of the following methods: (i) in cash, or its equivalent (e.g., by check), (ii) in Shares having a Fair Market Value equal to the aggregate Option Price for the Shares being purchased to the Company and satisfying such other requirements as may be imposed by the Committee; provided that such Shares have been held by the Participant for no less than six months (or such other period as established from time to time by the Committee or generally accepted accounting principles); (iii) partly in cash and partly in such Shares; (iv) if there is a public market for the Shares at such time, subject to such rules as may be established by the Committee, through delivery of irrevocable instructions to a broker to sell the Shares otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the aggregate Option Price for the shares being purchased or (v) such other method as approved by the Committee.  No Participant shall have any rights to dividends or other rights of a stockholder with respect to Shares subject to an Option until the Participant has given written notice of exercise of the Option, paid in full for such Shares and, if applicable, has satisfied any other conditions imposed by the Committee pursuant to the Plan.

 

(d)                                 ISOs.  The Committee may grant Options under the Plan that are intended to be ISOs.  Such ISOs shall comply with the requirements of Section 422 of the Code.  No ISO may be granted to any Participant who at the time of such grant is not an employee of the Company or of any of its Subsidiaries.  In addition, no ISO may be granted to any Participant who at the time of such grant owns more than 10% of the total combined voting power of all classes of stock of the Company or of any of its Subsidiaries, unless (i) the Option Price for such ISO is at least 110% of the Fair Market Value of a Share on the date the ISO is granted and (ii) the date on which such ISO terminates is a date not later than the day preceding the fifth anniversary of the date on which the ISO is granted.  Any Participant who disposes of Shares acquired upon the exercise of an ISO either (I) within two years after the date of grant of such ISO or (II) within one year after the transfer of such Shares to the Participant, shall notify the Company of such disposition and of the amount realized upon such disposition.  All Options granted under the Plan are intended to be non-qualified stock options, unless the applicable Award Agreement expressly states that the Option is intended to be an ISO.  If an Option is intended to be an ISO, and if for any reason such Option (or portion thereof) shall not qualify as an ISO, then, to the extent of such nonqualification, such Option (or portion thereof) shall be regarded as a non-qualified stock option granted under the Plan; provided that such Option (or portion thereof) otherwise complies with the Plan’s requirements relating to non-qualified stock options.  In no event shall any member of the Committee, the Company or any of its Affiliates (or their respective employees, officers or directors) have any liability to any Participant (or any other Person) due to the failure of an Option to qualify for any reason as an ISO.

 

(e)                                  Attestation.  Wherever in this Plan or any Award Agreement a Participant is permitted to pay the Option Price or taxes relating to the exercise of an Option by delivering Shares, the Participant may, subject to procedures satisfactory to the Committee, satisfy such delivery requirement by presenting proof of beneficial ownership of such Shares, in which case the Company shall treat the Option as exercised without further payment and

 

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shall withhold such number of Shares from the Shares acquired by the exercise of the Option.

 

8.                                      Stock Appreciation Rights

 

(a)                                 Grants.  The Committee may grant (i) a Stock Appreciation Right independent of an Option or (ii) a Stock Appreciation Right in connection with an Option, or a portion thereof.  A Stock Appreciation Right granted pursuant to clause (ii) of the preceding sentence (A) may be granted at the time the related Option is granted or at any time prior to the exercise or cancellation of the related Option, (B) shall cover the same number of Shares covered by an Option (or such lesser number of Shares as the Committee may determine) and (C) shall be subject to the same terms and conditions as such Option except for such additional limitations as are contemplated by this Section 8 (or such additional limitations as may be included in an Award agreement).

