FoodTable andof Beverage. Food and beverage end-users include dairy plants, dairy farms, breweries, soft-drink and juice bottling plants and other food processors. Contents

FoodTable andof Beverage. Food and beverage end-users include dairy plants, dairy farms, breweries, soft-drink and juice bottling plants and other food processors. Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10–K

¨x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE ANNUAL PERIOD ENDED DECEMBER 31, ~~2009~~2010

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 333-97427

DIVERSEY, INC.

(Exact name of registrant as specified in its charter)

Delaware

39-1877511

(State or other jurisdiction

of incorporation or organization)

(IRS Employer

Identification No.)

8310 16^th Street

Sturtevant, Wisconsin 53177-0902

(Address of Principal Executive Offices, Including Zip Code)

(262) 631-4001

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: None.

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes x¨ No ¨x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨x No x*¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S–K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10–K or any amendment to this Form 10–K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

There is no public trading market for the registrant’s common stock. As of March 54, ~~2010~~2011, there were 24,422 outstanding shares of the registrant’s common stock, $1.00 par value.

DOCUMENTS INCORPORATED BY REFERENCE: None.

* Note: As a voluntary filer not subject to filing requirements, the registrant filed all reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, which would be required to be filed if the registrant were required to file such reports.

INDEX

Section	Topic	Page
	Forward-Looking Statements	i	i
PART I
Item 1	Business	1	1
Item 1A	Risk Factors	12	13
Item 1B	Unresolved Staff Comments	22	24
Item 2	Properties	23	25
Item 3	Legal Proceedings	24	26
Item 4	~~Reserved~~Removed ~~for future use by the Securities~~ and ~~Exchange Commission (“SEC”)~~Reserved	24	26
PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25	27
Item 6	Selected Financial Data	25	27
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30	31
Item 7A	Quantitative and Qualitative Disclosures about Market Risk	59	62
Item 8	Financial Statements and Supplementary Data	61	64
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	61	64
Item 9A	Controls and Procedures	61	64
Item 9B	Other Information	62	65
PART III
Item 10	Directors, Executive Officers and Corporate Governance	63	66
Item 11	Executive Compensation	70	73
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	86	90
Item 13	Certain Relationships and Related Transactions, and Director Independence	89	93
Item 14	Principal Accounting Fees and Services	~~102~~	105
PART IV
Item 15	Exhibits, Financial Statement Schedules	~~103~~	106

Unless otherwise indicated, references to “Diversey,” “the Company,” “we,” “our” and “us” in this report refer to Diversey, Inc. and its consolidated subsidiaries.

On March 1, 2010, the Company changed its name from “JohnsonDiversey, Inc.” to “Diversey, Inc,” and our parent, JohnsonDiversey Holdings, Inc., changed its name to “Diversey Holdings, Inc.”

FORWARD-LOOKING STATEMENTS

We make statements in this annual report on Form 10–K that are not historical facts. These “"forward-looking statements”" can be identified by the use of terms such as “may,” “intend,” “might,” “will,” “should,” “could,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “project,” “potential,” or the negative of these terms, and similar expressions. You should be aware that these forward-looking statements are subject to risks and uncertainties that are beyond our control. Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time that may cause our business not to develop as we expect, and it is not possible for us to predict all of them. Factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to, the following:

•

our ability to execute our business strategies;

•

our ability to fully realize the anticipated benefits of the Transactions described herein under “Item 1. Business;”

• our substantial indebtedness and our ability to operate in accordance with the terms and conditions of the agreements governing the ~~new~~ indebtedness incurred pursuant to the Transactions, including the indebtedness under our ~~new~~ senior secured credit facilities, our ~~new~~ senior notes and the ~~new~~ Holdings senior notes;

•

potential conflicts of interest that any of our indirect principal stockholders may have with us in the future;

•

successful operation of outsourced functions, including information technology and certain financial shared services;

•

the vitality of the global market for institutional and industrial cleaning, sanitation and hygiene products and related services and conditions affecting the industry, including health-related, political, global economic and weather-related;

•

restraints on pricing flexibility due to competitive conditions in the professional market;

•

the loss or insolvency of a significant supplier or customer, or the inability of a significant supplier or customer to fulfill its obligations to us;

•

effectiveness in managing our manufacturing processes, including our inventory, fixed assets and system of internal control;

•

our ability and the ability of our competitors to maintain service levels, retain and attract customers, and introduce new products and technical innovations;

•

energy costs, the costs of raw materials and other operating expenses;

•

general global economic, political and regulatory conditions, interest rates, exposure to foreign currency risks and financial market volatility;

•

our ability to maintain our relationships and commercial arrangements with our key affiliates;

•

the loss of, or changes in, executive management or other key personnel, and other disruptions in operations or increased labor costs;

•

the costs and effects of complying with laws and regulations relating to the environment and to the manufacture, storage, distribution and labeling of our products;

•

the occurrence of litigation or claims;

•

tax, fiscal, governmental and other regulatory policies;

•

adverse or unfavorable publicity regarding us or our services;

•

natural and manmade disasters, including acts of terrorism, hostilities, war and other such events that cause business interruptions or affect our markets;

• ~~our~~the ~~ability~~effect toof ~~sustain~~relocating ~~our~~manufacturing ~~brand~~capability ~~equity~~from ~~subsequent to~~ our ~~name~~primary ~~change~~U.S. tomanufacturing ~~“Diversey, Inc.”~~facility;

• the ~~costs and~~ effect of afuture ~~relocation~~acquisitions ofor ~~our~~divestitures ~~primary~~or ~~U.S.~~other ~~manufacturing~~corporate ~~facility~~transactions; and

• the effect of future acquisitions or divestitures or other corporate transactions;

• our ability to successfully execute and complete our restructuring program, including workforce reduction, achievement of cost savings, plant closures and disposition of assets; and

•

the factors listed under “Item 1A.Risk Factors” in this annual report on Form 10-K.

PART I

ITEM 1.

BUSINESS

General

We are an environmentally responsible, leading global marketer and manufacturer of cleaning, hygiene, operational efficiency, appearance enhancing products, and equipment and related services for the institutional and industrial cleaning and sanitation market, which we operate under the ~~names~~name “Diversey~~,” “JohnsonDiversey” and “Johnson Wax Professional~~.”

We sell our products in more than 175 countries through our direct sales force, wholesalers and third-party distributors. Our sales are balanced geographically, with our principal markets being Europe and North America with a strong presence in Japan and an increasing presence in the emerging markets of Asia Pacific and Latin America. For the year ended December 31, ~~2009~~ 2010, we had net sales of $3.1127 billion, of which 5352.70% were from our Europe segment and 2029.41% were from ~~North~~our ~~America~~Americas segment. For a discussion of financial results by segment and by geographical location, see Note 2728 to our consolidated financial statements.

We file annual reports on Form 10–K, quarterly reports on Form 10–Q, current reports on Form 8–K and other information with the Securities and Exchange Commission (“SEC”) pursuant to covenants contained in the indenture governing our senior notes. The public can obtain copies of these materials by visiting the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549, by calling the SEC at 1-800-SEC-0330, or by accessing the SEC’s website at http://www.sec.gov. In addition, as soon as reasonably practicable after these materials are filed with or furnished to the SEC, we make copies available to the public free of charge on or through our website at http://www.diversey.com. The information on our website is not incorporated into, and is not part of, this annual report on Form 10-K.

History and Recent Transactions

We are a privately held business that was incorporated in Delaware in February 1997, under the name S.C. Johnson Commercial Markets, Inc. From February 1997 until November 1999, we were a wholly-owned subsidiary of S.C.Johnson & Son, Inc. (“SCJ”), a leading provider of innovative consumer home cleaning, maintenance and storage products founded by Samuel Curtis Johnson in 1886. In November 1999, we were separated from SCJ in a tax-free spin-off. In connection with the spin-off, Commercial Markets Holdco, ~~Inc.~~LLC, a ~~Delaware~~limited ~~corporation~~liability company that is majority-owned by descendants of Samuel Curtis Johnson (“CMH”), obtained substantially all of the shares of our common stock from SCJ and, in November 2001, contributed those shares to Johnson Professional Holdings, Inc., a wholly-owned subsidiary of CMH.

In May 2002, we acquired the DiverseyLever business, an institutional and industrial cleaning and sanitation business, from Conopco, Inc. (“Conopco”), a wholly-owned subsidiary of Unilever N.V. (“Unilever”). Following the acquisition, we changed our name to “JohnsonDiversey, Inc.” and Johnson Professional Holdings, Inc. changed its name to “JohnsonDiversey Holdings, Inc.” In connection with the acquisition, Unilever acquired a one-third interest in Holdings, and CMH retained the remaining two-thirds interest. At the closing of the acquisition, we entered into a master sales agency agreement (“Prior Agency Agreement”) with Unilever whereby we were appointed Unilever’s exclusive agent to sell its consumer branded products, a business we did not acquire, to institutional and industrial customers. In October 2007, the Prior Agency Agreement with Unilever, which expired in December 2007, was replaced by the “Umbrella Agreement”, which includes: (1) a new sales agency agreement (“New Agency Agreement”) with terms similar to the Prior Agency Agreement, covering Ireland, the United Kingdom, Portugal and Brazil, and (2) a master sub-license agreement, (“License Agreement”) under which Unilever has agreed to grant 31 of our subsidiaries a license to produce and sell professional size packs of Unilever’s consumer brand cleaning products. The entities covered by the License Agreement have also entered into agreements with Unilever to distribute Unilever’s consumer branded products. Except for some transitional arrangements in certain countries, the Umbrella Agreement became effective January 1, 2008, and, unless otherwise terminated or extended, will expire on December 31, 2017.

In June 2006, we completed the sale of one of our former operating segments (the “Polymer Business”), to BASF Aktiengesellschaft (“BASF”).

In June 2006, we completed the sale of one of former business segments (the “Polymer Business”), to BASF Aktiengesellschaft (“BASF”).

On October 7, 2009, we and Holdings entered into a series of agreements to recapitalize our company. The transactions contemplated by these agreements (the “Transactions”) are summarized below. Pursuant to the terms of these agreements, the Transactions consisted of the following:

•

the recapitalization of Holdings’ capital stock pursuant to the Investment and Recapitalization Agreement (the “Investment Agreement”) by and among Holdings, CDR Jaguar Investor Company, LLC (“CD&R Investor”), which is owned by a private investment fund managed by Clayton, Dubilier & Rice, LLC (“CD&R”), CMH and SNW Co., Inc. (“SNW”), which is an affiliate of SCJ, pursuant to which:

(1)

the certificate of incorporation of Holdings was amended and restated at the closing of the Transactions to, among other things, reclassify the common stock of Holdings such that (a) the outstanding class A common stock of Holdings was reclassified as new class A common stock, which have voting rights, and (b) the outstanding class B common stock of Holdings was reclassified as new class B common stock, which do not have voting rights except to the extent required by Delaware law;

(2)

new class A common stock of Holdings representing approximately 45.9% of the outstanding common stock of Holdings (immediately after giving effect to the Transactions and assuming the exercise of the Warrant (described below)) was issued to CD&R Investor and its affiliate, CD&R F&F Jaguar Investor, LLC (together, the “CD&R Investor Parties”), in exchange for approximately $477 million in cash;

(3)

pursuant to the amended and restated certificate of incorporation of Holdings, the shares of outstanding class A common stock of Holdings held by CMH was reclassified, without any action on the part of CMH, as new class A common stock of Holdings representing approximately 49.1% of the outstanding common stock of Holdings (immediately after giving effect to the Transactions and assuming the exercise of the Warrant); and

(4)

new class A common stock of Holdings representing approximately 1.0% of the outstanding common stock of Holdings (immediately after giving effect to the Transactions and assuming the exercise of the Warrant) was issued to SNW in exchange for approximately $9.9 million in cash;

•

the repurchase of all of the common equity ownership interests of Holdings then held by Marga B.V. (“Marga”), which is an affiliate of Unilever, and its affiliates pursuant to the Redemption Agreement (the “Redemption Agreement”) by and among Holdings, the Company, CMH, Unilever, Marga and Conopco, in exchange for:

(1) cash equal to $390.5 million and the settlement of certain amounts ~~owing~~owed by Unilever and its affiliates to Holdings and its affiliates, including the Company, and ~~owing~~owed to Unilever and its affiliates by Holdings and its affiliates, including the Company and CMH; and

(2)

a warrant (the “Warrant”) issued by Holdings to an affiliate of Unilever to purchase shares of new class A common stock of Holdings representing 4.0% of the outstanding common stock of Holdings (immediately after giving effect to the Transactions and assuming the exercise of the Warrant);

• the termination of the then-existing stockholders’ agreement among Holdings, CMH and Marga and all obligations thereunder, other than confidentiality obligations;

•

the termination of the purchase agreement, dated as of November 20, 2001, as amended (the “Acquisition Agreement”), among Holdings, the Company and Conopco, dated as of November 20, 2001, as amended, pursuant to which the Company acquired the DiverseyLever business, and all obligations thereunder, other than certain tax and environmental indemnification rights and obligations;

• the termination of the purchase agreement, dated as of November 20, 2001, as amended (the “Acquisition Agreement”), among Holdings, the Company and Conopco, dated as of November 20, 2001, as amended, pursuant to which the Company acquired the DiverseyLever business, and all obligations thereunder, other than certain tax and environmental indemnification rights and obligations;

•

the entry into a new stockholders agreement (the “Stockholders Agreement”) among CMH, Holdings, the CD&R Investor Parties and SNW;

•

the entry into a registration rights agreement (the “Holdings Registration Rights Agreement”) among CMH, Holdings, the CD&R Investor Parties, SNW, an affiliate of Unilever and the other parties from time to time party thereto;

• following the closing of the Transactions, the entry into new compensation arrangements with the officers and senior management team of Holdings and the Company that ~~will~~ provide for, among other things, the purchase or award of new class B common stock of Holdings and options to purchase new class B common stock of Holdings representing in the aggregate up to approximately 12.0% of the outstanding common stock of Holdings at the closing of the Transactions;

•

the amendment and restatement of certain commercial agreements between SCJ and the Company, including a license to use certain SCJ brand names and technology and a lease with SCJ for our Waxdale manufacturing facility in Sturtevant, Wisconsin, and the amendment of certain commercial agreements between Unilever and the Company; and

•

the refinancing of certain of the Company’s and Holdings’ then-outstanding debt obligations, including:

(1)

the repurchase or redemption by the Company of both series of its then-outstanding 9.625% senior subordinated notes due 2012 and by Holdings of its outstanding 10.67% senior discount notes due 2013;

(2)

the repayment of all outstanding obligations under our then-existing senior secured credit facilities;

(3) the entry into new $1.25 billion senior secured credit facilities (“Senior Secured Credit Facilities”) as fully described in Note 12 to the consolidated financial statements of the Company accompanying this annual report on Form 10-K;

(4) the issuance and sale by the Company of a new series of $400 million of 8.25% senior notes due 2019 (“Diversey Senior Notes”) as fully described in Note 12 to the consolidated financial statements of the Company accompanying this annual report on Form 10-K; and

(5) the issuance and sale by Holdings of a new series of $250 million of 10.50% senior notes due 2020 (“Holdings Senior Notes”) as fully described in Note 12 to the consolidated financial statements of the Company accompanying this annual report on Form 10-K.

The closing of the Transactions occurred on November 24, 2009. On March 1, 2010, as contemplated by the Transactions, the Company changed its name from “JohnsonDiversey, Inc.” to “Diversey, Inc,” and Holdings changed its name from “JohnsonDiversey Holdings, Inc.” to “Diversey Holdings, Inc.”

At the closing of the Transactions, the equity ownership of Holdings, assuming the exercise of the Warrant, was as follows: CMH, 49.1%, CD&R, 45.9%, SNW, 1%, and Unilever, 4%. Both SNW and CMH are majority-owned and controlled, either directly or indirectly, by descendants of Samuel Curtis Johnson. In connection with the Transactions, SNW granted an irrevocable proxy to CMH to vote its common stock of Holdings, which, subject to certain limitations, increased CMH’s voting ownership in Holdings from approximately 49.1% to approximately 50.1% and decreased SNW’s voting ownership Holdings from approximately 1.0% to 0.0%.

As of March 54, ~~2010~~2011, there were 24,422 shares of our common stock outstanding~~. Holdings~~, ~~owns~~ all of which ~~the~~are ~~outstanding shares of our common stock, except for one share~~ owned by ~~SCJ~~Holdings. ~~Pursuant to an agreement with SCJ, we expect to acquire this share in 2010.~~

Business Overview

We are a leading global provider of commercial cleaning, sanitation and hygiene products, services and solutions for food safety and service, food and beverage plant operations, floor care, housekeeping and room care, laundry and hand care. In addition, we offer a wide range of value-added services, including food safety and application training and consulting, and auditing of hygiene and water management. We serve institutional and industrial end-users such as food service providers, lodging establishments, food and beverage processing plants, building service contractors, building managers and property owners, retail outlets, schools and health-care facilities in more than 175 countries worldwide.

We believe that our company is differentiated by our dosing, dispensing and chemical concentrating ~~formulas~~capabilities, as well as a global footprint that reaches a diverse customer base. Working in a highly fragmented industry, we have a balance of direct selling capabilities as well as a global and regional distribution network that we believe reaches ~~thousands of~~ significant end-use customers beyond our direct coverage. We have invested in research that helps us understand our markets, which we believe positions us as an innovator and strong collaborative partner while also deepening our customer relationships and driving growth.

The global sustainability movement is expected to be a long-term driver of growth in our industry, as customers seek products and expertise that reduce their environmental profile while also providing clean, hygienic facilities that reduce the risk of human and food-borne infection. Consistent with this movement, our purpose, which reflects our long-held values, is to protect lives, preserve the earth and transform our industry.

Management estimates that the global market for institutional and industrial cleaning, sanitation and hygiene products and related solutions is approximately $40 billion, of which we had an approximate 8% share based on ~~2009~~2010 net sales. We have geographically diversified sales and we believe that we hold the #1 or #2 market position in each of the three key geographic regions that we serve. For the year ended December 31, ~~2009~~2010, we had net sales of $3.1127 billion and EBITDA of $~~312~~361.27 million. See footnote (42) under “Item 6. Selected Financial Data” for a definition of EBITDA, as well as a reconciliation of EBITDA to the most comparable U.S. Generally Accepted Accounting Principles (“GAAP”) measure.

Our principal executive offices are located at 8310 16th Street, Sturtevant, Wisconsin 53177-0902. Our telephone number is (262) 631-4001.

Operating Segments

~~Our~~As ~~operating~~discussed ~~segments~~in ~~are~~Note ~~defined~~2 ~~according~~to our consolidated financial statements, in June 2008, the Company announced plans to ~~geographic~~reorganize ~~regions~~its operating segments to better address consolidation and globalization trends among its customers and to enable the Company to more effectively deploy resources. Effective January 2010, the Company completed its reorganization from a five region model to the ~~include~~new three region model, having implemented the following:

~~Europe. Our~~• ~~European~~Three ~~segment~~regional ~~had~~presidents ~~$1.670~~were ~~billion~~appointed ofto ~~net~~lead ~~sales~~three in the year ended December 31, 2009, representing approximately 53.7 % of our total net sales during that period. Our European segment consists of operating units across Western Europe, Central and Eastern Europe, Africa and the Middle East. The largest operations comprising this segment are primarily in Western Europe and include the United Kingdom, Italy, France, the Netherlands, Germany, Turkey, Spain and Switzerland. regions;

~~North~~• ~~America. Our~~The ~~North~~three ~~American~~regional ~~segment~~presidents ~~had~~report ~~$636.1~~to ~~million~~the ofCompany’s ~~net~~Chief ~~sales~~Executive inOfficer ~~the year ended December 31~~(“CEO”), ~~2009,~~who ~~representing~~is ~~approximately~~its ~~20.4 %~~chief ofoperating ~~our~~decision ~~total net sales during that period. Our North American segment primarily consists of our operations in the United States and Canada.~~ maker;

~~Japan. Our~~• ~~Japanese~~Financial ~~segment,~~information ~~our~~is ~~third-largest~~prepared ~~segment,~~separately ~~had~~and ~~$306.4~~regularly ~~million~~for each of ~~net sales in~~ the ~~year~~three ~~ended~~regions; ~~December 31, 2009, representing approximately 9.8 % of our total net sales during that period.~~ and

~~Latin~~• ~~America. Our~~The ~~Latin~~CEO ~~American~~regularly ~~segment~~reviews ~~had~~the ~~$252.4~~results ~~million~~ of ~~net~~operations, ~~sales~~manages in the ~~year~~allocation ~~ended December 31, 2009, representing approximately 8.1 %~~ of ~~our~~resources ~~total~~and ~~net~~assesses ~~sales~~the ~~during~~performance ~~that~~of ~~period.~~each ~~Our Latin American segment consists~~ of ~~operating~~these ~~units across South America, Central America, and the Caribbean, with Brazil being our largest operation~~regions.

Prior to the reorganization, the Company’s operations were organized in five regions: Europe/Middle East/Africa (“Europe”), North America, Latin America, Asia Pacific and Japan. The new three region model is composed of the following:

•

The existing Europe region;

~~Asia~~• ~~Pacific. Our~~A ~~Asia~~new ~~Pacific~~Americas ~~segment~~region ~~had~~combining ~~$235.8 million of net sales in~~ the ~~year~~ ~~ended~~former ~~December 31, 2009, representing approximately 7.6 % of our total net sales during that period. This segment consists of operating units across~~ North ~~Asia, South Asia, Australia~~ and ~~New~~Latin ~~Zealand,~~American ~~with~~regions; ~~China~~ and ~~Australia being our largest operations in the region.~~

•

A new Greater Asia Pacific region combining the former Asia Pacific and Japan regions.

Our operating segments are currently defined according to geographic regions and include the following:

Europe. Our European region had $1.626 billion of net sales in the year ended December 31, 2010, representing approximately 52.0 % of our total net sales during that period. Our European region consists of operating units across Western Europe, Central and Eastern Europe, Africa and the Middle East. The largest operations comprising this segment are primarily in Western Europe and include the United Kingdom, Italy, France, the Netherlands, Germany, Turkey, Spain and Switzerland.

Americas. Our Americas region had $910.1 million of net sales in the year ended December 31, 2010, representing approximately 29.1 % of our total net sales during that period. Our Americas region consists of operating units across North America, South America, Central America, and the Caribbean, with United States, Brazil, and Canada being our largest operations in the region.

Greater Asia Pacific. Our Greater Asia Pacific region had $591.7 million of net sales in the year ended December 31, 2010, representing approximately 18.9 % of our total net sales during that period. This region consists of operating units across Japan, North Asia, South Asia, Australia and New Zealand, with Japan, China, India and Australia being our largest operations in the region.

2011 Geographic Realignment. In December 2010, the Company announced a further enhancement of its organizational structure. The new structure provides a focus on the role of emerging markets in our growth objectives, and will consist of four regions reporting to the CEO, as follows:

•

Europe – This region will be comprised of operating units in Western and Eastern Europe and Russia and will no longer include our operations in Turkey, Africa and Middle East countries. Europe will continue to be our largest region.

•

Americas – The operating units in this region will remain unchanged.

•

Asia Pacific, Africa, Middle East, Turkey (“APAT”) – This region will be comprised of our operations in Asia Pacific, Africa, Middle East, Turkey and the Caucasian and Asian Republics. This region will no longer include Japan.

•

Japan – Japan becomes a stand-alone region.

The implementation of the new structure is currently in progress. Regional presidents for each of the four regions have been appointed and are currently transitioning. The Company will continue to report its operating segments under the current three region model until the new management, operating, and financial reporting structures are effectively in place, which currently is expected to be completed later in our 2011 fiscal year.

Products and Services

As the nature of our business is generally similar across our geographic regions, the following description of our business and competitive environment is intended to be representative of all our regions unless specifically stated otherwise.

We offer a wide range of products and services designed primarily for use in five application categories: food service, food and beverage processing, floor care, restroom/other housekeeping and laundry. Many of our products are consumable and require periodic replacement, which generates recurring revenue and helps provide stability in our business.

Our enduring commitment to sustainable business practices motivates us to find ways to help our customers make their own businesses more sustainable and profitable. Our extensive suite of products, services and solutions improves our customers’ operational efficiency as well as their cleaning, sanitizing and hygiene results, which we believe assists them in protecting their brands. We also help our customers achieve ~~the~~their ~~increasingly prevalent~~ goals of reducing waste, energy and water consumption, and are able to provide documented analysis of the cost and resource savings they can achieve by implementing our solutions.

Food Service. Food service products remove soil and eliminate microbiological contamination from food contact surfaces. Our food service products include chemicals for washing dishes, glassware, flatware, utensils and kitchen equipment; dish machines; pre-rinse units; dish tables and racks; food handling and storage products; and safe floor systems and tools. We also manufacture and supply kitchen cleaning products, such as general purpose cleaners, lime scale removers, bactericides/disinfectants, detergents, oven and grill cleaners, general surface degreasers, floor cleaners and food surface disinfectants. In addition, we provide well-documented methods for various cleaning and hygiene programs.

Food and Beverage Processing. We offer detergents, cleaners, sanitizers and lubricants, as well as cleaning systems, electronic dispensers and chemical injectors for the application of chemical products and improvement of operational efficiency. We also offer gel and foam products for manual open plant cleaning, acid and alkaline cleaners and membrane cleaning products. In addition, we provide consulting services in the areas of food safety, water and energy use reduction and quality management.

Floor Care. We manufacture a broad range of floor care products and systems, including finishes, buffable waxes, cleaners, degreasers, polishes, sealers and strippers for all types of flooring surfaces, including vinyl, terrazzo, granite, concrete, marble, linoleum and wood. We also provide a full range of carpet cleaners, such as extraction cleaners and shampoos; carpet powders; treatments, such as pre-sprays and deodorizers; and a full line of carpet spotters. Our range of products also includes carpet cleaning and floor care machines, as well as utensils and tools, which support the floor cleaning and maintenance process.

Restroom/Other Housekeeping. We offer a fully integrated line of products and dispensing systems for hard surface cleaning, disinfecting and sanitizing, hand washing and air deodorizing and freshening. Our restroom care and other housekeeping products include bowl and hard surface cleaners, hand soaps, sanitizers, air care products, general purpose cleaners, disinfectants and specialty cleaning products.

Laundry. We offer detergents, stain removers, fabric conditioners, softeners and bleaches in liquid, powder and concentrated forms to clean items such as bed linen, clothing and table linen. Our range of products covers requirements of fabric washing from domestic-sized machines in small hotels to continuous batch washers at on-premise laundries. We also offer customized washing programs for different levels and types of soils, a comprehensive range of dispensing equipment and a selection of process control and management information systems.

Food Service. Food service products remove soil and address microbiological contamination on food contact surfaces. Our food service products include chemicals for washing dishes, glassware, flatware, utensils and kitchen equipment; dish machines; pre-rinse units; dish tables and racks; food handling and storage products; and safe floor systems and tools. We also manufacture and supply kitchen cleaning products, such as general purpose cleaners, lime scale removers, bactericides/disinfectants, detergents, oven and grill cleaners, general surface degreasers, floor cleaners and food surface disinfectants. In addition, we provide well-documented methods for various cleaning and hygiene programs.

Food and Beverage Processing. We offer detergents, cleaners, sanitizers and lubricants, as well as cleaning systems, electronic dispensers and chemical injectors for the application of chemical products and improvement of operational efficiency and sanitation. We also offer gel and foam products for manual open plant cleaning, acid and alkaline cleaners and membrane cleaning products. In addition, we provide consulting services in the areas of food safety, water and energy use reduction and quality management.

Floor Care. We manufacture a broad range of floor care products and systems, including finishes, waxes, cleaners, degreasers, polishes, sealers and strippers for all types of flooring surfaces, including vinyl, terrazzo, granite, concrete, marble, linoleum and wood. We also provide a full range of carpet cleaners, such as extraction cleaners and shampoos; carpet powders; treatments, such as pre-sprays and deodorizers; and a full line of carpet spotters. Our range of products also includes carpet cleaning and floor care machines, as well as utensils and tools, which support the cleaning and maintenance process.

