UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934

Date of Report:   May 10, 2005

NALCO HOLDING COMPANY

Delaware     011-32342       16-1701300
(State of Incorporation)   (Commission File Number)   (IRS Employer Identification Number)

1601 W. Diehl Rd., Naperville, IL   60563

630-305-1000

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o  
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240 240.14a-12)
o  
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o  
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.13e-4(c))


Item 1.01   Entry into a Material Definitive Agreement

A.    At its meeting on May 5, 2005, the Compensation Committee of Nalco Holding Company took the following actions:

1.  
Approved a salary increase for 2005 of 4.6% ($11,000) for Louis L. Loosbrock, Group Vice President and President of the Pacific Division. Mr. Loosbrock’s annual salary for 2005 will be $251,000.

2.  
Adopted the Nalco Company Supplemental Profit Sharing Plan. This plan allows contributions from eligible participants, including the Company’s named executive officers, that exceed the maximum amount permitted to be made to the Company’s tax-qualified retirement plan, the Nalco Company Profit Sharing and Savings Plan. This supplemental plan includes provisions designed to comply with the new requirements of Section 409A of the Internal Revenue Code for non-qualified deferred compensation. The Supplemental Profit Sharing Plan is attached as an exhibit.

3.  
Approved an amendment to an executive death benefit policy that permits executive officers to elect an increase in their benefit under this policy in lieu of some or all of an annual salary increase. Although the Company is contractually liable for payment of the death benefit under this policy, the Company protects against this risk by purchasing life insurance policies on the lives of the participating individuals. The amount of the increase of the death benefit for a given electing employee with respect to the amount of foregone salary is determined by the insurance company from which the Company is purchasing the policy and is based on the underwriters’ assessment of the risk of insuring that individual. A copy of the Death Benefit Agreement form and Addendum to this form is attached as an exhibit.
4.  
Approved the addition of two positions—Senior Product Managers and Technical Managers—to the Nalco Company Management Incentive Plan, incorporated by reference from Exhibit 99.1 on Form 8-K of Nalco Holding Company filed on March 1, 2005 (File No. 001-32342). The addition of those employees holding one of these two positions will increase the total number of eligible employees by approximately 5% (from approximately 600 employees including named executive officers to 630 employees) and is estimated to increase the overall projected compensation payable under the plan by less than 5%.

B.    On May 9, 2005, the Compensation Committee of Nalco Holding Company approved the execution of a Change of Control Employment Agreement, attached, for Chief Executive Officer William H. Joyce. This Agreement was anticipated by Dr. Joyce’s previously executed Employment Agreement.

 
Item 9.01   Financial Statements and Exhibits

(c) Exhibits

99.1  
Supplemental Profit Sharing Plan
99.2  
Death Benefit Agreement and Addendum to Death Benefit Agreement
99.3  
Change of Control Employment Agreement


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned.



                 NALCO HOLDING COMPANY

                 /s/ Stephen N. Landsman
                 Secretary

Date: May 10, 2005






NALCO COMPANY

SUPPLEMENTAL PROFIT SHARING PLAN
 
TABLE OF CONTENTS


ARTICLE I       INTRODUCTION
1.1.       Adoption and Effective Date
1.2.       Purpose

ARTICLE II       DEFINITIONS AND CONSTRUCTION
2.1.       Definitions
2.2.       Gender and Number; Headings
2.3.       Incorporation of the Qualified Plan

ARTICLE III       PARTICIPATION
3.1.       Participation

ARTICLE IV       MAINTENANCE OF ACCOUNTS
4.1.       Accounts
4.2.       Profit Sharing Credits
4.3.       Earnings Credits
4.4.       Vesting Upon Retirement, Death or Disability
4.5.      Vesting Upon Other Termination of Employment
4.6.      Participant Statements

ARTICLE V       DISTRIBUTION OF ACCOUNTS
5.1.      Form of Distributions
5.2.       Timing of Distributions
5.3.       Offset for Amounts Received Under Other Arrangements

ARTICLE VI       ADMINISTRATION
6.1.       Administration
6.2.       Claims Procedure
6.3.       Finality of Determination
6.4.       Expenses
6.5.       Indemnification and Exculpation

ARTICLE VII       FUNDING OF THE PLAN
7.1.       Funding

ARTICLE VIII       MERGER, AMENDMENT, AND TERMINATION
8.1.       Merger, Consolidation, or Acquisition
8.2.       Amendment and Termination

ARTICLE IX       ADOPTION BY AFFILIATED COMPANIES
9.1.       Adoption Procedure
9.2.       Withdrawal of Participating Employer

ARTICLE X       GENERAL PROVISIONS
10.1.       Nonalienation
10.2.      Effect on Other Benefit Plans
10.3.       Employer-Employee Relationship
10.4.       Incompetence
10.5.      Binding on Employer, Participants and Their Successors
10.6.      Tax Liability
10.7.       Severability
10.8.       Applicable Law


 


NALCO COMPANY
SUPPLEMENTAL PROFIT SHARING PLAN

ARTICLE I

INTRODUCTION
1.1.   Adoption and Effective Date

Nalco Company (the “Company”) hereby establishes the Nalco Company Supplemental Profit Sharing Plan (the “Plan”), effective May 1, 2005, in order to provide supplemental retirement benefits to certain employees of the Company whose benefits under the tax-qualified Nalco Company Profit Sharing and Savings Plan (the “Qualified Plan”) are limited by the application of Sections 401(a)(17) and 415(c) of the Internal Revenue Code of 1986, as amended (the “Code”). The Plan is intended to comply with the requirements of Code Section 409A.

