237,722 Shares
NALCO CHEMICAL COMPANY
Common Stock
par value $0.1875 per share
The 237,722 shares (the "Shares") of common stock, par value $0.1875 (the
"Common Stock"), of Nalco Chemical Company (the "Company") offered hereby
were transferred by the Company in 1994. See "Selling Stockholders."
The Shares are being sold for the account of the Selling Stockholders, and
the Company will not receive any proceeds from the sale of the Shares.
The Selling Stockholders have advised the Company that they may from time
to time offer and sell the Shares on the New York Stock Exchange, the Chicago
Stock Exchange or otherwise at market prices then prevailing or at prices and
upon terms then obtainable. Sales may be made in ordinary brokerage
transactions, in block transaction, in privately negotiated transactions or
otherwise. If the Shares are sold through brokers, the Selling Stockholders
expect to pay customary brokerage commissions and charges. The Company
will bear the costs of the offering, except that the Selling Stockholders
will pay all brokerage
commissions and charges as well as fees and expenses of any counsel retained
by them.
On March 17, 1995, the last reported sale price of the Common Stock on the
New York Stock Exchange was $34 1/2 per share.
________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS MARCH 20, 1995
No person is authorized in connection with any offering made hereby to give
any information or to make any representation not contained in this Prospectus,
and, if given or made, such information or representation must not be relied
upon as having been authorized by the Company or any Selling Stockholder. This
Prospectus does not constitute an offer to sell or a solicitation of an offer
to buy any security other than the Common Stock offered hereby, nor does it
constitute an offer to sell or a solicitation of an offer to buy any of the
securities offered hereby to any person in any jurisdiction in which it is
unlawful to make such an offer or solicitation to such person. Neither the
delivery of this Prospectus nor any sale made hereunder shall under any
circumstances create any implication that the information contained herein is
correct as of any date subsequent to the date hereof.
TABLE OF CONTENTS
Page
Available Information 2
Incorporation by Reference 3
The Company 4
Recent Developments 4
Plan of Distribution 6
Selling of Stockholders 6
Description of Capital Stock 7
Validity of Shares 7
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities Act
of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy material and other information concerning the
Company can be inspected and copied at the offices of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 or at its regional offices,
Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661 and Seven
World Trade Center, New York, New York 10048. Copies of such material can
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W. Washington, D.C. 20549 at prescribed rates. Such reports, proxy
material and other information concerning the Company also may be inspected at
the offices of the New York Stock Exchange, Inc. and the Chicago Stock
Exchange Incorporated.
The Company has filed with the Commission a registration statement on Form
S-3 (together with all amendments and exhibits, the "Registration Statement")
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the shares of Common Stock offered hereby. This propsectus
("Prospectus"), which constitutes a part of the Registration Statement, does
not contain all the information set forth in the Registration Statement, certain
items of which are contained in exhibits to the Registration Statement as
permitted by the rules and regulations of the Commission. Statements made in
this Prospectus as to the content of any contract, agreement or other
document referred to are not necessarily complete, although any material
terms of these documents are discussed in this Prospectus or the reports
incorporated herein. With respect to each such contract, agreement or other
document filed or incorporated by reference as an exhibit to the Registration
Statement, reference is made to the exhibit for a more complete description of
the matter involved, and each such statement shall be deemed qualified in
its entirety by such reference.
INCORPORATION BY REFERENCE
The following documents filed by the Company with the Commission pursuant to the
Exchange Act are incorporated by reference in this Prospectus:
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1993 (File No. 1-4957); and
The Company's Report on Form 10-Q dated March 31, 1994 (File No. 1-4957); and
The Company's Report on Form 10-Q dated June 30, 1994 (file No. 1-4957); and
The Company's Report on Form 10-Q dated September 30, 1994 (file No. 1-4957);
and
The Company's current report on Form 8-K dated February 3, 1994
(file No. 1-4957); and
The Company's current report on Form 8-K dated September 1, 1994
(file No. 1-4957); and
Description of Preferred Share Purchase Rights included in the Registration
Statement inspected at the offices of the New York Stock Exchange, Inc. and
the Chicago Stock Exchange Incorporated.
