NALCO CHEMICAL CO, S-8, 1996-06-27

NALCO CHEMICAL CO
S-8, 1996-06-27
MISCELLANEOUS CHEMICAL PRODUCTS

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As filed with the Securities and Exchange Commission on June 27, 1996.
- -------------- SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
----------------------------------

FORM S-8

REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-----------------------------------

NALCO CHEMICAL COMPANY
Incorporated in the State of Delaware
Employer Identification No. 36-1520480
------------------------------------

EMPLOYEE STOCK COMPENSATION PLAN
(Full title of the plan)

S. J. Gioimo, Secretary
NALCO CHEMICAL COMPANY
One Nalco Center
Naperville, Illinois 60563-1198
(Name and address of agent for service)
708-305-1000
(Telephone number of agent for service)

CALCULATION OF REGISTRATION FEE

- ------------------------------------------------- Proposed
Proposed Maximum Amount
Title of Amount Maximum Aggregate of
Securities to to be Offering Price Offering Registration
be Registered Registered Per Share(1) Price(1) Fee

- --------------------------------------------------------------------------------
Common Stock par
value $0.1875-per
Share (including
Preferred Stock 8,000,000
Purchase Rights) Shares $31.3125 $250,500,000 $86,379.31

(1) Estimated solely for purposes of determining the registration fee,
based on the average of the high and low sales price on the New York
Stock Exchange Composite Tape on June 21, 1996.

- --------------------------------------------------------------------------------
NALCO CHEMICAL COMPANY
- --------------------------------------------------------------------------------
8,000,000 Shares
Common Stock
par value $0.1875 per share
---------------------------

Up to 8,000,000 shares (the "Shares") of common stock, par value $0.1875 (the
"Common Stock"), of Nalco Chemical Company (the "Company") are offered by
persons who may be deemed to be affiliates of the Company and will be identified
in an appendix to the prospectus (the "Selling Stockholders"). The Shares
offered are those acquirable by the Selling Stockholders or for the account of
their donees or pledgees as key executive participants of the Company's Employee
Stock Compensation Plan (the "Plan"). The Selling Stockholders may, the Company
not so conceding, be deemed to be "affiliates" within the meaning of the
Securities Act of 1933, as amended. The Shares are being sold for the account of
the Selling Stockholders or their donees or pledgees and the Company will not
receive any proceeds from the sale of the Shares.

All or a portion of the Shares may be offered and sold 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 or their donees or pledgees expect to pay customary brokerage
commissions and charges. The Company will bear the costs of the offering, except
that the Selling Stockholders or their donees or pledgees will pay all brokerage
commissions and charges as well as fees and expenses of any counsel retained by
them.

On June 26, 1996, the last reported sale price of the Common Stock on the New
York Stock Exchange was $30.75 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 June 27, 1996

<PAGE>

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 the 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

Available Information...............................2 Plan of Distribution...4
Incorporation by Reference..........................3 Description of Capital.4
The Company.........................................4 Stock

AVAILABLE INFORMATION

.........The Company is subject to the informational requirements of the
Securities Exchange 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, 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 and the Chicago Stock Exchanges on which the Common
Stock of the Company is listed.

.........The Company has filed with the Commission a registration statement on
Form S-8 (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 prospectus
("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. 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:

(1) The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1996 (File No. 1-4957)

(2) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 (File No. 1-4957).

(3) Description of Preferred Share Purchase Rights included in the
Registration Statement on Form 8-A filed August 1, 1986 and Forms 8 and
8-K filed July 6, 1989 (File No. 1-4957).

(4) Description of Preferred Share Purchase Rights included in the
Registration Statement on Forms 8-A and 8-K filed June 24, 1996
(File No. 1-4957).

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 from the
date of filing of such documents. 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 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.

THE COMPANY

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.

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.

PLAN OF DISTRIBUTION

The Selling Stockholders have advised the Company that they or their
donees or pledgees 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 or their donees or pledgees expect to pay customary
brokerage commissions and charges. The Company will bear the costs of the
offering, except that the Selling Stockholders or their donees or pledgees will
pay all brokerage commissions and charges as well as fees and expenses of any
counsel retained by them.

DESCRIPTION OF CAPITAL STOCK

Common Stock
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
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.

Preferred Share Purchase Rights
On June 20, 1996, the Company's Board of Directors adopted a new
shareholder rights plan to replace the Company's existing shareholder rights
plan, which expires on August 31, 1996. Under the new shareholder rights plan,
each stockholder of record on September 1, 1996 will receive a distribution of
one Right (the "New Rights") for each share of the Company's outstanding Common
Stock. Initially, the New Rights, like the rights issued under the existing plan
(the "Existing Rights"), are represented by the Company's common stock
certificates and are not presently exercisable. A New Right will be issued with
respect to all shares of newly-issued Common Stock after September 1, 1996.