Restroom/Other Housekeeping. We offer a fully integrated line of products and dispensing systems for hard surface cleaning, disinfecting and sanitizing, hand washing and air deodorizing and freshening. Our restroom care and other housekeeping products include bowl and hard surface cleaners, hand soaps, sanitizers, air care products, general purpose cleaners, disinfectants and specialty cleaning products.

Laundry. We offer detergents, stain removers, fabric conditioners, softeners and bleaches in liquid, powder and concentrated forms to clean items such as bed linen, clothing and table linen. Our range of products covers requirements of fabric care from domestic-sized machines in small lodging facilities to washers in commercial laundry facilities. We also offer customized washing programs for different levels and types of soils, a comprehensive range of dispensing equipment and a selection of process control and management information systems.

End-Users and Customers

We offer our products directly or through third-party distributors to end-users in seven sectors—food service, lodging, retail, health care, building managers/service contractors, food and beverage and other. During fiscal year ~~2009~~2010, no single customer represented more than 4 % of our global consolidated net sales.

Food Service. End-users include fast food and full-service restaurants as well as contract caterers.

Lodging. We serve many of the largest hotel chains in the world as well as local independent properties and regional chains.

Retail. Retail end-users include supermarkets, drug stores, discounters, hypermarkets and wholesale clubs.

Health Care. These customers include both public and private hospitals, long-term care facilities and other facilities where medical services are performed.

~~Building~~6 Managers/Service Contractors. These end-users include building owners/managers as well as building service contractors. Contractors clean, maintain and manage office buildings, retail stores, health care facilities, production facilities and educational institutions.

~~Other~~Building Managers/Service Contractors. ~~End~~These end-users ininclude ~~this~~building owners/managers ~~sector~~as ~~include~~well ~~cash~~as ~~and~~building ~~carry~~service ~~establishments, education~~contractors. ~~and~~Contractors ~~government institutions~~clean, ~~industrial~~maintain ~~plants~~ and ~~laundries.~~manage ~~Cash~~office ~~and~~buildings, ~~carry~~retail ~~customers are~~ stores, inhealth ~~which~~care ~~professional~~facilities, ~~end-users~~production ~~purchase~~facilities, ~~products~~and ~~for~~education ~~their~~and ~~own~~government ~~use~~institutions.

Food and Beverage. Food and beverage end-users include dairy plants, dairy farms, breweries, soft-drink and juice bottling plants, protein and processed food production facilities, and other food processors.

In addition, we serve customers in cash and carry establishments, industrial plants and laundries. Cash and carry establishments are stores in which professional end-users purchase products for their own use.

We sell our products and systems in domestic and international markets through company-trained sales and service personnel, who also advise and assist customers in the proper and efficient use of products and systems in order to meet a full range of cleaning, sanitation and hygiene needs. We sell our products in more than 175 countries either directly to end-users or through a network of distributors, wholesalers and third-party intermediaries. We employ a direct sales force to market and sell our products. We contract with local third-party distributors on an exclusive and non-exclusive basis. We estimate that direct sales to end-users by our sales force typically account for more than half of our net sales.

In all customer sectors, the supply of cleaning, hygiene, operational efficiency and appearance enhancing products involves more than the physical distribution of ~~detergents~~chemicals and equipment. Customers may contract for the provision of a complete hygiene system, which includes products as well as safety and application training, hygiene consulting, hygiene auditing and after-sales services. We employ specialized sales people who are trained to provide these specific services and, through our tailored cleaning solutions approach, we are able to better address the specific needs of these customers.

Raw Materials

Suppliers provide raw materials, packaging components, equipment, accessories and contract manufactured goods. The key raw materials we use in our business are caustic soda, solvents, waxes, phosphates, surfactants, polymers and resins, chelates and fragrances. Packaging components include bag-in-the-box containers, bottles, corrugated boxes, drums, pails, totes, aerosol cans, caps, triggers and valves. Equipment and accessories include dilution control, ware washing and laundry equipment, floor care machines, air care dispensers, floor care applicators, mops, microfiber, buckets, carts and other items used in the maintenance of a facility.

We believe that the vast majority of our raw materials required for the manufacture of our products and all components related to our equipment and accessories are available from multiple sources and are available in amounts sufficient to meet our manufacturing requirements. Due to by-product/co-product chemical relationships to the automotive and housing markets, several materials will continue to be difficult to source. Although we purchase some raw materials under long-term supply arrangements with third parties, these arrangements follow market forces and are in line with our overall global sourcing strategy, which seeks to balance cost of acquisition and availability of supply.

Competition

Management estimates that the global market for institutional and industrial cleaning, sanitation and hygiene products and related services had industry-wide sales of approximately $40 billion in ~~2009~~2010. The market is highly diversified across geographic regions, products and services, end markets and customers. We believe the industry has demonstrated stable growth trends over time due to its broad end-market diversification, the consumable and recurring nature of its products and services and base demand driven by governmental and regulatory requirements and consumer expectations for cleanliness. More recently, market growth has been driven by a number of factors, including increasing food safety regulation and heightened public awareness of health, hygiene and infection risk. Highly publicized food contamination incidents and global health threats, such as the H1N1 virus, serve to accelerate this awareness, which we expect to continue to drive demand in ~~both~~the ~~developing and developed markets~~future.

~~Our~~7 business has two primary types of competitors: a single global competitor and numerous smaller competitors with generally more limited geographic, end-market or product scope. Our primary global competitor is Ecolab, Inc., which is the largest supplier in the global market for institutional and industrial cleaning, sanitation and hygiene products and related services, mainly as a result of its significant presence in the U.S. health and hospitality market. Outside the United States, we have either equal or greater market share in most regions. We believe that the numerous smaller competitors in our industry account for more than 75% of the global market. We face significant competition from numerous national, regional and local companies within some or all of our product lines in each sector that we serve. Other competitors in the market include 3M, The Procter & Gamble Company and The Clorox Company, which sell into the institutional sector from their bases in consumer products, and Kimberly-Clark Corporation, which has expanded from paper accessories into personal care and washroom products.

Our business has two primary types of competitors: a single global competitor and numerous smaller competitors with generally more limited geographic, end-market or product scope. Our primary global competitor is Ecolab, Inc., which is the largest supplier in the global market for institutional and industrial cleaning, sanitation and hygiene products and related services, mainly as a result of its significant presence in the U.S. health and hospitality market. Outside the United States, we have either equal or greater market share in most regions. We believe that the numerous smaller competitors in our industry account for more than 75% of the global market. We face significant competition from numerous national, regional and local companies within some or all of our product lines in each sector that we serve. Other competitors in the market include 3M, The Procter & Gamble Company and The Clorox Company, which sell into the institutional sector from their bases in consumer products, Kimberly-Clark Corporation, which has expanded from paper accessories into personal care and washroom products, and Tennant Company, Nilfisk-Advance A/S, and Newell Rubbermaid Inc., which supply floor care machines, tools and equipment.

We believe that we compete largely on the basis of our premium product offerings and application expertise, innovative product and dispensing equipment offerings, value-added solution delivery and strong customer service and support. We seek to differentiate our company from our competitors in our strategic sectors by becoming the preferred partner to our customers, and providing innovative, industry-leading products to make their facilities safer and healthier for the workers who clean them and the people who occupy them. We believe the quality, ease of use and environmental profile of our products are unique competitive strengths. In addition, we have long-standing, profitable relationships with many of our top customers. Our global reach and sales and service capabilities also give us a strong competitive advantage over smaller, regional and local players in the industry.

Foreign Operations

We conduct business operations through our subsidiaries in Europe, North America, Japan, Latin America and Asia Pacific. Approximately 83.17 % of our net sales for the year ended December 31, 2010 ~~2009~~ were generated outside the United States. Because our business has significant manufacturing operations, sales offices and research and development activities in foreign locations, fluctuations in currency exchange rates may have a significant impact on our consolidated financial statements.

In addition, our foreign operations are potentially subject to a number of unique risks and limitations, including: exchange control regulations, wage and price controls, employment regulations, regulatory approvals, foreign investment laws, import and trade restrictions and governmental instability. See “Item 1A. Risk Factors—We are subject to risks related to our operations outside of ~~North~~the ~~America~~United States” and “Item 1A. Risk Factors—Fluctuations in exchange rates may materially adversely affect our business, financial condition, results of operations and cash flows.”

Intellectual Property

We strategically manage our portfolio of patents, trade secrets, copyrights, trademarks and other intellectual property. Specifically, we rely upon trade secrets to protect the formulation of many of our chemical products, as well as our manufacturing processes. We own or have licenses under patents and registered trademarks which are used in connection with our business. Some of these patents or licenses cover significant product formulations and processes used to manufacture our products. The trademarks of ~~all~~ major products in each business are registered. Certain intellectual property is also protected, where appropriate, by confidentiality agreements or other agreements with suppliers, employees and other third parties. In part, our success can be attributed to the existence and continued protection of these trademarks, patents, trade secrets, and licenses.

7We believe that the Diversey trademark is important to our business. We own the Diversey trademark as used in our business. Other than the Diversey mark, we do not believe that our overall business is materially dependent on any individual trade name, trademark or patent.

~~We believe that the Johnson housemark and the Diversey trademark are important to our business.~~ Under a brand license agreement (“BLA”), we are granted a license to sell certain SCJ products, and to use the ~~trade~~ name “Johnson ~~Wax Professional~~” ~~and the name “Johnson”~~ in combination with our owned trade name “Diversey” in our business. The term of the BLA ends May 2, 2017. Thereafter, the BLA can be renewed, with SCJ’s consent, for successive one-year terms. Our license to use the housemark “JohnsonDiversey” will expire on the earlier of our transition to the “Diversey” name in the relevant region or August 2, 2012~~, and our license to use the housemark “Johnson Wax Professional” will expire on May 2, 2010~~. See “Item 13. ~~Certain~~ Certain Relationships and Related Transactions, and Director Independence—Relationships with SCJ—License Agreements” in this annual report on Form 10-K. We own the Diversey trademark as used in our business. Other than the Johnson and Diversey marks, we do not believe that our overall business is materially dependent on any individual trade name, trademark or patent.

In connection with the DiverseyLever acquisition in May 2002, we entered into several license agreements with Unilever, under which Unilever granted us a license of specified trademarks, patents, design rights, copyrights and know-how used in the DiverseyLever business that were retained by Unilever, and we granted a license to Unilever to use specified intellectual property rights and patents and registered designs that were transferred to us in the acquisition. The licenses granted under these agreements generally terminate with the expiration of the particular patent or design right or upon termination by the licensee in the case of copyrights or know-how, unless terminated earlier. See “Item 13. Certain Relationships and Related Transactions, and Director Independence—Relationships with Unilever—Intellectual Property Agreements” on this annual report on Form 10-K.

Research and Development

Innovative technologies and manufacturing expertise are important to our business. Through our research, we aim to develop new, more innovative and competitive products, applications, services and processes while providing technical assistance to customers helping them improve their operations. In particular, our ability to compete effectively is materially dependent on the integration of proprietary technologies with our knowledge of the applications served. We conduct most of our research and development activities at our research facilities located in Sturtevant, Wisconsin, Santa Cruz, California, Utrecht, the Netherlands, Mannheim, Germany, Muenchwilen, Switzerland, Sherwood Park, UK, Mumbai, India, Yokohama, Japan, and Sao Paulo, Brazil. We also have ~~regional~~specialized ~~development~~product and application support incenters ~~our~~throughout ~~Asia~~the ~~Pacific region, Japan and other locations in Europe~~globe. In addition, we have entered into a technology disclosure and license agreement with SCJ, under which each party may disclose to the other new technologies that it develops internally, acquires or licenses from third parties.

Substantially all of our principal products have been sourced and/or developed by our research and development and engineering personnel. Research and development expenses were $6365.37 million, $6763.13 million and $6567.51 million, respectively, for the fiscal years ended December 31, ~~2009~~2010, December 31, ~~2008~~2009 and December 2831, ~~2007~~2008.

Employees

As of March 54, ~~2010~~2011, we had approximately 10,~~400~~170 employees, of which about 1,350 were located in the United States.

None of our employees in the United States is covered by a collective bargaining agreement. In Europe, a significant portion of our employees are represented by labor unions and are covered by collective bargaining agreements. Collective ~~bargaining~~ bargaining agreements are generally renewable on an annual basis. In several European countries, local co-determination legislation or practice requires employees of companies that are over a specified size, or that operate in more than one European country, to be represented by a works council. Works councils typically meet between two and four times a year to discuss management plans or decisions that impact employment levels or conditions within our company, including closures of facilities. ~~Certain~~ Certain employees in Australia, Canada, Japan, Latin America, New Zealand and South Africa also belong to labor unions and are covered by collective bargaining agreements. Local employment legislation may impose significant requirements in these and ~~other~~ other jurisdictions~~, including consultation requirements in connection with the closing of the Transactions~~.

We believe that we have a satisfactory working relationship with organized labor and employee works councils around the world, and have not had any major work stoppages since incorporation in 1997.

Environmental Regulation

Our operations are regulated under a number of federal, state, local and foreign environmental, health and safety laws and regulations that govern, among other things, the discharge of hazardous materials into the air, soil and water as well as the use, handling, storage and disposal of these materials. These laws and regulations include the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, and the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), as well as analogous state, local and foreign laws. Compliance with these environmental laws is a major consideration for us because we use hazardous materials in some of our manufacturing processes. In addition, because we are a generator of hazardous wastes, we, along with any other person who disposes or arranges for the disposal of our wastes, may be subject to financial exposure for costs associated with an investigation and any remediation of sites at which we have disposed or arranged for the disposal of hazardous wastes if those sites become contaminated, even if we fully complied with applicable environmental laws at the time of disposal. Furthermore, process wastewater from our manufacturing operations is discharged to various types of wastewater management systems. We may incur significant costs relating to contamination that may have been, or is currently being, caused by this practice. We are also subject to numerous federal, state, local and foreign laws that regulate the manufacture, storage, distribution and labeling of many of our products, including some of our disinfecting, sanitizing and antimicrobial products. Some of these laws require us to have operating permits for our production facilities, warehouse facilities and operations, and we may not have some of these permits or some of the permits we have may not be current. In the event of a violation of these laws, we may be liable for damages and the costs of remedial actions and may also be subject to revocation, non-renewal or modification of our operating and discharge permits, and revocation of product registrations. Any revocation, non-renewal or modification may require us to cease or limit the manufacture and sale of products at one or more of our facilities and may have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, legislation or regulations restricting emissions of greenhouse gases and our need to comply with such legislation or regulations could affect our business, financial condition, results of operation or cash flows. Environmental laws may also become more stringent over time, imposing greater compliance costs and increasing risks and penalties associated with any violation, which also may have a material adverse effect on our business, financial condition, results of operations and cash flows.

Environmental regulations most significant to us are summarized below:

Toxic Substances

We are subject to various federal, state, local and foreign laws and regulations governing the production, transport and import of industrial chemicals. Notably, the Toxic Substances Control Act gives the U.S. Environmental Protection Agency (“EPA”), the authority to track, test and/or ban chemicals that may pose an environmental or human-health hazard. We are required to comply with certification, testing, labeling and transportation requirements associated with regulated chemicals. To date, compliance with these laws and regulations has not had a material adverse effect on our business, financial condition, results of operations or cash flows.

Pesticide Regulation

Some of our facilities are subject to various federal, state, local and foreign laws and regulations governing the manufacture and/or use of pesticides. We manufacture and sell certain disinfecting and sanitizing products that kill micro-organisms, such as bacteria, viruses and fungi. These products are considered “pesticides” or “antimicrobial pesticides” and, in the United States, are governed primarily by the Federal Insecticide, Fungicide and Rodenticide Act, as amended by the Food Quality Protection Act of 1996. To register these products, we must meet various efficacy, toxicity and labeling requirements and must pay initial and ongoing registration fees. In addition, some states or foreign jurisdictions may impose taxes on sales of pesticides. Although the cost of maintaining and delays associated with pesticide registration have increased in recent years, compliance with the various laws and regulations governing the manufacture and sale of pesticides has not had a material adverse effect on our business, financial condition, results of operations or cash flows.

Ingredient Regulation

Numerous federal, state, local and foreign laws and regulations relate to the sale of products containing ingredients that may impact human health and the environment. Specifically, the State of California has enacted Proposition 65, which requires us to disclose specified listed ingredient chemicals on the labels of our products. To date, compliance with these laws and regulations has not had a material adverse effect on our business, financial condition, results of operations or cash flows.

Other Environmental Regulation

Many of our facilities are subject to various federal, state, local or foreign laws and regulations governing the discharge, transportation, use, handling, storage and disposal of hazardous substances. In the United States, these statutes include the Clean Air Act, the Clean Water Act and the Resource Conservation and Recovery Act. We are also subject to the Superfund Amendments and Reauthorization Act of 1986, including the Emergency Planning and Community Right-to-Know Act, which imposes reporting requirements when toxic substances are released into the environment. In Europe, we are subject to portions of the compliance obligations under the EU European Community Directive “Registration, Evaluation, Authorization, and Restriction of Chemicals” (EU Directive No. 2006/1907). The directive imposes several requirements related to the identification and management of risks related to chemical substances manufactured or marketed in Europe. Our compliance obligations are mostly associated with the use of chemicals versus manufacture. Each year we make various capital investments and expenditures necessary to comply with applicable laws and regulations and satisfy our environmental stewardship principles. To date, these investments and expenditures have not had a material adverse effect on our business, financial condition, results of operations or cash flows.

Environmental Remediation and Proceedings

We may be jointly and severally liable under CERCLA or its state, local or foreign equivalent for the costs of environmental contamination on or from our properties and at off-site locations where we disposed of or arranged for the disposal or treatment of hazardous wastes. Generally, CERCLA imposes joint and several liability on each potentially responsible party (“PRP”), that actually contributed hazardous waste to a site. Customarily, PRPs will work with the EPA to agree on and implement a plan for site investigation and remediation. Based on our experience with these environmental proceedings, our estimate of the contribution to be made by other PRPs with the financial ability to pay their shares, and our third party indemnification rights at certain sites (including indemnities provided by Unilever and SCJ), we believe that our share of the costs at these sites will not have a material adverse effect on our business, financial condition, results of operations or cash flows.

In addition to the liabilities imposed by CERCLA or its state, local or foreign equivalent, we may be liable for costs of investigation and remediation of environmental contamination on or from our current or former properties or at off-site locations under numerous other federal, state, local and foreign laws. Our operations involve the handling, transportation and use of numerous hazardous substances. We are aware that there is or may be soil or groundwater contamination at some of our facilities resulting from past or current operations and practices. Based on available information and our indemnification rights, explained below, we believe that the costs to investigate and remediate known contamination at these sites will not have a material adverse effect on our business, financial condition, results of operations or cash flows. In many of the foreign jurisdictions in which we operate, however, the laws that govern our operations are still undeveloped or evolving.

Many of the environmental laws and regulations discussed above apply to properties and operations of the DiverseyLever business that we acquired from Conopco, ~~a wholly-owned subsidiary of Unilever,~~ in May 2002. Under the Acquisition Agreement, Unilever made certain representations and warranties to us with respect to the DiverseyLever business and agreed to indemnify us for damages in respect of breaches of its warranties and for specified types of environmental liabilities if the aggregate amounts of damages meet various dollar thresholds. Unilever will not be liable for any damages resulting from environmental matters, (1) in the case of known environmental matters or breaches, that are less than $250,000 in the aggregate, and (2) in the case of unknown environmental matters or breaches, that are less than $50,000 individually and $2 million in the aggregate. In the case of clause (1) above, we will bear the first $250,000 in damages. In the case of clause (2) above, once the $2 million threshold is reached, Unilever will not be liable for any occurrence where the damages are less than $50,000 or for the first $1 million of damages that exceed the $50,000 per occurrence threshold. In no event will Unilever be liable for any damages arising out of or resulting from environmental claims that exceed $250 million in the aggregate.

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Pursuant to the Redemption Agreement, all indemnity obligations under the Acquisition Agreement, other than environmental and tax matters, were terminated upon closing of the Transactions. The environmental and tax indemnity obligations thereunder of each of us and Unilever will continue to survive in accordance with the terms of the Acquisition Agreement for the DiverseyLever business. Thus, environmental claims made by us against Unilever prior to May 3, 2008 will continue to survive. On the other hand, Unilever has not made an environmental claim against us and our environmental indemnity obligations to Unilever under such agreement expired on May 3, 2008. Unilever has not made any tax indemnity claims against us under such agreement.

We have tendered various environmental indemnification claims to Unilever in connection with former DiverseyLever locations. Unilever has not indicated its agreement with our requests for indemnification. We may file additional requests for reimbursement in the future in connection with pending indemnification claims. We have recorded environmental remediation liabilities for which we intend to seek recovery from Unilever (see Note 27 to the consolidated financial statements in this annual report on Form 10-K.) However, there can be no assurance that we will be able to recover any amounts relating to these indemnification claims from Unilever.

Given the nature of our business, we believe that it is possible that, in the future, we will be subject to more stringent environmental laws or regulations that may result in new or additional restrictions imposed on our manufacturing, processing and distribution activities, which may result in possible violations, substantial fines, penalties, damages or other significant costs. The potential cost to us relating to environmental matters, including the cost of complying with the foregoing legislation and remediation of contamination, is uncertain due to such factors as the unknown magnitude and type of possible pollution and clean-up costs, the complexity and evolving nature of laws and regulations, including those outside the United States, and the timing, variable costs and effectiveness of alternative clean-up methods. We have accrued our best estimate of probable future costs relating to such known sites, but we cannot estimate at this time the costs associated with any contamination that may be discovered as a result of future investigations, and we cannot provide assurance that those costs or the costs of any required remediation will not have a material adverse effect on our business, financial condition, results of operations or cash flows.

Environmental Permits and Licensing

In the ordinary course of our business, we are continually subject to environmental inspections and monitoring by governmental enforcement authorities. In addition, our production facilities, warehouse facilities and operations require operating permits that are subject to renewal, modification and, in specified circumstances, revocation. While we believe that we are currently in material compliance with existing permit and licensing requirements, we may not be in compliance with permit or licensing requirements at some of our facilities. Based on available information and our indemnification rights, we believe that costs associated with our permit and licensing obligations will not have a material adverse effect on our business, financial condition, results of operations or cash flows.

Product Registration and Compliance

Various federal, state, local and foreign laws and regulations regulate some of our products and require us to register our products and to comply with specified requirements. In the United States, we must register our sanitizing and disinfecting products with the EPA. When we register these products, we must also submit to the EPA information regarding the chemistry, toxicology and antimicrobial efficacy for the agency’s review. Data must be consistent with the desired claims stated on the product label. In addition, each state where these products are sold requires registration and payment of a fee.

We are also subject to various federal, state, local and foreign laws and regulations that regulate products manufactured and sold by us for controlling microbial growth on humans, animals and processed foods. In the United States, these requirements are generally administered by the U.S. Food and Drug Administration, (“FDA”). The FDA regulates the manufacture and sale ~~of food, drugs and cosmetics, which includes antibacterial soaps and products used in food preparation establishments. The FDA requires companies to~~ register antibacterial hand care products and imposes specific criteria that the products must meet in order to be marketed for these regulated uses. Before we are able to advertise our product as an antibacterial soap or food-related product, we must generate, and maintain in our possession, information about the product that is consistent with the appropriate FDA monograph. FDA monographs dictate the necessary requirements for various product types such as antimicrobial hand soaps. In addition, the FDA regulates the labeling of these products. If the FDA determines that any of our products do not meet its standards for an antibacterial product, we will not be able to market the product as an antibacterial product. Some of our business operations are subject to similar restrictions and obligations under an order of the U.S. Federal Trade Commission which was issued in 1999 and will remain in effect until at least 2019.

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of food, drugs and cosmetics, which includes antibacterial soaps and products used in food preparation establishments. The FDA requires companies to register antibacterial hand care products and imposes specific criteria that the products must meet in order to be marketed for these regulated uses. Before we are able to advertise our product as an antibacterial soap or food-related product, we must generate, and maintain in our possession, information about the product that is consistent with the appropriate FDA monograph. FDA monographs dictate the necessary requirements for various product types such as antimicrobial hand soaps. In addition, the FDA regulates the labeling of these products. If the FDA determines that any of our products do not meet its standards for an antibacterial product, we will not be able to market the product as an antibacterial product. Some of our business operations are subject to similar restrictions and obligations under an order of the U.S. Federal Trade Commission which was issued in 1999 and will remain in effect until at least 2019.

Similar product registration regulations and compliance programs exist in many other countries where we operate.

To date, the cost of complying with product registration and compliance has not had a material adverse effect on our business, financial condition, results of operations or cash flows.

ITEM 1A.

RISK FACTORS

In addition to the other information contained in this annual report on Form 10-K, certain risk factors should be considered carefully in evaluating our business. The risk factors described below and the other factors described in this annual report on Form 10-K could adversely affect our business, results of operations, financial condition and cash flows.

We face significant competition ~~and expect to face more competition in the future~~.

The market for our products is highly competitive. Our primary global competitor is Ecolab, Inc., which is the largest supplier to the global market for institutional and industrial cleaning, sanitation and hygiene products and related services, mainly as a result of its significant presence in the U.S. health and hospitality market. We also face significant competition from numerous national, regional and local companies within some or all of our product lines in each sector that we serve. Barriers to entry and expansion in the institutional and industrial cleaning, sanitation and hygiene industry are low. Other competitors in the market include 3M, The Procter & Gamble Company and The Clorox Company, which sell into the institutional sector from their bases in consumer products, ~~and~~ Kimberly-Clark Corporation, which has expanded from paper accessories into personal care and washroom products, and Tennant Company, Nilfisk-Advance A/S, and Newell Rubbermaid Inc., which supply floor care machines, tools and equipment.

To achieve expected profitability levels, we must, among other things, maintain the service levels and competitive pricing necessary to retain existing customers and attract new customers. Our failure to address these challenges adequately could put us at a competitive disadvantage relative to our competitors.

We are subject to risks related to our operations outside of the United States.

We have substantial operations outside of the United States. Approximately 83.17% of our net sales for the year ended December 31, ~~2009~~2010 ~~were~~was generated outside the United States. We face risks related to our foreign operations such as:

•

foreign currency fluctuations;

•

unstable political, economic, financial and market conditions;

•

import and export license requirements;

•

trade restrictions;

•

increases in tariffs and taxes;

•

high levels of inflation;

•

restrictions on repatriating foreign profits back to the United States;

•

greater difficulty collecting accounts receivable and longer payment cycles;

•

less favorable intellectual property laws;

•

unfamiliarity with foreign laws and regulations; and

•

changes in labor conditions and difficulties in staffing and managing international operations.

All of these risks have affected our business in the past and may have a material adverse effect on our business, financial condition, results of operations and cash flows in the future.

The volatility of our raw material costs may adversely affect our operations.

The key raw materials we use in our business are caustic soda, solvents, waxes, phosphates, surfactants, polymers and resins, chelates and fragrances. The prices of many of these raw materials are cyclical~~, and in 2008, they reached record levels~~. Supply and demand factors, which are beyond our control, generally affect the price of our raw materials. ~~We try to minimize the effect of raw material price increases through production efficiency and the use of effective global sourcing strategies.~~ If we are unable to minimize the effects of increased raw material costs through sourcing or pricing actions, our business, financial condition, results of operations and cash flows may be materially adversely affected.

Fluctuations in exchange rates may materially adversely affect our business, financial condition, results of operations and cash flows.

Our results of operations are reported in U.S. dollars. Outside the United States, however, our sales and costs are denominated in a variety of currencies including the euro, British pound, Japanese yen, Brazilian real, Venezuelan bolivar and Turkish lira. A significant weakening of the currencies in which we generate sales relative to the U.S. dollar may adversely affect our ability to meet our U.S. dollar obligations.