All documents filed by the Company pursuant to Section 13(a), 13(c) 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering made hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof. Any
statement contained in a document incorporated or deemed to be incorporated
by reference herein will be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or
in any other subsequently filed document which is or is deemed to be
incorporated by reference herein modifies or supersedes any such statement.
Any such statement so modified or superseded will not be deemed, except as
so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the request of
such person, a copy of any of the foregoing documents incorporated herein
by reference (other than the exhibits to such documents unless such exhibits
are specifically incorporated by reference into such
documents). Requests should be directed to the Secretary, Nalco Chemical
Company, One Nalco Center, Naperville, Illinois 60563-1198 (telephone number
(708) 305-1000).
THE COMPANY
The Company is engaged primarily in the manufacture and sale of highly
specialized service chemicals. The Company's business includes the production
and sale of chemicals, technology, services and systems (monitoring and
surveillance) used in water treatment, pollution control, energy conservation,
steelmaking, papermaking, mining and mineral processing, electricity generation,
other industrial processes, and commercial building utility systems. Service
chemicals are developed and formulated to meet specific customer needs. In
general, service chemicals are part of value added/return on investment
programs designed
to help customers maintain a high level of operating performance and efficiency
in their facilities or to improve the quality of customers' end products. The
Company's products are used for purposes such as: control of scale, corrosion,
foam and fouling in cooling systems, boilers, and other equipment; clarification
of water; improved combustion; separation of liquids and solids; control of
dust; lubrication and corrosion protection in rolling, drawing and forming of
metals; improved production of production of pulp and qaulities of paper;
recovery of minerals; superabsorbent polymers of disposable diapers; and
specialized process
applications in a variety of industries. The Company also provides quality,
on-site technical personnel to provide problem solving, monitoring and
technical assistance in the use of the Company's products.
The principal executive officers of the Company are located at One Nalco
Center, Naperville, Illinois 60563-1198, and the Company's telephone number
is (708) 305-1000.
RECENT DEVELOPMENTS
On February 1, 1995, the Company announced that on a comparable basis, sales
for the fourth quarter of 1994 increased 8 percent to $314.0 million.
Actual sales reported for the fourth quarter of 1993 were $348.9 million and
included the business transferred to Nalco/Exxon Energy Chemicals L.P. ("NEEC").
On a comparable basis, sales in the fourth quarter of 1993 were $291.9 million.
For the year, sales were $1.35 billion, versus year-ago results of $1.39
billion. On a comparable basis, sales for 1994 were 2 percent higher than
the year before. Excluding an after-tax charge, fourth quarter earnings would
have been $41.2 million, or 52 cents per share, a 1 percent increase over year-
ago earnings of $40.8 million, or 51 cents per share. Net earnings for the
quarter were $22.7 million, or 28 cents per share, which included an after-tax
charge of $18.5 million, or 24 cents per share. As previously reported, the
charge for the year totaled $54.0 million after tax, or 70 cents per share,
and resulted from the formation of NEEC and adoption of a worldwide
consolidation plan. Net earnings for the year were $97.1 million, or 1.19
per share. Excluding the formation and consolidation charge, earnings
for the year would
have been $151.1 million, or $1.89 per share fully diluted, compared to year-
ago results of $152.7 million, or $1.88 per share, before one-time charges for
postretirement benefit expenses and prepayment of long-term debt.
For the quarter, sales in the Water and Waste Treatment Division increased 4
percent with the Polymer, Utility Chemicals and UNISOLV Groups reporting
healthy gains. Nalco's Process Chemicals Division was up 3 percent with the
Mining and Mineral Processing, and Pulp and Paper Groups showing double-digit
growth. On a comparable basis, Latin America led the Company with a 44 percent
sales increase. About half this increase was attributable to Nalcomex, Nalco's
former Mexican affiliate, which became a wholly owned subsidiary in the
fourth quarter. In addition, operations in Venezuela, Brazil, Argentina and
Chile reported very strong gains. The Pacific Region recorded a 17 percent
jump in sales with high double-digit growth in Japan, Korea, Thailand,
Philippines, and Indonesia. In Europe strong results from Nalco Italy, France,
Germany and Spain contributed to a 6 percent rise in that region's sales.
