Registration #33-9934
Rule 424(b)(3)
PROSPECTUS
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Nalco Chemical Company
DIVIDEND REINVESTMENT
AND STOCK PURCHASE PLAN
1,000,000 SHARES OF COMMON STOCK
(Par Value $0.1875 Per Share)
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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Nalco Chemical Company (the "Company") hereby offers to eligible holders of its
Common Stock the opportunity to purchase shares of its Common Stock, par value
$0.1875 per share, with cash dividends automatically reinvested and with
optional cash payments of up to $60,000 per calendar year. No service fees or
brokerage commissions will be charged to participants for purchases made under
the Nalco Chemical Company Dividend Reinvestment and Stock Purchase Plan (the
"Plan") except in connection with automatic monthly investments through
withdrawals from a predesignated account.
All stockholders of record of Common Stock are eligible to participate in the
Plan. Owners of Common Stock whose shares are registered in names other than
their own, such as a broker or nominee, must either arrange with the registered
owners to have all or a portion of their dividends reinvested or become holders
of record by having those shares registered in their own names in order to
reinvest dividends under the Plan. Such owners whose shares are registered in
other names and who desire to make optional cash payments must become holders of
record.
The shares purchased under the Plan may be newly-issued shares, shares held by
the Company as treasury stock or shares purchased for participants in the open
market by First Chicago Trust Company of New York, as agent. The price of
authorized but unissued shares of Common Stock and shares of Common Stock held
as treasury stock purchased for participants in the Plan will be 100% of the
average of the high and low sales prices of the Company's Common Stock as
reported on the New York Stock Exchange-Composite Transactions on the relevant
Investment Date (as hereinafter defined). If no trading occurs on the New York
Stock Exchange on the relevant Investment Date, the purchase price per share
will be determined by the Company on the basis of such market quotations as it
deems appropriate. In no event will the purchase price of such shares be less
than par value. The price of shares of Common Stock purchased for participants
in the Plan on the open market will be the weighted average price of such shares
purchased for the relevant Investment Date.
Further information concerning the Plan is set forth herein under "Nalco
Chemical Company Dividend Reinvestment and Stock Purchase Plan".
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The date of this Prospectus is May 20, 1996.
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AVAILABLE INFORMATION
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The Company is subject to the information requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports and other information with the Securities and Exchange Commission (the
"Commission").
Such reports, proxy and information statements and other information may be
inspected and copied at the offices of the Commission at 450 Fifth Street, N.W.,
Washington, D.C.; and at its regional Offices, 1500 West Madison Street,
Chicago, Illinois 60661 and World Trade Center, New York, New York, 10048.
Copies of such material may be obtained from the Public Reference Section of the
Commission in Washington, D.C. 20549 at prescribed rates. In addition, reports,
proxy and information statements and other information concerning the Company
may be inspected at the offices of the New York and the Chicago Stock Exchanges
on which the Common Stock of the Company is listed.
INCORPORATION BY REFERENCE
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The following documents, which have heretofore been filed by the Company with
the Commission pursuant to the Exchange Act, are incorporated by reference in
this Prospectus and shall be deemed to be a part hereof:
(a)Annual Report on Form 10-K for the year ended December 31, 1995.
(b) Description of Preferred Share Purchase Rights included in the
Registration Statement on Form 8-A filed August 1, 1986, Forms 8 and
8-K filed July 6, 1989 and Form 8-K filed May 15, 1989.
All documents filed by the Company with the Commission 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 by this Prospectus
shall be deemed to be incorporated herein by reference and to be a part hereof
from the date of filing such documents.
The Company hereby undertakes to provide without charge to each person to whom a
copy of the Prospectus has been delivered (including any beneficial owner), on
the written or oral request of any such person, a copy of any and all of the
documents referred to above which have been or may be incorporated in this
Prospectus by reference, other than exhibits to such documents unless such
exhibits are specifically incorporated by reference in the information that the
Registration Statement incorporates. Requests should be directed to the
Secretary, Nalco Chemical Company, One Nalco Center, Naperville, Illinois
60563-1198, the Company's principal executive offices. The Company's telephone
number is 708/305-1000 and beginning August 3, 1996 the telephone number will be
630/305-1000..