1.2.   Purpose

The purpose of the Plan is to provide Eligible Employees with supplemental retirement benefits that are primarily designed to provide benefits that would be payable to such individuals under the Qualified Plan if benefits under the Qualified Plan were determined without regard to the limitations and restrictions under Code Sections 401(a)(17) and 415(c). That portion of the Plan that provides benefits limited solely by the application of Code Section 415(c) is intended as a separate unfunded plan that meets the requirements of an “excess benefit plan” as described in Section 3(36) of ERISA. The remaining portion of the benefits provided by this Plan is intended as a separate unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of Section 201(2) of ERISA with the intent that it be exempt from the relevant requirements of Title I of ERISA. This Plan is not intended to satisfy the qualification requirements of Code Section 401.

ARTICLE II

DEFINITIONS AND CONSTRUCTION
2.1.   Definitions

Where the following capitalized words and phrases appear in this Plan, they shall have the meaning set forth below, unless the context clearly requires a different meaning:

(a)   “ Account ” means the accounts maintained by the Company and EBPAC for each Participant that reflects the Participant’s accrued benefit under the Plan.

(b)   “ Affiliated Company ” means (a) any corporation which together with the Company is a member of a “controlled group” of corporations (as defined in Code Section 414(b)); (b) any organization which together with the Company is under “common control” (as defined in Code Section 414(c)); (c) any organization which together with the Company is an “affiliated service group” (as defined in Code Section 414(m)); and (d) any organization required to be aggregated with the Company pursuant to Code Section 414(o).
 

(c)   “ Beneficiary ” means the individual, individuals, trust or other entity designated to receive the Participant’s benefits upon the death of the Participant pursuant to the terms of the Qualified Plan.

(d)   “ Code ” means the Internal Revenue Code of 1986, as amended, and the regulations issued thereunder.

(e)   “ Disabled ” means a Participant who (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of a Participating Employer.

(f)   “ EBPAC ” means the “Nalco Company Employee Benefit Plan Administration Committee,” which is responsible for the administration of the Qualified Plan and the Plan.

(g)   “ Effective Date ” means May 1, 2005.

(h)   “ Eligible Employee ” means an employee of a Participating Employer who is eligible to participate in the Qualified Plan at any relevant date.

(i)   “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations issued thereunder.

(j)   “ Participant ” means an Eligible Employee who becomes a participant in the Plan as provided in Section 3.1.

(k)   “ Participating Employer ” means the Company and each Affiliated Company that has elected to become a Participating Employer under this Plan as provided in Article IX.

(l)   “ Plan ” means the “Nalco Company Supplemental Profit Sharing Plan” as set forth herein and as the same may be amended from time to time.

(m)   “ Plan Year ” means the calendar year.

(n)   “ Profit Sharing Credits ” means the amounts credited to a Participant’s Account pursuant to Section 4.2.

(o)   “ Qualified Plan ” means the Nalco Company Profit Sharing and Savings Plan, as amended and restated effective as of January 1, 2004.
 

(p)   “ Retirement Date ” means the date on which a Participant qualifies for early or normal retirement benefits under the Nalco Company Retirement Income Plan.

(q)   “ Termination of Employment ” means a Participant’s separation from service (within the meaning of Code Section 409A) with the Company or an Affiliated Company for any reason.
 
2.2.   Gender and Number; Headings

Except when otherwise indicated by the context, any masculine terminology when used in this Plan shall also include the feminine gender, and the definition of any term in the singular shall also include the plural. Headings of Articles and Sections herein are included solely for convenience, and if there is any conflict between such headings and the text of the Plan, the text shall control.

2.3.   Incorporation of the Qualified Plan

The Qualified Plan is hereby incorporated by reference into and shall form a part of this Plan as fully as if set forth herein. Any amendment made to the Qualified Plan shall also be incorporated by reference into and form a part of this Plan, as of the effective date of such amendment. The Qualified Plan, whenever referred to in this Plan, shall mean the Qualified Plan as amended, and as it exists as of the date any determination is made of benefits payable under this Plan.