The Existing Rights or, after September 1, 1996, the New Rights become
exercisable only if a person acquires, or announces a tender offer which would
result in, beneficial ownership of 15% or more of the Company's Common Stock. If
a person acquires beneficial ownership of 15% or more of the Company's Common
Stock, all holders of Rights other than the acquiring person will generally be
entitled to purchase the Company's Common Stock at one-half of its average
market price over a specified period. The Existing Rights 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 Form 8-K filed with the Commission
on July 6, 1989. The new shareholder rights plan is more particularly described
in the Company's Registration Statement on Form 8-A and its Form 8-K filed with
the Commission on June 24, 1996.

VALIDITY OF THE SHARES

The validity of the shares offered hereby will be passed upon for the
Company by S. J. Gioimo, Corporate Secretary of the Company, Attorney at Law.
S. J. Gioimo is the beneficial owner of approximately 4,930 shares of Common
Stock. She also has options to acquire 18,900 shares of Common Stock under the
Company's Stock Option Plans.

<PAGE>

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference

The following documents or portions of documents previously filed with
the Securities and Exchange Commission (the "Commission") are incorporated
herein by reference:

(1) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996 (File No. 1-4957)

(2) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 (File No. 1-4957).

(3) Description of Preferred Share Purchase Rights included in the
Registration Statement on Form 8-A filed August 1, 1986, and Forms 8 and
8-K filed July 6, 1989 (File No. 1-4957).

(4) Description of Preferred Share Purchase Rights included in the
Registration Statement on Forms 8-A and 8-K filed June 24, 1996 (
File No. 1-4957).

Item 4. Description of Securities

Not applicable.

Item 5. Interests of Named Experts and Counsel

S. J. Gioimo, Corporate Secretary of the Company, is the beneficial
owner of approximately 4,930 shares of the Company Common Stock. She also has
options under the Company's Stock Option Plans to acquire 18,900 shares of
Common Stock.

IItem 6. Indemnification of Directors and Officers

(a) Section 145 of the Delaware general Corporation Act permits, and
in some circumstances requires, indemnification of officers,
directors and employees of the Company.

(b) Article Six of the Certificate of Incorporation of the Company
requires the Company to indemnify directors and officers of the
Company to the full extent permitted by law.

(c) The Company maintains insurance policies which insure the
Company and the officers and directors of the Company against
certain liabilities, including certain liabilities which might
arise under the Securities Act of 1933.

Item 7. Exemption from Registration Claimed

Not applicable.

Item 8. Exhibits

See Exhibit Index included herewith which is incorporated herein by
reference.

Item 9. Undertakings

The undersigned registrant hereby undertakes:

(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement;

(iii) To include any material information with respect to the
plan of distribution not previously
disclosed in the registration statement;

Provided, however, that paragraphs (a)(i) and (a)(ii) do
not apply if the registration statement is on Form S-3 or
Form S-8, and the information required to be included in
a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference
in the registration statement.

(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.

(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions set forth or described in Item 6 of this
Registration Statement, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act, the Company
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Naperville and State of Illinois on the 27th day of
June, 1996.

......... NALCO CHEMICAL COMPANY

......... By /s/ E. J. Mooney
----------------
......... E. J. Mooney
......... Chairman of the Board, Chief
Executive Officer and President

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and
appoints E. J. Mooney and S. J. Gioimo, and each of them, the true and lawful
attorneys-in-fact and agents of the undersigned, with full power of substitution
and resubstitution, for and in the name, place and stead of the undersigned, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, and hereby grants to such attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his or her substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on the 27th day of June, 1996.

Signature..... Title
--------- -----

/s/ E. J. Mooney ......... Chairman of the Board, Chief Executive Officer,
- ----------------
E. J. Mooney ......... President and Director

/s/ W. E. Buchholz......... Vice President and Chief Financial Officer
- ------------------
W. E. Buchholz

/s/ R. L. Ratliff ......... Controller
- -----------------
R. L. Ratliff

/s/ J. L. Ballesteros...... Director
- ---------------------
J. L. Ballesteros

/s/ H. G. Bernthal......... Director
- ------------------
H. G. Bernthal

______________ ......... Director
H. Corless

______________ ......... Director
H. M. Dean

/s/ J. P. Frazee, Jr....... Director
- ---------------------
J. P. Frazee, Jr.