THE COMPANY
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Nalco Chemical Company was incorporated in 1928 in Delaware and has its
principal executive offices at One Nalco Center, Naperville, Illinois
60563-1198. Its telephone number is 708/305-1000 and beginning August 3, 1996
the telephone number will be 630/305-1000.
The Company is engaged primarily in the manufacture and sale of highly
specialized service chemicals. This includes the production and sale of
chemicals, technology and 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.
NALCO CHEMICAL COMPANY DIVIDEND
REINVESTMENT AND STOCK PURCHASE PLAN
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Introduction
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The Plan consists in its entirety of the questions and answers appearing below.
The Plan
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1. What is the Plan?
The Plan provides that the Company's eligible stockholders can automatically
invest their cash dividends from some or all of their shares of the Company's
Common Stock in additional shares of Common Stock. Eligible stockholders may
also make optional cash payments to purchase additional shares of Common Stock
in amounts from $25 up to an aggregate of $60,000 per calendar year. (See
Question 14.)
2. What is the purpose of the Plan?
The Plan offers a convenient method for eligible stockholders to invest in
shares of the Company's Common Stock without payment of any brokerage commission
or service charge except in connection with automatic monthly investments
through withdrawals from a predesignated account. Funds from reinvested
dividends and optional cash payments are intended to be used by the Company for
general corporate purposes or to purchase shares in the open market for
participants. (See Question 4 and "Use of Proceeds".)
Administration
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3. Who will administer the Plan for participants?
First Chicago Trust Company of New York ("First Chicago"), a wholly-owned
subsidiary of First Chicago NBD Corporation, will administer the Plan for
participants, keep records for the Plan, perform other duties relating to the
Plan and mail statements of account to the participants. Common Stock purchased
under the Plan will be registered in the name of First Chicago (or its nominee),
as agent for the participants in the Plan, and will be credited to the accounts
of the respective participants. As record holder of Common Stock held for the
benefit of participants under the Plan, First Chicago will receive dividends on
all shares of Common Stock held under the Plan on the dividend record date, will
credit such dividends to participants' accounts on the basis of full and
fractional shares held in their accounts, and will automatically reinvest such
dividends in shares of Common Stock. Certificates for any number of whole shares
credited to an account under the Plan will be issued to a participant upon
written request. (See Question 20.)
Purchases
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4. What is the source of Common Stock purchased under the Plan?
Shares of Common Stock will be, at the Company's discretion, purchased either
directly from the Company, in which event such shares will be either authorized
but unissued shares or shares held by the Company as treasury stock, or, on the
open market, or by combination of the foregoing.
5. When will shares be purchased under the Plan?
Purchases from the Company of authorized but unissued shares of Common Stock and
shares held as treasury stock will be made on the relevant Investment Date (as
defined in the next paragraph). If the Company elects to cause First Chicago to
make purchases on the open market, such purchases will begin on the Investment
Date and will be completed no later than 30 days from such date except where
completion at a later date is necessary or advisable under any applicable
regulatory requirements. Such open market purchases may be made on any
securities exchange where such shares are traded or by negotiated transactions
and may be subject to such terms with respect to price, delivery and otherwise
as First Chicago may agree to. Neither the Company nor any Plan participant will
have any authority or power to direct the time or price at which shares may be
purchased, or the selection of the broker or dealer through or from whom
purchases are to be made.
An Investment Date in any month in which a dividend is paid is the Company's
dividend payment date and in any other month will be the 10th day of such month.
If the Investment Date falls on a date when the New York Stock Exchange is
closed, the Investment Date will be the first day immediately succeeding such
date on which the Exchange is open.
6. What is the purchase price of the shares?
The price of authorized but unissued shares of Common Stock and shares of Common
Stock held as treasury stock purchased for participants in the Plan will be 100%
of the average of the high and low sales prices of the Company's Common Stock as
reported on the New York Stock Exchange-Composite Transactions on the relevant
Investment Date. If no trading in Common Stock occurs on the New York Stock
Exchange on the relevant Investment Date, the purchase price per share will be
determined by the Company on the basis of such market quotations as it deems
appropriate. In no event will the purchase price for such shares be less than
par value.