In addition, we are required to maintain compliance with financial covenants under our ~~new~~Senior ~~senior~~Secured ~~secured~~Credit ~~credit facilities~~Facilities. The covenants are measured in U.S. dollar terms; therefore, an adverse shift in currency exchange rates may cause us to be in breach of these covenants, which, if not cured or waived, may result in the acceleration of some or all of our indebtedness.

In all jurisdictions in which we operate, we are also subject to laws and regulations that govern foreign investment, foreign trade and currency exchange transactions. These laws and regulations may limit our ability to repatriate cash as dividends or otherwise to the United States and may limit our ability to convert foreign currency cash flows into U.S. dollars. A weakening of the currencies in which we generate sales relative to the currencies in which our costs are denominated may lower our operating profits and cash flows.

Our relationship with SCJ is important to our future operations.

We are party to various agreements with SCJ, including the BLA, a technology disclosure and license agreement (“TDLA”), supply and manufacturing agreements and several leases. Under the BLA, we are granted a license to sell certain SCJ products and use specified trade names and housemarks incorporating “Johnson,” (including ~~“Johnson Wax Professional”), including~~ the right to use “Johnson” in combination with our owned trade name “Diversey,” in the institutional and industrial channels of trade and, subject to certain limitations, in specified channels of trade in which both our business and SCJ’s consumer business operate. In connection with our entry into amendments to the BLA as a part of the Transactions, SCJ is our sole supplier of SCJ products licensed to us under the BLA. Our sales of these products have historically been significant to our business. Under the TDLA, SCJ has granted us the right to use specified technology of SCJ. We lease our principal manufacturing facilities in Sturtevant, Wisconsin from SCJ. In addition, in some countries, we ~~depend on SCJ to produce or sell some of our products. For additional details concerning our relationship with SCJ, see~~ “Item 13. Certain Relationships and Related Transactions, and Director Independence —Relationships with SCJ” in annual report on Form 10-K. If we default under our agreements with SCJ and the agreements are terminated, SCJ fails to perform its obligations under these agreements, or our relationship with SCJ is otherwise damaged or severed, this could have a material adverse effect on our business, financial condition, results of operations and cash flows.

depend on SCJ to produce or sell some of our products. For additional details concerning our relationship with SCJ, see “Item 13. Certain Relationships and Related Transactions, and Director Independence —Relationships with SCJ” in this annual report on Form 10-K. If we default under our agreements with SCJ and the agreements are terminated, SCJ fails to perform its obligations under these agreements, or our relationship with SCJ is otherwise damaged or severed, this could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our relationship with Unilever is important to our future operations, and we may lose substantial amounts in agency fees or sales revenue if our License Agreement and distribution arrangements with Unilever are terminated.

In connection with our acquisition of the DiverseyLever business from Conopco in May 2002, we entered into the Prior Agency Agreement with Unilever. The Prior Agency Agreement provided that we and various of our subsidiaries act as Unilever’s sales agents in specified territories for the sale into the institutional and industrial markets of certain of Unilever’s consumer brand cleaning products. With the exception of some transitional arrangements for certain countries, on January 1, 2008, in all territories except the United Kingdom, Ireland, Portugal and Brazil, the Prior Agency Agreement was replaced with the License Agreement. Pursuant to the License Agreement, Unilever has agreed to grant 31 of our subsidiaries a license to produce and sell professional size packs of Unilever’s consumer brand cleaning products. In the United Kingdom, Ireland, Portugal and Brazil, the New Agency Agreement is in place.

If we are unable to comply with our obligations under these agreements, or if Unilever terminates all or any of the agreements for any other reason, including if we are insolvent or our sales drop below 75% of targeted sales for a given year in a region/operating segment, we may lose significant amounts in agency fees or sales revenue. If Unilever fails to observe its commitments under these agreements, we may not be able to operate in accordance with our business plans and we may incur additional costs. Any failure by Unilever to observe its obligations may have a material adverse effect on our business, financial condition, results of operations and cash flows. If any or all of the agreements are terminated prior to their scheduled termination date, or if we and Unilever are unable to agree to mutually acceptable replacement agreements, we may not be able to obtain similar services, intellectual property or products on the same terms from third parties or at all. As a result, we may lose substantial amounts in agency fees or sales revenue, which may have a material adverse effect on our business, financial condition, results of operations and cash flows. See “Item 13. Certain Relationships and Related Transactions, and Director Independence —Relationships with Unilever” in this annual report on Form 10-K.

In addition, as a result of the DiverseyLever acquisition, we own the name “Diversey.” We also hold licenses to use some trademarks and technology of Unilever in the market for institutional and industrial cleaning, sanitation and hygiene products and related services under license agreements with Unilever. We believe that these license agreements are critical to our business and the termination of our rights under any of these agreements may have a material adverse effect on our business, financial condition, results of operations and cash flows.

The ~~current~~ recent global economic downturn and credit crisis has had and may continue to have an ~~adverse~~ impact on our business, financial condition, results of operations and cash flows.

The recent global economic downturn has adversely impacted some of our end-users, such as hotels, restaurants, retail establishments and other end-users that are particularly sensitive to business and consumer spending. During economic downturns, these end-users may reduce their volume of purchases of cleaning, hygiene, operational efficiency and appearance enhancing products. Furthermore, as a result of the recent disruption in the credit markets, our customers may face difficulties gaining timely access to sufficient credit, which could impair their ability to make timely payments to us. In addition, the ~~recent~~ economic ~~crisis~~downturn could ~~also~~ adversely impact our suppliers’ ability to provide us with materials and components.

If the economic downturn is deeper or longer than we expect, we may not be able to comply with the financial covenants in the credit agreement relating to our new senior secured credit facilities. A breach of any of those covenants or failure to maintain a required ratio or meet a required test may result in an event of default under such agreement. This may allow the lenders under our new senior secured credit facilities to declare all amounts outstanding thereunder, together with accrued interest, to be immediately due and payable. If this occurs, we may not be able to refinance the accelerated indebtedness on favorable terms, or at all, or repay the accelerated indebtedness.

The factors described above have had and may continue to have a negative impact on our business, financial condition, results of operations and cash flows.

If we are unable to retain key employees and other personnel, our operations and growth may be adversely affected.

Our success depends largely on the efforts and abilities of our management team and other key personnel. Their experience and industry contacts significantly benefit us, and we need their expertise to execute ongoing cost saving and growth activities. If any of our senior management or other key personnel ceases to work for us, our business, financial condition, results of operations and cash flows may be materially adversely affected.

We could experience disruptions in operations and/or increased labor costs.

In Europe, the majority of our employees ~~are~~is represented by labor unions and ~~are~~is covered by collective bargaining agreements, which are generally renewable on an annual basis. As is the case with any negotiation, we may not be able to negotiate acceptable new collective bargaining agreements, which could result in strikes or work stoppages by affected workers. Renewal of collective bargaining agreements could also result in higher wages or benefits paid to union members. A disruption in operations or higher ongoing labor costs could materially affect our business.

We could experience failure or disruptions to our information technology and telecommunications systems.

We are dependent on internal and third party information technology networks and systems, including the Internet, to process, transmit and store electronic information. In particular, we depend on our information technology infrastructure for fulfilling and invoicing customer orders, applying cash receipts, and placing purchase orders with suppliers, making cash disbursements, and conducting digital marketing activities, data processing, and electronic communications among business locations. We also depend on telecommunication systems for communications between company personnel and our customers and suppliers. Future system disruptions, security breaches, or shutdowns could significantly disrupt our operations or result in lost or misappropriated information and may have a material adverse effect on our business, financial condition and results of operations.

Pricing terms in our multi-year contracts with customers may adversely affect our profitability and cash flows.

From time to time, we enter into multi-year contracts with some of our customers. These contracts may include terms restricting our pricing flexibility. Under these contracts, we bear a significant portion of the risk for cost overruns. Accordingly, we may incur losses under such contracts in the case of unexpected cost increases, operational difficulties or other changes during the contract period. If we were to experience significant unexpected cost increases under our multi-year contracts, the resulting losses could have an adverse impact on our profitability and cash flows.

~~Proposed~~The ~~future~~United ~~U.S.~~States Patient Protection and ~~Netherlands~~Affordable ~~income~~Care ~~tax~~Act ~~legislation~~and the United States Health Care and Education Reconciliation Act of 2010 could result in anincreased ~~increase~~costs inrelated to our ~~future~~postretirement ~~tax~~benefit ~~liabilities~~plans.

In ~~May~~March ~~2009~~2010, the ~~Obama~~Patient ~~Administration announced proposed future tax legislation that could substantially modify the rules governing the U.S.~~Protection ~~taxation~~and ofAffordable ~~certain~~Care ~~non-U.S.~~Act ~~subsidiaries.~~and ~~These potential changes include, but are not limited to: (1) limitations on~~ the ~~deferral~~Health ofCare ~~U.S. taxation of foreign earnings; (2) limitations on the ability to claim~~ and ~~utilize~~Education ~~foreign~~Reconciliation ~~tax credits;~~Act ~~and (3) deferral~~ of ~~various~~2010 ~~U.S.~~were ~~tax~~signed ~~deductions~~into ~~until non-U~~law.S. ~~earnings~~These ~~are~~statutes ~~repatriated~~include toa ~~the~~number ~~United States. Many~~ of ~~these~~provisions ~~proposals were included in the Obama Administration’s 2011 budget proposal. The Netherlands also published discussion documents~~ that ~~describe~~will ~~proposed~~impact ~~future~~companies ~~tax legislation~~ that ~~could~~provide ~~substantially~~retiree ~~modify~~health ~~the~~care ~~rules~~benefits ~~governing~~through ~~income tax deductions for interest expense claimed by a Netherlands entity. Many details of the above proposals remain unknown,~~postretirement ~~although~~benefit ifplans ~~any~~and ofwill ~~these~~require ~~proposals~~certain ~~are~~changes ~~enacted~~to ~~into~~be ~~law~~made ~~they~~to ~~could~~individual ~~result~~plans in anorder ~~increase~~to incomply ~~our~~with ~~future~~the ~~tax~~new ~~liabilities~~legislation.

In addition, these statutes require changes to our information technology infrastructure and in our administrative processes. The ultimate extent and cost of these changes, including the timing of when these costs will be recognized in our consolidated financial statements, cannot be determined at this time but will continue to be evaluated as regulations and interpretations relating to the legislation become available.

Future changes of indirect ownership of our company could result in an increase in our future tax liabilities.

Under existing U.S. tax law, if there is an ownership change with respect to a corporation, as defined in Section 382 of the Internal Revenue ~~Service~~Code of 1986 (the “Code), a limitation generally will be imposed on usage of certain U.S. tax attributes of such corporation (such as tax loss and credit carryforwards) at the time of the ownership change. Given the projected U.S. income tax position of our company, we currently do not expect that a limitation under Section 382 of the Code would have a material effect on our future tax liabilities. However, if circumstances change or differ from our projections, then an ownership change with respect to our company could result in an increase in our future tax liabilities. Under existing tax laws in non-U.S jurisdictions, an ownership change could result in elimination of existing tax attributes. Future changes in ownership structure, could result in the elimination of tax attributes in certain non-U.S. jurisdictions and could result in an increase in our future tax liabilities.

We are subject to taxation in multiple jurisdictions. As a result, any adverse development in the tax laws of any of these jurisdictions or any disagreement with our tax positions could have a material adverse effect on our business, financial condition or results of our operations.

We are subject to taxation in, and to the tax laws and regulations of, multiple jurisdictions as a result of the international scope of our operations and our corporate and financing structure. We are also subject to transfer pricing laws with respect to our intercompany transactions, including those relating to the flow of funds among our companies. Adverse developments in these laws or regulations, or any change in position regarding the application, administration or interpretation thereof, in any applicable jurisdiction, could have a material adverse effect on our business, financial condition or results of our operations. In addition, the tax authorities in any applicable jurisdiction, including the United States, may disagree with the positions we have taken or intend to take regarding the tax treatment or characterization of any of our transactions. If any applicable tax authorities, including U.S. tax authorities, were to successfully challenge the tax treatment or characterization of any of our transactions, it could have a material adverse effect on our business, financial condition or results of our operations.

15We have deferred tax assets that we may not be able to use under certain circumstances.

~~Table~~If ofwe ~~Contents~~are unable to generate sufficient future taxable income in certain jurisdictions, or if there is a significant change in the time period within which the underlying temporary differences become taxable or deductible, we could be required to increase our valuation allowances against our deferred tax assets. This would result in an increase in our effective tax rate, and would have an adverse effect on our future operating results. In addition, changes in statutory tax rates may change our deferred tax assets or liability balances, with either favorable or unfavorable impact on our effective tax rate. Our deferred tax assets may also be impacted by new legislation or regulation.

Our ~~substantial~~ indebtedness may adversely affect our financial health.

We have ~~substantial~~ indebtedness. As of December 31, ~~2009~~2010, we ~~have~~had total indebtedness of approximately $1.~~409~~239 billion (excluding unaccreted original issue discount of $1713.72 million and amortization of principal), including $400.0 million of ~~new~~Diversey ~~senior~~Senior ~~notes issued on November 24~~Notes, ~~2009,~~ $~~981~~814.18 million of borrowings under our ~~new~~Senior ~~term~~Secured ~~loan~~Credit ~~facilities~~Facilities ~~executed on November 24, 2009~~ and approximately $2724.72 million in short-term credit lines. In addition, after giving effect to outstanding letters of credit, we would have been able to borrow up to an additional $~~245~~246.23 million under our new revolving credit facility. As of December 31, ~~2009~~2010, we also had approximately $~~178~~169.16 million in operating lease commitments and approximately $21.36 million in capital lease commitments.

The degree to which we are leveraged may have important consequences for our company. For example, it may:

•

make it more difficult for us to make payments on our indebtedness;

•

increase our vulnerability to general economic and industry conditions, including recessions and periods of significant inflation and financial market volatility;

•

require us to use a substantial portion of our cash flow from operations to service our indebtedness, thereby reducing our ability to fund working capital, capital expenditures, research and development efforts and other expenses;

•

limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate;

•

place us at a competitive disadvantage compared to competitors that have less indebtedness; and

•

limit our ability to borrow additional funds that may be needed to operate and expand our business.

The indenture governing our ~~new~~Diversey ~~senior~~Senior ~~notes~~Notes and the credit agreement for our ~~new~~Senior ~~senior~~Secured ~~secured~~Credit ~~credit~~Facilities ~~facilities~~ contain financial and other restrictive covenants that limit our ability to engage in activities that may be in our long-term best interests. Those covenants include restrictions on our ability to, among others, incur more indebtedness, pay dividends, redeem stock or make other distributions, make investments, create liens, transfer or sell assets, merge or consolidate and enter into certain transactions with our affiliates. Our failure to comply with those covenants could result in an event of default, which, if not cured or waived, could result in the acceleration of all of our indebtedness.

Despite our indebtedness levels, we and our subsidiaries may be able to incur more indebtedness which may increase the risks created by our indebtedness.

We and our subsidiaries may be able to incur additional indebtedness in the future. The terms of the indenture governing ~~our~~the ~~new~~Diversey ~~senior~~Senior ~~notes~~Notes do not fully prohibit us or our subsidiaries from doing so. If we or our subsidiaries are in compliance ~~with~~ with the financial covenants set forth in the credit agreement for our ~~new~~Senior ~~senior~~Secured ~~secured~~Credit ~~credit~~Facilities ~~facilities~~ and the indenture governing ~~our~~the ~~new~~Diversey ~~senior~~Senior ~~notes~~Notes, we and our subsidiaries may be able to incur additional indebtedness, which may increase ~~the~~ the risks created by our current indebtedness.

We require a significant amount of cash to service our indebtedness. The ability to generate cash and/or refinance our indebtedness as it becomes due depends on many factors, some of which are beyond our control.

Our ability to make payments on our indebtedness, including ~~our~~the ~~new~~Diversey ~~senior~~Senior ~~notes~~Notes and our ~~new~~Senior ~~senior~~Secured ~~secured~~Credit ~~credit facilities~~Facilities, and to fund planned capital expenditures, research and development efforts and other corporate expenses depend on our future operating performance and on economic, financial, competitive, legislative, regulatory and other factors. Many of these factors are beyond our control. We cannot assure that our business will generate sufficient cash flow from operations, that currently anticipated cost savings and operating improvements will be realized or that future borrowings will be available to us in an amount sufficient to enable us to repay our indebtedness or to fund our other needs. In order to repay our indebtedness and fund our planned capital expenditures, we must continue to execute our business strategy and our restructuring program announced in November 2005 (“November 2005 Plan”). If we are unable to do so, we may need to reduce or delay our planned capital expenditures or refinance all or a portion of our indebtedness on or before maturity. Significant delays in our planned capital expenditures may materially and adversely affect our future revenue prospects. In addition, we cannot assure that we will be able to refinance any of our indebtedness, including our new senior notes and our new senior secured credit facilities, on commercially reasonable terms or at all.

16The indenture governing the Diversey Senior Notes, the indenture governing the Holdings Senior Notes, the credit agreement for our Senior Secured Credit Facilities and the Stockholders Agreement restrict our ability and the ability of most of our subsidiaries to engage in some business and financial transactions.

~~Table~~Indenture governing the Diversey Senior Notes. The indenture governing the Diversey Senior Notes contains restrictive covenants that, among other things, limit our ability and the ability of ~~Contents~~our restricted subsidiaries to:

The indenture governing our new senior notes, the indenture governing the new Holdings senior notes, the credit agreement for our new senior secured credit facilities and the Stockholders Agreement restrict our ability and the ability of most of our subsidiaries to engage in some business and financial transactions.

Indenture governing our new senior notes. The indenture governing our new senior notes contains restrictive covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to:

•

incur more indebtedness;

•

pay dividends, redeem stock or make other distributions;

•

make investments;

•

create liens;

•

transfer or sell assets;

•

merge or consolidate; and

•

enter into certain transactions with our affiliates.

Indenture governing the ~~new~~ Holdings ~~senior~~Senior ~~notes~~Notes. We and all of our subsidiaries that are restricted subsidiaries under the indenture governing ~~our~~the ~~new~~Diversey ~~senior~~Senior ~~notes~~Notes are restricted subsidiaries of Holdings under the indenture governing the ~~new~~ Holdings ~~senior~~Senior ~~notes~~Notes. The indenture governing the ~~new~~ Holdings ~~senior~~Senior ~~notes~~Notes generally contains the same covenants as contained in the indenture governing the ~~notes~~Diversey Senior Notes, and none of ~~the~~ the covenants in the indenture governing the ~~new~~ Holdings ~~senior~~Senior ~~notes~~Notes are more restrictive with respect to us or any of our restricted subsidiaries than the covenants in the indenture governing ~~our~~the ~~new~~Diversey ~~senior~~Senior ~~notes~~Notes. The ~~new~~ Holdings ~~senior~~Senior ~~notes~~Notes are direct obligations of Holdings. Neither we nor any of our subsidiaries guarantee the ~~new~~ Holdings ~~senior~~Senior ~~notes~~Notes or have any other obligation to make funds available for payment on the ~~new~~ Holdings ~~senior~~Senior ~~notes~~Notes.

~~New~~Senior ~~senior~~Secured ~~secured~~Credit ~~credit facilities~~Facilities. The credit agreement for our ~~new~~Senior ~~senior~~Secured ~~secured~~Credit ~~credit~~Facilities ~~facilities~~ contains a number of covenants that:

•

require us to meet specified financial ratios and financial tests;

•

limit our capital expenditures;

•

restrict our ability to declare dividends;

•

restrict our ability to redeem and repurchase capital stock;

•

limit our ability to incur additional liens;

•

limit our ability to engage in sale-leaseback transactions; and

•

limit our ability to incur additional debt and make investments.

The credit agreement for our ~~new~~Senior ~~senior~~Secured ~~secured~~Credit ~~credit~~Facilities ~~facilities~~ also contains other covenants customary for credit facilities of this nature. Our ability to borrow additional amounts under our ~~new~~Senior ~~senior~~Secured ~~secured~~Credit ~~credit~~Facilities ~~facilities~~ depends upon satisfaction of these covenants. Events beyond our control can affect our ability to meet these covenants.

Stockholders Agreement. Under the Stockholders Agreement, CD&R Investor and CMH each must approve specified transactions and actions by Holdings and its subsidiaries, including us. These transactions include, subject to specified exceptions, acquisitions and dispositions, the issuance of additional shares of capital stock, the incurrence of additional indebtedness, the entry into any new material line of business unrelated to our business, any other material change in the nature of our business and any mergers, consolidations or reorganizations.

17Our failure to comply with obligations under the indenture governing the Diversey Senior Notes, the indenture governing the Holdings Senior Notes and the credit agreement for our Senior Secured Credit Facilities may result in an event of default under those indentures or the credit agreement for our Senior Secured Credit Facilities. A default, if not cured or waived, may permit acceleration of our indebtedness. We cannot be certain that we will have funds available to remedy these defaults. If our indebtedness is accelerated, we cannot be certain that we will have sufficient funds available to pay the accelerated indebtedness or that we will have the ability to refinance the accelerated indebtedness on terms favorable to us or at all.

Our failure to comply with obligations under the indenture governing our new senior notes, the indenture governing the new Holdings senior notes and the credit agreement for our new senior secured credit facilities may result in an event of default under those indentures or the credit agreement for our new senior secured credit facilities. A default, if not cured or waived, may permit acceleration of our indebtedness. We cannot be certain that we will have funds available to remedy these defaults. If our indebtedness is accelerated, we cannot be certain that we will have sufficient funds available to pay the accelerated indebtedness or that we will have the ability to refinance the accelerated indebtedness on terms favorable to us or at all.

An increase in interest rates would increase the cost of servicing our debt and could reduce our profitability.

To the extent LIBOR ~~exceeds~~and EURIBOR exceed a certain rate ~~to be~~ set forth in the credit agreement for our Senior ~~new~~Secured ~~senior~~Credit ~~secured credit facilities~~Facilities, our indebtedness under our ~~new~~Senior ~~senior~~Secured ~~secured~~Credit ~~credit~~Facilities ~~facilities~~ will bear interest at variable rates. As a result, an increase in interest rates may increase the cost of servicing such debt and could materially reduce our profitability and cash flows. The impact of such an increase would be more significant for us than it would be for some other companies because of our substantial debt.

We are subject to a variety of environmental and product registration laws that expose us to potential financial liability and increased operating costs.

Our operations are subject to a number of federal, state, local and foreign environmental, health and safety laws and regulations that govern, among other things, the discharge of hazardous materials into the air, soil and water and the use, handling, storage and disposal of these materials. Compliance with these laws is a major consideration for us because we generate, use and dispose of hazardous materials in some of our manufacturing processes. We may become subject to costs associated with the investigation and remediation of sites at which we have disposed of, or arranged for the disposal of, hazardous waste if those sites become contaminated, even if we fully complied with applicable environmental laws at the time of disposal.

We are also subject to various federal, state, local and foreign laws and regulations that govern the manufacture, storage, distribution and labeling of many of our products, and certain jurisdictions require the registration of some of our products. Some of these laws require us to have operating permits for our production and warehouse facilities and operations. ~~We may not have some of these permits, and some of the permits we have may not be current.~~ The violation of any of these laws may result in our being liable for damages and the costs of remedial actions and may also result in the revocation, non-renewal or modification of our operating and discharge permits and product registrations. Any such revocation, non-renewal or modification may require us to cease or limit the manufacture and sale of products at one or more of our facilities, and may have a material adverse effect on our business, financial condition, results of operations and cash flows. Any revocation, non-renewal or modification may also result in an event of default under the indenture governing ~~our~~the Diversey ~~new~~Senior ~~senior notes~~Notes, the indenture governing the ~~new~~ Holdings ~~senior~~Senior ~~notes~~Notes and the credit agreement for our ~~new~~Senior ~~senior~~Secured ~~secured~~Credit ~~credit facilities~~Facilities, which, if not cured or waived, may result in the acceleration of that indebtedness.

The potential cost to us relating to environmental and product registration matters is uncertain because of the unknown magnitude and type of possible contamination and clean-up costs to which we may become subject and the timing and effectiveness of clean-up and compliance methods. Environmental and product registration laws and regulations, including those applicable outside of the United States, may also become more stringent and complicated over time and may impose greater compliance costs and increasing risks and penalties associated with any violation, which may also negatively impact our operating results. Accordingly, we may become subject to additional liabilities and increased operating costs in the future under these laws and regulations, which may have a material adverse effect on our business, financial condition, results of operations and cash flows.

We expect significant future environmental compliance obligations in our European operations as a result of a European Community Directive “Registration, Evaluation, Authorization, and Restriction of Chemicals” (EU Directive No. 2006/1907) enacted on December 18, 2006. The directive imposes several requirements related to the identification and management of risks related to chemical substances manufactured or marketed in Europe. Our environmental costs and operating expenses will be subject to evolving regulatory requirements and will depend on the scope and timing of the effectiveness of requirements in these various jurisdictions. As a result of the directive, we may be subject to an increased regulatory burden, and we expect significant future environmental compliance obligations in our European operations. This directive may have a material adverse effect on our business, financial condition, results of operations and cash flows.

1820

We have tendered various environmental indemnification claims to Unilever pursuant to the Acquisition Agreement.

Under the Acquisition Agreement, Unilever made warranties to us with respect to the DiverseyLever business. In addition, Unilever agreed to indemnify us for damages in respect of breaches of its warranties and for specified types of environmental liabilities if the aggregate amount of damages meets various dollar thresholds. Unilever will not be liable for any damages resulting from environmental matters, (1) in the case of known environmental matters or breaches, that are less than $250,000 in the aggregate, and (2) in the case of unknown environmental matters or breaches, that are less than $50,000 individually and $2 million in the aggregate. In the case of clause (1) above, we will bear the first $250,000 in damages. In the case of clause (2) above, once the $2 million threshold is reached, Unilever will not be liable for any occurrence where the damages are less than $50,000 or for the first $1 million of damages that exceed the $50,000 per occurrence threshold. In no event will Unilever be liable for any damages arising out of or resulting from environmental claims that exceed $250 million in the aggregate. We were required to notify Unilever of any environmental indemnification claims by May 3, 2008. Any environmental claims pending after this date, for which we have notified Unilever, remain subject to indemnification until completed in accordance with the Acquisition Agreement. As a result, if we incur damages or liabilities that do not meet the indemnity thresholds under the Acquisition Agreement, if we failed to notify Unilever of an environmental indemnity claim within the period specified in the Acquisition Agreement or if the aggregate limits on indemnity payments under the Acquisition Agreement become applicable, we would not be entitled to indemnity from Unilever and would be required to bear the costs ourselves.

Pursuant to the Redemption Agreement, all indemnity obligations under the Acquisition Agreement, other than environmental and tax matters, have been terminated upon closing of the Transactions. The environmental and tax indemnity obligations thereunder of each of us and Unilever will continue to survive in accordance with the terms of the Acquisition Agreement. Thus, environmental claims made by us against Unilever prior to May 3, 2008 will continue to survive. On the other hand, Unilever has not made an environmental claim against us and our environmental indemnity obligations to Unilever under such agreement expired on May 3, 2008. Unilever has not made any tax indemnity claims against us under such agreement.

We have tendered various environmental indemnification claims to Unilever in connection with former DiverseyLever locations. Unilever has not indicated its agreement with our request for indemnification. We may file additional requests for reimbursement in the future in connection with pending indemnification claims. However, there can be no assurance that we will be able to recover any amounts relating to these indemnification claims from Unilever. If we are unable to recover costs relating to the sites for which we seek indemnification, we cannot be certain that we will have sufficient funds to bear these costs relating to environmental matters.

Our insurance policies may not cover all operating risks and a casualty loss beyond the limits of our coverage could adversely impact our business.

Our business is subject to operating hazards and risks relating to handling, storing, and transporting of the products we sell. We maintain insurance policies in such amounts and with such coverage and deductibles that we believe are reasonable and prudent. Nevertheless, our insurance coverage may not be adequate to protect us from all liabilities and expenses that may arise from claims for personal injury or death or property damage arising in the ordinary course of business, and our current levels of insurance may not be maintained or available in the future at economical prices. If a significant liability claim is brought against us that is not adequately covered by insurance, we may have to pay the claim with our own funds, which could have a material adverse effect on our business, financial condition and results of operations.