/S/ A. L. Kelly ......... Director
- ---------------
A. L. Kelly

/s/ F. A. Krehbiel......... Director
- ------------------
F. A. Krehbiel

/s/ W. A. Pogue ......... Director
- ---------------
W. A. Pogue

/s/ J. J. Shea ......... Director
- --------------
J. J. Shea

INDEX TO EXHIBITS
<S> <C> <C>

......... Sequentially
Exhibit ......... Numbered
Number Exhibit.. Page

(4.1) .........Restated Certificate of Incorporation1

(4.2) .........Certificates of Correction and Amendment to
.........the Restated Certificate of Incorporation2

(4.3) .........Certificate of Designations, Preferences and Rights
.........of Series B ESOP Convertible Preferred Stock3

(4.4) .........By-laws4

(4.5) .........Certificate of Designations, Preference and Rights
.........of Series C Junior Participating Preferred Stock4

(5) .........Opinion of Counsel as to the legality of 12
.........the securities being registered

(23.1) .........Consent of S. J. Gioimo is contained in the 12
.........opinion filed as Exhibit 5 to this Registration
.........statement.

(23.2) .........Consent of Price Waterhouse LLP 13

(24) .........Powers of Attorney (Contained on the signature 9
.........page of the original registration statement
.........hereof)

</TABLE>

<PAGE>

June 27, 1996

"This document constitutes part of a prospectus
covering securities that have been registered
under the Securities Act of 1933."

NALCO CHEMICAL COMPANY

EMPLOYEE STOCK COMPENSATION PLAN

DESCRIPTION OF EMPLOYEE STOCK COMPENSATION PLAN

On December 21, 1995, the Board of Directors approved the Employee
Stock Compensation Plan (the "Plan") effective as of January 1, 1996 subject to
approval of the stockholders which was obtained. The Plan shall end December 31,
2005.

The Plan is administered by the Executive Compensation Committee (the
"Committee"). The Committee is elected by the Board of Directors of the Company
at its Annual Meeting each year and its members are subject to removal by the
Board.

The Plan is not subject to ERISA requirements and is not qualified
under Section 401(a) of the Internal Revenue Code as amended (the "Code").

Purpose and Eligibility
The purpose of the Plan is to encourage ownership of stock of the
Company by employees of the Company and its subsidiaries and to provide
additional long term incentive for them to continue their association with the
Company and to promote the success of the business by using their maximum
efforts in its behalf. All employees of the Company and its subsidiaries are
eligible to participate in the Plan. The Committee shall designate which
employees shall receive awards under the Plan.

Shares Subject to Plan
The aggregate number of shares of the Company's common stock that may
be granted under the Plan is 8,000,000 shares. Such shares may be either
authorized and unissued shares or Treasury shares. A grant to an employee is
limited to a maximum of 200,000 shares pursuant to a Stock Option and 50,000
Share Units during a year, subject to any adjustments upon changes in
capitalization. Shares subject to grants that are canceled or terminated will
again become available for use under the Plan. In the event there is any change
in capitalization of the Company, such as stock splits, stock dividends or
spin-off, the number of shares reserved for use under the Plan, and the number
of Stock Options or Share Units covered by outstanding grants shall be
appropriately adjusted.

Administration
The Plan shall be administered by the Executive Compensation Committee
(the "Committee"), which shall consist of two or more disinterested directors
appointed by the Board. A member of the Board shall be deemed to be
disinterested if he or she satisfies such requirements as the Securities and
Exchange Commission may establish for disinterested administrators acting under
plans intended to qualify for exemption under Rule 16b-3 of the Securities
Exchange Act of 1934, as amended, (the "Exchange Act") and satisfies Section
162(m) of the Internal Revenue Code of 1986, as amended, (the "Code"). The
Committee is authorized to interpret the terms and provisions of the Plan, to
accellerate the vesting of any previously grant award and to adopt rules and
regulations for the administration of the Plan. To the extent permitted by law,
the Committee may delegate its powers.

Stock Option Grants and Exercises
The Committee may grant non-qualified Stock Options or incentive Stock
Options subject to Section 422(b) of the Code. Options will be granted for such
terms as the Committee shall determine, but not longer than ten years from the
date of grant. The option price will be the fair market value of the Company's
Common Stock on the date of grant, or par value if greater. The option exercise
price can be paid in cash or in shares of Company Common Stock that have been
held by the employee for at least six months. The maximum number of shares which
may be granted to a key management employee during any fiscal year is 250,000
shares.