The price of shares of Common Stock purchased for participants in the Plan on
the open market will be the weighted average price of shares purchased for the
relevant Investment Date.
7. How many shares will be purchased for the participant?
In accordance with the stockholder's selection on the Enrollment Authorization
Form, cash dividends invested, including dividends received on shares credited
to the participant's account under the Plan, and optional cash payments will be
used to purchase Common Stock for the participant's account. Both whole and
fractional shares will be purchased, with the latter computed to three decimal
places. Shares purchased, including fractional shares, will be credited to the
participant's account. The number of shares, including fractional shares, so
purchased will depend on the amount of dividends invested, the amount of
optional cash payments, if any, and the price per share as determined under
Question 6.
Advantages
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8. What are the advantages of the Plan?
Participants in the Plan may (1) reinvest the cash dividends from all shares of
Common Stock registered in their names in additional shares of Common Stock, and
may also invest additional amounts by making optional cash payments, (2)
reinvest the cash dividends from some of the shares of Common Stock registered
in their names, and may also make optional cash payments, or (3) continue to
receive all cash dividends from shares registered in their names and invest by
making optional cash payments. (See Question 12.) Optional cash payments may be
made in amounts from $25 up to an aggregate of $60,000 per calendar year. (See
Question 14.) In addition to eliminating brokerage commissions, service charges
(except in connection with automatic monthly investments through withdrawals
from a predesignated account) and other expenses for participants in connection
with shares purchased under the Plan, participants achieve full investment of
funds, because the Plan permits fractions of shares, as well as whole shares, to
be credited to participants' accounts. (See Question 7.) Moreover, participants
may avoid safekeeping of certificates evidencing shares credited to their
accounts and thus be protected against the risks of loss, theft or destruction
of such certificates. Statements of account will be issued after each purchase
to provide simplified record keeping.
Participation in the Plan
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9. Who is eligible to participate in the Plan?
All stockholders of record of Common Stock are eligible to participate in the
Plan. Owners of Common Stock whose shares are registered in names other than
their own, such as a broker or nominee, must either arrange with the registered
owners to have all or a portion of their dividends reinvested or become holders
of record by having those shares registered in their own names in order to
reinvest dividends under the Plan. Such owners whose shares are registered in
other names and who desire to make optional cash payments must become holders of
record in order to make such optional cash payments. (See Question 14.)
The Company has made arrangements with First Chicago to facilitate reinvestment
of dividends under the Plan by record holders such as brokers and nominees, on a
per-dividend basis, on behalf of beneficial owners. (See Question 13.)
10. How does an eligible stockholder participate?
Any eligible stockholder may join the Plan by completing and signing the
Enrollment Authorization Form accompanying this Prospectus and returning it to
First Chicago. A postage-paid envelope is provided for this purpose. Additional
Enrollment Authorization Forms may be obtained at any time by written request to
First Chicago Trust Company at P.O. Box 2598, Jersey City, New Jersey 07303-2598
or by calling the toll free number 1-800-446-2617.
A broker or nominee may reinvest dividends under the Plan on behalf of
beneficial owners by signing and returning to First Chicago either the
Enrollment Authorization Form or the Broker and Nominee Authorization Form (the
"B&N Form"). (See Question 13.)
11. When may an eligible stockholder join the Plan?
An eligible holder of Common Stock may join the Plan at any time. Once in the
Plan, such stockholder will remain a participant until such stockholder
discontinues participation. If an Enrollment Authorization Form requesting
reinvestment of dividends is received by First Chicago on or before the record
date established for a particular dividend, reinvestment will commence with that
dividend. Dividend record dates for Common Stock (and the related payment dates)
are anticipated to be as follows in 1996. Future dividends are contingent upon
Board approval.
Record Date (Date by Payment Date (Date on
which Enrollment Authorization or after which
Form must be dividend will
received) be reinvested)
February 20, 1996 March 8, 1996
May 20, 1996 June 10, 1996
August 20, 1996 September 10, 1996
November 20, 1996 December 10, 1996
It is anticipated that subsequent dividend record dates and payment dates for
Common Stock will occur on approximately the same dates each year.