 

(b)                                 Terms.  The exercise price per Share of a Stock Appreciation Right shall be an amount determined by the Committee but in no event shall such amount be less than the Fair Market Value of a Share on the date the Stock Appreciation Right is granted; provided that notwithstanding the foregoing in the case of a Stock Appreciation Right granted in conjunction with an Option, or a portion thereof, the exercise price may not be less than the Option Price of the related Option.  Each Stock Appreciation Right granted independent of an Option shall entitle a Participant upon exercise to an amount equal to (i) the excess of (A) the Fair Market Value on the exercise date of one Share over (B) the exercise price per Share, times (ii) the number of Shares covered by the Stock Appreciation Right.  Each Stock Appreciation Right granted in conjunction with an Option, or a portion thereof, shall entitle a Participant to surrender to the Company the unexercised Option, or any portion thereof, and to receive from the Company in exchange therefore an amount equal to (i) the excess of (A) the Fair Market Value on the exercise date of one Share over (B) the Option Price per Share, times (ii) the number of Shares covered by the Option, or portion thereof, which is surrendered.  Payment shall be made in Shares or in cash, or partly in Shares and partly in cash (any such Shares valued at such Fair Market Value), all as shall be determined by the Committee.  Stock Appreciation Rights may be exercised from time to time upon actual receipt by the Company of written notice of exercise stating the number of Shares with respect to which the Stock Appreciation Right is being exercised.  The date a notice of exercise is received by the Company shall be the exercise date.  No fractional Shares will be issued in payment for Stock Appreciation Rights, but instead cash will be paid for a fraction or, if the Committee should so determine, the number of Shares will be rounded downward to the next whole Share.

 

(c)                                  Limitations.  The Committee may impose, in its discretion, such conditions upon the exercisability or transferability of Stock Appreciation Rights as it may deem fit.

 

9.                                     Other Stock-Based Awards

 

(a)                                 Generally.  The Committee, in its sole discretion, may grant the right to purchase Shares, Awards of Shares, Awards of restricted Shares, Awards of phantom stock units and other Awards that are valued in whole or in part by reference to, or are otherwise based on the Fair Market Value of, Shares (“Other Stock-Based Awards”).  Such Other Stock-Based Awards shall be in such form, and dependent on such conditions, as the Committee shall determine, including, without limitation, the right to receive one or more Shares (or the

 

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equivalent cash value of such Shares) upon the completion of a specified period of service, the occurrence of an event and/or the attainment of performance objectives.  Other Stock-Based Awards may be granted alone or in addition to any other Awards granted under the Plan.  Subject to the provisions of the Plan, the Committee shall determine: (a) the number of Shares to be awarded under (or otherwise related to) such Other Stock-Based Awards; (b) whether such Other Stock-Based Awards shall be settled in cash, Shares or a combination of cash and Shares; and (c) all other terms and conditions of such Other Stock-Based Awards (including, without limitation, the vesting provisions thereof and provisions ensuring that all Shares so awarded and issued shall be fully paid and non-assessable).

 

(b)                                 Performance-Based Awards.  Notwithstanding anything to the contrary herein, certain other Stock-Based Awards granted under this Section 9 may be granted in a manner which is deductible by the Company under Section 162(m) of the Code (or any successor section thereto) (such awards, “Performance-Based Awards”).  A Participant’s Performance-Based Award shall be determined based on the attainment of written performance goals approved by the Committee for a performance period established by the Committee (i) while the outcome for that performance period is substantially uncertain and (ii) no more than 90 days after the commencement of the performance period to which the performance goal relates or, if less, the number of days which is equal to 25 percent of the relevant performance period.  The performance goals, which must be objective, shall be based upon one or more of the following criteria; (i) consolidated earnings before or after taxes (including earnings before interest, taxes, depreciation and amortization); (ii) net income; (iii) operating income; (iv) earnings per Share; (v) book value per Share; (vi) return on shareholder’s equity; (vii) expense management; (viii) return on investment; (ix) improvements in capital structure; (x) profitability of an identifiable business unit or product; (xi) maintenance or improvement of profit margins; (xii) stock price; (xiii) market share; (xiv) revenues or sales; (xv) costs; (xvi) cash flow; (xvii) working capital and (xviii) return on assets.  The foregoing criteria may relate to the Company, one or more of its Subsidiaries or one or more of its divisions or units, or any combination of the foregoing, and may be applied on an absolute basis and/or be relative to one ore more peer group companies or indices, or any combination thereof, all as the Committee shall determine.  In addition, to the degree consistent with Section 162(m) of the Code (or any successor section thereto), the performance goals may relate to the Company, one or more of its Subsidiaries or one or more of its divisions or units, or any combination of the foregoing, and may be applied on an absolute basis and/or be relative to one or more peer group companies or indices, or any combination thereof, all as the Committee shall determine.  In addition, to the degree consistent with Section 162(m) of the Code (or any successor section thereto), the performance goals may be calculated without regard to the extraordinary items.  The maximum amount of a Performance-Based Award during a calendar year to any Participant shall be; (x) with respect to Performance-Based Awards that are Options or Stock Appreciation Rights shall be 500,000 shares and (y) with respect to Performance-Based Awards that are not Options or Stock Appreciation Rights shall be $4,000,000; provided that in no event shall the aggregate Fair Market Value of the Shares underlying all Awards granted to a Participant during a calendar year (including the Black-Scholes value of any Options or Stock Appreciation Rights), exceed $4,000,000.  The Committee shall determine whether, with respect to a performance period, the applicable performance goals have been met with respect to a given Participant and, if they have, to so certify and ascertain the amount of the applicable Performance-Based Award.  No Performance-Based Awards will be paid for such performance period until such certification is made by the