Sales in Canada were up double-digit despite a stronger U. S. dollar compared
to year-ago results.
Summary Of Consolidated Earnings
<TABLE>
<CAPTION>
Three Months Ended Year Ended
December 3 December 31
Dollars in millions 1994 1993 1994 1993
per share of figures
<S> <C> <C> <C> <C>
Net Sales $314.0 $348.9 $1,345.6 $1,389.4
Operating costs and expenses
Cost of products sold 137.7 152.1 598.9 608.9
Selling, administrative
and research expenses 116.4 130.6 503.8 517.6
Results before formation and
consolidation expenses 59.9 66.2 242.9 262.9
Formation and consolidation
expenses 17.1 - 68.2 -
Operating earnings 42.8 66.2 174.7 262.9
Other income (expense) 0.5 (1.4) (5.2) (13.1)
Equity in earnings of Nalco/Exxon
Energy Chemicals, L. P. 4.3 - 6.9 -
Earnings before income taxes 47.6 64.8 176.4 249.8
Income taxes 24.9 24.0 79.3 97.1
Earnings before extraordinary loss
and effect of accounting change 22.7 40.8 97.1 152.7
Extraordinary loss from retirement
of debt, net of taxes - - - (10.6)
Cumulative effect of accounting
change, net of taxes - - - (56.5)
Net earnings $ 22.7 $ 40.8 $ 97.1 $ 85.6
Per common share
Earnings - Primary
Before extraordinary
loss and accounting
change $ .29 $ .55 $ 1.25 $ 2.03
Extraordinary loss
and accounting change - - - (.96)
Net earnings $ .29 $ .55 $1.25 $1.07
Earnings - Fully Diluted
Before extraordinary
loss and accounting
change $ .28 $ .51 $1.19 $1.88
Extraordinary loss and
accounting change - - - (.86)
Net earnings $ .28 $ .51 $1.19 $1.02
Cash dividends $ .24 $ .225 $ .945 $ .885
Average primary shares outstanding
(in thousands) 68,466 69,542 69,029 69,863
Average fully diluted shares
outstanding (in thousands) 76,583 77,767 77,610 78,127
</TABLE>
USE OF PROCEEDS
The Company will not receive any of the proceeds of the sale of the Shares
offered hereby.
PLAN OF DISTRIBUTION
The Selling Stockholders have advised the Company that they may from time to
time offer and sell the Shares on the New York Stock Exchange, the Chicago
Stock Exchange or otherwise at market prices then prevailing or at prices and
upon terms then obtainable. Sales may be made in ordinary brokerage
transactions, in block transactions, in privately negotiated transactions or
otherwise. If the Shares are sold through brokers, the Selling Stockholders
expect to pay customary brokerage commissions and charges.
The Company will bear the costs of the offering, except that the Selling
Stockholders will pay all brokerage
commissions and charges as well as fees and expenses of any counsel retained
by them.
SELLING STOCKHOLDERS
The table below sets forth the name of each Selling Stockholder, the number
of shares of Common Stock beneficially owned by each Selling Stockholder prior
to the Offering, the maximum number of shares of Common Stock offered hereby
by each Selling Stockholder and the number of shares of Common Stock to be
held by each Selling Stockholder after the Offering. In each case, the shares
of Common Stock to be held by each Selling Stockholder prior to and after the
Offering represents less than one percent of the outstanding shares of
Common Stock.
Number of Shares Maximum Number Number of Shares to
Owned Prior to the of Shares to be Sold be Owned After the
Name Offering in the Offering Offering
The Nalco
Foundation(1) 21,397 221,397 -0-
North Carolina State
University Endowment
Fund 16,325 16,325 -0-
__
(1) The Nalco Foundation, established by the Company in 1953, is a
not-for-profit corporation funded only by the Company. The Nalco Foundation
makes grants in communities where the Company has large concentrations of
employees and facilities. All operating expenses and personnel salaries of
The Nalco Foundation are paid by the Company.