If an Enrollment Authorization Form is received from an eligible stockholder
after the record date established for a particular dividend, the reinvestment of
dividends will begin on the dividend payment date following the next record date
if such stockholder is still a holder of record.
12. What does the Enrollment Authorization Form provide?
The Enrollment Authorization Form provides for the purchase of additional shares
of Common Stock through the following investment options:
If "Full Dividend Reinvestment" is elected, the Enrollment Authorization
Form directs First Chicago to apply all the cash dividends on all the shares
then or subsequently registered in a participant's name, together with any
optional cash payments, toward the purchase of additional Common Stock.
If "Partial Dividend Reinvestment" is elected, First Chicago will apply all
the cash dividends on only the number of shares registered in the
Participant's name that are specified on the Enrollment Authorization Form,
together with any optional cash payments, toward the purchase of additional
Common Stock.
If "Optional Cash Payments Only" is elected, the participant will continue
to receive cash dividends on shares registered in his or her name in the
usual manner, and First Chicago will apply optional cash payments received
toward the purchase of additional Common Stock.
Selection of the "Full Dividend Reinvestment" or "Partial Dividend Reinvestment"
options will not preclude an eligible stockholder from also making optional cash
payments.
The Enrollment Authorization Form further directs First Chicago to reinvest
automatically any subsequent dividends on shares held in the participant's Plan
account. Under the Plan, dividends will be reinvested on a cumulative basis on
the shares designated on the Enrollment Authorization Form and on all shares
held in the Plan account, until a participant specifies otherwise or withdraws
from the Plan altogether, or until the Plan is terminated.
If the participant has authorized "Full Dividend Reinvestment," cash dividends
with respect to shares withdrawn from a participant's account will continue to
be reinvested. If, however, cash dividends with respect to only part of the
shares registered in a participant's name are being reinvested, First Chicago
will continue to reinvest dividends on only the number of shares specified by
the Participant on the Enrollment Authorization Form unless a new Enrollment
Authorization Form specifying a different number of shares is delivered. If a
participant disposes of shares of stock while participating under the partial
dividend reinvestment option above such that the new share total is less than
the number of shares specified on the Enrollment Authorization Form, all
dividends paid on shares of stock registered in the stockholder's name will be
reinvested.
If a change in method of participation is desired, the participant need simply
file a new Enrollment Authorization Form indicating the method of participation
to continue thereafter. The Enrollment Authorization Form must be signed by all
registered owners of the stock.
13. What does the B&N Form provide?
The B&N Form (for brokers and nominees) provides a means whereby a broker or
nominee may inform First Chicago each time the Company declares a cash dividend
of the names of participating beneficial owners and specify as to each
beneficial owner the number of shares of Common Stock with respect to which the
dividend is to be reinvested. The B&N Form, therefore, unlike the Enrollment
Authorization Form, contemplates new instructions to First Chicago each time a
dividend is declared. First Chicago, on the Investment Date, will reinvest the
dividend payable with respect to the number of shares specified in the record
holder's instructions for each identified beneficial owner in as many whole
shares of Common Stock as can be purchased in accordance with the Plan. As soon
as practical following the Investment Date, First Chicago will transmit to the
record holder information with respect to each beneficial owner for whom the
record holder has requested dividend reinvestment showing as to each such
beneficial owner: (a) the number of shares specified for reinvestment of the
dividend, (b) the total dividend paid with respect to such shares, (c) the
number of whole shares purchased, (d) the total cost of the shares purchased,
(e) the amount of the total dividend not reinvested, (f) the aggregate fair
market value of the shares purchased and (g) the total dividend reportable for
federal income tax purposes. Accompanying such information will be a share
certificate, registered in the name of the record holder, for the total number
of shares purchased for each of such beneficial owners, and a check for the
aggregate amount of the dividend not reinvested for such beneficial owners.
The B&N Form and appropriate instructions must be received by First Chicago not
later than the fifth business day following the record date for such dividend or
no dividends will be reinvested based on such B&N Form.
Optional Cash Payments
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14. What is the procedure for making optional cash payments?