Termination of Stock Option Grants
Options terminate upon termination of employment, except that an
optionee may exercise the option for five years following retirement under the
Company's retirement program or termination of employment for total and
permanent disability. If the employee dies while employed or within five years
of retirement, the option may be exercised within the longer of five years from
the date of retirement or one year from the date of death by any person to whom
the option passes by will or the laws of descent and distribution. In all
instances, however, the option must be exercised during the term established at
the time of grant.

Share Units
The Committee will select the employees to be granted Share Units,
determine the number of such units to be granted, establish the date of grant,
and determine the time and conditions under which the Share Units would become
vested. The Company shall record in a separate account set up for each grantee
the number of Share Units awarded. Whenever the Company pays a cash dividend or
makes any cash distribution with respect to issued and outstanding Company
Common Stock it will promptly pay to each grantee of Share Units the fair value
of such dividends or distributions in respect to the number of Share Units held
on a one-to-one basis. Whenever the Company pays a Common Stock Dividend or
makes a Common Stock distribution with respect to issued and outstanding Company
Common Stock that does not result in an adjustment of Share Units, it will
promptly pay to each grantee a number of Dividend Units as shall be allocable to
the Share Units held on a one-to-one basis. If any dividends on Common Stock are
payable in a form other than cash, the applicable Dividend Units for the
Qualified Share Units shall not be currently distributable to the grantee, but
shall be reinvested in additional Share Units that are credited to the grantee's
account, subject to the vesting restrictions applicable to that account.

Vesting of Share Units
Awards of Common Stock will be made to Share Unit grantees within 45
days of vesting. Vesting shall only occur if on the date of vesting the grantee
has continuously been an employee of the Company or its subsidiaries since the
date of award. The Committee, subject to the approval of the Board of Directors,
may cancel in whole or part any grant of Share Units not yet vested if it
determines the grantee is not performing satisfactorily. In the event of death,
total and permanent disability, or retirement of a grantee before vesting, all
Share Units shall automatically become vested.

Qualified Share Units
The Committee, in its discretion, may designate Share Units being
granted to any grantee as "Qualified Share Units" intended to be
"performance-based compensation" as that term is used in section 162 (m) of the
Code. No grantee may receive both Share Units and Qualified Share Units in the
same year. Performance targets applicable to a grant of Qualified Share Units
shall be established by the Committee. Such performance targets shall be
objective and established in writing by the Committee not later than 90 days
after the beginning of the performance period (but in no event after 25% of the
performance period has elapsed) and while the outcome as to the performance
targets is substantially uncertain. The performance targets established by the
Committee shall be based on one or more of the following specific performance
goals: quality, customer satisfaction, profitability, return on sales, return on
equity, return on capital, productivity, net margin as a percentage of revenue,
or debt to capitalization. These goals may be in lieu of or in addition to
vesting requirements that are based on continued employment.

With certain exceptions described below, Qualified Share Units shall
not become vested unless and until the Committee has determined that the
applicable performance target(s) have been attained. To the extent the Committee
exercises discretion in making such a determination, such exercise may not
result in an increase in the amount of the benefit that would otherwise be
provided to the grantee. Should the grantee's employment terminate because of
death or total and permanent disability prior to the end of a performance
period, the grantee's Qualified Share Units shall become vested without regard
to whether the Qualified Share Units would be "performance-based compensation".
If a grantee's employment terminates because of retirement prior to the end of a
performance period, the grantee's Qualified Share Units shall not vest until the
end of the performance period and then only to the extent that vesting would
have occurred if the grantee's retirement had occurred immediately after the end
of the performance period.

Modification and Termination of Plan
The Plan may be terminated at any time or may be modified or amended by
the Board of Directors except that no change shall be made that would disqualify
the Plan from the exemption provided by Rule 16b-3 under the Exchange Act of
1934 (the "Exchange Act") or that would disqualify the options as
"performance-based compensation" under Section 162(m) of the Code.