We have recorded a significant amount of goodwill and other identifiable intangible assets, and we may never realize the full value of our intangible assets.

We have recorded a significant amount of goodwill and other identifiable intangible assets, including customer relationships, trademarks and developed technologies. Goodwill and other net identifiable intangible assets were approximately $1.~~475~~440 billion as of December 31, ~~2009~~2010, or approximately 4243.05% of our total assets. Goodwill, which represents the excess of cost over the fair value of the net assets of the businesses acquired, was approximately $1.~~254~~246 billion as of December 31, ~~2009~~2010, or 3537.7% of our total assets.

~~Goodwill~~21 and net identifiable intangible assets are recorded at fair value on the date of acquisition and, in accordance with the Financial Accounting Standards Board (“FASB”)’s Accounting Standards Codification (“ASC”) Topic 350, Intangibles-Goodwill and Other, will be reviewed at least annually for impairment. Impairment may result from, among other things, deterioration in our performance, adverse market conditions, adverse changes in applicable laws or regulations, including changes that restrict the activities of or affect the products and services sold by our business, and a variety of other factors. Some of the products and services we sell to our customers are dependent upon laws and regulations, and changes to such laws or regulations could impact the demand for our products and services. The amount of any quantified impairment must be expensed immediately as a charge to results of operations. We did not record any charges for impairment of goodwill in 2009, 2008 or 2007. We did not record any charges for impairment relating to other identifiable intangible assets in 2009 and 2008, and an insignificant amount was recorded in 2007. Depending on future circumstances, it is possible that we may never realize the full value of our intangible assets. Any future determination of impairment of a significant portion of goodwill or other identifiable intangible assets would have an adverse effect on our financial condition and results of operations.

Goodwill and net identifiable intangible assets are recorded at fair value on the date of acquisition and, in accordance with the Financial Accounting Standards Board (“FASB”)’s Accounting Standards Codification (“ASC”) Topic 350, Intangibles-Goodwill and Other, will be reviewed at least annually for impairment. Impairment may result from, among other things, deterioration in our performance, adverse market conditions, adverse changes in applicable laws or regulations, including changes that restrict the activities of or affect the products and services sold by our business, and a variety of other factors. Some of the products and services we sell to our customers are dependent upon laws and regulations, and changes to such laws or regulations could impact the demand for our products and services. The amount of any quantified impairment must be expensed immediately as a charge to results of operations. We did not record any charges for impairment of goodwill in 2010, 2009 or 2008. We did record impairment charges relating to other identifiable intangible assets of $0.5 million, $0.4 million and $0 in 2010, 2009 and 2008, respectively, as further discussed in Note 2 to the consolidated financial statements. Depending on future circumstances, it is possible that we may never realize the full value of our intangible assets. Any future determination of impairment of a significant portion of goodwill or other identifiable intangible assets would have an adverse effect on our financial condition and results of operations.

The consolidation of our customers may adversely affect our business, financial condition and results of operations.

Customers in the building care, foodservice, food and beverage, lodging, retail and healthcare sectors have been consolidating in recent years, and we believe this trend may continue. Such consolidation could have an adverse impact on our ability to retain customers, which could in turn adversely affect our business, financial condition and results of operations.

The benefits from changing our name to “Diversey, Inc.” may not be realized on a timely basis, or at all.

We renamed our company “Diversey, Inc.” in connection with the closing of the Transactions in light of the strong brand equity we believe the Diversey name has in major markets. Based on the results of customer research, we are also changing our tag line with the intention of more effectively targeting our brand to customers in the marketplace. Although we believe that changing our company’s name and tag line will enhance our marketing capabilities, there can be no assurance that the benefits of these changes will be realized on a timely basis, or at all.

Our ability to compete effectively with other companies depends, in part, on our ability to sustain our brand equity. If we are unable to sustain the proprietary nature of our brand equity and our significant current or proposed products, we may experience decreased sales or increased operating costs, either of which would decrease our liquidity and profitability.

If we are not able to protect our trade secrets or maintain our trademarks, patents and other intellectual property, we may not be able to prevent competitors from developing similar products or from marketing their products in a manner that capitalizes on our trademarks, and this loss of a competitive advantage could decrease our profitability and liquidity.

Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of our owned and licensed intellectual property. If we were unable to maintain the proprietary nature of our intellectual property and our significant current or proposed products, this loss of a competitive advantage could result in decreased sales or increased operating costs, either of which would decrease our liquidity and profitability.

We rely on trade secrets to protect the formulation and manufacturing techniques of many of our products. As such, we have not sought U.S. or international patent protection for some of our principal product formula and manufacturing processes. Accordingly, we may not be able to prevent others from developing products that are similar to or competitive with our products.

We own several patents and pending patent applications on our products, aspects thereof, methods of use, and/or methods of manufacturing. There is a risk that our patents may not provide meaningful protection and patents may never be issued for our pending patent applications.

We own, or have licenses to use, all of the material trademark and trade name rights used in connection with the packaging, marketing and distribution of our major products both in the United States and in other countries where our products are principally sold. Trademark and trade name protection is important to our business. Although most of our trademarks are registered in the United States and in the foreign countries in which we operate, we may not be successful in asserting trademark or trade name protection. In addition, the laws of some foreign countries may not protect our intellectual property rights to the same extent as the laws of the United States. The costs required to protect our trademarks and trade names may be substantial.

20The market for our products depends to a significant extent upon the goodwill associated with our brand names. Under the BLA, we are granted a license to sell certain SCJ products and use specified trade names and housemarks incorporating “Johnson,” including the right to use “Johnson” in combination with our owned trade name “Diversey,” in our business. The BLA will terminate by its terms on May 2, 2017. Thereafter, the BLA can be renewed, with SCJ’s consent, for successive one-year terms. Our license to use the housemark “JohnsonDiversey” will expire on the earlier of our transition to the “Diversey” name in the relevant

~~The market for our products depends to a significant extent upon the goodwill associated~~ with our brand names. Under the BLA, we are granted a license to sell certain SCJ products and use specified trade names and housemarks incorporating “Johnson” (including “Johnson Wax Professional”), including the right to use “Johnson” in combination with our owned trade name “Diversey,” in our business. The BLA will terminate by its terms on May 2, 2017. Thereafter, the BLA can be renewed, with SCJ’s consent, for successive one-year terms. Our license to use the housemark “JohnsonDiversey” will expire on the earlier of our transition to the “Diversey” name in the relevant region or August 2, 2012, and our license to use the housemark “Johnson Wax Professional” ~~will~~expired ~~expire~~ on May 2, 2010. If the BLA is terminated, we may lose the ability to sell specified SCJ products or to use SCJ brand names and technology, which may have a material adverse effect on our business, financial condition, results of operations and cash flows. See “Item 13. Certain Relationships and Related Transactions, and Director Independence —Relationships with SCJ—License Agreements” in this annual report on ~~this~~ Form 10-K.

We cannot be certain that we will be able to assert these intellectual property rights successfully in the future or that they will not be invalidated, circumvented or challenged. Other parties may infringe on our intellectual property rights and may thereby dilute the value of our intellectual property in the marketplace. Third parties, including competitors, may assert intellectual property infringement or invalidity claims against us that could be upheld. Intellectual property litigation, which could result in substantial cost to and diversion of effort by us, may be necessary to protect our trade secrets or proprietary technology or for us to defend against claimed infringement of the rights of others and to determine the scope and validity of others’ proprietary rights. We may not prevail in any such litigation, and if we are unsuccessful, we may not be able to obtain any necessary licenses on reasonable terms or at all.

Similarly, other parties may infringe on intellectual property rights that SCJ licenses to us. The protection of these licensed intellectual property rights is under the control of SCJ and, therefore, we cannot assure the protection of those trademarks or other intellectual property rights or prevent dilution in the marketplace of the value of those brands. Finally, we may infringe on others’ intellectual property rights. Any failure by us or SCJ to protect our trademarks and other intellectual property rights, or any adverse judgment with respect to infringement by us of others’ intellectual property rights, may have a material adverse effect on our business, financial condition, results of operations and cash flows.

A The relocation of our manufacturing capability from our primary U.S. manufacturing facility could adversely affect our business, financial condition and results of operations.

We manufacture a significant portion of the products we sell. In connection with the Transactions, our various operating agreements with SCJ, including our lease from SCJ of our Waxdale manufacturing facility, was amended. See “Item 13. Certain Relationships and Related Transactions, and Director Independence —Relationships with SCJ —Leases” in this annual report on ~~this~~ Form 10-K. As amended, the lease will expire on May 31, 2013, and we do not ~~expect~~plan ~~that~~to ~~the~~renew this lease ~~will be renewed~~ after expiration. ~~Accordingly~~As discussed in Note 15 to the consolidated financial statements included in this annual report, wethe ~~will~~Company ~~need~~has made arrangements to ~~acquire~~relocate orits ~~build~~manufacturing ~~our~~capability ~~own~~by ~~production~~moving some ~~facility~~production to its other locations in North America, and by pursuing contract manufacturing for a portion of its product lines. The ~~costs~~timeline to transition out of ~~acquiring~~Waxdale oris ~~building~~not acertain, ~~new~~but ~~production~~is ~~facility~~expected ~~could~~to be ~~significant~~largely completed during the first semester of fiscal 2012. While we have extensive experience in restructuring value chain operations, this relocation may pose significant risks, which could include:

•

the risk that we may be unable to integrate successfully the relocated manufacturing operations;

•

the risk that we may be unable to coordinate management and integrate and retain employees of the relocated manufacturing operations;

•

the risk that we may not be able to obtain contract manufacturing on favorable terms or at all;

•

the risk that we may face difficulties in implementing and maintaining consistent standards, controls, procedures, policies and information systems;

•

the risk that we may fail to realize anticipated synergies, economies of scale or other anticipated benefits, or to maintain operating margins;

•

potential strains on our personnel, systems and resources, and diversion of attention from other priorities; and

•23 ~~any unforeseen or contingent liabilities of the relocated manufacturing operations.~~

•

any unforeseen or contingent liabilities of the relocated manufacturing operations.

We may not achieve growth through acquisitions.

As part of our business strategy, we may from time to time pursue acquisitions of companies that we believe are strategic to our business. There can be no assurance that we will be able to identify attractive acquisition targets, negotiate satisfactory terms for acquisitions or obtain necessary financing for acquisitions. Further, acquisitions involve risks, including that acquired businesses will not perform in accordance with expectations that we will not realize the operating efficiencies expected from acquisitions and that business judgments concerning the value, strengths and weaknesses of companies we acquire will prove to have been incorrect. If we fail to complete acquisitions, if we acquire companies but are not able to successfully integrate them with our business or if we do not otherwise realize the anticipated financial and strategic goals for our acquisitions, our business and results of operations may be adversely affected. In addition, future acquisitions may result in the incurrence of debt, and contingent liabilities and an increase in interest expense, amortization expenses and significant charges relating to integration costs.

We may not realize anticipated incremental cost savings from the remaining portion of the restructuring contemplated by the November 2005 Plan.

We have realized significant cost savings to date as a result of actions taken under the November 2005 Plan. The restructuring program has included redesigning our organizational structure, closing a number of manufacturing and other facilities, outsourcing the majority of information technology support worldwide, outsourcing certain financial services in Western Europe and reducing our workforce by approximately 15%. Our execution of the November 2005 Plan is expected to be completed in the first half of 2010, but a portion of the planned restructuring remains outstanding. In addition to the divestitures that we have completed, which most notably included the divestiture of the Polymer Business in 2006, we are also considering the potential divestiture of, or exit from, certain other non-core or underperforming businesses of an immaterial nature.

Restructuring programs are inherently risky given that a successful outcome is dependent on the ability to successfully execute and manage significant changes to the business. Our assumptions underlying estimates of anticipated cost savings from remaining restructuring initiatives may be inaccurate, and future business conditions and events may impede our ability to complete these initiatives. If we are unable to complete them in a timely manner, or if we do not realize the anticipated incremental cost savings, our business, financial condition, results of operations and cash flows may be materially adversely affected.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

Not applicable.

2224

ITEM 2.

PROPERTIES

We have a total of 2926 manufacturing facilities in 2220 countries, including Brazil, Canada, China, France, Germany, India, Italy, Japan, the Netherlands, Spain, Switzerland, Turkey, the United Kingdom and the United States. One of our principal manufacturing facilities is located at Waxdale in Sturtevant, Wisconsin, which facility we lease from SCJ. In connection with the Transactions, our lease of the Waxdale manufacturing facility was amended. As amended, the lease will expire in 2013, and we do not ~~expect~~plan ~~that~~to ~~the~~renew this lease ~~will be renewed~~ after expiration. See “Item 13. Certain Relationships and Related Transactions, and Director Independence—Relationships with SCJ—Leases.” Our worldwide and ~~North~~Americas ~~American~~ headquarters are located in Sturtevant, Wisconsin. We believe our facilities are in good condition and are adequate to meet the existing production needs of our businesses.

The following table summarizes our principal plants and other physical properties that are important to our business. Unless indicated otherwise, all owned properties listed below are subject to mortgages.

Approximate SquareFeet Occupied

~~Principal Activity~~

~~Primary~~Principal ~~SegmentUsed In (3)~~Activity

Primary SegmentUsed In (3)

Location

Owned

~~Leased~~

Leased

United States

Madera, California

~~90,000~~

90,000

~~Manufacturing and warehouse~~

~~North~~Manufacturing ~~America~~and warehouse

Americas

Santa Cruz, California

75,000

Manufacturing and research and development

North America

Mt. Pleasant, Wisconsin

50,000

General and administrative office

Americas

Mt. Pleasant, Wisconsin

50,000

General and administrative office

North America

Sturtevant, Wisconsin

180,000

(2)

Manufacturing

Americas

Sturtevant, Wisconsin

~~180,000~~

~~(2)~~

550,000

~~Manufacturing~~

~~North~~Warehousing ~~America~~logistics

Americas

Sturtevant, Wisconsin

278,000

~~550,000~~

~~Warehousing logistics~~

~~North~~International ~~America~~headquarters, data center, and research and development

Other

Sturtevant, Wisconsin

278,000

International headquarters, data center, and research and development

Other

Watertown, Wisconsin

125,000

Manufacturing

Americas

Watertown, Wisconsin

~~125,000~~

150,000

~~Manufacturing~~

~~North~~Warehousing ~~America~~logistics

Americas

Watertown, Wisconsin

150,000

Warehousing logistics

North America

International

Villa Bosch, Argentina

77,000

Manufacturing

Americas

Villa Bosch, Argentina

77,000

Manufacturing

Latin America

Socorro, Brazil

123,000

(1)

97,000

Manufacturing

Americas

Socorro, Brazil

123,000

(1)

97,000

Manufacturing

Latin America

London, Ontario, Canada

193,000

Manufacturing

Americas

London, Ontario, Canada

193,000

Manufacturing

North America

Guangdong, China

75,000

Manufacturing

GreaterAsiaPacific

Guangdong, China

75,000

Manufacturing

Asia Pacific

Villefranche-sur-Soane, France

181,000

(1)

Manufacturing

Europe

Villefranche-sur-Soane, France

181,000

(1)

Manufacturing

Europe

Kirchheimbolanden, Germany

302,000

86,000

Manufacturing

Europe

Kirchheimbolanden, Germany

302,000

86,000

Manufacturing

Europe

Nalagarh, India

19,000

Manufacturing

GreaterAsiaPacific

Nalagarh, India

19,000

Manufacturing

Asia Pacific

Bagnolo, Italy

594,000

(1)

Manufacturing

Europe

Bagnolo, Italy

594,000

(1)

Manufacturing

Europe

Shizuoka-Ken, Kakegawa, Japan

115,000

Manufacturing

GreaterAsiaPacific

Shizuoka-Ken, Kakegawa, Japan

115,000

Manufacturing

Japan

Enschede, The Netherlands

289,000

Manufacturing

Europe

Enschede, The Netherlands

289,000

Manufacturing

Europe

Utrecht, The Netherlands

44,000

68,000

Office and research and development

Europe

Utrecht, The Netherlands

44,000

68,000

Office and research and development

Europe

Valdemoro, Spain

45,000

Manufacturing

Europe

Valdemoro, Spain

45,000

Manufacturing

Europe

Munchwilen, Switzerland

112,000

Manufacturing and research and development

Europe

Munchwilen, Switzerland

112,000

Manufacturing and research and development

Europe

Gebze, Turkey

50,000

Manufacturing

Europe

Gebze, Turkey

50,000

Manufacturing

Europe

Cotes Park, United Kingdom

583,000

Manufacturing and warehouse

Europe

Cotes Park, United Kingdom

583,000

Manufacturing and warehouse

Europe

(1)	Property not mortgaged.

(2)	Leased from SCJ.

(3)	In general, our manufacturing facilities primarily serve the segment listed in the table above. However, certain facilities manufacture products for export to other segments, which use or sell the product.

2325

ITEM 3.

LEGAL PROCEEDINGS

We are party to various legal proceedings in the ordinary course of our business which may, from time to time, include product liability, intellectual property, contract, employee benefits, environmental and tax claims as well as government or regulatory agency inquiries or investigations. While the final outcome of these proceedings is uncertain, we believe that, taking into account our insurance and reserves and the available defenses with respect to legal matters currently pending against us, the ultimate resolution of these proceedings will not, individually or in the aggregate, have a material adverse effect on our business, financial position, results of operations or cash flows.

ITEM 4. ~~RESERVED~~REMOVED ~~FOR FUTURE USE BY THE SECURITIES~~ AND ~~EXCHANGE COMMISSION (“SEC”).~~RESERVED

~~Not~~26 ~~Applicable~~

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

As of March 54, ~~2010~~2011, there were 24,422 shares of our common stock outstanding. Holdings owns all of the outstanding shares of our ~~common~~ ~~stock, except for one share owned by SCJ. Pursuant to an agreement with SCJ, we expect to acquire in 2010 the one share of our~~ common stock ~~owned by SCJ~~. There is no established public trading market for our common stock.

The following table sets forth the amount of cash dividends we paid to our stockholders in fiscal years ~~2009~~2010 and ~~2008~~2009 on a per share basis:

	2009		2008
	2010			2009
May 15		~~887.57~~—		~~887.57~~	887.57
November 15		~~887~~642.5715		~~887.57~~	887.57
November 24		~~3,622.94~~—		—	3,622.94
	$	~~5,398~~642.0815	$	~~1,775.14~~$	5,398.08

Dividends on November 15, 2010 were paid to enable Holdings to pay interest on the Holdings Senior Notes. Dividends on May 15 and November 15 of 2009 ~~and~~ ~~2008~~ were paid to enable Holdings to pay interest on its previously outstanding 10.67% senior discount notes. Prior to the redemption of the senior discount notes in December 2009, interest payments on the notes were due semiannually on May 15 and November 15. Dividends on November 24 of 2009 were paid to enable, among other things, Holdings to settle its obligations relating to the Redemption Agreement.

Our ability to pay dividends is restricted by covenants in the indenture governing ~~our~~the ~~senior~~Diversey ~~notes~~Senior Notes and in the credit agreement for our ~~new senior~~Senior ~~secured~~Secured ~~credit~~Credit ~~facilities~~Facilities. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” in this annual report on Form 10-K.

ITEM 6.

SELECTED FINANCIAL DATA

Prior to 2008, we reported our results of operations on a 52/53 week year ending on the Friday nearest to December 31. Beginning with fiscal year 2008, we changed our fiscal year end date from the Friday nearest December 31 to December 31. Accordingly, references in this annual report on Form 10-K to our fiscal year 2008 relate to the period from December 29, 2007 to December 31, 2008. For the fiscal years ended December 31, 2010, 2009 and 2008, our results include 52 weeks ~~and~~plus one day, 52 weeks plus one day and 52 weeks ~~and~~plus 3 days, respectively. Operations included 52 weeks in each of fiscal years 2007, ~~2006~~ and ~~2005~~2006. Our fiscal year 2007 commenced on December 30, 2006 and ended on December 28, 2007. Our fiscal year 2006 commenced on December 31, 2005 and ended on December 29, 2006. ~~Our fiscal year 2005 commenced on January 1, 2005 and ended December 30, 2005.~~

We derived the following selected historical consolidated financial data from our consolidated financial statements as of and for the ~~fiscal~~ fiscal years ended December 31, ~~2009~~2010, December 31, ~~2008~~2009, December 2831, ~~2007~~2008, December 2928, ~~2006~~2007 and December 3029, ~~2005~~2006. Those consolidated financial statements have been prepared under U.S. GAAP. You should read ~~the~~ the following selected historical consolidated financial data in conjunction with the financial statements and related notes included elsewhere in this annual report on Form 10-K and with the information included in this annual report on Form 10-K ~~under~~ under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

25Except for Cash Flow and EBITDA measures, the selected historical data is presented on a continuing operations basis. The operational results and gains associated with the divestitures of DuBois Chemicals, divested in September 2008, Chemical

~~Except for Cash Flow and EBITDA measures, the selected historical data is presented on a~~ ~~continuing operations basis. The operational results and gains associated with the divestitures of DuBois Chemicals, divested in September 2008, Chemical~~ Methods Associates, divested in September 2006, the Polymer Business, divested in June 2006, and Whitmire Micro-Gen Research Laboratories, Inc., divested in June 2004, are presented in “Income from discontinued operations, net of tax.” Accordingly, fiscal years prior to the fiscal year ended December 31, ~~2009~~2010 have been restated to conform to current year presentation.

	Fiscal Year Ended
	December 31,2009			December 31,2008			December 28,2007			December 29,2006			December 30,2005
	December 31,2010			December 31,2009			December 31,2008			December 28,2007			December 29,2006
	(dollars in thousands)
Selected Income Statement Data:
Net sales:
Net product and service sales	$	3,~~083~~101,~~711~~277		$	3,~~280~~083,~~857~~711		$	23,~~949~~280,~~812~~857		$	2,~~753~~949,~~752~~812		$	2,~~766~~753,~~068~~752
Sales agency fee income (1)		2726,~~170~~400			3527,~~020~~170			9135,~~928~~020			8591,~~516~~928			9485,~~105~~516
Cost of sales (3)		1,828,933			1,990,082			1,764,224			1,666,817			1,657,059
Cost of sales		1,800,419			1,828,933			1,990,082			1,764,224			1,666,817
Gross profit		1,~~281~~327,~~948~~258			1,~~325~~281,~~795~~948			1,~~277~~325,~~516~~795			1,~~172~~277,~~451~~516			1,~~203~~172,~~114~~451
Selling, general and administrative expenses (2)(3)		988,095			1,067,732			1,117,702			1,123,880			1,068,364
Selling, general and administrative expenses		1,005,927			988,095			1,067,732			1,117,702			1,123,880
Research and development expenses		6365,~~328~~655			6763,~~077~~328			6567,~~539~~077			5865,~~112~~539			5358,~~968~~112
Restructuring expenses		32,914			57,291			27,165			114,787			17,677
Restructuring expenses (credits)		(2,277	)		32,914			57,291			27,165			114,787
Operating profit (loss) (2)		197,611			133,695			67,110			(124,328	)		63,105
Operating profit (loss)		257,953			197,611			133,695			67,110			(124,328	)
Interest expense, net		92114,~~381~~242			9792,~~720~~381			9697,~~559~~720			~~107~~96,~~583~~559			~~133~~107,~~997~~583
Notes redemption and other costs		~~25,402~~—			—25,402			—			—			—
Other (income) expense, net (2)		(4,699	)		5,671			(787	)		5,232			960
Other (income) expense, net		2,732			(4,699	)		5,671			(787	)		5,232
Income tax (benefit) provision		76,129			57,531			65,846			(92,994	)		133,231
Income tax provision (benefit)		66,258			76,129			57,531			65,846			(92,994	)
Income (loss) from continuing operations		874,~~398~~721			~~(27~~8,~~227~~398	)		(9427,~~508~~227	)		(~~144~~94,~~149~~508	)		(~~205~~144,~~083~~149	)
Income (loss) from discontinued operations, net of tax		(~~529~~10,361	)		~~15,465~~(529	)		715,~~877~~465			~~262~~7,~~456~~877			38262,~~421~~456
Net income (loss)	$	764,~~869~~360		$	~~(11~~7,~~762~~869	)	$	(8611,~~631~~762	)	$	~~118~~(86,~~307~~631	)	$	~~(166~~118,~~662~~307	)
Net income (loss) attributable to noncontrolling interests		—			—			—			~~(25~~—	)		65(25	)
Net income (loss) attributable to Diversey, Inc.	$	764,~~869~~360		$	~~(11~~7,~~762~~869	)	$	(8611,~~631~~762	)	$	~~118~~(86,~~282~~631	)	$	~~(166~~118,~~597~~282	)
Selected Other Financial Data:
EBITDA (4)	$	312,240		$	278,001		$	235,551		$	465,192		$	303,629
EBITDA (2)	$	361,744		$	312,240		$	278,001		$	235,551		$	465,192
Credit Agreement EBITDA (4)		403,180			364,157			373,557			315,080			385,570
Credit Agreement EBITDA (2)		452,877			403,180			364,157			373,557			315,080
Depreciation and amortization		~~112~~116,~~097~~828			~~128~~112,~~236~~097			~~156~~128,~~746~~236			~~198~~156,~~410~~746			~~183~~198,~~448~~410
Capital expenditures (5)		94,294			121,211			111,159			93,381			92,169
Capital expenditures (3)		94,662			94,294			121,211			111,159			93,381
Net cash provided by (used in) operating activities		~~122~~150,~~767~~518			49122,~~197~~767			3349,~~296~~197			(633,~~492~~296	)		~~135~~(6,~~170~~492	)
Net cash provided by (used in) investing activities		(8994,~~163~~185	)		1(89,~~817~~163	)		~~(102~~1,~~362~~817	)		~~390~~(102,~~828~~362	)		~~(71~~390,~~590~~828	)
Net cash provided by (used in) financing activities		~~102~~(159,~~361~~055	)		~~(46~~102,~~310~~361	)		(5546,~~972~~310	)		(~~343~~55,~~471~~972	)		74(343,~~718~~471	)
Gross profit margin (6)		41.2	%		40.0	%		42.0	%		41.3	%		42.1	%
Gross profit margin (4)		42.4	%		41.2	%		40.0	%		42.0	%		41.3	%
Operating profit margin (7)		6.4	%		4.0	%		2.2	%		-4.4	%		2.2	%
Operating profit margin (5)		8.2	%		6.4	%		4.0	%		2.2	%		-4.4	%

2628

	As of
	December 31,2009		December 31,2008			December 28,2007			December 29,2006		December 30,2005
	December 31,2010			December 31,2009				December 31,2008			December 28,2007		December 29,2006
	~~(dollars in thousands)~~			(dollars in thousands)
Selected Balance Sheet Data:
Cash and cash equivalents	$	~~249~~157,~~440~~754	$	~~107,818~~$	249,440	$	~~97,071~~	$	$107,818	~~208,313~~	$	~~158~~97,~~186~~071	$	208,313
Restricted cash		3920,~~654~~407		~~49,463~~	39,654		—		49,463	—		—		—
Accounts receivable, net		~~578~~569,~~663~~439		~~570,654~~	578,663		~~636,470~~		570,654	~~548,275~~		~~502~~636,~~089~~470		548,275
Due from parent		9264,~~247~~241		~~436~~	92,247		~~363~~		436	~~321~~		~~294~~363		321
Inventories		~~255~~263,~~989~~247		~~255,330~~	255,989		~~279,175~~		255,330	~~253,049~~		~~243~~279,~~329~~175		253,049
Accounts payable		~~416~~351,~~278~~625		~~387,527~~	416,278		~~405,362~~		387,527	~~401,860~~		~~369~~405,~~553~~362		401,860
Working capital (8)		418,374		438,457			510,283			399,464		375,865
Working capital (6)		481,061			418,374				438,457			510,283		399,464
Property, plant and equipment, net		~~415~~410,~~645~~507		~~412,022~~	415,645		~~442,434~~		412,022	~~410,689~~		~~420~~442,~~200~~434		410,689
Total assets		3,~~512~~309,~~238~~324		~~3,197,192~~	3,512,238		~~3,436,529~~		3,197,192	~~3,302,772~~		3,~~308~~436,~~893~~529		3,302,772
Total debt, including current portion		1,~~391~~225,~~103~~849		~~1,081,826~~	1,391,103		~~1,101,530~~		1,081,826	~~1,095,545~~		1,~~406~~101,~~262~~530		1,095,545
Stockholders’ equity		704,803		714,496			958,267			944,671		728,178
Stockholder’s equity		780,124			704,803				714,496			958,267		944,671

(1) Sales agency termination fees of $0.76 million, $0.7 million, $30.27 million, $13.12 million and $71.71 million under the Prior Agency Agreement were included in sales agency fees in fiscal years ended December 31, ~~2009~~2010, December 31, ~~2008~~2009, December 2831, ~~2007~~2008, December 2928, ~~2006~~2007 and December 3029, ~~2005~~2006, respectively.