ARTICLE III

PARTICIPATION
3.1.   Participation

Each Eligible Employee shall become a Participant in the Plan as of the first date on which contributions made on his behalf to the Qualified Plan are limited by reason of the application of Code Section 401(a)(17) or 415(c), or the successors to such Sections. Notwithstanding any other provision of this Plan to the contrary, if EBPAC, in its sole discretion, determines that participation by any Participant shall cause this Plan to be subject to Part 2, 3 or 4 of Subtitle B of Title I of ERISA, EBPAC shall have the right, in its sole discretion, (i) to prevent the Participant from accruing any additional benefits under the Plan, and (ii) to the extent permitted by Code Section 409A, to immediately distribute the Participant’s entire Account balance.

ARTICLE IV

MAINTENANCE OF ACCOUNTS
4.1.   Accounts  

EBPAC (or its designee) shall establish an Account for each Participant who is entitled to receive a Profit Sharing Credit pursuant to Section 4.2. In its sole discretion, EBPAC may credit any Participant’s Account with an opening balance equal to such amount as EBPAC may determine to provide such Participant with the benefit that he would have accrued under the Plan if it had been implemented on a date prior to the Effective Date. Such Account shall be adjusted to reflect credits pursuant to this Article IV and distributions and forfeitures pursuant to Article V. EBPAC may, from time to time, assess reasonable service charges against Participants’ Accounts to defray costs associated with the implementation and administration of the Plan. Distributions shall be charged against Accounts on the dates on which the distributions are made and forfeitures shall be charged against Accounts on the dates on which the Participants incur a Termination of Employment.
 
 
4.2.   Profit Sharing Credits

As of the last day of each Plan Year, the Company shall credit each Participant’s Account with a Profit Sharing Credit equal to:

(i)   The amount of profit sharing contributions that would have been allocated to the Participant’s account under the Qualified Plan for such Plan Year if such contributions were calculated without regard to the limitations imposed by Code Sections 401(a)(17) and 415(c); minus

(ii)   The amount of profit sharing contributions actually allocated to the Participant’s account under the Qualified Plan for such Plan Year.
 
4.3.   Earnings Credits  

EBPAC shall determine a rate of return to be applied to each Participant’s Account. The rate established by EBPAC shall be based on such factors as EBPAC deems appropriate. Such rate of return shall be credited to Participants’ Accounts as of the last day of each Plan Year or as of such other date or dates as EBPAC shall determine.
 
4.4.   Vesting Upon Retirement, Death or Disability  
 
A Participant shall become 100 percent vested in his Account if (i) he incurs a Termination of Employment as a result of retirement on or after his Retirement Date or death, or (ii) he becomes Disabled.
 
4.5.   Vesting Upon Other Termination of Employment  

Except as otherwise provided in Section 4.4, a Participant’s vested percentage in his Account shall be equal to his vested percentage in his Profit Sharing Account under the Qualified Plan. The portion of a Participant’s Account that is not fully vested pursuant to Section 4.4 or this Section 4.5 shall be forfeited on the date of the Participant’s Termination of Employment.
 
4.6.   Participant Statements

A written statement indicating the total amount credited to a Participant’s Account as of the last day of the Plan Year shall be furnished to the Participant as soon as practicable after the end of each Plan Year.
 
 
 
ARTICLE V

DISTRIBUTION OF ACCOUNTS
5.1.   Form of Distributions

A Participant’s Account shall be distributed to the Participant, or to his Beneficiary in the event of his death, in the form of a single lump-sum cash payment.
 
5.2.   Timing of Distributions

A Participant’s Account shall be distributed as soon as administratively practicable following the earliest of: (i) the date that is six (6) months after the date of a Participant’s Termination of Employment for reasons other than death, (ii) the date of the Participant’s death, or (iii) the date a Participant becomes Disabled.
 
5.3.   Offset for Amounts Received Under Other Arrangements  
Any benefits which a Participant or the Participant’s Beneficiary is entitled to receive under this Plan shall be offset by the benefit, if any, that such recipient is entitled to receive under any other plan, agreement or arrangement with a Participating Employer that is intended to provide such recipients with benefits that cannot be provided under the Qualified Plan because of the limitations set forth in Code Sections 401(a)(17) and 415(c).
 
ARTICLE VI

ADMINISTRATION
6.1.   Administration

This Plan shall be administered by EBPAC. EBPAC shall be the “named fiduciary” of the Plan (within the meaning of Section 402(a)(3) of ERISA) and the “administrator” of the Plan (within the meaning of Section 3(16)(A) of ERISA). EBPAC may assign some of its duties hereunder to officers or other management employees of the Company. EBPAC shall administer this Plan in a manner consistent with the administration of the Qualified Plan, except that this Plan shall be administered as an unfunded plan which is not intended to meet the qualification requirements of Code Section 401. EBPAC shall have the   same rights and authority granted to it under the Qualified Plan, which shall include the full power, discretion and authority to interpret, construe and administer this Plan. EBPAC shall establish and maintain such accounts or records as EBPAC may from time to time consider necessary.