Any stockholder of record is eligible to make optional cash payments upon
joining the Plan. Cash payments must be a minimum of $25 each and may not exceed
an aggregate of $60,000 per calendar year. First Chicago will apply any optional
cash payment received from a participant before an Investment Date to the
purchase of Common Stock for the account of the participant on such Investment
Date if the Common Stock is purchased from the Company and as soon as practical
after such Investment Date if such Common Stock is purchased on the open market.
Brokers or nominees participating on behalf of beneficial owners cannot utilize
the optional cash payment provision of the Plan. Therefore, if shares of Common
Stock are held by a broker or nominee and the owner of such shares wishes to
participate in the optional cash payment feature of the Plan, such owner must
become a stockholder of record by having all or a part of such shares registered
in such owner's name. The owner must then enroll such shares in the Plan. (See
Questions 10 and 11.)
If the "Optional Cash Payments Only" box on the Enrollment Authorization Form
has been checked, the Company will pay cash dividends on shares registered in
the participant's name to the participant in the usual manner.
An initial optional cash payment may be made by a participant upon joining the
Plan by enclosing a check or money order with the Enrollment Authorization Form
and by returning it to First Chicago. Thereafter, optional cash payments may be
made using cash payment forms which will be sent to participants with their
statements of account. Checks or money orders should be made payable to "First
Chicago - Nalco Chemical".
NO INTEREST WILL BE PAID ON OPTIONAL CASH PAYMENTS. Therefore, it is suggested
that optional cash payments be sent to First Chicago shortly before an
Investment Date. Reasonable mail delay time should be taken into account so that
receipt by First Chicago is on a timely basis.
Participants may also make optional cash payments by automatic monthly
investments of a specified amount (not less than $25 per transaction or more
than $60,000 per calendar year) through an Automated Clearing House ("ACH")
withdrawal from a predesignated account. A $1.00 transaction fee will be
subtracted from the amount drawn from the participant's bank account prior to
each investment. To initiate automatic monthly deductions, a participant must
complete and sign an Automatic Monthly Deduction Form ("Authorization Form") and
return it to First Chicago together with a voided blank check or a savings
account deposit slip for the account from which funds are to be drawn. Forms
will be processed and will become effective as promptly as practicable. Once
automatic monthly deductions are initiated, funds will be drawn from the
participant's account three business days preceding each Investment Date.
A participant may change or terminate automatic monthly deductions by completing
and submitting to First Chicago a new Authorization Form. When a participant
transfers shares or otherwise establishes a new account, an Authorization Form
must be completed for the new account. If a participant closes or changes a bank
account number, a new Authorization Form must be completed. To be effective with
respect to a particular Investment Date, however, the new Authorization Form
must be received by First Chicago at least six business days preceding the
Investment Date.
A request to return optional cash payments will be honored if a written request
is received by First Chicago at least 48 hours before the Investment Date. The
same amount of cash need not be sent each time an optional cash payment is made
and there is no obligation to make optional cash payments.
Costs
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15. What are the costs to a participant in the Plan?
A participant will incur no brokerage commissions or service charges for
purchases made under the Plan, except a $1.00 transaction fee if automated
monthly investments are made. All costs of administration of the Plan and
brokerage commissions or service charges incurred in connection with the
purchase of shares will be paid by the Company. A service fee and any brokerage
commissions or transfer taxes in connection with a sale by First Chicago of all
or a part of the shares held for a participant under the Plan will be charged to
such participant. (See Question 16.)
Withdrawal
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16. How does a participant withdraw from the Plan?
In order to withdraw from the Plan, a participant must notify First Chicago in
writing or by telephone of the desire to withdraw. Written notice should be
addressed to First Chicago Trust Company, P.O. Box 2598, Jersey City, New Jersey
07303-2598. In the event of withdrawal, or in the event of termination of the
Plan by the Company, a certificate for whole shares credited to the
participant's account under the Plan will be issued and a cash payment will be
made for any fractional share based on the then current market price of the
Company's Common Stock. Such payment will be less any brokerage commission.