(2) InEBITDA ~~March~~and ~~2005,~~Credit weAgreement ~~reclassified~~EBITDA ~~gains~~are non-U.S. GAAP financial measures, and ~~losses~~you onshould ~~fixed~~not ~~asset~~consider EBITDA and ~~product~~Credit ~~line~~Agreement ~~disposals~~EBITDA ~~from~~as ~~other~~alternatives to U.S. GAAP financial measures such as (a) operating profit or net income as a measure of our operating performance or (b) ~~expense~~cash toflows ~~selling~~provided by operating, ~~general~~investing and ~~administrative~~financing ~~expenses~~activities (as determined in accordance with U.S. GAAP) as a measure of our ability to meet cash needs.

In March 2005, we reclassified gains and losses on business divestitures from other (income) expense to selling, general and administrative expenses.

(3) In January 2005, in order to achieve alignment with our functional cost structure, we reclassified certain customer support costs. Accordingly, in the above selected historical consolidated financial data for the fiscal year ended December 30, 2005, certain customer support costs of $0.9 million have been included in / reclassified to cost of sales.

(4) EBITDA is a non-U.S. GAAP financial measure, and you should not consider EBITDA as an alternative to U.S. GAAP financial measures such as (a) operating profit or net income as a measure of our operating performance or (b) cash flows provided by operating, investing and financing activities (as determined in accordance with U.S. GAAP) as a measure of our ability to meet cash needs.

We present EBITDA because we believe it provides investors with important additional information to evaluate our performance. We believe EBITDA is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. In addition, we believe that investors, analysts and rating agencies will consider EBITDA useful in measuring our ability to meet our debt service obligations. However, EBITDA is not a recognized measure under GAAP, and when analyzing our financial results, investors should use EBITDA in addition to, and not as an alternative to, net income or net cash provided by operating activities as defined under GAAP. In addition, because other companies may calculate EBITDA differently, this measure will not be comparable to EBITDA or similarly titled measures reported by other companies.

We also present Credit Agreement EBITDA because it is a financial measure which is used in the credit agreement for our ~~new~~Senior ~~senior~~Secured ~~secured~~Credit ~~credit facilities~~Facilities. Credit Agreement EBITDA is not a recognized measure under GAAP and should not be considered as a substitute for financial performance and liquidity measures determined in accordance with GAAP, such as net income, operating income or operating cash flow. Credit Agreement EBITDA differs from the term EBITDA as it is commonly used. Credit Agreement EBITDA is calculated as set forth below and is defined in accordance with the credit agreement for our ~~new senior~~Senior ~~secured~~Secured ~~credit~~Credit ~~facilities~~Facilities.

Borrowings under our ~~new~~Senior ~~senior~~Secured ~~secured~~Credit ~~credit~~Facilities ~~facilities~~ are a key source of our liquidity. Our ability to borrow under our ~~new~~Senior ~~senior~~Secured ~~secured~~Credit ~~credit~~Facilities ~~facilities~~ depends upon, among other things, compliance with certain representations, warranties and covenants under the credit agreement for our ~~new~~Senior ~~senior~~Secured ~~secured credit facilities~~Credit Facilities. The financial covenants in our ~~new~~Senior ~~senior~~Secured ~~secured~~Credit ~~credit~~Facilities ~~facilities~~ include a specified debt to Credit Agreement EBITDA leverage ratio and a specified Credit Agreement EBITDA to interest expense coverage ratio for specified periods. Failure to comply with these financial ratio covenants would result in a default under the credit agreement for ~~our~~Senior ~~new~~Secured ~~senior~~Credit ~~secured~~Facilities ~~credit facilities~~ and, absent a waiver or an amendment from our lenders, would permit the acceleration of all outstanding ~~borrowings~~ borrowings under our ~~new~~Senior ~~senior~~Secured ~~secured~~Credit ~~credit facilities~~Facilities.

Neither EBITDA nor Credit Agreement EBITDA is used in the indenture governing the notes. The term “Consolidated EBITDA” is used in the indenture as part of the calculation of the term “Consolidated Coverage Ratio,” which is used for a number of purposes, including determining our ability to incur additional indebtedness, and may include certain cost savings or synergies.

EBITDA or Credit Agreement EBITDA should not be construed as a substitute for, and should be considered together with, net cash flows provided by operating activities as determined in accordance with U.S. GAAP. The following table reconciles EBITDA and Credit Agreement EBITDA to net cash flows provided by (used in) operating activities, which is the GAAP measure most comparable to EBITDA and Credit Agreement EBITDA, for each of the periods for which EBITDA and Credit Agreement EBITDA are presented.

2829

	Fiscal Year Ended
	December 31,2009			December 31,2008			December 28,2007			December 29,2006			December 30,2005
	December 31,2010			December 31,2009			December 31,2008			December 28,2007			December 29,2006
	~~(dollars in thousands)~~			(dollars in thousands)
Net cash flows provided by (used in) operating activities	$	~~122~~150,~~767~~518		$	49122,~~197~~767		$	3349,~~296~~197		$	(633,~~492~~296	)	$	~~135~~(6,~~170~~492	)
Changes in operating assets and liabilities, net of effects from acquisitions and divestitures of businesses		(272,~~446~~191	)		9(2,~~404~~156	)		939,~~261~~404			9593,~~069~~261			7695,~~116~~069
Depreciation and amortization expense		(~~112~~116,~~097~~828	)		(~~128~~112,~~236~~097	)		(~~156~~128,~~746~~236	)		(~~198~~156,~~410~~746	)		(~~183~~198,~~448~~410	)
Amortization of debt issuance costs		(1518,~~711~~091	)		(415,~~984~~711	)		(4,~~747~~984	)		(54,~~848~~747	)		(285,~~738~~848	)
Interest accrued on long-term receivables–related parties		2,551			2,749			2,583			2,464			3,317
Accretion of original issue discount		(3,777	)		(290	)		—			—			—
Changes in deferred income taxes		(7,474	)		6,058			(41,618	)		10,395			(157,983	)
Interest accrued on long- term receivables–related parties		—			2,551			2,749			2,583			2,464
Changes in restricted cash and cash equivalents		27,404			49,463			—			—			—
Changes in deferred income taxes		(7,392	)		(7,474	)		6,058			(41,618	)		10,395
Gain (loss) from divestitures		(32	)		11,753			(538	)		234,974			667
Changes in restricted cash and cash equivalents		—			27,404			49,463			—			—
Gain (loss) on property disposals		(726	)		(736	)		4,218			(581	)		(5,715	)
Gain (loss) from divestitures		(845	)		(32	)		11,753			(538	)		234,974
Compensation costs for long-term incentives		(215	)		(400	)		(515	)		(393	)		(5,136	)
Gain (loss) on property disposals		(153	)		(726	)		(736	)		4,218			(581	)
Other		(6,152	)		(6,030	)		(15,825	)		(12,896	)		(847	)
Stock-based compensation		—			(215	)		(400	)		(515	)		(393	)
Net income (loss)		7,869			(11,762	)		(86,631	)		118,282			(166,597	)
Impairment of investment		(5,900	)		—			—			—			—
Net income (loss) attributable to noncontrolling interests		—			—			—			25			(57	)
Other		(5,363	)		(6,152	)		(6,030	)		(15,825	)		(12,896	)
Income tax provision		74,425			63,755			68,811			40,610			152,096
Net income (loss)		64,360			7,869			(11,762	)		(86,631	)		118,282
Interest expense, net		92,447			97,772			96,625			107,865			134,739
Net income (loss) attributable to noncontrolling interests		—			—			—			—			25
Notes redemption and other costs		25,402			—			—			—			—
Income tax provision		66,258			74,425			63,755			68,811			40,610
Depreciation and amortization expense		112,097			128,236			156,746			198,410			183,448
Interest expense, net		114,298			92,447			97,772			96,625			107,865
EBITDA		312,240			278,001			235,551			465,192			303,629
Notes redemption and other costs		—			25,402			—			—			—
Restructuring related costs (a)		59,607			94,014			105,453			199,181			55,939
Depreciation and amortization expense		116,828			112,097			128,236			156,746			198,410
Acquisition and divestiture adjustment (b)		2,167			(22,624	)		1,161			(381,637	)		—
EBITDA		361,744			312,240			278,001			235,551			465,192
Non-cash and other items, net ( c )		12,132			1,635			18,925			28,078			26,002
Restructuring related costs (a)		8,609			59,607			94,014			105,453			199,181
Compensation adjustment (d)		17,034			13,131			12,467			4,266			—
Acquisition and divestiture adjustment (b)		10,361			2,167			(22,624	)		1,161			(381,637	)
Credit agreement EBITDA (e)	$	403,180		$	364,157		$	373,557		$	315,080		$	385,570
Non-cash expenses and charges ( c )		21,058			8,898			1,635			18,925			28,078
Non-recurring gains or losses (d)		31,102			3,234			—			—			—
Compensation adjustment (e)		20,003			17,034			13,131			12,467			4,266
Credit agreement EBITDA (f)	$	452,877		$	403,180		$	364,157		$	373,557		$	315,080

(a)	For a further description of restructuring and other one-time charges relating to the November 2005 Plan, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

(b)	For a further description of adjustments related to businesses divested during the applicable period, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Divestitures.”

(c)	Adjustments primarily related to changes in the allowance for doubtful accounts, changes in the reserve for excess and obsolete inventory and gains and losses on sales of capital assets.

(d) ~~Expenses~~For ~~related~~a tofurther ~~certain~~explanation ~~cash~~of these non-~~based~~recurring ~~employee~~costs, ~~benefits~~see ~~that~~discussion ~~will~~of beselling, ~~converted~~general toand anadministrative ~~equity~~expenses ~~plan~~under in“Management’s ~~connection~~Discussion ~~with~~and ~~the~~Analysis ~~Transactions~~of Financial Condition and Results of Operations.”

(e) ~~Credit~~Expenses ~~Agreement~~related ~~EBITDA~~to ~~includes EBITDA of~~ certain ~~operations~~cash-based ~~divested~~employee ~~subsequent~~benefits tothat ~~the~~will ~~applicable~~be ~~period~~converted ofto ~~$57,~~an ~~$44,144,~~equity ~~$17,637~~plan ~~and~~in ~~$7,918~~connection inwith the ~~fiscal years ended December 30, 2005, December 29, 2006, December 28, 2007 and December 31, 2008, respectively~~Transactions.

(5f) ~~Capital~~Credit ~~expenditures~~Agreement ~~include~~EBITDA ~~expenditures~~includes ~~for~~EBITDA ~~capitalized~~of ~~computer~~certain ~~software~~operations divested subsequent to the applicable period of $44,144, $17,637 and $7,918 in the fiscal years ended December 29, 2006, December 28, 2007 and December 31, 2008, respectively.

(63) ~~Gross~~Capital ~~profit~~expenditures ~~margin~~include isexpenditures ~~gross~~for ~~profit~~capitalized ascomputer ~~a percentage of net sales~~software.

(74) ~~Operating~~Gross profit margin is ~~operating~~gross profit as a percentage of net sales.

(85) ~~Working~~Operating ~~capital~~profit margin is ~~defined~~operating profit as ~~net~~a ~~accounts~~percentage ~~receivable~~of ~~plus~~net ~~inventories less accounts payable~~sales.

29(6) Working capital is defined as net accounts receivable plus inventories less accounts payable.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion summarizes the significant factors affecting our consolidated operating results, financial condition and liquidity for ~~the~~ the three-year period ended December 31, ~~2009~~2010. This discussion should be read in conjunction with our consolidated financial statements and notes to the consolidated financial statements included in this annual report on Form 10-K as well as ~~the~~ the sections entitled “Forward-Looking Statements” located before Part I and “Risk Factors” located in Item 1A. of this annual report on Form 10-K.

Executive Overview

In June 2008, the Company announced plans to reorganize its operating segments to better address consolidation and globalization trends among its customers and to enable the Company to more effectively deploy resources. Effective January 2010, the Company completed its reorganization from a five region model to the new three region model, having implemented the following:

•

Three regional presidents were appointed to lead the three regions;

•

The three regional presidents report to the Company’s Chief Executive Officer (“CEO”), who is its chief operating decision maker;

•

Financial information is prepared separately and regularly for each of the three regions; and

•

The CEO regularly reviews the results of operations, manages the allocation of resources and assesses the performance of each of these regions.

•

The existing Europe region;

•

A new Americas region combining the former North and Latin American regions; and

•

A new Greater Asia Pacific region combining the former Asia Pacific and Japan regions.

In 2010, as a result of integrating certain of the Company’s equipment business into the Americas and Europe segments, associated revenues, expenses, assets and liabilities have been reclassified from Eliminations/Other to the Americas and Europe segments (see Note 28 to the consolidated financial statements). This reclassification is consistent with changes in the Company’s organizational reporting and reflects the chief operating decision maker’s approach to assessing performance and asset allocation.

Accordingly, the following management discussion and analysis reflects segment information in conformity with the three region model and the equipment business reclassification, and prior period segment information has been restated for comparability and consistency.

Except where noted, the management discussion and analysis below, excluding the consolidated statements of cash flows, reflects the results of continuing operations, which excludes the results of DuBois Chemicals (“DuBois”) as discussed in Note 6 to the consolidated financial statements.

In the fiscal year ended December 31, 2009, net sales decreased by $205.0 million compared to the prior year. As indicated in the following table, after excluding the impact of foreign currency exchange rates, acquisitions and divestitures, sales agency fee income (“SAF”), and sales from our Master Sub-License Agreement (the “License Agreement”), our net sales decreased by 0.2% for the fiscal year ended December 31, 2009, compared to the prior year. Beginning in fiscal year 2008, the License Agreement replaced the Prior Agency Agreement in most countries.

	Fiscal Year Ended
(dollars in millions)	December 31,2009			December 31,2008			Change
Net sales	$	3,110.9		$	3,315.9		-6.2	%
Variance due to:
Foreign currency exchange		—			(164.1	)
Acquisitions and divestitures		—			(9.9	)
Sales agency fee income		(27.2	)		(35.0	)
License Agreement revenue		(133.4	)		(151.3	)
		(160.6	)		(360.3	)
	$	2,950.3		$	2,955.6		-0.2	%

The fiscal year 2009 global economic environment was challenging to many companies and had a significant impact on our operations. In addition and as previously identified, there were 2 fewer selling days in fiscal 2009 compared to fiscal 2008. The table above shows that our organic sales in 2009, compared to the prior year, decreased by 0.2%. The marginal decrease in sales was due to generally lower volume than last year. We believe the contraction in sales is generally consistent with the global economic slowdown. The decrease in sales would have been higher had we not been able to effectively implement the pricing initiatives that we started in the last quarter of 2008. Our delivery of value to our customers allowed us to effectively execute this strategy. We also aggressively pursued new customers and introduced innovation as part of our product delivery. As a result of these initiatives, we were able to achieve modest sales increases in some segments of our business, and mitigate the effects of the economic recession. We believe that our disciplined and effective approach to implementing price increases across all segments of our business was the primary factor to our maintaining sales levels in 2009.

As indicated in the following table, our gross profit percentage improved significantly for the year ended December 31, 2009 compared to the year ended December 31, 2008. Excluding the impact of SAF, our gross profit percentage improved 140 basis points for the year ended December 31, 2009 compared to the year ended December 31, 2008.

Margin on Net Sales as ReportedFiscal Year Ended				Margin on Net Sales Adjusted for SAFFiscal Year Ended
December 31, 2009		December 31, 2008		December 31, 2009		December 31, 2008
41.2	%	40.0	%	40.7	%	39.3	%

The 140 basis point improvement was largely the result of increased prices and a favorable reduction in certain raw material costs, including phosphorous materials, caustic soda, and chelates. Additional cost reductions were achieved through various cost savings initiatives attained through our global sourcing activities, as we resolved to control the effects of rising raw material prices. In conjunction with these initiatives, we further improved gross margins by rationalizing the number of product offerings and eliminating low margin products. In addition, we implemented internal processes to more effectively monitor customer profitability.

The economic recession has adversely affected a number of end-users of our products and services, such as hotels, restaurants, food and beverage processors and others that are sensitive to business travel and leisure. These end-users reduced their purchase volume of cleaning, hygiene, operational efficiency and appearance enhancing products in 2009. However, we did not experience a material loss in customers. As a consequence of the economic pressures, we may have difficulty maintaining some of the price increases we implemented. A further deterioration in economic conditions could exacerbate the disruptions in the credit markets, and our customers may face difficulties gaining timely access to sufficient credit, which could impair their ability to make timely payments to us.

We implemented materials sourcing savings programs and continued cost containment measures during 2009. Although we believe we have instituted appropriate strategies to attain profitability and achieve growth, we cannot fully mitigate the effects of the global recession on our operations. While we attempt to continuously manage our costs, including our personnel costs, in relation to our sales volumes, our efforts may not be successful and the timing of these efforts and associated costs may adversely affect our results. We will continue to monitor economic conditions closely and pursue cost saving opportunities as well as growth opportunities through strategic investments and innovations.

We recapitalized our Company through the debt and equity investment transactions that closed on November 24, 2009. The terms of our new debt provide us with more liquidity and position us well for growth and stability. In the current economic climate, we will continue to prioritize our receivable collections and working capital management initiatives.

As of December 31, 2009, we were in compliance with the financial covenants under the credit agreement for our new senior secured credit facilities. The global economy has been greatly affected by the ongoing credit crisis and recessionary environment with many lenders and institutional investors ceasing to provide or limiting credit to even the most credit-worthy borrowers. We believe that we are positioned to deal with the continuing economic downturn; however, we are not able to predict how severe the downturn may become, how long it will last and how it will affect our business or our customers’ businesses going forward.

In November 2005, in response to structural changes in raw material markets that gave rise to significant increases in our input costs, we announced the November 2005 Plan to implement an operational restructuring of our company. We believe that our restructuring program positioned us to confront these challenges more effectively.

During fiscal year 2009, we made significant progress with the operational restructuring of our company in accordance with the November 2005 Plan. In particular, key activities during the year included the following:

• continued plans to transition to new organizational models in our regions;

•In ~~finalized~~the fiscal year ended December 31, 2010, net sales increased by $16.8 million compared to the ~~transition~~prior year. As indicated in the following table, after excluding the impact of ~~certain~~foreign ~~general~~currency ~~ledger~~exchange ~~accounting~~rates, ~~functions~~our innet ~~Western~~sales ~~Europe~~decreased by 0.3% for the fiscal year ended December 31, 2010, compared to athe ~~third-party~~prior ~~provider;~~year.

• completed the implementation of a global human resource information system;


	Fiscal Year Ended
(dollars in millions)	December 31, 2010		December 31, 2009		Change
Net sales	$	3,127.7	$	3,110.9		0.5	%

Variance due to foreign currency exchange				26.6

	$	3,127.7	$	3,137.5		-0.3	%

•When ~~continued~~adjusted for the ~~redesign~~reduction in H1N1 pandemic related volume, net sales increased by 1% over the prior year. Strong growth in emerging markets was offset by the challenging economic conditions in the developed markets of Western Europe, North America and Japan. Our consistent pricing strategies, improved customer contract compliance and customer acquisitions helped offset the ~~Japanese~~adverse impact of decreased consumption of our products in those developed markets. In particular, emerging markets across the world and global equipment sales have demonstrated consistent growth trends throughout fiscal 2010. We continue to believe that our differentiated value proposition, global customer solutions and ~~marketing~~approach ~~functions~~to innovation, ~~supported~~complemented by ~~Enterprise~~our ~~Resources~~diverse ~~Planning~~customer ~~system~~base, ~~upgrades;~~should allow us to effectively execute our sales strategies and help mitigate market uncertainty.

•As ~~continued~~indicated ~~progress~~in onthe ~~various~~following ~~supply~~table, ~~chain~~our ~~optimization~~gross ~~projects~~profit percentage improved significantly for the year ended December 31, 2010 compared to ~~improve~~the ~~capacity~~year ~~utilization~~ended ~~and~~December 31, ~~efficiency~~2009.

In connection with the aforementioned and other activities under the November 2005 Plan, we recorded restructuring charges which consisted primarily of severance costs, of approximately $32.9 million and $57.3 million for fiscal years 2009 and 2008, respectively. In addition, we recorded period costs of $32.8 million and $42.8 million related to the November 2005 Plan for fiscal years 2009 and 2008, respectively. For the fiscal year ended December 31, 2009, the period costs mainly related to projects at the corporate center as well as the Japanese and North American regions. These period costs consisted of the following:

•For ~~$19~~the year ended December 31, 2010 compared to prior year, the Company’s margin improved by 120 basis points.6 ~~million~~This ~~for~~improvement ~~personnel-related~~was largely the result of continued implementation of price increases, reductions in certain raw material costs, successful implementation of ~~employees~~our restructuring program, and ~~consultative~~structural ~~resources~~improvements ~~connected~~in our global sourcing activities. This includes more efficient materials purchasing, improvements in our manufacturing and logistics footprint, rationalizing the number of product offerings, eliminating low margin products, and implementing internal processes to more ~~restructuring~~effectively ~~initiatives;~~monitor customer profitability. We expect to leverage our process improvements and continued pricing actions to help mitigate current and expected inflationary pressures.

•While ~~$7.1~~the ~~million~~uncertain ~~related~~economic toconditions ~~value~~throughout ~~chain~~2010 ~~and~~adversely ~~cost~~affected ~~savings~~a ~~projects;~~number of end-users of our products and services, we did not experience a loss of material customers.

•We $6continued implementing materials sourcing savings programs and cost containment measures during 2010.1 ~~million~~Although ~~related~~we believe we have instituted appropriate strategies to ~~facilities~~improve profitability and achieve growth, ~~asset~~we ~~impairment~~cannot ~~charges~~be ~~and~~assured ~~various~~that ~~other~~we ~~costs~~can fully mitigate the effects of global economic conditions on our operations.

WeAs ~~expect~~of toDecember 31, ~~complete~~2010, ~~our~~we ~~November~~were ~~2005~~in ~~restructuring~~compliance ~~program~~with ~~during~~the financial covenants under the ~~first~~credit ~~half~~agreement offor ~~2010,~~our ~~with~~Senior ~~the~~Secured ~~associated~~Credit Facilities. ~~reserves~~Our ~~expected~~favorable operating performance provided us with excess cash to ~~be substantially~~voluntarily ~~paid~~pay ~~out~~down byour ~~the~~debt ~~end~~by of$125 ~~the~~million in 2010 ~~fiscal~~and ~~year,~~to ~~mostly~~terminate ~~through~~ our ~~restricted~~receivables ~~cash~~securitization ~~balance~~facilities. ~~The~~We ~~primary~~will ~~restructuring~~continue ~~focus~~to ~~for~~closely monitor the ~~2010~~ongoing ~~fiscal~~global economic ~~year~~conditions ~~will~~that bemay ~~organizing~~affect ~~various~~our ~~functions~~liquidity ~~for~~and ~~efficiency~~the ~~and~~future ~~growth~~availability of credit. We believe that ~~this reorganization~~we ~~will~~are ~~better~~positioned ~~position~~to usdeal with inflationary concerns or economic downturns; however, we are not able to ~~address~~predict ~~consolidation~~how ~~and~~much ~~globalization~~either ~~trends~~would ~~among~~affect our business ~~customers~~and ~~while~~our ~~enabling~~customers’ usbusinesses togoing ~~more~~forward. ~~effectively~~From ~~deploy~~time ~~resources~~ to time, the ~~most~~Company ~~compelling~~has ~~market~~considered and ~~customer~~may ~~growth~~in ~~opportunities.~~the Wefuture ~~also~~pursue ~~believe~~debt ~~this reorganization~~or ~~will~~other ~~boost~~financing ~~our~~alternatives, ~~efforts~~depending toon ~~more~~market ~~rapidly~~conditions ~~deploy~~and ~~innovation~~other ~~globally~~factors.

During fiscal year 2010, we continued to make significant progress with the operational restructuring of our Company in accordance with the November 2005 Plan. Key activities during the year included the continued transition to a new organizational model in our Europe region, and continued progress on various supply chain optimization projects designed to improve capacity utilization and efficiency. Our November 2005 restructuring program activity will continue through fiscal 2011, with the majority of associated reserves expected to be paid out through our restricted cash balance.

In conjunction with its ongoing operational efficiency efforts, the Company announced plans to transition certain accounting functions in its corporate center and North America location to a third party provider. The Company commenced the plan in fiscal 2010 and expects to complete execution by December 2011. The Company also affirmed its decision to cease manufacturing operations at Waxdale, its primary U.S. manufacturing facility, and to move some production to its other locations in North America, as well as to pursue contract manufacturing for a portion of its product line. The timeline to transition out of Waxdale is not certain, but is expected to be largely completed by the first semester of fiscal 2012.

In December 2010, the Company announced a further enhancement of its organizational structure. The new structure provides a focus on the role of emerging markets in our growth objectives, and will consist of four regions reporting to the CEO, as follows:

•

Americas – The operating units in this region will remain unchanged.

•

Japan – Japan becomes a stand-alone region.

The implementation of this organizational redesign is currently in progress. Regional presidents for each of the four regions have been appointed and are currently transitioning. The Company will continue to report its operating segments under the current three region model until the new management, operating, and financial reporting structures are effectively in place, which currently is expected to be completed later in our 2011 fiscal year.

Critical Accounting Policies

The preparation of our financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results may differ from these estimates under different assumptions or conditions. The following are the accounting policies that we believe are most critical to our financial condition and results of operations and that involve management’s judgment and/or evaluation of inherent uncertain factors:

Revenue Recognition. We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or ownership has transferred to the customer, the sales price is fixed or determinable, and collection is probable. We record an estimated reduction to revenue for customer discount programs and incentive offerings, including allowances and other volume-based incentives. If market conditions were to decline, we may take actions to increase customer incentive offerings, possibly resulting in a reduction of gross profit margins in the period during which the incentive is offered. Revenues are reflected in the consolidated statement of operations net of taxes collected from customers and remitted to governmental authorities.

In arriving at net sales, we estimate the amounts of sales deductions likely to be earned by customers in conjunction with incentive programs such as volume rebates and other discounts. Such estimates are based on written agreements and historical trends and are reviewed periodically for possible revision based on changes in facts and circumstances.

Estimating Reserves and Allowances. We estimate inventory reserves based on periodic reviews of our inventory balances to identify slow-moving or obsolete items and to value inventories at the lower of cost or net realizable value. This determination is based on a number of factors, including new product introductions, changes in customer demand patterns, product life cycle, and historic usage trends.

32We estimate the allowance for doubtful accounts by analyzing accounts receivable balances by age, applying historical trend rates, analyzing market conditions and specifically reserving for identified customer balances, based on known facts, which are deemed probable as uncollectible. For larger accounts greater than 90 days past due, an allowance for doubtful accounts is recorded based on the customer’s ability and likelihood to pay and based on management’s review of the facts and circumstances. For other customers, we recognize an allowance based on the length of time the receivable is past due and on historical experience. See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” for further discussion on credit risk as it relates to the recent global economic slowdown.