6.2.   Claims Procedure

To the extent an expected benefit under this Plan is subject to ERISA, a Participant or Beneficiary who is denied all or a portion of such benefit for any reason may file a claim with EBPAC. Claims for benefits under this Plan shall be administered in accordance with the claims procedures contained in the Qualified Plan.
 
 
6.3.   Finality of Determination

The determination of EBPAC as to any disputed questions arising under this Plan, including questions of construction and interpretation, shall be final, binding, and conclusive upon all persons.

6.4.   Expenses

The expenses of administering this Plan shall be borne by the Participating Employers in the proportions determined by EBPAC.

6.5.   Indemnification and Exculpation

The members of EBPAC and its agents, and the officers, directors, employees and agents of the Company or any other Participating Employer, shall be indemnified and held harmless by the Participating Employers against and from any and all loss, cost, liability, or expense that may be imposed upon or reasonably incurred by them in connection with or resulting from any claim, action, suit, or proceeding to which they may be a party or in which they may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by them in settlement (with the Company’s written approval) or paid by them in satisfaction of a judgment in any such action, suit, or proceeding. The foregoing provision shall not be applicable to any person if the loss, cost, liability, or expense is due to such person’s gross negligence or willful misconduct.


ARTICLE VII

FUNDING OF THE PLAN
7.1.   Funding

Nothing contained herein shall require or be deemed to require the Company to segregate, earmark or otherwise set aside any funds or other assets to provide for any payments made hereunder. Benefits hereunder shall be paid from assets which shall continue, for all purposes, to be part of the general, unrestricted assets of the Company and its Affiliated Companies. The obligations of the Company hereunder shall be an unfunded and unsecured promise to pay money in the future. However, the Company may establish one or more trusts to assist in meeting its obligations under the Plan, the assets of which shall be subject to the claims of the Company’s general creditors. No current or former Participant, Beneficiary or other person, individually or as a employee of a group, shall have any right, title or interest in any account, fund, grantor trust, or any asset that may be acquired by the Company in respect of its obligations under the Plan (other than as a general creditor of the Company with an unsecured claim against its general assets).
 
 
ARTICLE VIII

MERGER, AMENDMENT, AND TERMINATION
8.1.   Merger, Consolidation, or Acquisition

In the event of a merger, consolidation, or acquisition where a Participating Employer is not the surviving organization, unless the successor or acquiring organization shall elect to continue and carry on the Plan, this Plan shall terminate with respect to such Participating Employer, all benefits accrued to date shall become fully vested and no additional benefits shall accrue for the Participants of such organization. To the extent permitted by Code Section 409A, unpaid benefits shall be paid upon the termination of the Plan with respect to such Participants.

8.2.   Amendment and Termination

EBPAC may amend or terminate the Plan at any time and in any manner, provided that no such amendment or termination may reduce the balance in any Participant’s Account. Such actions by EBPAC shall be binding upon all other Participating Employers. In addition, this Plan shall automatically terminate at the time of the termination of the Qualified Plan. To the extent permitted by Code Section 409A, upon termination of the Plan, EBPAC may, in its discretion, direct early distribution of all Participants’ Accounts.

ARTICLE IX

ADOPTION BY AFFILIATED COMPANIES
9.1.   Adoption Procedure

With the consent of the Company, any other organization which satisfies the definition of Affiliated Company under the Qualified Plan and this Plan and which is eligible by law to do so, may adopt this Plan for the benefit of its Eligible Employees who are or who become participants under the Qualified Plan, on express condition that the Company assumes no liability as a result of any such adoption of this Plan by any other organization. Such other organization may adopt this Plan by

(a)   executing an adoption instrument adopting the Plan, and agreeing to be bound as a Participating Employer by all the terms, provisions, conditions, and limitations of the Plan; and

(b)   submitting all information required by the Company with reference to employees in its employment eligible for participation in the Plan.

The adoption instrument shall specify the effective date of such adoption of the Plan and shall become, as to such organization and persons in its employment, a part of this Plan. Any such adoption instrument may be in any form as recognized by the Company, including resolutions as may be adopted by the governing body of such Participating Employer. The Participating Employers under the Plan may be listed in an Appendix attached to the end of the Plan document.

9.2.   Withdrawal of Participating Employer
Any Participating Employer may withdraw from the Plan by giving 30 days’ notice in writing of its intention to withdraw to the Company, unless a shorter notice shall be agreed to by the Company.
 

ARTICLE X

GENERAL PROVISIONS
10.1.   Nonalienation

No benefit payable at any time under the Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge, attachment, garnishment, or encumbrance of any kind (including pursuant to a qualified domestic relations order), and shall not be subject to or reached by any legal or equitable process (including execution, garnishment, attachment, pledge, or bankruptcy) in satisfaction of any debt, liability, or obligation, prior to receipt. Any attempt to alienate, sell, transfer, assign, pledge, or otherwise encumber any such benefit, whether presently or thereafter payable, shall be void. Notwithstanding the foregoing provisions of this Section 10.1, no benefit amount payable under the Plan shall be payable until and unless any and all amounts representing debts or other obligations owed to the Company or other Participating Employer by the Participant with respect to whom such amount would otherwise be payable shall have been fully paid.