Taxes
The grant of a non-qualified Stock Option will not result in taxable
income to the employee. The employee will realize ordinary income at the time of
exercise in an amount equal to the excess of the fair market value of the shares
acquired at the time income is realized over the exercise price for those
shares, and generally the Company will be entitled to a corresponding deduction.
The Committee has no present intention to grant incentive Stock Options and has
not done so for the last ten years. However, should the Company decide to award
an Incentive Stock Option in the future, the tax consequences would be as
follows. An employee who has been granted an Incentive Stock Option will not
realize taxable income and the Company will not be entitled to a deduction at
the time of the grant or exercise of such option. If the employee makes no
disposition of shares acquired pursuant to an incentive stock option within two
years from the date of grant of such option, or within one year of the transfer
of the shares to such employee, any gain or loss realized on a subsequent
disposition of such shares will be treated as a long-term capital gain or loss.
Under such circumstances, the Company will not be entitled to any deduction for
Federal income tax purposes. If the foregoing holding period requirements are
not satisfied, the employee will generally realize ordinary income at the time
of disposition in an amount equal to the lesser of (i) the excess of the fair
market value of the shares on the date of exercise over the option price or (ii)
the excess of the amount realized upon disposition of the shares, if any, over
the option price, and the Company will be entitled to a corresponding deduction.
A grant of Share Units will not result in any taxable income. However, vesting
of the Share Units and receipt of Common Stock by an employee will result in
taxable compensation and generally the Company will be entitled to a
corresponding deduction. Federal income tax laws are complex and subject to
change and interpretation; their applications may vary in individual cases.

Change of Control
The Committee shall have the right, in its sole discretion, to include
with respect to any grant, provisions accelerating any vesting of such grant
upon a Change of Control as defined under other Company plans subject to
securities law restrictions. Such acceleration rights may be included as part of
the agreement relating to such grants or may be included at any time thereafter.

Transferability
Neither Stock Options nor Share Units are transferable other than by
the laws of descent and distribution or by will. Stock Options may be exercised
during his or her lifetime only by the employee to whom they are granted.

USE OF PROCEEDS

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.

DESCRIPTION OF CAPITAL STOCK

Common Stock
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. The
shares offered hereby, upon issuance pursuant to the terms of the Plan, will be
fully paid and non-assessable. There is no charter restriction on the repurchase
by the Company of shares of its own stock.

INCORPORATION OF DOCUMENTS BY REFERENCE
AND AVAILABLE INFORMATION

The following documents or portions of documents, previously filed with
the Securities and Exchange Commission, (the "Commission") are incorporated
herein by reference:

(1) The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996 (file No. 1-4957).

(2) The Company's Annual Report on Form 10-K for the year ended
December 31, 1995.

(3) Description of Preferred Share Purchase Rights included in the
Registration Statement on Form 8-A filed August 1, 1986 and
Forms 8 & 8-K filed July 6, 1989 (File No. 1-4957).

(4) Description of Preferred Share Purchase Rights included in the
Registration Statement on Forms 8-A and
8-K filed June 24, 1996 (File No. 1-4957).

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 for
reports and for additional information about the Plan and its administration
should be directed to the Secretary, Nalco Chemical Company, One Nalco Center,
Naperville, Illinois 60563-1198 (telephone number (708) 305-1000).

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, 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, 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 and
the Chicago Stock Exchanges on which the Common Stock of the Company is listed.

shared\sec\escp.doc

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1 Incorporated herein by reference from the Registrant's Form 10-K for the year
ended 1987.
2 Incorporated herein by reference from the Registrant's Form 10-K for the year
ended 1991.
3 Incorporated herein by reference from the Registrant's Form 8-K dated May 15,
1989.
4 Incorporated herein by reference from the Registrant's Form 8-K dated June 24,
1996.

Exhibit (23.2)

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 2, 1996, which appears on
page 13 of the 1995 Annual Report to Shareholders of Nalco Chemical Company,
which is incorporated by reference in Nalco Chemical Company's Annual Report on
Form 10-K for the year ended December 31, 1995. We also consent to the
incorporation by reference of our report on the Financial Statement Schedule,
which appears on page 10 of such Annual Report on Form 10-K.

/S/ Price Waterhouse LLP
Price Waterhouse LLP

Chicago, Illinois
June 20, 1996

Exhibit No. 5

June 27, 1996

Securities and Exchange Commission
450 5th Street N.W.
Judiciary Plaza
Washington, D.C. 20549

Ladies and Gentlemen:

I am representing Nalco Chemical Company (the "Company") in connection
with the registration under the Securities Act of 1933 of 8,000,000 shares of
common stock, par value $0.1875 per share ("Common Stock") of the Company,
issuable from time to time pursuant to the Company's Employee Stock Compensation
Plan (the "Plan"). In connection therewith, I have examined or am otherwise
familiar with such documents and instruments as I have deemed necessary for the
purposes of this opinion. Based upon the foregoing, I am of the opinion that the
shares authorized for issuance under the Plan have been duly authorized and when
issued pursuant to the Plan participants will be legally issued, fully paid and
non-assessable shares of Common Stock.

I hereby consent to the filing of this opinion as an exhibit to the
subject Registration Statement.

Very truly yours,

/s/ S. J. Gioimo
S. J. Gioimo
Corporate Secretary and Attorney

SJG/pad