A participant may withdraw some or all of the participant's shares held in the
participant's account under the Plan. If a participant requests, a certificate
for all or a portion of the participant's shares held in the participant's
account under the Plan will be issued in the participant's name. (See Question
20.) If a participant so requests, First Chicago will sell all or a portion of
any shares credited to such participant's account under the Plan, and remit the
proceeds, less a service fee, any related brokerage commission and any other
costs of sale, to the participant. Participants may direct their requests to the
above address or by phoning toll free 1-800-446-2617
17. When may a participant withdraw from the Plan?
Participants may withdraw from the Plan at any time. If a request to withdraw is
received by First Chicago on or after the record date for a dividend payment,
First Chicago, in its sole discretion, may either pay any such dividend in cash
or reinvest it in Common Stock on behalf of the withdrawing participant. If such
dividend is reinvested, First Chicago may sell the shares purchased and remit
the proceeds to the participant, less any brokerage commission, any service fee
and any other costs of sale. Any optional cash payments sent to First Chicago
prior to the request to withdraw will also be invested unless return of the
amount is expressly requested in the request to withdraw and such request is
received at least 48 hours before the dividend payment date.
After withdrawing from the Plan, a stockholder may re-enroll by sending a new
Enrollment Authorization Form to First Chicago. (See Questions 10 and 11.)
Account Statements
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18. How will the participant be advised of purchases of Common Stock?
Each participant in the Plan will receive a statement of account as soon as
practicable after each Investment Date. These statements are a participant's
continuing record of the cost of shares purchased and should be retained for
income tax purposes.
Each participant will receive copies of all communications sent to other
stockholders including the Company's Annual and Quarterly Reports to
Stockholders, Notices of Annual and Special Meetings of Stockholders and Proxy
Statements and income tax information for reporting dividends paid.
Dividends
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19. Will participants be credited with dividends on shares held in their
account under the Plan?
Yes. The Company pays dividends, as declared, to the stockholders of record of
all its shares of Common Stock. As the holder of record for Plan participants,
First Chicago, as agent, will receive dividends for all Plan shares held on the
record date. It will credit such dividends received to participants' accounts on
the basis of full and fractional shares held in their accounts, and will invest
such dividends in additional shares of Common Stock.
Stock Certificates
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20. Will stock certificates be issued for shares of Common Stock purchased?
Normally, certificates for shares of Common Stock purchased and held under the
Plan will not be issued to participants. The number of shares credited to an
account under the Plan will be shown on the participant's statement of account.
This service protects against loss, theft or destruction of stock certificates.
Certificates for any number of whole shares credited to an account under the
Plan will be issued upon the written or telephone request of a participant. Any
remaining full shares and fractional shares will continue to be credited to the
participant's account.
Shares credited to an account of a participant in the Plan and held by First
Chicago may not be pledged or otherwise hypothecated. A participant who wishes
to pledge such shares must first request that a certificate for such shares be
issued.
When certificates are issued, they will be registered in the participant's name
as shown in the Company's records. Certificates for shares purchased with
dividends reinvested pursuant to instructions received on B&N Forms will be
delivered to the holder of record.
(See Question 13.)
Certificates for fractional shares will not be issued under any circumstances.
21. May stock certificates be deposited with shares held under the Plan?
A participant may deposit with First Chicago any Common Stock certificates now
or hereafter registered in the participant's name for credit under the Plan.
There is no charge for this custodial service and, by making the deposit, the
participant will be relieved of the responsibility for loss, theft or
destruction of the certificate.
First Chicago provides insurance coverage on certificates mailed by participants
to First Chicago for safekeeping in Plan accounts in certain instances as
described below. Certificates sent to First Chicago for deposit should not be
endorsed. To be eligible for certificate mailing insurance, certificates must be
mailed in brown, pre-addressed return envelopes supplied by First Chicago.
Certificates mailed in this manner are insured for up to $25,000 current market
value provided they are mailed first class. First Chicago will promptly send the
Service User a statement confirming each deposit of certificates. First Chicago
must be notified of any claim within thirty (30) calendar days of the date the
certificates were mailed. To submit a claim, a stockholder must be a current
participant or the stockholder's loss must be incurred in connection with
becoming a participant. In the latter case, the claimant must enroll in the Plan
at the time the insurance claim is processed. The maximum insurance protection
provided is $25,000 and coverage is available only when the certificate(s) are
sent to First Chicago in accordance with the guidelines described above. For
information about mailing certificates to First Chicago having a current market
value in excess of $25,000, contact First Chicago.