10.2.   Effect on Other Benefit Plans

Amounts credited or paid under this Plan shall not be considered to be compensation for the purposes of the Qualified Plan or any other retirement plans maintained by a Participating Employer. The treatment of such amounts under other employee benefit plans shall be determined pursuant to the provisions of such plans.

10.3.   Employer-Employee Relationship

The establishment and operation of this Plan shall not be construed as conferring any legal or other rights upon any employee or any person for a continuation of employment, nor shall it interfere with the rights of a Participating Employer to discharge any employee or otherwise act with relation to the employee. A Participating Employer may take any action (including discharge) with respect to any employee or other person and may treat such person without regard to the effect which such action or treatment might have upon such person as a Participant under this Plan.

10.4.   Incompetence

Every person receiving or claiming benefits under the Plan shall be conclusively presumed to be mentally competent until the date on which EBPAC receives a written notice, in a form and manner acceptable to EBPAC, that such person legally vested with the care of such person’s person or estate has been appointed; provided, however, that if EBPAC shall find that any person to whom a benefit is payable under the Plan is unable to care for such person’s affairs because of incompetency, any payment due (unless a prior claim therefor shall have been made by a duly appointed legal representative) may be paid as provided in the Qualified Plan, to the extent permitted by Code Section 409A. Any such payment so made shall be a complete discharge of liability therefor under the Plan.
 

10.5.   Binding on Employer, Participants and Their Successors

This Plan shall be binding upon and inure to the benefit of the Participating Employers, their successors and assigns and the Participants and Beneficiaries, and their heirs, executors, administrators and legal representatives. The provisions of this Plan shall be applicable with respect to each Participating Employer separately, and amounts payable hereunder shall be paid by the Participating Employer of the particular Participant. In the event any Participant becomes entitled to a benefit under the Qualified Plan based on service with more than one Participating Employer, the benefit obligations under this Plan shall be apportioned among such Participating Employers as determined by EBPAC.

10.6.   Tax Liability

A Participating Employer may withhold from a Participant’s salary and/or bonus, or from the Participant’s Account, in a manner determined by the Participating Employer, the Participant’s share of FICA and other employment taxes due with respect to his Account prior to distribution. A Participating Employer may withhold from any distribution of benefits hereunder any federal, state and local income, employment and other taxes required to be withheld by the Participating Employer in connection with such distribution, in amounts and in a manner to be determined in the sole discretion of the Participating Employer.

10.7.   Severability

In the event any provision of this Plan shall be held invalid or illegal for any reason, any illegality or invalidity shall not affect the remaining parts of this Plan, but this Plan shall be construed and enforced as if the illegal or invalid provision had never been inserted, and the Company shall have the privilege and opportunity to correct and remedy such questions of illegality or invalidity by amendment as provided in this Plan.

 
10.8.   Applicable Law

This Plan shall be governed and construed in accordance with the laws of the State of Illinois.
* * * * * * * * * *

IN WITNESS WHEREOF , EBPAC has caused this instrument to be executed by its chairman this ___ day of _____________, 2005, to be effective as of May 1, 2005.

NALCO COMPANY
By:________________________________
Chairman, Employee Benefit Plan
Administration Committee






DEATH BENEFIT AGREEMENT

Employee Name

THIS AGREEMENT , effective MM DD, YYYY, between Nalco Company (hereinafter "Nalco"), a corporation organized and existing under the laws of Delaware, and Employee name (hereinafter "Executive").

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

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

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

ARTICLE I

DEATH BENEFIT

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

If the Executive dies at any time after retirement (meaning he qualifies for retiree health and welfare benefits i.e. - has ten or more years of service with Nalco after age 45), and before reaching 62 years of age, with this Agreement having been in effect at the time of such qualification, Nalco will pay a benefit under this Agreement in an amount equal to Two Hundred Percent (200%) of the Executive's base annual salary as of the date of the Executive's last day of work, to such beneficiary or beneficiaries as the Executive may have designated by filing with Nalco a notice in writing in a form attached hereto as Exhibit A.

If the Executive dies at any time after retirement from employment (as defined in the preceding paragraph) with Nalco and after reaching 62 years of age, with this Agreement having been in effect at the time of retirement, Nalco will pay a benefit under this Agreement in an amount equal to Three Hundred Percent (300%) of the Executive's base annual salary as of the date of the Executive's last day of work, to such beneficiary or beneficiaries as the Executive may have designated by filing a notice in writing in a form attached hereto as Exhibit A.

In the absence of any such designation of beneficiaries, such benefit which is payable will be paid to the Executive's estate. Such benefit which is payable will be paid by Nalco in a lump sum within thirty (30) days following the date of Executive’s death, or within thirty (30) days following the settlement date with the insurance company if a policy is taken out by Nalco, whichever is later. If the termination of the Executive's employment is on account of any occurrence or circumstances other than the Executive's death or retirement after qualifying for retiree health and welfare benefits, no benefit will be payable under this Agreement.
 