~~Table~~We accrue for losses associated with litigation and environmental claims based on management's best estimate of ~~Contents~~future costs when such losses are probable and reasonably able to be estimated. We record those costs based on what management believes is the most probable amount of the liability within the ranges or, where no amount within the range is a better estimate of the potential liability, at the minimum amount within the range. The accruals are adjusted as further information becomes available or circumstances change.

We estimate the allowance for doubtful accounts by analyzing accounts receivable balances by age, applying historical trend rates, analyzing market conditions and specifically reserving for identified customer balances, based on known facts, which are deemed probable as uncollectible. For larger accounts greater than 90 days past due, an allowance for doubtful accounts is recorded based on the customer’s ability and likelihood to pay and based on management’s review of the facts and circumstances. For other customers, we recognize an allowance based on the length of time the receivable is past due and on historical experience. See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” for further discussion on credit risk as it relates to the current global economic slowdown.

We accrue for losses associated with litigation and environmental claims based on management’s best estimate of future costs when such losses are probable and reasonably able to be estimated. We record those costs based on what management believes is the most probable amount of the liability within the ranges or, where no amount within the range is a better estimate of the potential liability, at the minimum amount within the range. The accruals are adjusted as further information becomes available or circumstances change.

Pension and Post-Retirement Benefits. We sponsor separately funded pension and post-retirement plans in various countries, including the United States. Several statistical and judgmental factors, which attempt to anticipate future events, are used in calculating the expense and liability related to the plans. These factors include assumptions about the discount rate, expected return on plan assets, rate of future compensation increases and healthcare cost trends, as determined by us and our actuaries. In addition, our actuarial consultants also use subjective factors, such as withdrawal and mortality rates, to estimate these factors. We use actuarial assumptions that may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates, longer or shorter life spans of participants and changes in actual costs of healthcare. Actual results may significantly affect the amount of pension and other post-retirement benefit expenses recorded by us.

~~Goodwill~~34 and Non-Amortizing Intangibles. Goodwill and non-amortizing intangible assets are reviewed for impairment on an annual basis and between annual tests when significant events or changes in business circumstances indicate that their carrying values may not be recoverable. We have defined our reportable segments as our reporting units for our goodwill impairment testing. We use a two-step process to test goodwill for impairment. First, the reporting unit’s fair value is compared to its carrying value. Fair value is estimated using a combination of a discounted cash flow approach and a market approach. If a reporting unit’s carrying amount exceeds its fair value, an indication exists that the reporting unit’s goodwill may be impaired, and the second step of the impairment test would be performed. The second step of the goodwill impairment test is to measure the amount of the impairment loss, if any. In the second step, the implied fair value of the reporting unit’s goodwill is determined by allocating the reporting unit’s fair value to all of its assets and liabilities other than goodwill in a manner similar to a purchase price allocation. The implied fair value of the goodwill that results from the application of this second step is then compared to the carrying amount of the goodwill and an impairment charge would be recorded for the difference if the carrying value exceeds the implied fair value of the goodwill. We test the carrying value of other intangible assets with indefinite lives by comparing the fair value of the intangible assets to the carrying value. Fair value is estimated using a relief of royalty approach, a discounted cash flow methodology.

We conduct our annual impairment reviews at the beginning of the fourth quarter with the assistance of a third-party valuation firm. We typically complete this analysis as of the first day of our fiscal fourth quarter. Based on our business approach to decision-making, planning and resource allocation, we have determined that we have five reporting units for purposes of evaluating goodwill for impairment, which is aligned with our five geographic segments. Goodwill balances are typically recorded at the reporting unit level; however, where applicable, balances may be allocated to reporting units in proportion to the goodwill balances recorded at the reporting unit level. We performed our impairment reviews for fiscal years 2009, 2008 and 2007, and found no impairment of goodwill and recorded impairment charges of $0 million, $0 million and $0.2 million, respectively, for non-amortizing intangibles, which are included in selling, general and administrative expenses in the consolidated statements of operations. None of the charges related to restructuring activities. Moreover, management currently expects to evaluate goodwill impairment indicators on a regular basis and will conduct interim impairment reviews in the event circumstances indicate such a review is appropriate. As a key and quantifiable value driver, we have chosen interim EBITDA as its primary benchmark measure for interim impairment reviews. We track consolidated actual performance against this benchmark to assess whether or not a step-one evaluation may be necessary. There can be no assurance that future goodwill and non-amortizing intangible asset impairment tests will not result in a charge to earnings.

Goodwill and Non-Amortizing Intangibles. Goodwill and non-amortizing intangible assets are reviewed for impairment on an annual basis and between annual tests when significant events or changes in business circumstances indicate that their carrying values may not be recoverable. For goodwill impairment testing, we have defined our reporting units as Europe, North America, Latin America, Asia Pacific, and Japan. We use a two-step process to test goodwill for impairment. First, the reporting unit’s fair value is compared to its carrying value. Fair value is estimated using a combination of a discounted cash flow approach and a market approach. If a reporting unit’s carrying amount exceeds its fair value, an indication exists that the reporting unit’s goodwill may be impaired, and the second step of the impairment test would be performed. The second step of the goodwill impairment test is to measure the amount of the impairment loss, if any. In the second step, the implied fair value of the reporting unit’s goodwill is determined by allocating the reporting unit’s fair value to all of its assets and liabilities other than goodwill in a manner similar to a purchase price allocation. The implied fair value of the goodwill that results from the application of this second step is then compared to the carrying amount of the goodwill and an impairment charge would be recorded for the difference if the carrying value exceeds the implied fair value of the goodwill. We test the carrying value of other intangible assets with indefinite lives by comparing the fair value of the intangible assets to the carrying value. Fair value is estimated using a relief of royalty approach, a discounted cash flow methodology.

We conduct our annual impairment reviews at the beginning of the fourth quarter with the assistance of a third party valuation firm. We complete this analysis as of the first day of our fiscal fourth quarter. Goodwill balances are recorded at the reporting unit level; however, where applicable, balances may be allocated to reporting units in proportion to the goodwill balances recorded at the reporting unit level. We performed our impairment reviews for fiscal years 2010, 2009 and 2008, and found no impairment of goodwill and non-amortizing intangibles. Moreover, due to the challenging global economic environment during 2010, management evaluated goodwill impairment indicators on a periodic basis to determine if interim impairment reviews were appropriate. As a key and quantifiable value driver, we chose interim EBITDA as its primary benchmark measure for interim impairment reviews. We tracked consolidated actual performance against this benchmark to assess whether or not a step-one evaluation may be necessary. No interim impairment indicators were identified during 2010. There can be no assurance that future goodwill and non-amortizing intangible asset impairment tests will not result in a charge to earnings.

During our 2010 impairment review, each of our reporting units had a fair value that exceeded its carrying value by 45% or more, except for our Japan reporting unit, whose fair value exceeded its carrying value by 20%. The fair value of our Japanese reporting is impacted by macroeconomic factors that exist in that country, which was reflected in our use of a perpetuity growth rate of 1% in our valuation models. The risk-adjusted discount rate utilized was 10.9%. Failure of the Japanese business to realize financial forecasts or further weakening of the Japanese business environment could potentially impact the future recoverability of the $144.3 million of goodwill held in our Japanese reporting unit at December 31, 2010. On March 11, 2011, Japan suffered a significant natural disaster. While immediate losses are not expected to be material, the future impact to operating results and related risk of asset impairment is not currently determinable.

Long-Lived Assets and Amortizing Intangibles. We periodically conduct impairment reviews on long-lived assets, including amortizable intangible assets, whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets. We also periodically reassess the estimated remaining useful lives of our amortizing intangible assets and our other long-lived assets. Changes to estimated useful lives would affect the amount of depreciation and amortization expense recorded in our consolidated financial statements.

We recorded impairment charges on certain long-lived assets of $15.24 million, $61.32 million and $126.83 million during fiscal years ~~2009~~2010, ~~2008~~ 2009 and ~~2007~~2008, respectively~~, in connection with the November 2005 Plan~~.

Stock-Based Compensation. We estimate the grant date fair values of stock awards with the assistance of an independent third party valuation firm. We estimate the fair values of stock options using a Black-Scholes valuation model. Under this model, the fair value of an award is affected by estimates of underlying stock price, the risk free interest rate, stock volatility, holding period, and expected dividends. We estimate the risk-free interest rate based upon United States treasury rates appropriate for the expected life of the awards. We use the implied volatility based on the median monthly volatility of peer companies. Holding period and expected dividends are estimated using management’s judgment of potential liquidity activity and dividend policy. The estimates

we use are subjective and changes to these estimates will cause the fair values of our stock awards and related stock-based compensation expense that we record to vary from time to time.

Accounting for Income Taxes. Significant judgment is required in determining our worldwide income tax provision, deferred tax assets and liabilities, and any valuation allowances recorded against net deferred tax assets. In the ordinary course of a global business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Although the Company believes that its estimates are reasonable, the final tax outcome of these matters could be different from that which is reflected in historical income tax calculations. Such differences could have a material effect on the Company’s income tax provision, net income, and net deferred tax assets in the period in which such determination is made.

The Company does not record a deferred tax liability for certain undistributed foreign earnings where such earnings are considered indefinitely reinvested. Remittances of foreign earnings are planned based on many factors, including projected cash flow, working capital requirements and investment needs of the Company’s foreign and domestic operations. Based on these factors, the Company estimates the amount that will be distributed to the United States or other foreign affiliates and provides United States federal and/or foreign taxes on these amounts. Material changes in the Company’s estimates or tax legislation that limits or restricts the amount of undistributed foreign earnings that are considered indefinitely reinvested could materially impact the Company’s income tax provision and effective income tax rate.

The Company records a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized. In order for the Company to realize deferred tax assets, sufficient taxable income must be generated in those jurisdictions where the deferred tax assets are located. In determining the need for a valuation allowance, the Company considers many factors, including future growth, forecasted earnings, future taxable income, the mix of earnings in the jurisdictions in which it operates, historical earnings, taxable income in prior years, if carryback is permitted under the law, and prudent and feasible tax planning strategies. In the event the Company was to determine that it would not be able to realize all or part of the net deferred tax assets in the future, an adjustment to the valuation allowance would be charged to earnings in the period in which such a determination was made. If the Company later determines that it is more likely than not that the net deferred tax assets would be realized, the applicable portion of the previously provided valuation allowance would be reversed as an adjustment to earnings at such time.

The Company calculates current and deferred income tax provisions based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed during the subsequent year. Adjustments based on filed income tax returns are generally recorded in the period when the income tax returns are filed, which can materially impact the Company’s effective income tax rate.

The amount of taxable income (loss) reported in jurisdictions in which the Company operates is subject to ongoing audits by federal, state and foreign tax authorities, which could result in proposed assessments. The Company’s estimate of the potential outcome for any uncertain tax position is highly judgmental. The Company accounts for these uncertain tax positions pursuant to ASC 740, Income Taxes, which contains a two-step approach to recognizing and measuring uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the income tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the income tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Although the Company believes uncertain tax positions have been adequately reserved for, no assurance can be given with respect to the final outcome of these matters. The Company adjusts the amount of unrecognized tax benefits for uncertain tax positions due to changing facts and circumstances, such as the closing of income tax audits, judicial rulings, refinement of estimates or realization of earnings or deductions that differ from previous estimates. To the extent that the final outcome of these matters is different than the amounts recorded, such differences generally will impact the Company’s provision for income taxes in the period in which such a determination is made. The Company’s income tax provision includes the impact of unrecognized tax benefits and changes to unrecognized tax benefits that are considered appropriate and also include any related interest and penalties.

New Accounting Pronouncements

For information with respect to new accounting pronouncements and the impact of these pronouncements on our consolidated financial statements, see Note 2 to the consolidated financial statements in Item 8 of this annual report on Form 10-K.

Fiscal Year Ended December 31, ~~2009~~2010, Compared to Fiscal Year Ended December 31, ~~2008~~2009

Net Sales:

	Fiscal Year Ended					~~Change~~		Change
(dollars in millions)	December 31,~~2009~~2010		~~December 31,2008~~	December 31,2009		~~Amount~~		Amount		~~Percentage~~		Percentage
Net product and service sales	$	3,~~083~~101.73	$	~~3,280.9~~$	3,083.7	$	~~(197.2~~	)$	17.6	~~-6.0~~	%		0.6	%
Sales agency fee income		2726.24		~~35.0~~	27.2		~~(7.8~~	)	(0.8	~~-22.4~~)	%		-2.8	%
	$	3,110.9	$	3,315.9		$	(205.0	)		-6.2	%
Net sales		3,127.7			3,110.9				16.8				0.5	%
Variance due to foreign currency exchange					26.6				(26.6	)
	$	3,127.7		$	3,137.5			$	(9.8	)			-0.3	%

• The comparability of net sales reported in the two periods is ~~significantly~~ affected by the impact of foreign exchange rate movements. ~~In addition, there were 2 fewer selling days in fiscal 2009 compared to fiscal 2008.~~ As measured against prior year’s results, the ~~stronger~~weaker U.S. dollar against ~~the~~a ~~euro~~majority ~~and~~of ~~certain~~the ~~other~~ foreign currencies in countries where we operate, resulted in a $~~159~~26.86 million ~~reduction~~increase in net ~~product and service~~ sales in ~~2009~~2010.

• Excluding the ~~negative~~ impact of foreign currency exchange rates, ~~acquisitions,~~net ~~SAF~~sales ~~income~~decreased by $9.8 million or 0.3% in fiscal 2010, ~~and~~compared ~~License~~to ~~Agreement~~the ~~revenue~~prior fiscal year. When adjusted for the reduction in H1N1 pandemic related volume, net sales ~~decreased~~increased by ~~0.2~~1% ~~year-~~over- the prior year. ~~This~~Strong isgrowth ~~primarily~~in ~~due~~emerging tomarkets was offset by the ~~current~~challenging ~~global~~economic ~~recession,~~conditions ~~reflecting~~in athe ~~general~~developed ~~softness~~markets inof ~~demand~~Western ~~for~~Europe, ~~our~~North ~~products~~America and ~~services~~Japan. ~~The~~Our ~~potentially~~consistent pricing strategies, improved customer contract compliance and customer acquisitions helped offset the adverse ~~effects~~impact of ~~the~~decreased ~~recession~~consumption ~~were~~of ~~mitigated~~our products in ~~large~~those ~~part~~developed bymarkets. In particular, emerging markets across the ~~successful~~world ~~pricing~~and ~~strategies~~global ~~that~~equipment ~~were~~sales ~~initiated~~have indemonstrated ~~the~~consistent ~~last~~growth ~~quarter~~trends ofthroughout ~~2008~~fiscal 2010. ~~Although~~We wecontinue ~~experienced~~to abelieve ~~general~~that ~~decline~~our indifferentiated ~~sales~~value ~~volume~~proposition, ~~our~~global ~~Europe~~customer solutions and approach to innovation, ~~Middle~~complemented ~~East~~by ~~and~~our ~~Africa~~diversified customer base, ~~Latin~~should ~~America~~allow ~~and~~us ~~Asia~~to ~~Pacific~~effectively ~~regions~~execute ~~reported~~our sales ~~growth~~strategies and help mitigate market uncertainty. The following is a review of the sales performance for each of our segments:

– In our Europe, Middle East and Africa ~~segment~~markets, net sales ~~increased~~decreased by 0.15% in ~~2009~~2010 compared to the prior year. ~~This~~When ~~increase~~adjusted ~~was~~for ~~achieved~~H1N1 ~~despite~~virus ~~the~~related ~~economic~~sales ~~recession,~~in ~~primarily from successfully implementing price increases and customer acquisitions across~~ the ~~region.~~prior ~~Sales~~year, ~~volume~~net ~~also~~sales increased inby ~~certain~~0.7%. ~~emerging~~Emerging markets, ~~such~~continued asits ingrowth ~~Central and Eastern Europe~~trend, but ~~was~~we ~~offset~~experienced bypressure ~~volume~~on ~~declines~~sales volume in Western Europe, ~~particularly~~primarily indue ~~floor~~to ~~care~~the ~~equipment~~stressed ~~and~~economic ~~cleaning~~conditions ~~tools~~driving ~~and~~lower ~~engineering~~consumption ~~sales,~~patterns. aAdjusted ~~result~~for ofH1N1 ~~customers~~related ~~deferring~~sales, ~~their~~growth ~~capital~~was ~~investments.~~largely Wedriven ~~expect~~by ~~that~~pricing ~~the weakened economic environment~~ and ~~related~~customer ~~tightening~~acquisitions ofin ~~credit~~the ~~markets~~food ~~will~~and ~~continue~~beverage toand ~~challenge~~lodging ~~sales~~sectors. ~~growth;~~In ~~however~~addition, weequipment ~~plan~~sales togrew ~~accelerate~~despite ~~innovation~~the inchallenging ~~product~~marketplace. ~~and~~We ~~service~~will ~~solutions and~~ continue to ~~target~~pursue ~~new~~the ~~customers~~successful ~~and~~execution ~~markets~~of our sales strategies to ~~offset~~mitigate ~~this~~continuing ~~downward~~economic ~~pressure~~challenges.

34– In our Americas region, net sales decreased by 1.1% in 2010 compared to the prior year. When adjusted for H1N1 virus related sales in the prior year, net sales increased by 0.7%. Our emerging markets in Latin America experienced strong growth, particularly in the food and beverage, health care and lodging sectors. These gains were partially offset by sales declines in the U.S. and Canada, resulting from our voluntary exit from underperforming

–applications ~~In Latin America, net sales increased by 6.1 %~~ in ~~2009 compared to~~ the ~~prior~~food ~~year.~~and ~~Growth~~beverage ~~came from most countries in the region~~sector, ~~primarily~~as ~~through~~well ~~the~~as ~~implementation~~decreased ofconsumption ~~price increases, offset by volume decreases~~ in the ~~lodging~~government and ~~retail~~education ~~sectors.~~sector ~~The~~due ~~effects~~to oftheir ~~the~~budgetary ~~recession~~constraints. ~~resulted~~We inexpect ~~sales~~a ~~volume~~continued ~~shortfalls~~trend ~~from~~of ~~existing~~consumption ~~customers but were offset by strong~~ growth ~~from~~in ~~new~~emerging ~~customers~~markets. WeOur ~~expect~~expanded ~~continued~~product ~~regional~~offerings ~~growth~~ in ~~all~~the ofU.S. ~~our~~and ~~business~~Canada ~~sectors,~~will ~~through~~help ~~select~~address ~~price~~the ~~increases,~~softness ~~customer acquisitions~~ and ~~delivery~~economic ofuncertainties ~~improved~~in ~~product~~many ~~and~~sectors ~~service~~of ~~solutions~~these marketplaces.

– In our Greater Asia Pacific region, net sales increased by 1.6 7% in ~~2009~~2010 compared to the prior year. ~~This~~When adjusted for H1N1 virus related sales in the prior year, net sales increased by 2.4%. The increase ~~was~~is mainly due to ~~continuing~~strong volume improvements across sectors in ~~developing~~our emerging markets, ~~such~~in asparticular, India, and ~~stable~~China. We experienced sales growth in ~~Australia,~~the ~~offset~~food byand ~~volume~~beverage ~~decreases~~sector indue ~~the~~to ~~remainder~~new ofcustomer ~~the~~acquisitions. This region ~~primarily~~also ~~caused~~delivered bygrowth ~~lower traffic~~ in the lodging sector., Werelated ~~expect~~to ~~favorable~~improved ~~growth~~occupancy inrates, ~~our~~as ~~business,~~well ~~particularly~~as continuing improvement in ~~the~~equipment ~~lodging~~sales ~~sector,~~across asvarious wecustomer ~~continue~~sectors. toOur ~~drive~~growth ~~market~~trends ~~share~~in emerging markets were offset by volume decreases in ~~the~~Japan, consistent with certain other developed markets. The region byexpects ~~capitalizing~~sales ongrowth ~~key~~as ~~account~~economic ~~acquisitions,~~recovery and ~~expected~~customer ~~improvements~~demand inis ~~lodging~~restored ~~occupancy~~and ~~rates~~as inwe ~~2010~~continue our focus on key customer acquisitions and emerging markets.

–Sales Inagency ~~North~~fee. ~~America,~~As ~~net~~further ~~sales~~discussed ~~decreased by 1.2 %~~ in ~~2009~~Note ~~compared~~3 to the ~~prior~~consolidated ~~year~~financial statements, ~~primarily~~sales ~~due~~agency tofees ~~reduced~~pertain ~~demand in the institutional distribution network and our decision~~ to ~~exit~~fees ~~certain~~earned underperforming food and beverage sector accounts. We plan to stabilize and increase our market position by enhancing our value propositions and delivering innovative solutions to our customers. A more open distribution strategy is expected to generate growth opportunities in connection with the ~~health~~sales ~~care,~~agency ~~building~~agreements ~~managers/service~~with ~~contractors and retail sectors~~Unilever.

– In Japan, net sales decreased by 10.6 % in 2009 compared to the prior year. The economic recession contributed to approximately half of this decline in sales, while choices we made to discontinue low margin businesses and underperforming accounts in both direct and indirect channels accounted for the other half. The negative conditions in the Japanese economy will continue to put pressure on our plans to stabilize and grow our market position.

• Sales agency fee and License Agreement. In connection with the DiverseyLever acquisition in 2002, we entered into the Prior Agency Agreement with Unilever, whereby we act as an exclusive sales agent in the sale of Unilever’s consumer branded products to various institutional and industrial end-users. At the time of the DiverseyLever acquisition, we assigned an intangible value to the Prior Agency Agreement of $13.0 million.

An agency fee was paid by Unilever to us in exchange for our sales agency services. An additional fee was payable by Unilever to us in the event that conditions for full or partial termination of the Prior Agency Agreement were met. We elected, and Unilever agreed, to partially terminate the Prior Agency Agreement in several territories resulting in payment by Unilever to us of additional fees. In association with the partial terminations, we recognized sales agency fee income of $0.6 million and $0.7 million during the years ended December 31, 2009 and December 31, 2008, respectively.

In October 2007, we and Unilever entered into the Umbrella Agreement to replace the Prior Agency Agreement, which includes (i) the New Agency Agreement, with terms similar to those of the Prior Agency Agreement, covering Ireland, the United Kingdom, Portugal and Brazil, and (ii) the License Agreement, under which Unilever has agreed to grant 31 of our subsidiaries a license to produce and sell professional size packs of Unilever’s consumer branded cleaning products. Many of the entities covered by the License Agreement have also entered into agreements with Unilever to distribute Unilever’s consumer branded products. Except for some transitional arrangements in certain countries, the Umbrella Agreement became effective January 1, 2008, and, unless otherwise terminated or extended, will expire on December 31, 2017.

The amounts of sales agency fees and License Agreement revenues earned under these agreements are reported in the preceding tables.

Gross Profit:

	Fiscal Year Ended						Change
(dollars in millions)	December 31,~~2009~~2010			December 31,~~2008~~2009			Amount			Percentage
Gross Profit	$	1,~~281~~327.93		$	1,~~325~~281.89		$	~~(43~~45.94	)	~~-3.3~~	%3.5	%
Gross profit as a percentage of net sales:		4142.24	%		4041.02	%
Gross profit as a percentage of net sales adjusted for sales agency fee income:		40.7	%		39.3	%

• The comparability of gross profit between the two periods is ~~significantly~~ affected by the impact of foreign exchange rate movements. As measured against ~~the~~prior ~~same~~ period’s ~~in the prior year~~results, the ~~stronger~~weaker U.S. dollar against ~~the~~a ~~euro~~majority ~~and~~of ~~certain~~the ~~other~~ foreign currencies in countries where we operate resulted in a $695.18 million ~~reduction~~increase in gross profit in ~~2009~~2010.

• Our gross profit percentage ~~(based on net sales as reported)~~ improved by 120 basis points in ~~2009~~2010 compared to the prior year. ~~Excluding the impact of SAF income, our gross profit percentage improved 140 basis points in 2009 compared to the prior year.~~

• The ~~140~~120 basis point improvement isin margin was largely the result of ~~increased~~continued ~~prices~~implementation ~~and~~of aprice ~~favorable~~increases, ~~reduction~~reductions in certain raw material costs, ~~including~~successful ~~phosphorous~~implementation ~~materials,~~of ~~caustic~~our ~~soda~~restructuring program, and ~~chelates.~~structural ~~These~~improvements ~~cost reductions were achieved mainly through various cost savings initiatives that we aggressively built~~ in to our global sourcing activities,. asThis weincludes ~~resolved~~more toefficient ~~control~~materials ~~the~~purchasing, ~~effects~~improvements ofin ~~rising~~our ~~raw~~manufacturing ~~material~~and ~~prices~~logistics ~~which~~footprint, werationalizing ~~experienced in~~ the ~~first~~number ~~quarter~~ of ~~2009.~~product Inofferings, ~~conjunction~~eliminating ~~with~~low ~~these~~margin ~~initiatives~~products, weand ~~further~~implementing ~~improved~~internal ~~gross~~processes ~~margins~~to bymore ~~rationalizing~~effectively ~~the~~monitor ~~number~~customer ofprofitability. ~~product~~We ~~offerings~~expect ~~and~~to ~~eliminating~~leverage ~~low~~our ~~margin~~process ~~products.~~improvements Inand ~~addition,~~continued wepricing ~~implemented~~actions ~~internal~~to ~~processes~~help tomitigate ~~more~~current ~~effectively~~and ~~monitor~~expected ~~customer~~inflationary ~~profitability~~pressures.

3638

Operating Expenses:

	Fiscal Year Ended						Change
(dollars in millions)	December 31,~~2009~~2010			December 31,~~2008~~2009			Amount			Percentage
Selling, general and administrative expenses	$	~~988.~~1,005.9		$	~~1,067~~988.71		$	~~(79~~17.68	)	~~-7.5~~	%1.8	%
Research and development expenses		6365.37			6763.13			(32.84	)	~~-5.6~~	%3.7	%
Restructuring expenses		32.9			57.3			(24.4	)	-42.5	%
Restructuring expenses (credits)		(2.3	)		32.9			(35.2	)		-106.9	%
	$	1,~~084~~069.3		$	1,~~192~~084.13		$	(~~107~~15.80	)	~~-9.0~~	%-1.4	%
As a percentage of net sales:
Selling, general and administrative expenses		3132.82	%		3231.28	%
Research and development expenses		2.01	%		2.0	%
Restructuring expenses		1-0.1	%		1.71	%
		34.9	%		35.9	%
		34.2	%		34.9	%
As a percentage of net sales adjusted for SAF:
Selling, general and administrative expenses		32.0	%*		32.5	%*
Research and development expenses		2.1	%		2.0	%
Restructuring expenses		1.1	%		1.7	%
		35.2	%		36.2	%

*• The ~~percentages~~comparability ~~for~~of ~~2009~~operating ~~and~~expenses ~~2008~~between ~~are~~the ~~31.0%~~two ~~and~~years 31is affected by the impact of foreign exchange rate movements.~~3%,~~ ~~respectively,~~As ~~when~~measured against prior period’s ~~costs~~results, ~~associated~~the ~~with~~weaker U.S. dollar against a majority of the ~~November~~foreign ~~2005~~currencies ~~Plan~~in ~~are~~countries ~~excluded~~where ~~from~~we ~~selling,~~operate ~~general~~resulted ~~and~~in ~~administrative~~a $6.6 million increase in operating expenses in 2010.

~~The~~• ~~comparability~~Selling, ofgeneral ~~operating~~and administrative expenses. ~~between~~Included ~~the~~in ~~two~~selling, ~~years~~general isand ~~significantly affected~~administrative byexpenses ~~the~~are ~~impact~~period ofcosts ~~foreign~~associated ~~exchange~~with ~~rate movements. As measured against~~ the ~~same~~November ~~period~~2005 Plan in the ~~prior~~amounts ~~year,~~of ~~the stronger U~~$17.S.0 ~~dollar~~million ~~against the euro~~ and ~~certain~~$31.0 ~~other~~million ~~foreign~~for ~~currencies~~the ~~resulted~~fiscal inyears a2010 ~~$47.6~~and ~~million~~2009, ~~reduction in operating expenses~~respectively.