 

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Committee.  The amount of the Performance-Based Award actually paid to a given Participant may be less than the amount determined by the applicable performance goal formula, at the discretion of the Committee.  The amount of the Performance-Based Award determined by the Committee for a performance period shall be paid to the Participant at such time as determined by the Committee in its sole discretion after the end of such performance period; provided that a Participant may, if and to the extent permitted by the Committee and consistent with the provisions of Sections 162(m) and 409A of the Code, elect to defer payment of a Performance-Based Award.

 

10.                               Adjustments Upon Certain Events

 

Notwithstanding any other provisions in the Plan to the contrary, the following provisions shall apply to all Awards granted under the Plan:

 

(a)                                 Generally.  In the event of any change in the outstanding Shares after the Effective Date by reason of any Share dividend or split, reorganization, recapitalization, merger, consolidation, spin-off, combination or transaction or exchange of Shares or other corporate exchange, or any distribution to shareholders of Shares other than regular cash dividends or any transaction similar to the foregoing, the Committee in its sole discretion and without liability to any person may make such substitution or adjustment, if any, as it deems to be equitable, as to (i) the number or kind of Shares or other securities issued or reserved for issuance pursuant to the Plan or pursuant to outstanding Awards, (ii) the Option Price or exercise price of any Stock Appreciation Right and/or (iii) any other affected terms of such Awards.  Except in a manner consistent with the foregoing, neither the Compensation Committee nor the Board shall have authority to change the exercise price of previously granted stock options.

 

(b)                                 Change in Control.  To the extent not prohibited or penalized under Section 409A of the Code, the event of a Change of Control after the Effective Date, the Committee may, in its sole discretion, provide for the (i) termination of an Award upon the consummation of the Change of Control, but only if such Award has vested and is paid out or the Participant has been permitted to exercise the Option in full for a period of not less than 30 days prior to the Change of Control, (ii) acceleration of the vesting of all or any portion of an Award, (iii) payment of an amount (in cash or, in the discretion of the Committee, in the form of consideration paid to shareholders of the Company in connection with such Change of Control) in exchange for the cancellation of an Award, which, in the case of Options and Stock Appreciation Rights, may equal the excess, if any, of the Fair Market Value of the Shares subject to such Options or Stock Appreciation Rights over the aggregate Option Price or grant price of such Option or Stock Appreciation Rights, and/or (iv) issuance of substitute Awards that will substantially preserve the otherwise applicable terms of any affected Awards previously granted hereunder.

 

11.                               No Right to Employment or Awards

 

The granting of an Award under the Plan shall impose no obligation on the Company or any of its Affiliates to continue the Employment of a Participant and shall not lessen or affect the Company’s or its Affiliates’ rights to terminate the Employment of such Participant.  No Participant or other Person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards.  The terms and conditions of Awards and the

 

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Committee’s determinations and interpretations with respect thereto need not be the same with respect to each Participant (whether or not such Participants are similarly situated).