ARTICLE II

MISCELLANEOUS PROVISIONS

2.1 Satisfaction of Claim

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

2.2 Amendments/Entire Agreement

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

2.3 Governing Law

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

2.4 Non-Assignable Rights

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

2.5 No Contract of Employment Created

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

 
2.6 Non-Secured Promise

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

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

2.7 Limitations on Benefits

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

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

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

2.8 Administrator

Nalco's Employee Benefit Plan Administration Committee (EBPAC) will be the Administrator under this Agreement. EBPAC may authorize or designate a person or group of persons to fulfill the responsibilities of EBPAC as Administrator. The Administrator (or designee(s)) may employ others to render advice with regard to its responsibilities under this Agreement.

2.9 Claims Procedure

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

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

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

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

Executive


_____________________________
Employee Name


Nalco Company


____________________________

 
 


EXHIBIT A


DESIGNATION OF BENEFICIARY
DEATH BENEFIT AGREEMENT
Nalco Company


Name   ________________________________________________________

I hereby designate   ___________________________________________________

of   _______________________________________________________________
Address
Who is my   _________________________________________________________
Relationship

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

Witness:                                                       Executive:

___________________________                              ____________________________
Witness should not be a beneficiary

 



Dated:     





 

ADDENDUM TO

DEATH BENEFIT AGREEMENT




THIS ADDENDUM AGREEMENT , effective , between Nalco Company (hereinafter "Nalco"), a corporation organized and existing under the laws of Delaware, and (hereinafter "Executive").

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

WHEREAS, the Executive, as a corporate officer, has entered into a Death Benefit Agreement dated ___________ (the “Agreement”) to which this Addendum relates; and

WHEREAS , Nalco will agree to pay to the Executive or the Executive's designees additional benefits under the Agreement in return for Executive waiving any right to a salary increase during _________.

Therefore, Nalco and Executive agree as follows:

Article I, paragraph 1 of the Agreement shall be modified to delete the words “Two Hundred Percent (200%)” in the third line and replace these words with __________.

Article I, paragraph 2 of the Agreement shall be modified to delete the words “Two Hundred Percent (300%)” in the fifth line and replace these words with _______________.

Article I, paragraph 3 of the Agreement shall be modified to delete the words “Three Hundred Percent (300%)” in the fourth line and replace these words with ___________.

Except as indicated in this Addendum, the Agreement shall otherwise remain unchanged.

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



Executive                                   Nalco Company


_________________________         _________________________________
Employee Name                     By:




CHANGE OF CONTROL EMPLOYMENT AGREEMENT

AGREEMENT effective May 10, 2005 between Nalco Holding Company, a Delaware corporation (the “ Company ”) and William H. Joyce, a resident of Connecticut (“ Executive ”).

Executive is a skilled and dedicated employee who has important management responsibilities and talents which benefit the Company. The Company believes that its best interests will be served if Executive is encouraged to remain with the Company or its Subsidiaries. The Company has determined that Executive’s ability to perform Executive’s responsibilities and utilize Executive’s talents for the benefit of the Company, and the Company’s ability to retain Executive as an employee, will be significantly enhanced if Executive is provided with fair and reasonable protection from the risks of a change in control of the Company. Accordingly, the Company and Executive agree as follows:

1.   Defined Terms.

Unless otherwise indicated, capitalized terms used in this Agreement which are defined in Schedule A shall have the meanings set forth in Schedule A.

2.   Effective Date; Term.

This Agreement shall be effective as of May 10, 2005 (the “ Effective Date ”) and shall remain in effect until December 31, 2008 (the “ Term ”). Notwithstanding the foregoing, this Agreement shall, if in effect on the date of a Change of Control, remain in effect for three years following the Change of Control.
 
3.   Change of Control Benefits.

(a)   If Executive’s employment with the Company and its Subsidiaries is terminated at any time within the three years following a Change of Control by the Company and any of its Subsidiaries without Cause or by Executive for Good Reason (the effective date of either such termination hereafter referred to as the “ Termination Date ”), Executive shall be entitled to the payments and benefits provided hereafter in this Section  3 and as set forth in this Agreement. If Executive’s employment by the Company and any of its Subsidiaries is terminated prior to a Change of Control by the Company and any of its Subsidiaries without Cause (i) in connection with or in anticipation of a Change of Control or (ii) at the request of a third party that has taken steps reasonably calculated to effect a Change of Control, Executive shall be entitled to the payments and benefits provided hereafter in Section  3 and as otherwise set forth in this Agreement (offset by any other severance benefits received by Executive, including, without limitation, any severance benefits under the Employment Agreement), and Executive’s Termination Date shall be deemed to have occurred immediately following the Change of Control.

