Ecolab 8-K 2007
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 21, 2007
(Exact name of registrant as specified in its charter)
Registrants telephone number, including area code: 651-293-2233
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
(b) Retirement of a Director.
Ulrich Lehner, a director of Ecolab Inc. (the Company), pursuant to notice tendered February 21, 2007, retired as a director of the Company effective February 22, 2007, due to his announced planned retirement under Henkel KGaAs mandatory policy in 2008.
(d) Election of a Director.
Effective February 22, 2007, Ecolabs Board of Directors appointed Hans Van Bylen to the Ecolab Board pursuant to recommendation by the Boards Governance Committee to fill the vacancy created by Ulrich Lehners retirement from the Ecolab Board.
Mr. Van Bylens appointment to the Board was made pursuant to the Stockholders Agreement between Ecolab and Henkel KGaA of Düsseldorf, Germany (Henkel). Under the Stockholders Agreement, Henkel is entitled to designate a number of persons to be nominated for election to the Board proportionate to Henkels shareholding in the Company rounded down to the nearest whole number. Henkel beneficially owns approximately 29% of the Companys outstanding Common Stock and is accordingly entitled to designate three directors. Currently, Messrs. Stefan Hamelmann, Kasper Rorsted and Hans Van Bylen have been elected or appointed to the Board pursuant to designation by Henkel.
A copy of the press release issued by the Company announcing the retirement of Prof. Lehner and the appointment of Mr. Van Bylen is filed as Exhibit (99) to this Form 8-K.
Pursuant to the Stockholders Agreement, Henkels equity ownership in the Company is subject to certain restrictions pertaining to, among other things, Henkels acquisition, transfer and voting rights of our Common Stock. Generally, the Stockholders Agreement terminates when Henkel owns less than two percent of our voting shares. Pursuant to the Stockholders Agreement, Henkel is precluded from acquiring more than 35% of our outstanding Common Stock or from acting, alone or in concert with others, to control or influence the Company.
Henkel may sell its shares of our Common Stock under certain conditions specified in the Stockholders Agreement, subject to our right of first refusal. Any disposition by Henkel of any shares of our Common Stock would be effected in an orderly manner in accordance with the Stockholders Agreement, including our right of first refusal.
Henkel has agreed to vote its shares in the case of election of our directors, certain stockholder proposals, compensation and certain matters pertaining to the independent publicly traded nature of the Company, in accordance with the recommendations or directions of our Board. In all other cases, except with respect to certain strategic transactions, Henkel may vote, at its option, either in accordance with the recommendation of our Board or pro rata in the same manner and proportion that votes of our stockholders (other than Henkel and our officers or directors) have been cast. Any vote with respect to strategic transactions, (for example a disposition, recapitalization, liquidation or consolidation of the Company or other transactions which could reasonably be expected to have a material effect upon Henkels investment in our Common Stock) may be cast at Henkels sole discretion.
In addition, the Stockholders Agreement provides that beginning in 2011 Henkel will be permitted to make proposals to our Board of Directors to acquire all, but not less than all, of our outstanding voting shares at certain times, and under terms and conditions set forth in the Stockholders Agreement.
In addition to the Stockholders Agreement, Ecolab and Henkel are also parties to various toll manufacturing and services agreements, an Intellectual Property Agreement, a Brand License Agreement and an Environmental Agreement. During 2006, Ecolab sold products and services in the amount of approximately $5,726,000 to Henkel and its affiliates, and purchased products and services in the amount of approximately $66,040,000 from Henkel and its affiliates. Ecolab believes its sales to and purchases from Henkel were made in the ordinary course, at arms length, and at prices and on terms customarily available. The payments for products and services include amounts paid to Henkel and its affiliates for administrative services and for products under supply arrangements by our affiliates in approximately 25 countries outside of Europe where we formerly acquired industrial and institutional cleaning and sanitizing businesses from Henkel.
Under the Intellectual Property Agreement, (i) Henkel transferred certain trademarks and patents used by Henkel-Ecolab to Ecolab and Ecolab granted a perpetual royalty-free license back to Henkel to use such transferred intellectual property outside of the cleaning and sanitizing field; and (ii) Henkel granted a perpetual (in a limited number of cases, the license for certain trademarks is limited to five years) royalty-free license to Ecolab to use certain other trademarks, patents and technology used by Henkel-Ecolab which were not transferred to Ecolab. Pursuant to a Brand License Agreement, Henkel granted Ecolab a license for certain Henkel trademarks to use on products for sale to retail customers who sell to both commercial and household end-use customers. Ecolab believes this license agreement was made in the ordinary course, at arms length, and on terms customarily available. Under the Environmental Agreement, Henkel agreed to indemnify Ecolab for certain environmental liabilities associated with the former Henkel-Ecolab.
Item 9.01 Financial Statements and Exhibits.
(99) Ecolab Inc. New Release dated February 23, 2007.
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 hereunto duly authorized.