 

12.                               Successors and Assigns

 

The Plan shall be binding on all successors and assigns of the Company and a Participant, including without limitation, the estate of such Participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the Participant’s creditors.

 

13.                               Nontransferability of Awards

 

Unless otherwise determined by the Committee, an Award shall not be transferable or assignable by the Participant other than by will or by the laws of descent and distribution.  An Award exercisable after the death of a Participant may be exercised by the legatees, personal representatives or distributees of the Participant.

 

14.                               Awards Subject to the Plan

 

In the event of a conflict between any term or provision contained in the Plan and a term or provision in any Award Agreement, the applicable terms and provisions of the Plan will govern and prevail.

 

15.                               Severability

 

If any provision of the Plan or any Award is, becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

 

16.                               Amendments or Termination

 

(a)                                 Amendments or Termination of the Plan.  The Committee may amend, alter or discontinue the Plan, but no amendment, alteration or discontinuation shall be made, without the written consent of a Participant, if such action would diminish any of the rights of the Participant under any Award theretofore granted to such Participant under the Plan; provided that the Committee may amend the Plan in such manner as it deems necessary to permit the granting of Awards meeting the requirements of the Code or other applicable laws.  Shareholder approval for certain amendments may also be required by NYSE, tax or regulatory requirements.

 

(b)                                 Amendments to Awards.  The Committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any Award theretofore granted, prospectively or retroactively; provided that no waiver, amendment, alteration, suspension, discontinuation, cancellation or termination shall impair the rights of any Participant or any holder or beneficiary of any Award theretofore granted without the consent of the affected Participant, holder or beneficiary.

 

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(c)                                  Compliance with Section 409A of the Code.  Without limiting the generality of the foregoing paragraphs (a) and (b) of this Section 16 and notwithstanding anything herein to the contrary, this Plan and Awards issued hereunder shall be interpreted in accordance with the requirements of Section 409A of the Code and Department of Treasury regulations and other interpretative guidance issued thereunder, including without limitation, any such regulations or other guidance that may be issued after the Effective Date.  Notwithstanding any provision of the Plan to the contrary, in the event that the Committee determines that any amounts payable hereunder will be taxable to a Participant, under Section 409A of the Code and related Department of Treasury guidance, then prior to payment to such Participant of such amount, the Company may (a) adopt such amendments to the Plan and Awards and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Committee determines necessary or appropriate to preserve the intended tax treatment of the benefits provided by the Plan and Awards hereunder and/or (b) take such other actions as the Committee determines necessary or appropriate to comply with the requirements of Section 409A of the Code.

 

17.                               Other Benefit Plans

 

All Awards shall constitute a special incentive payment to the Participant and shall not be taken into account in computing the amount of salary or compensation of the Participant for the purpose of determining any benefits under any pension, retirement, profit-sharing, bonus, life insurance or other benefit plan of the Company or under any agreement between the Company and the Participant, unless such plan or agreement specifically provides otherwise.

 

18.                               Choice of Law

 

The Plan shall be governed by and construed in accordance with the laws of the State of New York without regard to conflicts of laws, and except as otherwise provided in the pertinent Award Agreement, any and all disputes between a Participant and the Company or any Affiliate relating to an Award shall be brought only in a state or federal court of competent jurisdiction sitting in New York, New York.

 

19.                               Effectiveness of the Plan

 

The Plan shall be effective as of the Effective Date and, unless earlier terminated by the Committee, the Plan shall remain in effect until the exercise, forfeiture or expiration of all Awards granted pursuant to the Plan prior to the Effective Date.

 

10Exhibit  4.4

 

	

    	
 
    	
 
    
	
 
    	
 
    	
Nalco   Company
   1601 West Diehl Road
   Naperville, IL 60563-1198
   USA
    

 

 

February 19, 2008

 

Confidential
 Mr. J. Erik Fyrwald

 

Dear Erik:

 

We are pleased to confirm to you our offer of employment with Nalco Holding Company (the “Company”) according to the terms set forth in this letter:

 

	
Position;   Title:
    	
 
    	
You   will serve as the Company’s chief executive with the title of President and   Chief Executive Officer.