 
(i)
Severance Payments . Within fifteen business days after the Termination Date, the Company shall pay Executive a cash lump sum amount equal to the Severance Multiple times the sum of (x) Executive’s Base Salary and (y) the Bonus Amount.

 
(ii)
Continuation of Employee Benefits . For a period following the Termination Date equal to the lesser of (x) the number of months remaining in the Term and (y) thirty-six months, the Company shall provide Executive and Executive’s spouse and dependents (each as defined under the applicable program) with medical and dental coverage at least equal to those benefits that would have been provided to them in accordance with the applicable program, if Executive’s employment continued during such period (or, if more favorable, to Executive, as in effect generally at any time thereafter with respect to other executive of the Company); provided , however , that if Executive becomes employed by a new employer that provides substantially equivalent medical and dental coverage, continuing medical and dental coverage from the Company shall cease.
 
4.   Gross-Up.
(a)   In the event it shall be determined that any payment, benefit or distribution (or combination thereof) by the Company, any of its affiliates, or one or more trusts established by the Company for the benefit of its employees, to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement, the Employment Agreement or otherwise) (a “ Payment ”) is subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, hereinafter collectively referred to as the “ Excise Tax ”), Executive shall be entitled to receive an additional payment (a “ Gross-Up Payment ”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section  4(a) , if it shall be determined that Executive is entitled to a Gross Up Payment, but that the Payment does not exceed 110% of the greatest amount that could be paid to Executive without giving rise to any Excise Tax (the “ Safe Harbor Amount ”), then no Gross Up Payment shall be made to Executive and the amounts payable under this Agreement shall be reduced so that the Payment, in the aggregate, is reduced to the Safe Harbor Amount. The reduction of the amounts payable hereunder, if applicable, shall be made by first reducing the payments under Section  3 , unless an alternative method of reduction is elected by Executive.

(b)   All determinations required to be made under this Section  4 , including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a nationally recognized accounting firm appointed by the Company and reasonably acceptable to the Executive (the “ Accounting Firm ”) which shall provide detailed supporting calculations both to the Company and Executive within ten business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company; provided that for purposes of determining the amount of any Gross-Up Payment, Executive shall be deemed to pay federal income tax at the highest marginal rates applicable to individuals in the calendar year in which any such Gross-Up Payment is to be made and deemed to pay state and local income taxes at the highest marginal rates applicable to individuals in the state or locality of Executive’s residence and/or place of employment in the calendar year in which any such Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes that can be obtained from deduction of such state and local taxes, taking into account limitations applicable to individuals subject to federal income tax at the highest marginal rates. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section  4 , shall be paid by the Company to Executive five days prior to when to when due (or to the appropriate taxing authority on Executive’s behalf when due). If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall so indicate to Executive in writing. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code, it is possible that the amount of the Gross-Up Payment determined by the Accounting Firm to be due to (or on behalf of) Executive was lower than the amount actually due (“ Underpayment ”). In the event that the Company exhausts its remedies pursuant to Section  4(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
 
 
(c)   Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of any Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the thirty day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive prior to the expiration of such period that it desires to contest such claim, Executive shall (i) give the Company any information reasonably requested by the Company relating to such claim, (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, (iii) cooperate with the Company in good faith in order to effectively contest such claim and (iv) permit the Company to participate in any proceedings relating to such claim; provided , however , that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section  4(c) , the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided , further , that if the Company directs Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive, on an interest-free basis, and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; provided , further , that if Executive is required to extend the statute of limitations to enable the Company to contest such claim, Executive may limit this extension solely to such contested amount. The Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d)   If, after the receipt by Executive of an amount paid or advanced by the Company pursuant to this Section  4 , Executive becomes entitled to receive any refund with respect to a Gross-Up Payment, Executive shall (subject to the Company’s complying with the requirements of Section  4(c) ) promptly pay to the Company the amount of such refund received (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to Section  4(c) , a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of the Gross-Up Payment required to be paid.
 

5.   Other Terminations.

Nothing in this Agreement shall be construed to prevent the Company or any of its Subsidiaries from terminating Executive’s employment for any reason. If Executive is terminated (a) by the Company for Cause, (b) due to Executive’s death or Permanent Disability, (c) due to Executive’s resignation without Good Reason or (d) any termination of employment (x) prior to a Change of Control (other than a termination of employment by the Company without Cause prior to a Change of Control as set forth in Section  3 hereof) or (y) following the third anniversary of a Change of Control, the Company shall have no obligation to make any payments or provide any benefits under this Agreement. Except as expressly set forth in this Agreement, the terms and condition of Executive’s employment, and termination of employment, shall be governed by the terms and conditions of the Employment Agreement.
 
6.   Assignment.

Except as otherwise provided herein, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Company and Executive and their respective heirs, legal representatives, successors and assigns. If the Company shall be merged into or consolidated with another entity, the provisions of this Agreement shall be binding upon and inure to the benefit of the entity surviving such merger or resulting from such consolidation. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by agreement, expressly (other than an assumption that occurs by operation of law ) to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

7.   Withholding.

Notwithstanding any other provision of this Agreement, the Company may, to the extent required by law, withhold applicable federal, state and local income and other taxes from any payments due to Executive hereunder.