If a participant does not use the brown pre-addressed envelope provided by First
Chicago, certificates should be sent to the address listed below via registered
mail, return receipt requested, and insured for possible mail loss for 2% of the
market value (minimum of $20.00); this represents the replacement cost to the
participant.
Insurance covers the replacement of shares of stock, but in no way protects
against any loss resulting from fluctuations in the value of such shares from
the time the stockholder mails the certificates until such time as replacement
can be effected.
Whenever certificates are issued to the participant either upon request or upon
termination of participation, new, differently numbered certificates will be
issued. Dividends will be reinvested on shares represented by the certificates
deposited with First Chicago.
Sales
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22. How does a participant sell shares held under the Plan?
A participant may at any time, including upon withdrawal, request the sale of
all or any whole shares held in his or her account under the Plan. Any such
request may be made by either writing to First Chicago or calling First Chicago
at 1-800-446-2617. First Chicago will make every effort to process all sale
orders (written and telephone) on the day it receives them, provided that
instructions are received before 1:00 p.m. Eastern time on a business day when
First Chicago and the relevant securities markets are open. The proceeds from
such sale, less a service fee, any brokerage commission, and any other costs of
sale, will be remitted to the participant. Each sale request will be processed
and a check for the net proceeds will be mailed as promptly as possible after
First Chicago receives such sale request.
Other Information
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23. What happens when participants sell or transfer all of the shares registered
in their names on the books of the Company other than shares held under the
Plan?
When participants sell or transfer all shares of Common Stock registered in
their names, First Chicago will continue to invest the dividends on the shares
credited to their accounts under the Plan until otherwise notified.
24. What happens if the Company has a rights offering?
In the case of a Common Stock rights offering, Plan participants will receive
rights based upon whole shares of Common Stock registered in their names as of
the record date for any such rights offered, and whole shares credited to their
accounts under the Plan as of the record date.
25. Are shares purchased under the Plan entitled to preferred share purchase
rights?
Each share of Common Stock, including each whole share purchased under the Plan,
is entitled to one preferred share purchase right. If at any time certificates
representing preferred share purchase rights are distributed to holders of
Common Stock, First Chicago will distribute to participants such certificates
issued with respect to shares of Common Stock held in the Plan.
26. What happens if the Company issues a stock dividend or declares a stock
split?
Any stock dividend or split shares of Common Stock distributed by the Company on
shares credited to the account of a participant under the Plan will be added to
the participant's account. Stock dividends or split shares distributed on shares
held directly by the participant and registered in the participant's name will
be mailed to such participant in the same manner as to stockholders who are not
participating in the Plan.
27. What are the Federal income tax consequences of participation in the Plan?
In the case of reinvested dividends, when First Chicago acquires shares for a
participant's account directly from the Company, the participant must include in
gross income a dividend equal to the fair market value of the shares on the
relevant dividend payment date. The participant's basis in those shares will
also equal the fair market value of the shares on the relevant dividend payment
date.
Alternatively, when First Chicago purchases Common Stock for a participant's
account on the open market with reinvested dividends, a participant must include
in gross income a dividend equal to the actual purchase price to First Chicago
of the shares plus that portion of any brokerage commissions paid by the Company
which are attributable to the purchase of the participant's shares. The
participant's basis in Plan shares held for his or her account will be equal to
their purchase price plus allocable brokerage commissions.
In the case of shares purchased directly from the Company with optional cash
investments, the participant will not realize any income by reason of the
purchase, and the participant's basis in the shares so purchased will be their
cost. In the case of shares purchased on the open market with optional cash
investments, participants will be in receipt of a dividend to the extent of any
brokerage commissions paid by the Company. The participant's basis in the shares
acquired on the open market with optional investments will be the cost of the
shares plus an allocable share of any brokerage commissions paid by the Company.