 

We   anticipate that you will serve as Chairman of the Company’s Board of   Directors and will continue to hold such position during your tenure as   President and Chief Executive Officer, subject to election to the Board by   the Company’s shareholders and election to the Chairman role by the Company’s   directors.
    
	
 
    	
 
    	
 
    
	
Commencement   Date:
    	
 
    	
We   expect you to commence your employment on a mutually agreed date (the   “Commencement Date”) as soon as practicable, but in no event later than   March 1, 2008.
    
	
 
    	
 
    	
 
    
	
Base   Salary:
    	
 
    	
Your   base salary will be $850,000 per annum, to be reviewed annually by our   Compensation Committee and subject to periodic adjustment in accordance with   the Company’s executive compensation program. Our executive board members do   not receive separate compensation for their service on our boards.
    
	
 
    	
 
    	
 
    
	
Annual   Incentive Plan:
    	
 
    	
You   will participate with other senior management in the Management Incentive   Plan of Nalco Company (the “MIP”) administered by the Compensation Committee.   The amounts awarded each year will be determined by the Compensation   Committee typically targeting a percentage of a participating employee’s base   salary, and dependent upon the level of achievement of various personal   and/or Company performance objective(s) established by the Compensation   Committee early in the fiscal year.
    

 

 

	
 
    	
 
    	
Payment   of amounts earned under the MIP, once determined by the Committee, will be   made within two and one-half months following the end of the fiscal year.

 

For   the initial year your target payout under the MIP will be 100% of your base   salary, with a range of award to be earned of 0% to 200% of target based on   performance. The Compensation Committee intends to utilize adjusted EBITDA,   cash flow, and EPS growth relative to peers in establishing performance goals   for the FY08 MIP awards.
    
	
 
    	
 
    	
 
    
	
Annual   Stock Awards:
    	
 
    	
The   Company currently intends to include annual equity grants of stock options   and performance shares (“Stock Awards”) under the Company’s 2004 Stock   Incentive Plan (the “Stock Plan”) (or outside of the Stock Plan, as   necessary) as a component of its executive compensation program. The amounts,   terms, timing, and mix of the Stock Awards will be determined annually by the   Compensation Committee based on various factors. For the initial year, you   will receive Stock Awards with an aggregate fair value on the date of grant   of approximately 350% of your annual base salary. The valuation will be based   on application of the stock-based compensation pricing model as then adopted   by the Company. Your annual Stock Awards will be evidenced by separate Award   Agreements issued in accordance with the Stock Plan. For FY08, you will   receive a grant of 225,000 stock options and 75,000 performance shares at   target (with the performance period covering 2008-10), each having a value of   approximately $1.5M, for a total long term incentive of $3.0M.

 

You   will also be granted a transition grant of 50,000 performance shares at   target having a value of approximately $1.0M. The performance period will   cover 2008 performance only with earned shares, if any, vesting upon   continued employment through the end of 2010.

 

These   equity grants shall be subject to the same terms and conditions as stated in   the Stock Plan. Executive shall be employed by the Company on the date of   vesting as a condition to vesting unless Executive’s employment has been   terminated due to death or disability.

 

Per   Company policy, all grants will be made on the fifth business day of the   month following your commencement date, i.e., March 7, 2008.
    
	
 
    	
 
    	
 
    
	
Initial   Equity Grants:
    	
 
    	
You   will receive the following equity grants:

 

Stock   options: You will receive a grant of 150,000 stock options
    

 

 

	
 
    	
 
    	
valued   at approximately $1.0M. Such options will be issued with an exercise price   based on the closing price on the date of grant, will have a 10 year term   from the date of this grant, and will vest 50% on each of the 3rd and 4th   anniversaries of the date of grant.

 

Restricted   shares: You will receive 200,000 restricted shares having   a value of approximately $4.0M as of the date of grant and such shares will   vest 50% on each of the 3rd and 4th anniversaries of the date of grant.