8.   Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to conflicts of laws principles thereof.

9.   Notice.

Any notice given hereunder shall be in writing and shall be deemed to have been given when delivered by messenger or courier service (against appropriate receipt), or mailed by registered or certified mail (return receipt requested), addressed as follows:

If to the Company:         Nalco Holding Company
1601 W. Diehl Road
Naperville, Illinois 60563
Attention: General Counsel

If to Executive:   To the most recent address of Executive  set forth in the personnel records of the Company.

 
10.   Entire Agreement; Modification.

This Agreement (and the documents referred to in this Agreement) set forth the entire agreement between the parties with respect to the subject matter referred to in this Agreement and merge and supersede all prior discussions, agreements and understandings of every kind and nature between any of them, and neither party shall be bound by any term or condition other than as expressly set forth or provided for in this Agreement. This Agreement may not be changed or modified except by an agreement in writing, signed by the parties hereto. Except as expressly set forth in the Employment Agreement, nothing in this Agreement shall impair or diminish the rights of Executive under the Employment Agreement.

11.   Counterparts.

This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.



 
IN WITNESS WHEREOF , the parties have executed this Agreement as of the 10 th of May, 2005.

NALCO HOLDING COMPANY


______________________________
By:
Title:



______________________________
EXECUTIVE





Schedule A

CERTAIN DEFINITIONS
 
           As used in this Agreement, and unless the context requires a different meaning, the following terms, when capitalized, have the meaning indicated:

1.   “ Base Salary” means Executive’s annual rate of base salary in effect on the date in question.

2.   “Bonus Amount” means actual Variable Compensation (as defined in the Employment Agreement) paid for the last completed year immediately before the date of termination (or in the case of such termination prior to the payment of Variable Compensation, if any, for 2004, the target Variable Compensation).

3.   “Cause” means a termination based upon a determination that Executive has (a) engaged in serious misconduct in connection with the performance of his duties hereunder, (b) willfully neglected his duties hereunder, or (c) engaged in criminal conduct or other serious misconduct that is likely to be harmful to the business or reputation of the Company; provided, that if the foregoing actions or inactions on the part of Executive are capable of cure, the board or directors of the Company shall give Executive notice of the first occurrence thereof and five business days’ opportunity to cure.

4.   “Change of Control” means the consummation of any transaction (including any merger or consolidation) the result of which is that any Person, other than a Sponsor or an affiliate of a Sponsor, becomes the beneficial owner, directly or indirectly, of (a) more than 50% of the voting securities of the Company or its successor entity or (b) all or substantially all of the assets of the Company or its successor entity.

5.   “Code” means the Internal Revenue Code of 1986, as amended.

6.   “Company” means Nalco Holding Company and, after a Change of Control, any successor or successors thereto.

7.   “Employment Agreement” means the employment agreement between Executive and the Company, dated as of August 3, 2004, as may be amended from time to time.

8.   “Good Reason” means any of the following actions on or after a Change of Control, other than due to Executive’s Permanent Disability or death:

(a)   the assignment to the Executive of any duties materially inconsistent with the Executive’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities, or any material diminution in such position, authority, duties or responsibilities (other than occurring solely as a result of the Company’s ceasing to be a publicly traded entity);

(b)   the failure of the Company to pay or cause to be paid Executive’s Base Salary or Variable Compensation when due or any reduction in Executive’s Base Salary;

(c)   any failure by the Company to comply with and satisfy Section  6 ; or

(d)   the requirement by the Company that Executive’s principal office be relocated to an area that requires Executive to travel more than one hour longer than the   travel time required for Executive to arrive at Executive's current principal office.

9.   “ Permanent Disability” means inability, by reason of any physical or mental impairment, to substantially perform the significant aspects of his regular duties which inability has lasted for six months and is reasonably expected to be permanent.

10.   “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

11.   “Severance Multiple” means the lesser of (1) the number of months remaining in the Term and (2) thirty-six divided by (B) twelve.

12.   “Sponsor” means each of BCP Nalco I LLC, BCP Nalco II LLC, BCP IV, Blackstone Family Investment Partnership IV-A L.P., Blackstone Capital Partners IV-A L.P., GS Nalco LLC, GSCP, GS Capital Partners 2000 Offshore L.P., GS Capital Partners 2000 GmbH & Co. Beteiligungs KG, GS Capital Partners 2000 Employee Fund, L.P., Goldman Sachs Direct Investment Fund 2000, L.P., APV Nalco LLC, AP Nalco LP, Apollo V and Apollo/Nalco Acquisition LLC.

13.   “Subsidiary” means a subsidiary corporation, as defined in Section 424(f) of the Code (or any successor section thereto).