DESCRIPTION OF CAPITAL STOCK
Common Stock
The record holders of Common Stock are entitled, ratably, to such dividends
thereon as the Company's Board of Directors in its discretion may declare out
of funds legally available therefore; are entitled to receive pro rata all
assets of the Company available for distribution to stockholders in the event
of liquidation of the Company; are entitled to one vote for each share held;
and have no preemptive rights to purchase or subscribe for any stock of the
Company now or hereafter authorized or securities convertible into Common
Stock. All outstanding shares of Common Stock, including the shares
offered hereby, are fully paid and non-assessable. There is no charter
restriction on the repurchase by the Company of shares of its own stock.
Preferred Stock
The Company's Restated Certificate of Incorporation permits the Board of
Directors of the Company, without further stockholder approval, to authorize
the issuance of up to 2,000,000 shares of Preferred Stock, $1.00 par value,
and to fix the various rights, preferences, terms and provisions of each
series of Preferred Stock so issued. No such Preferred Stock has been issued
other than Series B ESOP Convertible Preferred Stock (the "ESOP Stock"), of
which 415,800 Shares were issued to the Northern Trust Company as Trustee
of the Nalco Chemical Company Employee Stock Ownership Plan (the "ESOP").
These shares are
subject to restrictions on transfer set forth in the Certificate of
Designations relating to the ESOP Stock and a stock purchase transfer agreement
dated May 15, 1989. The shares are convertible into the Company's Common
Stock in a 20-1 ratio with the number of votes per share of ESOP stock equal
to the shares of Common Stock into which the ESOP Stock can be converted.
Except with respect to the preferred share purchase rights described below,
there are presently no understandings, agreements, negotiations or discussions
which will or might involve the possible issuance of Preferred Stock for any
purpose.
Preferred Share Purchase Rights
On July 24, 1986, the Company's Board of Directors declared a dividend of
certain preferred share purchase rights on each outstanding share of Common
Stock. The Company will issue similar rights with respect to newly-issued
shares of Common Stock as long as the rights are attached to Common Stock.
The rights, which are not exercisable until certain events involving a
potential takeover occur, are more particularly described in the Company's
Registration Statement on Form 8-A, filed with the Commission on August 1, 1986,
and Forms 8 and 8-K, filed with the Commission on July 6, 1989, which are
incorporated herein by reference.
VALIDITY OF THE SHARES
The validity of the shares offered hereby will be passed upon for the Company
by Suzzanne J. Gioimo, Corporate Secretary and attorney of the Company, who
is acting as counsel to the Company regarding this issuance. Suzzanne J.
Gioimo is the beneficial owner of 3,107 shares of Common Stock and has options
under the Company's 1982 and 1990 stock option plan to acquire an additional
8,200 shares of Common Stock.
EXPERTS
The consolidated financial statements as of December 31, 1993 and for the
year then ended incorporated by reference in this Prospectus have been so
incorporated in reliance on the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting. The consolidated financial statements as of December 31, 1992
and for each of the two years in the period ended December 31, 1992 incorporated
by reference in this Prospectus have been so incorporated in reliance on the
report of Ernst & Young LLP, independent auditors, given on the authority of
said firm as experts in auditing and accounting.
With respect to the unaudited consolidated financial information of the
Company for the three, six and nine-month periods ended March 31, June 30 and
September 30, 1994, incorporated by reference in this Prospectus, Price
Waterhouse LLP reported that they have applied limited procedures in
accordance with professional standards for a review of such information.
However, their separate reports dated April 20, July 29 and October 24, 1994,
incorporated by reference states that they did not audit and they do
not express an opinion on that unaudited consolidated financial
information. Price Waterhouse LLP has
not carried out any significant or additional audit tests beyond those which
would have been necessary if their report had not been included. Accordingly,
the degree of reliance on their report on such information should be
restricted in light of the limited nature of the review procedures applied.
Price Waterhouse LLP is not subject to liability provisions of section 11 of
the Securities Act of 1933 for their report on the unaudited consolidated
financial information because that report is not a "report" or a "part" of
the registration statement prepared or certified by Price Waterhouse LLP
within the meaning of sections 7 and 11 of the Act.