The holding period for Plan shares will begin the day after the date the shares
are acquired. A participant will not realize any taxable income when he or she
receives certificates for whole shares credited to his or her account under the
Plan, either upon a request for such certificates or upon withdrawal from or
termination of the Plan. However, a participant who receives, upon withdrawal
from or termination of the Plan, a cash payment for the sale of Plan shares or
for a fractional share then held in his or her account will realize gain or loss
measured by the difference between the amount of the cash received and the
participant's basis in such shares or fractional share. Such gain or loss will
be capital in character if such shares or fractional shares are a capital asset
in the hands of the participant.
Dividends distributed pursuant to the Plan may be subject to withholding, in the
same circumstances as regular dividends are subject to withholding. In the case
of foreign or other stockholders who are subject to income tax withholding,
dividends will be reinvested after the deduction of such withholding taxes.
For further information as to tax consequences of participation in the Plan,
participants should consult with their own tax advisors.
28. How many shares will be sold by the Company under the Plan?
Of the shares registered with the Securities and Exchange Commission for the
Plan, the Company will sell as many shares as the dividends and optional cash
payments of participating stockholders will purchase. The Company anticipates
that it will, from time to time, as required, make additional shares available
for purchase under the Plan. (See Question 31)
29. How will participants' shares held under the Plan be voted at meetings of
stockholders?
For each meeting of stockholders, participants will receive proxies which will
enable them to vote shares registered in their names and also whole shares
credited to their accounts under the Plan.
30. Who interprets and regulates the Plan?
The Company reserves the right to interpret and regulate the Plan, as deemed
desirable or necessary, in connection with its operation.
31. May the Plan be modified or discontinued?
The Company reserves the right to suspend, modify or terminate the Plan at any
time. Participants in the Plan will be notified of any suspension, termination
or significant modification of the Plan. If the Plan is terminated, shares held
in the participant's account will be distributed as described in Question 16.
32. What are the responsibilities of the Company and First Chicago under the
Plan?
Neither the Company, nor First Chicago, as administrator of the Plan, will be
liable for any good faith act or for any good faith omission to act, including,
without limitation, any claim or liability arising out of failure to terminate a
participant's account upon such participant's death, the prices at which shares
are purchased or sold for a participant's account, the times when purchases or
sales are made, or fluctuations in the market value of Common Stock.
The participants should recognize that neither the Company nor First Chicago can
assure them of a profit or protect them against a loss on the shares purchased
by them under the Plan. The Company has no obligation to purchase shares issued
under the Plan.
33. Who should be contacted with questions about the Plan?
All correspondence and inquiries concerning the Plan should be directed to:
First Chicago Trust Company
P.O. Box 2598
Jersey City, New Jersey 07303-2598
Telephone inquires should be directed to:
Stockholder customer service, including sale of shares:
1-800-446-2617
Normal hours: 8:00 am - 10:00 pm, Eastern time, each
business day
8:00 am - 3:30 pm, Eastern time, Saturdays
Customer Service Representatives are available 9:00 am -6:00
pm, Eastern time, each business day.
Internet: Messages forwarded on the Internet will be
responded to within one business day. The
First Chicago Internet address is "HTTP://WWW.FCTC.COM"
TDD: 1-201-222-4955 Telecommunications Device for the hearing
impaired.
DESCRIPTION OF CAPITAL STOCK
Common Stock
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The record holders of the Common Stock are entitled, ratably, to such dividends
thereon as the Company's Board of Directors in its discretion may declare out of
funds available therefor; 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
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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
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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.
Use of Proceeds
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The Company does not know the number of shares that will ultimately be purchased
from the Company under the Plan nor the prices at which such shares will be
sold. The proceeds are intended to be used for general corporate purposes or to
purchase shares in the open market for participants.
<PAGE>
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TABLE OF CONTENTS
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Page
Available Information........... 2
Incorporation by Reference...... 2
The Company..................... 2
Nalco Chemical Company Dividend
Reinvestment and Stock Purchase Plan 3
Description of Capital Stock.... 14
Preferred Share Purchase Rights. 14
Use of Proceeds................. 14
No person has been authorized 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. The delivery of this Prospectus at any time does not imply that
information herein is correct at any time subsequent to its date.
Nalco Chemical Company
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DIVIDEND REINVESTMENT
AND STOCK PURCHASE PLAN
PROSPECTUS
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May 20, 1996
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