• Selling, general and administrative expenses. ~~Excluding period costs associated with the November 2005 Plan, selling, general and administrative expenses~~ as a percentage of net sales ~~adjusted for SAF~~ were 3132.02% for the year ended December 31, ~~2009~~2010 compared to 31.38% for the prior year. Excluding the impact of foreign currency, selling, general and administrative costs ~~declined~~increased $329.72 million in ~~2009~~2010 compared to the prior year. This ~~favorable~~increase ~~decline~~ is ~~mainly~~substantially due to ~~cost~~a ~~savings~~net ~~under~~increase ~~our~~in ~~November~~non-recurring ~~2005~~costs ~~Plan~~arising from: (a) employee termination costs, including those related to the Company’s decision to move certain accounting functions to a third party provider and ~~our~~to ~~aggressive~~relocate ~~expense~~its ~~control~~primary ~~management~~U.S. inmanufacturing ~~response~~capability (see Note 15 to the ~~current~~consolidated ~~economic~~financial ~~conditions~~statements), (b) various costs associated with assessing a reorganization of the Company’s European operations, (c) accrued contribution pledged to a charitable organization near the Company’s headquarters (see Note 27 to the consolidated financial statements), (d) information technology systems changes and legal filing fees associated with the Company’s name change, (e) an impairment charge on investments (see Note 2 to the consolidated financial statements), offset by (f) the recognition of pension related net settlement and curtailment gains and (g) lower period costs associated with the November 2005 Plan. WeExcluding ~~achieved~~the impact of these ~~savings~~non-recurring ~~while~~costs. ~~maintaining~~selling, general and ~~improving~~administrative ~~our~~expense ~~customer-facing~~as ~~capabilities~~a percentage of sales were effectively flat in 2010.

• Research and development expenses. Excluding the impact of foreign currency, research and development expenses ~~decreased~~increased by $13.53 million during the year ended December 31, ~~2009~~2010 compared to the prior year., ~~This~~the ~~cost~~majority ~~reduction~~of which is ~~largely~~related ~~due~~ to ~~globalization of~~ the ~~function~~addition ~~and~~of ~~investments~~engineering ~~in technology, which have improved our efficiency~~resources.

• Restructuring expenses (credits). Excluding the impact of foreign currency, restructuring expenses decreased by $2634.01 million during the year ended December 31, ~~2009~~2010 compared to the prior year., ~~This~~primarily ~~was mainly~~ due to ~~decreased employee severance and other expenses related to~~ the ~~November~~winding ~~2005~~down ~~Plan, consisting primarily~~ of ~~involuntary~~restructuring ~~termination~~efforts ~~costs~~and ~~associated~~adjustments ~~with~~of ~~our~~previously ~~European~~recorded ~~business~~restructuring ~~segment~~reserves.

3739

Restructuring ~~and Integration~~:

A summary of all costs associated with the November 2005 Plan during ~~2009~~2010 and ~~2008~~2009, and since its inception in November 2005, is outlined below:

(dollars in millions)	Fiscal Year EndedDecember 31, ~~2009~~2010			Fiscal Year EndedDecember 31, ~~2008~~2009			Total Project to DateDecember 31, ~~2009~~2010
Reserve balance at beginning of period	$	6048.14		$	4660.21		$	—
Restructuring (net) costs charged to income		32.9			57.3			236.7
Restructuring charges and adjustments		(2.3	)		32.9			234.7
Liability adjustments		—			—			0.3	(1)
Payments of accrued costs		(23.0	)		(44.6	)		(211.6	)
Payments of accrued costs		(44.6	)		(43.4	)		(188.6	)
Reserve balance at end of period	$	23.1		$	48.4		$	23.1
Reserve balance at end of period	$	48.4		$	60.1		$	48.4
Period costs classified as selling, general and administrative expenses	$	17.0		$	31.0		$	319.3
Period costs classified as selling, general and administrative expenses	$	31.0		$	42.2		$	302.3
Period costs classified as cost of sales		2.4			1.8			8.6
Period costs classified as cost of sales		1.8			0.6			6.2
Capital expenditures		—			22.3			84.1
Capital expenditures		23.8			20.8			85.6
(1) $0.4 million of this amount was reclassified from other liabilities and $0.1 million was recorded as a reduction of restructuringexpense, resulting in a net liability adjustment of $0.3 million.

• November 2005 Plan Restructuring Costs. During the fiscal years ~~ended~~of ~~December~~2010 ~~31, 2009~~ and ~~December 31~~2009, ~~2008,~~ we recorded a benefit of $32(2.93) million and expense of $5732.39 million, respectively, of restructuring costs related to our November 2005 Plan. ~~Costs~~During ~~for~~the fiscal year ~~2009~~2010, ~~consisted~~the ~~primarily~~Company ofreduced ~~severance~~restructuring ~~costs~~liabilities ~~associated~~by ~~with~~$2.3 ~~our~~million ~~European~~as ~~and~~certain ~~North~~individuals, ~~American~~formerly ~~business~~expected ~~segments~~to ~~and~~be severed, were either retained by the Company or resigned. Most of this reduction is associated with the European operating segment. The costs for fiscal year ~~2008~~2009 consisted primarily of ~~severance~~involuntary termination costs associated with our European and ~~Japanese~~American business segments.

• November 2005 Plan Period Costs. Period costs of $3117.0 and $4231.20 million for ~~2009~~2010 and ~~2008~~2009, respectively, included in selling, general and administrative expenses and $12.84 million and $01.68 million for ~~2009~~2010 and ~~2008~~2009, respectively, included in cost of sales pertained to: (a) $195.6 million in ~~2009~~2010 ($2019.56 million in ~~2008~~2009) for personnel related costs of employees and consultative resources associated with restructuring initiatives, (b) $72.14 million in ~~2009~~2010 ($37.21 million in ~~2008~~2009) for value chain and cost savings projects, and (c) $611.14 million in ~~2009~~2010 ($196.1 million in ~~2008~~2009) related to facilities, asset impairment charges and various other costs. The overall decrease in these expenses over the prior year was mainly due to a reduction in restructuring activities within our ~~European~~Corporate Center and ~~North~~our ~~American~~Greater ~~business~~Asia ~~segments~~Pacific asand ~~well~~Americas asoperating ~~the Corporate Center~~segments.

•40 Tax Valuation Allowances. Based on the continued tax losses in various jurisdictions, we continued to conclude that it was not more likely than not that certain deferred tax assets would be fully realized. Accordingly, we recorded a charge for an additional U.S. valuation allowance of $9.1 million and $11.0 million for continuing operations for the years ended December 31, 2009 and December 31, 2008, respectively, and we recorded a charge for additional valuation allowance for foreign subsidiaries of $8.8 million and $11.6 million for continuing operations for the years ended December 31, 2009 and December 31, 2008, respectively. We do not believe the valuation allowances recorded in fiscal years 2009 and 2008 are indicative of future cash tax expenditures.

Non-Operating Results:

	Fiscal Year Ended						Change
(dollars in millions)	December 31,~~2009~~2010			December 31,~~2008~~2009			Amount			Percentage
Interest expense	$	96119.94		$	~~105~~96.49		$	(822.5	)	~~-8.0~~	%23.1	%
Interest income		(45.61	)		(74.76	)		3(0.15	)	~~-40.7~~	%-12.3	%
Net interest expense	$	92114.3		$	9792.73		$	(522.40	)	~~-5.6~~	%23.8	%
Notes redemption and other costs		~~25.4~~—			—25.4			(25.4	)	NM	NM
Other expense (income), net		(42.7	)		5(4.7	)		~~(10~~7.4	)	~~-182.9~~	%158.1	%

• Net interest expense ~~decreased~~increased during the year ended December 31, ~~2009~~2010 compared to the ~~same~~prior ~~period~~year inprimarily due to higher loan principal balances and the ~~prior~~recognition ~~year~~of ~~primarily~~$9.3 million of additional non-cash interest expense due to ~~lower~~the ~~interest~~acceleration ~~rates~~of onamortization ~~borrowings,~~of ~~offset~~discounts byand ~~decreased~~capitalized ~~interest~~debt ~~income~~issuance costs arising from voluntary principal payments made by the Company on ~~lower~~its ~~average~~Term ~~cash~~Loans ~~balances~~(see Note 2 to the consolidated financial statements) and athe ~~lower~~write-off ~~yield~~of onunamortized ~~investments~~origination fees in connection with the termination of our accounts receivable securitization programs in November 2010 (see Note 7 to the consolidated financial statements).

• Notes redemption and other costs pertain to certain costs that were incurred pursuant to the Transactions in 2009 and are explained in Note 12 to the consolidated financial statements. They include $11.7 million for the early redemption premium on our previously outstanding senior subordinated notes, $10.1 million for the write-off of debt issuance costs related to the redeemed notes, and $3.2 million for the termination of interest rate swaps related to our terminated Term Loan B.

• ~~Other~~The ~~expense~~change in other (income) ~~improved~~expense, net, was primarily due to the recognition of $3.9 million in foreign currency loss resulting from our adoption of highly inflationary accounting for our Venezuelan subsidiary and gains on foreign currency positions in 2009.

Income Taxes:

	Fiscal Year Ended						Change
(dollars in millions)	December 31,~~2009~~2010			December 31,~~2008~~2009			Amount			~~Percentage~~	Percentage
Income from continuing operations, before income taxes	$	84141.50		$	3084.35		$	5456.25		~~178.9~~	%	66.8	%
Provision for income taxes		7666.13			5776.51			18(9.68	)	~~32.3~~	%	-13.0	%
Effective income tax rate		9047.10	%		~~189~~90.81	%

• We reported an effective income tax rate of 9047.10% on the pre-tax income from continuing operations for the fiscal year ended December 31, ~~2009~~2010, and an effective income tax rate of ~~189~~90.81% on the pre-tax income from continuing operations for the fiscal year ended December 31, ~~2008~~2009. The high effective income tax rates, as compared to the statutory rate, are primarily the result of increased valuation allowances against deferred tax assets for U.S. and ~~international~~foreign tax loss and credit carryforwards, increased valuation allowances against other net deferred tax assets, and increases in tax contingency reserves. The effective income tax rate for the fiscal year ended December 31, 2010 is lower than the effective income tax rate for the fiscal year ended December 31, 2009 primarily due to higher pre-tax income from continuing operations in 2010, reversal of valuation allowance in 2010 for certain foreign subsidiaries, and a lower income tax expense charge for tax contingency reserve in 2010.

39• Tax Valuation Allowances. Based on the continued tax losses in the U.S. and certain foreign jurisdictions, we continued to conclude that it was not more likely than not that certain deferred tax assets would be fully realized. Accordingly, we recorded a charge for an additional U.S. valuation allowance of $25.7 million and $9.1 million for continuing operations for the fiscal years ended December 31, 2010 and December 31, 2009, respectively, and we recorded a charge for

additional valuation allowance for foreign subsidiaries of $8.8 million for continuing operations for the fiscal year ended December 31, 2009. Based on improved profitability in certain foreign jurisdictions in 2010, we concluded that it was more likely than not that certain deferred tax assets, which previously were offset by a valuation allowance, would be realized. Accordingly, we recorded income tax benefit for a net reduction in valuation allowance for foreign subsidiaries of $10.1 million for continuing operations for the fiscal year ended December 31, 2010. We do not believe the valuation allowances recorded in fiscal years 2010 and 2009 are indicative of future cash tax expenditures.

Discontinued Operations:

	Fiscal Year Ended						~~Change~~	Change
(dollars in millions)	December 31,~~2009~~2010			December 31,~~2008~~2009			~~Amount~~	Amount			~~Percentage~~	Percentage
Income (loss) from discontinued operations	$	(2.2	)	$	21.7		$	(23.9	)		-110.3	%
Loss from discontinued operations	$	(10.4	)	$	(2.2	)		$	(8.2	)			-364.8	%
(Benefit) provision for income taxes		(1.7	)		6.2			(7.9	)		-127.4	%
Benefit for income taxes		—			(1.7	)			1.7				100.0	%
Income (loss) from discontinued operations, net of taxes	$	(0.5	)	$	15.5		$	(16.0	)		-103.4	%
Loss from discontinued operations, net of taxes	$	(10.4	)	$	(0.5	)		$	(9.9	)			-1877.5	%

The loss from ~~discontinued~~ discontinued operations during the year ended December 31, ~~2009~~2010 includes $0.38 million ~~related~~in to after-tax ~~income~~additional ~~associated~~closing ~~with~~costs ~~the~~and ~~DuBois~~certain ~~divestiture~~pension-related adjustments ($150.42 million after-tax ~~income~~costs in ~~2008~~2009), ~~and~~related to the divestiture of Polymer business and $09.85 million after-tax loss related to the Polymer ~~divestiture~~tolling agreement ($0.16 million after-tax ~~income~~loss in ~~2008~~2009). The amounts of loss from discontinued operations in both fiscal years 2010 and 2009 also include adjustments associated with the Dubois divestiture.

Net Income:

Our net income increased by $1956.65 million to $764.94 million for the year ended December 31, ~~2009~~2010 compared to the prior year. Excluding the negative impact of foreign currency exchange of $113.02 million, our net income increased by $3059.67 million. This increase was primarily due to an increase of $2539.25 million in gross profit, and a decrease of $6021.16 million in operating expenses~~, a favorable decrease in net interest expense, an increase in other income, offset by the notes redemption and other costs of $25~~.4 ~~million related to the Transactions and a decrease in income from discontinued operations.~~ As previously discussed, the increase in gross profit is due to continued ~~increased~~implementation ~~prices~~of price increases and a favorable reduction in certain raw material costs. The reduction in operating expenses is primarily due to ~~savings~~a ~~from~~decrease ~~our~~in ~~November~~restructuring ~~2005~~expenses ~~Plan~~primarily due to the winding down of restructuring efforts and adjustments of previously recorded restructuring reserves.

EBITDA:

EBITDA is a non-U.S. GAAP financial measure, and you should not consider EBITDA as an alternative to U.S. GAAP financial measures such as (a) operating profit or net income (loss) as a measure of our operating performance or (b) cash flows provided by operating, investing and financing activities (as determined in accordance with U.S. GAAP) as a measure of our ability to meet cash needs.

We believe that, in addition to operating profit, net income (loss) and cash flows from operating activities, EBITDA is a useful financial measurement for assessing liquidity as it provides management, investors, lenders and financial analysts with an additional basis to evaluate our ability to incur and service debt and to fund capital expenditures. In addition, various covenants under our senior secured credit facilities are based on EBITDA, as adjusted pursuant to the provisions of those facilities.

In evaluating EBITDA, management considers, among other things, the amount by which EBITDA exceeds interest costs for the period, how EBITDA compares to principal repayments on outstanding debt for the period and how EBITDA compares to capital expenditures for the period. Management believes many investors, lenders and financial analysts evaluate EBITDA for similar purposes. To evaluate EBITDA, the components of EBITDA, such as net sales and operating expenses and the variability of such components over time, should also be considered.

~~Accordingly,~~42 we believe that the inclusion of EBITDA in this annual report on Form 10-K permits a more comprehensive analysis of our liquidity relative to other companies and our ability to service debt requirements. Because all companies do not calculate EBITDA identically, the presentation of EBITDA in this annual report on Form 10-K may not be comparable to similarly titled measures of other companies.

Accordingly, we believe that the inclusion of EBITDA in this annual report on Form 10-K permits a more comprehensive analysis of our liquidity relative to other companies and our ability to service debt requirements. Because all companies do not calculate EBITDA identically, the presentation of EBITDA in this annual report on Form 10-K may not be comparable to similarly titled measures of other companies.

EBITDA should not be construed as a substitute for, and should be considered together with, net cash flows provided by operating activities as determined in accordance with U.S. GAAP.

EBITDA for fiscal year ~~2009~~2010 was $~~312~~361.27 million. EBITDA for ~~2008~~2009, when stated on comparable ~~2009~~2010 foreign exchange rates, would have been $~~256~~308.57 million. Net of a negative foreign currency impact of $213.5. million, EBITDA increased by $5553.70 million. This was primarily due to increased gross profits arising from favorable increased prices and a favorable reduction in certain raw material costs, and decreases in our operating expenses, all as explained in the preceding paragraphs.

Credit Agreement EBITDA:

We also present Credit Agreement EBITDA because it is a financial measure which is used in the credit agreement for our ~~new~~Senior ~~senior~~Secured ~~secured~~Credit ~~credit facilities~~Facilities. Credit Agreement EBITDA is not a recognized measure under GAAP and should not be considered as a substitute for financial performance and liquidity measures determined in accordance with GAAP, such as net income, operating income or operating cash flow. Credit Agreement EBITDA differs from the term EBITDA as it is commonly used. Credit Agreement EBITDA is calculated in accordance with the credit agreement for our ~~New~~ Senior Secured Credit ~~Facility~~Facilities and is set forth below under “Liquidity and Capital Resources – Financial Covenants under our ~~New~~ Senior Secured Credit ~~Facility~~Facilities.”

Fiscal Year Ended December 31, ~~2008~~2009, Compared to Fiscal Year Ended December 2831, ~~2007~~2008

Net Sales:

	Fiscal Year Ended						~~Change~~
(dollars in millions)	December 31,~~2008~~2009			~~December 28,2007~~	December 31,2008		~~Amount~~		Change		~~Percentage~~
Net product and service sales	$	3,280.9		$	2,949.8		$	331.1			11.2	%
Net sales	$	3,110.9			$	3,315.9				-6.2	%
Sales agency fee income		35.0			91.9			(56.9	)		-61.9	%
Variance due to:
	$	3,315.9		$	3,041.7		$	274.2			9.0	%
Foreign currency exchange		—				(164.1	)
Acquisitions and divestitures		—				(9.9	)
Sales agency fee income		(27.2	)			(35.0	)
License Agreement revenue		(133.4	)			(151.3	)
		(160.6	)			(360.3	)
	$	2,950.3			$	2,955.6				-0.2	%

• ~~Net~~The ~~product~~comparability ~~and~~of ~~service~~net sales reported in the two periods is significantly affected by the impact of foreign exchange rate movements. In addition, there were two fewer selling days in fiscal 2009 compared to fiscal 2008. As measured against prior year’s results, the ~~weakening~~stronger ~~of the~~ U.S. dollar against the euro and certain other foreign currencies ~~contributed~~resulted in a $~~130~~164.21 million toreduction ~~the increase~~ in net ~~product and service~~ sales. ~~In addition, there were three more selling days~~ in ~~fiscal 2008 compared to fiscal 2007~~2009.

~~Excluding~~43 the impact of foreign currency exchange rates, acquisitions and divestitures, sales agency fee income, and sales under the License Agreement, our net product and service sales increased 3.5% compared to the same period in the prior year. All regions except Japan contributed to the increase, primarily due to price increases taking hold in all global geographic areas and business sectors and the expansion of developing markets in Latin America, Asia Pacific and Central and Eastern Europe, which contributed to increased sales volumes. The following is a review of the sales performance for each of our regions, which also excludes the impact of foreign currency exchange rates, acquisitions and divestitures, sales agency fee income, and sales under the License Agreement:

- In our Europe, Middle East and Africa markets, net sales increased 4.3% compared to the prior year. This increase was primarily driven by increased pricing, the expansion of certain markets in Western Europe as well as developing markets in Central and Eastern Europe and success with certain top customer accounts.

-• InExcluding ~~Latin~~the ~~America~~impact of foreign currency exchange rates, acquisitions, sales agency fee income and License Agreement revenue, net sales ~~increased~~decreased 10by 0.42% ~~compared~~year-over-year. This was primarily due to the ~~prior~~global ~~year~~recession, ~~with~~reflecting ~~growth~~a ~~coming~~general ~~from~~softness ~~most~~in ~~countries~~demand infor ~~the~~our ~~region~~products and services. ~~Approximately~~The ~~half~~adverse effects of the ~~increase~~recession ~~was~~were ~~due~~mitigated toin large part by the successful pricing ~~with~~strategies that were initiated in the ~~remainder~~last ~~coming~~quarter ~~from~~of ~~volume~~2008. ~~growth,~~Although ~~driven~~we byexperienced ~~success~~a ~~with~~general decline in sales volume, our ~~indirect~~Americas ~~channel~~region ~~partners~~reported ~~and~~sales growth. inThe following is a review of the ~~food~~sales ~~and~~performance ~~beverage~~for ~~sector.~~each of our segments:

-– In ~~Asia Pacific~~Europe, net sales ~~increased~~in ~~7.7%~~fiscal year 2009 were flat when compared to the prior year. ~~with~~The ~~growth~~2008 ~~coming~~sales ~~from~~level ~~most~~was ~~countries~~sustained indespite the ~~region.~~economic ~~Volume~~recession, ~~growth~~primarily ~~contributed~~by ~~approximately~~successfully ~~two~~implementing ~~thirds~~price ofincreases ~~this~~and ~~increase~~customer ~~while~~acquisitions ~~pricing~~across ~~drove~~the ~~one~~region. ~~third~~Sales ofvolume ~~the~~increased ~~increase.~~in ~~Growth~~certain ~~was~~emerging ~~achieved~~markets, ~~through~~such ~~top~~as ~~customer~~in ~~growth~~Central and ~~strong~~Eastern ~~sales~~Europe, ~~volume~~but inwas ~~certain~~offset ~~key~~by ~~developing~~volume ~~markets~~declines in ~~the~~Western ~~region~~Europe, ~~primarily~~particularly in ~~the~~equipment ~~food~~ and ~~beverage~~cleaning tools and ~~the~~engineering ~~lodging~~sales, ~~sectors~~a result of customers deferring their capital investments.

-– In ~~North~~the ~~America~~Americas, net sales increased 1.by 0.3% in fiscal year 2009 compared to the ~~prior~~fiscal year 2008. Growth came from emerging markets in the region, primarily ~~due~~through tothe implementation of price increases, ~~taking~~offset ~~hold~~by volume decreases in ~~all~~the ~~sectors~~lodging and ~~an expanding~~ retail ~~sector~~sectors. ~~This~~The ~~growth~~effects ~~was~~of ~~partially~~the recession resulted in sales volume shortfalls from existing customers, but were offset by strong growth from new customers. In the United States and Canada, sales volume ~~declines~~decreased due to reduced demand in ~~other~~the ~~sectors~~institutional ~~due~~distribution network and to ~~customer~~our ~~consolidation~~decision to exit certain underperforming food and ~~distributor~~beverage ~~inventory~~sector ~~reduction~~accounts.

-– In ~~Japan~~Greater Asia Pacific, net sales decreased 3by 5.27% in 2009 compared to the prior year. This is primarily due to the economic recession and choices we made to ~~exit~~discontinue ~~certain~~low ~~non-core~~margin businesses and~~/or~~ underperforming accounts in both direct and indirect channels in Japan, one of our major markets in this segment. Lower traffic in the lodging sector also caused a decrease in volume. We experienced continuing volume improvements in developing markets such as India, and stable growth in Australia.

• Sales ~~Agency~~agency ~~Fee~~fee and License Agreement. In ~~October~~connection ~~2007, we reached agreement~~ with ~~Unilever~~the onDiverseyLever aacquisition ~~new~~in ~~Umbrella Agreement~~2002, towe ~~replace~~entered into the Prior Agency Agreement, ~~which includes; (i) a New Agency Agreement~~ with ~~terms similar to the Prior Agency Agreement~~Unilever, ~~covering~~whereby ~~Ireland,~~we ~~the~~act ~~United~~as ~~Kingdom,~~an ~~Portugal~~exclusive ~~and~~sales ~~Brazil,~~agent ~~and~~in ~~(ii)~~ the ~~License~~sale ~~Agreement under which Unilever has agreed to grant 31~~ of ~~our subsidiaries a license to produce and sell professional size packs of~~ Unilever’s consumer ~~brand~~branded ~~cleaning~~ products. ~~The entities covered by the License Agreement have also entered into agreements with Unilever~~ to ~~distribute~~various ~~Unilever’s~~institutional ~~consumer~~and ~~branded~~industrial ~~products~~end-users. ~~Except~~At ~~for~~the ~~some~~time ~~transitional~~of ~~arrangements in certain countries,~~ the ~~Umbrella~~DiverseyLever ~~Agreement became effective January 1~~acquisition, ~~2008,~~we ~~and~~assigned ~~unless~~an ~~otherwise~~intangible ~~terminated~~value orto ~~extended,~~the ~~will~~Prior ~~expire~~Agency onAgreement ~~December~~of ~~31,~~$13.0 ~~2017~~million.

~~Sales~~An ~~under~~agency ~~the~~fee ~~License~~was ~~Agreement~~paid ~~are~~by ~~recorded~~Unilever to us in exchange for our sales agency services. An additional fee was payable by Unilever to us in the ~~net~~event ~~product~~that ~~and~~conditions ~~service~~for ~~sales~~full or partial termination of the Prior Agency Agreement were met. We ~~recorded~~elected, ~~net~~and Unilever agreed, to partially terminate the Prior Agency ~~product~~Agreement ~~and~~in ~~service~~several territories resulting in payment by Unilever to us of additional fees. In association with the partial terminations, we recognized sales agency fee income of $~~151~~0.36 million ~~under~~and $0.7 million during the ~~License~~years ~~Agreement~~ended ~~during~~December 31, 2009 ~~fiscal~~and ~~year~~December 31, 2008, respectively.

~~With~~In ~~respect~~October to2007, we and Unilever entered into the ~~sales agency~~Umbrella ~~arrangements,~~Agreement weto ~~recorded~~replace the ~~total~~Prior ~~sales~~Agency ~~agency~~Agreement, ~~fee~~which ~~income~~includes of(i) the ~~$35.0~~New ~~million~~Agency Agreement, ~~consisting~~with ofterms ~~$30.1~~similar ~~million~~to ~~under~~those of the ~~New~~Prior Agency Agreement, ~~$4.2~~covering ~~million~~Ireland, ~~under~~the ~~transitional~~United ~~arrangements~~Kingdom, Portugal and ~~$0.7~~Brazil, ~~million~~and (ii) the License Agreement, under which Unilever has agreed to grant 31 of ~~termination~~our ~~fees~~subsidiaries a license to produce and sell professional size packs of Unilever’s consumer branded cleaning products. ~~Except~~Many ~~for~~of the ~~countries~~entities covered by the License Agreement have also entered into agreements ~~mentioned~~with ~~above,~~Unilever ~~substantially~~to ~~all~~distribute ~~sales~~Unilever’s ~~under~~consumer ~~the~~branded ~~previous~~products. ~~agreement~~Except for ~~other~~some ~~countries~~transitional ~~converted~~arrangements toin certain countries, the ~~License~~Umbrella Agreement inbecame effective January 1, 2008, and, unless otherwise terminated or extended, will expire on December 31, 2017.

The amounts of sales agency fees and License Agreement revenues earned under these agreements are reported in the preceding tables.

Gross Profit:

	Fiscal Year Ended						Change
(dollars in millions)	December 31,~~2008~~2009			December 2831,~~2007~~2008			Amount			~~Percentage~~	Percentage
Gross Profit	$	1,~~325~~281.89		$	1,~~277~~325.58		$	48(43.39	)	~~3.8~~	%	-3.3	%
Gross profit as a percentage of net sales:		4041.02	%		4240.0	%
Gross profit as a percentage of net sales adjusted for sales agency fee income:		39.3	%		40.2	%
Gross profit as a percentage of net salesadjusted for sales agency fee income:		40.7	%		39.3	%

• The comparability of gross profit between the two periods is significantly affected by the impact of foreign exchange rate movements. As measured against ~~prior~~the ~~year’s~~same ~~results,~~period in the ~~weakening~~prior ofyear, the stronger U.S. dollar against the euro and certain other foreign currencies ~~increased~~resulted ~~gross~~in ~~profit~~a by $5769.31 million reduction in ~~2008~~gross profit in 2009.