 

The   foregoing grant of stock options and restricted shares will also vest upon a   termination by the Company without Cause or a termination by you for Good   Reason as defined in the Severance Agreement.

 

Your   restricted shares and stock options will be evidenced by separate Award   Agreements issued in accordance with the terms and conditions substantially   similar to those in the Stock Plan (if such awards are issued outside of the   Stock Plan).

 

Per   Company policy, all grants will be made on the fifth business day of the   month following your commencement date, i.e., March 7, 2008.
    
	
 
    	
 
    	
 
    
	
Equity   Ownership Policy:
    	
 
    	
The   Company maintains equity ownership requirements for its executive officers.   The Chief Executive Officer is expected to own Company stock worth five times   (5x) his or her annual salary. You will have five (5) years in which to   meet this equity ownership requirement. The Company will provide you with   additional details on the policy and how it is applied.
    
	
 
    	
 
    	
 
    
	
Severance   Agreement and Representations:
    	
 
    	
The   Company intends to enter into a Severance Agreement with you contemporaneous   with your acceptance of this letter agreement.

 

Your   Severance Agreement will provide for certain severance payments and   continuation of certain benefits for a period following (i) a   termination by the Company without Cause or a termination by you for Good   Reason (as such terms are defined in the Severance Agreement), and   (ii) execution and delivery to the Company of a prescribed form of   waiver and release. Your Severance Agreement also will impose certain   restrictive covenants on you, including matters pertaining to   confidentiality, cooperation, non-competition, non-solicitation, and   non-disparagement. Your severance protection includes the following:

 

(i)          severance   payment under the Severance Agreement equal to two times (2x) the sum of your   base salary and target MIP (defined above) payment, plus a
    

 

 

	
 
    	
 
    	
prorata MIP payment for the year in which the   termination occurs;

 

(ii)         18   months of continued medical and dental coverage for which you will only pay   the active employee rate(s);

 

(iii)        Eligibility   for certain outplacement services following termination; and

 

If   the termination occurs following a Change in Control, an excise tax gross-up   payment if your severance and related payments are subject to excise tax   under Section 280G of the Internal Revenue Code of 1986, as amended from   time to time, and the regulations issued thereunder, but which shall only be   payable if your after-tax benefits exceed by ten percent (10%) the amount you   would receive if your benefits and payments were capped at the maximum that   could be paid to you without the imposition of such excise tax.

 

You   represent and warrant that: (i) there are no contractual or legal   impediments that restrict your acceptance of employment with Nalco or would   in any way restrict your performance of your job and (ii) you will not   bring or use any confidential or proprietary information or property of any   prior employer.
    
	
 
    	
 
    	
 
    
	
Transition   Assistance:
    	
 
    	
You   will be covered by the Company’s standard relocation program plus up to   $15,000 of legal fees related to the initiation of your employment with the   Company.
    
	
 
    	
 
    	
 
    
	
Benefits   and Perquisites:
    	
 
    	
You   will be eligible for the standard retirement programs and other health and   welfare benefit programs as outlined in the term sheet.
    

 

This letter agreement, including the various separate agreements referred to herein, embodies the full contents of your employment offer.  We would like and expect a response to this offer letter by February 21, 2008, at which time this offer expires.

 

 

Erik, we are very excited about the prospect of your joining Nalco.  We look forward to welcoming you to the Company.

 

	
 
    	
 
    	
Sincerely   yours,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
NALCO   HOLDING COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/   Rodney F. Chase
    
	
 
    	
 
    	
Rodney   F. Chase
    
	
 
    	
 
    	
Interim   Chairman of the Board
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/   Stephen N. Landsman
    
	
 
    	
 
    	
Stephen   N. Landsman
    
	
 
    	
 
    	
Vice   President and General Counsel
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Pursuant   to Authorization of the Board of Directors
    
	
 
    	
 
    	
 
    
	
Accepted:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   J. Erik Fyrwald
    	
 
    	
February 21,   2008
    
	
J.   Erik Fyrwald
    	
 
    	
Date

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