• Our gross profit percentage, ~~excluding~~(based ~~the~~on ~~impact~~net of sales ~~agency~~as ~~fee~~reported) ~~income,~~improved ~~declined~~by 90120 basis points in ~~2008~~2009 compared to ~~2007~~the asprior ~~pricing~~year. ~~actions~~Excluding ~~taken during in~~ the ~~latter~~impact ~~half~~ of ~~2008~~SAF ~~did not keep pace with unprecedented cost increases in key raw materials costs. Based on net sales as reported~~income, our gross profit percentage ~~declined~~improved by140 ~~200~~ basis points in ~~2008~~2009 compared to ~~2007. Volatile raw material costs are expected to continue to present significant challenges in 2009. In response, we continue to implement increases to recover increased costs, to~~ the ~~fullest~~prior ~~extent possible, and pursue cost reduction initiatives~~year.

42• The 140 basis point improvement was largely the result of increased prices and a favorable reduction in certain raw material costs, including phosphorous materials, caustic soda and chelates. These cost reductions were achieved mainly through various cost savings initiatives that we aggressively built in to our global sourcing activities, as we resolved to control the effects of rising raw material prices which we experienced in the first quarter of 2009. In conjunction with these initiatives, we further improved gross margins by rationalizing the number of product offerings and eliminating low margin products. In addition, we implemented internal processes to more effectively monitor customer profitability.

Operating Expenses:

	Fiscal Year Ended						Change
(dollars in millions)	December 31,~~2008~~2009			December 2831,~~2007~~2008			Amount			Percentage
Selling, general and administrative expenses	$	~~1,067~~988.71		$	1,~~117~~067.7		$	(5079.06	)	~~-4.5~~	%-7.5	%
Research and development expenses		6763.13			6567.51			1(3.68	)	~~2.3~~	%-5.6	%
Restructuring expenses		5732.39			2757.23			30(24.14	)	~~110.9~~	%-42.5	%
	$	1,~~192~~084.13		$	1,~~210~~192.41		$	(18107.38	)	~~-1.4~~	%-9.0	%
As a percentage of net sales:
Selling, general and administrative expenses		3231.28	%*		3632.72	%*
Research and development expenses		2.0	%		2.20	%
Restructuring expenses		1.71	%		01.97	%
		35.9	%		39.8	%
		34.9	%		35.9	%
As a percentage of net sales adjusted for SAF:
Selling, general and administrative expenses		32.50	%*		3732.95	%*
Research and development expenses		2.01	%		2.20	%
Restructuring expenses		1.71	%		01.97	%
		36.2	%		41.0	%
		35.2	%		36.2	%

* The percentages for ~~2008~~2009 and ~~2007~~2008 are 31.30% and 3431.83%, respectively, when period costs associated with the November 2005 Plan are excluded from selling, general and administrative expenses.

• ~~Operating~~The comparability of operating expenses between the two years is significantly affected by the impact of foreign exchange rate movements. As measured against ~~prior~~the ~~year’s~~same ~~results,~~period in the ~~weakening~~prior ofyear, the stronger U.S. dollar against the euro and certain other foreign currencies ~~increased~~resulted ~~operating~~in ~~expenses~~a by $3747.06 million reduction in ~~2008~~operating expenses.

• Selling, general and administrative expenses. Excluding period costs associated with the November 2005 Plan, selling, general and administrative expenses as a percentage of net ~~product and service~~ sales ~~(excludes~~adjusted ~~sales~~for ~~agency~~SAF ~~fee income)~~ were 31.30% infor ~~2008~~the year ended December 31, 2009 compared to 3431.83% for the prior year. Excluding the impact of foreign currency ~~and costs associated with the November 2005 Plan~~, selling, general and administrative costs declined $3732.57 million in ~~2008~~2009 compared to the prior year. This favorable decline was ~~achieved~~mainly ~~primarily~~due ~~through~~to cost savings ~~from~~under our November 2005 Plan and ~~controlled~~our ~~spending~~aggressive expense control management in ~~most~~response ofto the economic conditions. We achieved these savings while maintaining and improving our ~~regions~~customer-facing capabilities.

• Research and development expenses. Excluding the impact of foreign currency ~~exchange rates~~, research and development expenses decreased by $01.35 million induring ~~2008~~the year ended December 31, 2009 compared to the prior year. ~~primarily~~This cost reduction was largely due to ~~spending~~globalization ~~control~~of ~~initiatives~~the function and investments in technology, which improved our efficiency.

• Restructuring expenses. Excluding the impact of foreign currency ~~exchange rates~~, restructuring expenses ~~increased~~decreased $3126.30 million induring ~~2008~~the year ended December 31, 2009 compared to the prior year. This was ~~primarily~~mainly due to ~~increased~~decreased employee severance ~~in European~~ and ~~Japanese~~other ~~business~~expenses ~~segments~~ related to the November 2005 Plan, consisting primarily of involuntary termination costs associated with our European operating segment.

4346

Restructuring ~~and Integration~~:

A summary of all costs associated with the November 2005 Plan during ~~2008~~2009 and ~~2007~~2008, and since its inception in November 2005, is outlined below:

	Fiscal Year Ended						TotalProject toDate
(dollars in millions)	December 31,~~2008~~2009			December 2831,~~2007~~2008
Reserve balance at beginning of period	$	4660.21		$	7046.2		$	—
Restructuring costs charged to income		5732.39			2757.23			~~203~~236.87
Liability adjustments		—			~~(0.1~~—	)		0.3
Payments of accrued costs		(4344.46	)		(5143.14	)		(~~144~~188.06	)
Reserve balance at end of period	$	6048.14		$	4660.21		$	6048.14
Period costs classified as selling, general and administrative expenses	$	4231.20		$	9142.62		$	~~271~~302.3
Period costs classified as cost of sales		01.68			(0.6	)		46.42
Capital expenditures		2022.83			2220.18			6184.81

• November 2005 Plan ~~restructuring~~Restructuring ~~costs~~Costs. During the ~~fiscal~~ years ~~2008~~ended December 31, 2009 and ~~2007~~December 31, 2008, we recorded $5732.39 million and $2757.23 million, respectively, of restructuring costs related to our November 2005 Plan ~~in our consolidated statements of operations~~. Costs infor ~~2008~~fiscal year 2009 consisted primarily of ~~involuntary~~severance ~~termination~~ costs associated with our European and ~~Japanese~~Americas ~~business~~operating segments. ~~Costs~~and inthe ~~2007~~costs for fiscal year 2008 consisted primarily of ~~involuntary~~severance ~~termination~~costs ~~and~~associated ~~other~~with ~~costs~~our ~~incurred~~European inand ~~North~~Greater ~~America~~Asia ~~and~~Pacific ~~Europe~~operating segments.

• November 2005 Plan ~~period~~Period ~~costs~~Costs. ~~During~~Period ~~fiscal~~costs ~~years~~of ~~2008~~$31.0 and ~~2007, we recorded period costs related to our November 2005 Plan consisting of~~ $42.2 million ~~and~~for ~~$91.6~~2009 ~~million~~and 2008, respectively, ofincluded in selling, general and administrative expenses asand ~~well as~~ $01.68 million and a $0.6 million ~~reduction~~for ~~(as~~2009 anand ~~adjustment of previous inventory reserves)~~2008, respectively, ~~for~~included in cost of sales. ~~These~~pertained ~~costs~~to: ~~include~~(a) $619.36 million ~~and~~in 2009 ($1220.85 million, ~~respectively,~~in 2008) for ~~long-lived~~personnel ~~asset~~related ~~impairments~~costs of employees and consultative resources associated with restructuring initiatives, (b) $27.61 million ~~and~~in 2009 ($23.02 million, ~~respectively~~in 2008) for ~~write-offs~~value chain and ~~adjustments~~cost ofsavings ~~other assets (pensions~~projects, ~~inventory,~~ and ~~accounts receivable~~(c) ~~and~~ $336.91 million ~~and~~in 2009 ($7619.21 million, ~~respectively,~~in ~~for~~2008) ~~other~~related ~~period~~to ~~costs~~facilities, ~~associated~~asset ~~with~~impairment ~~restructuring~~charges ~~activities~~and various other costs. The overall decrease in ~~restructuring-related~~these ~~period~~expenses ~~costs~~ over the prior year was mainly due to ~~reduced~~a ~~expenses~~reduction atin ~~our~~restructuring ~~Corporate~~activities ~~Center~~within ~~and~~our European ~~business~~and ~~segment~~Americas operating segments as well as the Corporate Center.

•47 DiverseyLever acquisition. In connection with the acquisition of the DiverseyLever business, we recorded liabilities for the involuntary termination of former DiverseyLever employees and other exit costs associated with former DiverseyLever facilities. During the fiscal years 2008 and 2007, we paid cash of $0.4 million and $1.0 million, respectively, representing contractual obligations associated with involuntary terminations and lease payments on closed facilities. The restructuring reserve balances associated with the exit plans and our acquisition-related restructuring plans were $0.5 million and $1.6 million as of December 31, 2008 and December 28, 2007, respectively. We continue to make cash payments representing contractual obligations associated with involuntary terminations and lease payments on closed facilities.

• Tax Valuation Allowances. Based on the continued historical tax losses and the anticipated additional expenses to be incurred as part of the November 2005 Plan in various jurisdictions, we continued to conclude that it was not more likely than not that certain deferred tax assets would be fully realized. Accordingly, we recorded a charge for an additional U.S. valuation allowance of $11.0 million and $26.3 million for continuing operations for the years ended December 31, 2008 and December 28, 2007, respectively, and we recorded a charge for additional valuation allowance for foreign subsidiaries of $11.6 million and $29.0 million for continuing operations for the years ended December 31, 2008 and December 28, 2007, respectively. We do not believe the valuation allowances recorded in fiscal years 2008 and 2007 are indicative of future cash tax expenditures.

Non-Operating Results:

	Fiscal Year Ended						Change
(dollars in millions)	December 31,2008			December 2831,~~2007~~2008			Amount			Percentage
Interest expense	$	~~105~~96.49		$	~~106~~105.64		$	(18.25	)	~~-1.1~~	%-8.0	%
Interest income		(74.76	)		(107.07	)		2.3.1		~~-23.5~~	%-40.7	%
Net interest expense	$	9792.73		$	9697.67		$	1(5.14	)	~~1.1~~	%-5.6	%
Other expense (income), net		5.7			(0.8	)		6.5		-820.6	%
Notes redemption and other costs		25.4			—			25.4			NM
Other expense (income), net		(4.7	)		5.7			(10.4	)		-182.9	%

• Net interest expense ~~increased~~decreased during ~~2008~~the ~~compared~~year toended ~~2007~~December ~~primarily~~31, ~~due~~2009 compared to ~~lower interest income resulting from lower average cash balances during~~ the same period asin ~~compared to~~ the prior year, ~~and~~primarily ~~a lower interest yield on investments~~ due to lower interest rates. ~~This~~on ~~was~~borrowings, ~~partially~~ offset by ~~lower~~decreased interest ~~expense,~~income ~~resulting~~on ~~from~~ lower average ~~interest~~cash ~~rates~~balances ~~during~~and ~~the~~a ~~year~~lower asyield ~~compared~~on ~~to the prior year~~investments.

• ~~Other~~Notes ~~expense/(income),~~redemption ~~net,~~and ~~increased~~other ~~compared~~costs pertain to certain costs that were incurred pursuant to the ~~prior~~Transactions ~~year,~~and ~~primarily~~are ~~due~~explained in Note 12 to ~~net~~the ~~losses~~consolidated ~~from~~financial ~~foreign~~statements. ~~currency~~They ~~translation~~included $11.7 million for the early redemption premium on our previously outstanding senior subordinated notes, $10.1 million for the write-off of debt issuance costs related to the redeemed notes, and ~~transactions~~$3.2 million for the termination of interest rate swaps related to our previously outstanding term loans.

•

Other expense (income) improved due to gains on foreign currency positions.

Income Taxes:

	Fiscal Year Ended						Change
(dollars in millions)	December 31,~~2008~~2009			December 2831,~~2007~~2008			Amount			Percentage
Income (loss) from continuing operations, before income taxes	$	30.3		$	(28.7	)	$	59.0		-205.7	%
Income from continuing operations, before income taxes	$	84.5		$	30.3		$	54.2			178.9	%
Provision for income taxes		5776.51			6557.85			(818.36	)	~~-12.6~~	%32.3	%
Effective income tax rate		~~189~~90.81	%		~~-229~~189.78	%

• We reported an effective income tax rate of ~~189~~90.81% on the pre-tax income from continuing operations for the fiscal year ended December 31, ~~2008~~2009, and an effective income tax rate of ~~-229~~189.78% on the pre-tax ~~loss~~income from continuing operations for the fiscal year ended December 2831, ~~2007~~2008. The high effective income tax rates ~~are~~were primarily the result of increased valuation allowances against deferred tax assets for U.S. and ~~international~~foreign tax loss and credit carryforwards, increased valuation allowances against other net deferred tax assets, and increases in tax contingency reserves.

•

Tax Valuation Allowances. Based on the continued tax losses in various jurisdictions, we continued to conclude that it was not more likely than not that certain deferred tax assets would be fully realized. Accordingly, we recorded a charge for an additional U.S. valuation allowance of $9.1 million and $11.0 million for continuing operations for the years ended December 31, 2009 and December 31, 2008, respectively, and we recorded a charge for additional valuation allowance for foreign subsidiaries of $8.8 million and $11.6 million for continuing operations for the years ended December 31, 2009 and December 31, 2008, respectively. We do not believe the valuation allowances recorded in fiscal years 2009 and 2008 are indicative of future cash tax expenditures.

Discontinued Operations:


	Fiscal Year Ended					Change
(dollars in millions)	December 31, 2009			December 31, 2008		Amount			Percentage
Income (loss) from discontinued operations	$	(2.2	)	$	21.7	$	(23.9	)		-110.3	%
(Benefit) provision for income taxes		(1.7	)		6.2		(7.9	)		-127.4	%

Income (loss) from discontinued operations, net of taxes	$	(0.5	)	$	15.5	$	(16.0	)		-103.4	%

The loss from discontinued operations during the year ended December 31, 2009 included $0.3 million related to after-tax income associated with the DuBois divestiture ($15.4 million after-tax income in 2008), and $0.8 million after-tax loss related to the Polymer divestiture ($0.1 million after-tax income in 2008).

Net Income:

Our net income increased by $7419.96 million, to ~~a net loss of~~ $117.89 million infor ~~fiscal~~the year ~~2008~~ended December 31, 2009 compared to athe ~~net~~prior ~~loss of $86~~year.6 ~~million~~Excluding the innegative ~~fiscal~~impact ~~year~~of ~~2007~~foreign ~~primarily~~currency ~~due~~exchange ~~to an increased operating profit~~ of $6611.60 million, aour ~~$8.3~~net ~~million decrease in the~~ income ~~tax provision~~increased ~~and~~by a $730.6 million. This increase ~~in income from discontinued operations, which~~ was ~~mainly~~primarily due to ~~the~~an increase of $1025.72 ~~after-tax~~million ~~gain~~in ~~from~~gross ~~the~~profit, ~~sale~~a decrease of ~~DuBois~~$60.1 ~~These~~million ~~gains~~in ~~were~~operating ~~partially~~expenses, ~~offset~~a favorable bydecrease ain ~~$6.5~~net ~~million~~interest expense, an increase in other ~~expense/ (~~income), ~~driven~~offset by ~~net~~ ~~losses~~the ~~from~~notes ~~foreign~~redemption ~~currency~~and ~~translation~~other ~~and~~costs ~~transactions~~of $25.4 ~~The~~million ~~increase~~related into ~~operating~~the ~~profit~~Transactions ~~was~~and ~~primarily~~a ~~achieved~~decrease ~~through~~in aincome ~~$48~~from discontinued operations.3 ~~million~~As previously discussed, the increase in gross profit ~~and~~was andue ~~overall~~to ~~$18.1~~increased ~~million~~prices ~~decrease~~and ina ~~restructuring~~favorable ~~expenses~~reduction ~~and~~in ~~period~~certain ~~costs included~~raw inmaterial ~~selling,~~costs. ~~general~~The ~~and~~reduction ~~administrative~~in operating expenses ~~related~~was primarily due to ~~the~~savings from our November 2005 Plan.

EBITDA: for fiscal year 2009 was $312.2 million. EBITDA for 2008, when stated on comparable 2009 foreign exchange rates, would have been $256.5 million. Net of a negative foreign currency impact of $21.5 million, EBITDA increased by $55.7 million. This was primarily due to increased gross profits arising from favorable increased prices and a favorable reduction in certain raw material costs, and decreases in our operating expenses, all as explained in the preceding paragraphs.

~~EBITDA~~49 for fiscal year 2008 was $278.0 million, which increased by $42.5 million in 2008 compared to the prior year. The increase was primarily due to: (1) a $15.7 million decrease in restructuring expenses and period costs (included in selling, general and administrative expenses and cost of sales) related to the November 2005 Plan, (2) a $14.8 million gain from the sale of DuBois and (3) cost savings generated from the November 2005 Plan, which contributed to the $66.6 million increase in operating profit over the prior year. This increase was partially offset by raw material costs increases not fully offset by pricing actions in the latter half of 2008.

Liquidity and Capital Resources

	Fiscal Year Ended						Change
(dollars in millions)	December 31,~~2009~~2010			December 31,~~2008~~2009			Amount			Percentage
Net cash provided by operating activities	$	~~122~~150.85		$	49122.28		$	7327.67		~~149.5~~	%22.5	%
Net cash provided by (used in) investing activities		(89.2	)		1.8			(91.0	)	-5007.2	%
Net cash used in investing activities		(94.2	)		(89.2	)		(5.0	)		-5.6	%
Net cash provided by (used in) financing activities		~~102~~(159.41	)		~~(46~~102.34	)		~~148~~(261.75	)	~~-321.0~~	%-255.5	%
Capital expenditures (1)		(94.37	)		~~(121~~94.23	)		260.94		~~-22.2~~	%0.4	%
							Change
	December 31,2010			December 31,2009			Amount			Percentage
Cash and cash equivalents	$	157.8		$	249.4		$	(91.6	)		-36.7	%
Working capital (2)		481.1			418.4			62.7			15.0	%
Short-term borrowings		24.2			27.7			(3.5	)		-12.5	%
Total debt		1,225.8			1,391.1			(165.3	)		-11.9	%

					Change
	December 31,2009		December 31,2008		Amount			Percentage
Cash and cash equivalents	$	249.4	$	107.8	$	141.6		131.4	%
Working capital (2)		418.4		438.5		(20.1	)	-4.6	%
Total debt		1,391.1		1,081.8		309.3		28.6	%

(1)

Includes expenditures for capitalized computer software.

(2)

Working capital is defined as net accounts receivable, plus inventories less accounts payable.

• The ~~increase~~decrease in cash and cash equivalents at December 31, ~~2009~~2010 compared to December 31, ~~2008~~2009 resulted primarily from ~~cash~~$133.8 ~~generated~~million byin ~~operating~~mandatory ~~activities~~ and ~~proceeds~~optional ~~from~~repayments ~~the issuance~~ of long-term ~~debt in connection with the Transactions on November 24~~borrowings, ~~2009. This cash generation was~~ partially offset by ~~capital~~improved ~~expenditures~~cash ~~and~~generated ~~dividends~~by ~~paid~~operating activities.

• The increase in net cash provided by operating activities during the year ended December 31, ~~2009~~2010 compared to the prior year was primarily due to an increase in net income ~~and a greater decrease in working capital as compared to the prior year~~.

• The increase in net cash ~~provided by (~~used in) investing activities during the year ended December 31, ~~2009~~2010 compared to the prior year was primarily due to a decrease in proceeds from ~~divestitures,~~disposal asof ~~the~~property, ~~Company~~plant ~~divested the Auto-Chlor business in February 2008~~ and ~~the DuBois business in September 2008~~equipment. ~~This~~Capital ~~was partially offset by lower capital~~ expenditures inwere ~~2009~~flat compared to the prior year. Our capital investments tend to be in dosing and feeder equipment with new and existing customer accounts, as well as ongoing expenditures in information technology, manufacturing and innovation development.

• The increase in net cash provided by (used in) financing activities during the year ended December 31, ~~2009~~2010 compared to the prior year was primarily due to ~~proceeds~~$133.8 ~~from~~million ~~the~~in ~~issuance~~optional and mandatory repayments of long-term ~~borrowings~~debt. inThe ~~connection~~increase ~~with~~in ~~the~~long-term ~~Transactions~~debt onin ~~November 24,~~ 2009. ~~This~~ was ~~partially~~due ~~offset~~to bythe ~~repayment~~issuance of long-term borrowings, ~~payments~~in ofconnection ~~debt~~with ~~issuance~~the ~~costs~~Transactions ~~and~~on ~~dividends~~November ~~paid~~24, ~~to Holdings~~2009. We paid $~~132~~15.08 million and $43132.40 million in dividends to Holdings in fiscal years ~~2009~~2010 and ~~2008~~2009, respectively.

• Working capital ~~decreased~~increased by $2062.17 million during the year ended December 31, ~~2009~~2010. This resulted from a $2864.87 million ~~increase~~decrease in accounts payable, ~~offset~~and bya ~~an approximate~~ $87.02 million increase in ~~accounts~~inventories, ~~receivable~~offset ~~and~~by ~~about~~ a $09.72 million ~~increase~~decrease in ~~inventories~~accounts receivable. The decrease in ~~working~~accounts ~~capital~~payable ~~reflects~~was ~~our~~due ~~continuing~~to ~~management~~a number of ~~our~~factors, ~~cash~~including ~~resources,~~taking ~~which~~advantage ~~was~~of ~~particularly~~negotiated ~~challenging~~discounts ~~given~~with ~~the~~vendors driven by our global ~~economic~~sourcing ~~environment~~initiative. InThe ~~response~~increase toin ~~the~~inventories ~~ongoing~~was ~~economic~~primarily ~~pressures,~~driven weby ~~will~~a ~~continue~~build toup ~~aggressively~~for ~~manage~~new product offerings, the transition of our ~~collection~~manufacturing ~~programs~~capability, and ~~expects~~variability toin ~~benefit~~customer ~~from~~ordering ~~the~~patterns. ~~implementation~~The ofdecrease ~~inventory~~in ~~rationalization~~accounts ~~projects~~receivable reflects our continuing efforts to aggressively manage our collection programs.

46• As of December 31, 2010, short-term borrowings primarily consisted of borrowings by our foreign subsidiaries on local lines of credit, which totaled $24.2 million at a weighted average interest rate of approximately 4.94%. Local credit arrangements vary by country and are primarily used to fund working capital. The maximum amount of short-term borrowings during 2010 was about $58.9 million. This peak level of borrowing was primarily to fund seasonal working capital requirements, and borrowings under our receivables facilities that have since been terminated by the Company.

•

Total debt decreased primarily as a result of $133.8 million in optional and mandatory repayments of our Term Loans, as previously discussed, and the impact of a weaker euro on our euro denominated Term Loans.

Debt and Contractual Obligations

In connection with the Transactions, we refinanced our debt and entered into new debt agreements. We repurchased our previously outstanding senior subordinated notes and repaid all of our outstanding obligations under our previous senior secured credit facilities. We entered into the following new debt agreements:

~~New~~ Senior Secured Credit ~~Facility~~Facilities. Diversey, its Canadian subsidiary and one of its European subsidiaries, each as a borrower, entered into a new credit agreement, whereby the lenders provided an aggregate principal amount of up to $1.25 billion available in U.S. dollars, euros, Canadian dollars and British pounds.

The new facility (“~~New~~ Senior Secured Credit ~~Facility~~Facilities”) consists of (a) a revolving loan facility in an aggregate principal amount not to exceed $250.0 million, including a letter of credit sub-limit of $50.0 million and a swingline loan sub-limit of $30.0 million, that matures on November 24, 2014, and (b) term loan facilities in US dollars, euros and Canadian dollars maturing on November 24, 2015 (“~~New~~ Term Loans”). The ~~New~~ Senior Secured Credit ~~Facility~~Facilities also provides for an increase in the revolving credit facility of up to $50.0 million under specified circumstances. The revolving ~~facility~~ facility will mature on November 24, 2014. As of December 31, ~~2009~~2010, we had $43.87 million in letters of credit outstanding under the revolving portion of the ~~New~~ Senior Secured Credit ~~Facility~~Facilities and therefore had the ability to borrow an ~~additional~~ additional $~~245~~246.23 million under this revolving facility.

The net proceeds of the ~~New~~ Term Loans, after deducting the original issue discount of $15.0 million, but before offering expenses and other debt issuance costs, were approximately $985.0 million. The New Term Loans will mature on November 24, 2015 and will amortize in quarterly installments of 1.0% per annum with the balance due at maturity.

At the Company’s option, loans under the ~~New~~ Senior Secured Credit ~~Facility~~Facilities bear interest at a rate equal to, (1) in the case of U.S. dollar denominated loans, the Applicable Margin (as described below) plus the Base Rate (as defined in the credit agreement for the ~~New~~ Senior Secured Credit ~~Facility~~Facilities), or the Applicable Margin plus the London interbank offered rate (defined in the credit agreement for the ~~New~~ Senior Secured Credit ~~Facility~~Facilities as the “LIBO Rate”), (2) in the case of Canadian dollar denominated loans, the Applicable Margin plus the BA Rate (as defined in the credit agreement for the ~~New~~ Senior Secured Credit ~~Facility~~Facilities), and (3) in the case of euro- or British pound-denominated loans, the Applicable Margin plus the current LIBO Rate or European interbank offered rate (defined in the credit agreement for the ~~New~~ Senior Secured Credit ~~Facility~~Facilities as the “EURIBO Rate”) for euro or British pounds, as the case may be.

The “Applicable Margin” is initially equal to (i) with respect to revolving credit loans maintained as Base Rate loans, a rate equal to 2.50% per annum, (ii) with respect to (A) revolving credit loans maintained as LIBO Rate loans, (B) revolving credit loans maintained as EURIBO Rate loans and (C) revolving credit loans maintained as BA Rate loans, a rate equal to 3.50% per annum and (iii) with respect to the term facilities, as of any date of determination, a per annum rate equal to the rate set forth below opposite the then applicable leverage ratio:


LEVERAGE RATIO	BASE RATE LOANS			LIBO RATE LOANS			EURIBO RATE LOANS			BA RATE LOANS
Greater than 2.75 to 1		2.50	%		3.50	%		4.25	%		3.50	%
Less than or equal to 2.75 to 1		2.25	%		3.25	%		4.00	%		3.25	%

Interest for Base Rate loans is payable quarterly in arrears. Interest for LIBO Rate, BA Rate and EURIBO Rate loans is payable in arrears in the applicable currency for interest periods of one, two, three or six months at the end of the relevant interest period, subject to certain exceptions, but at least quarterly. The Base Rate is the highest of (1) Citibank’s base rate, (2) the three-month certificate of deposit rate plus 0.50%, (3) the federal funds effective rate plus 0.50% and (4) the sum of the one-month LIBO Rate and the difference between the Applicable Margin for LIBO Rate loans and the Applicable Margin for Base Rate loans. Interest payable in respect of the term facilities, excluding the Applicable Margin, includes minimum floors of: (i) 3.00% in respect of loans maintained as Base Rate loans, (ii) 2.00% in respect of loans maintained as LIBO Rate loans or BA Rate loans and (iii) 2.25% in respect of loans maintained as EURIBO Rate loans. A default rate applies on all loans in the event of payment- or insolvency-related defaults at a rate per annum of 2.0% above the applicable interest rate.

4751

The Company must pay a per annum fee equal to the Applicable Margin with respect to ~~the LIBO~~LIBOR ~~Rate~~ under the revolving facility on the aggregate face amount of outstanding letters of credit. In addition, the Company must pay an issuance fee of 0.25% per annum on the aggregate face amount of outstanding letters of credit as well as other customary administration fees. The Company must also pay a commitment fee on the unused portion of the revolving facility. The rate used to calculate the commitment fee is 0.75% per annum with reductions to 0.625% if our leverage ratio is below 3.0 to 1.0 and to 0.5% if our leverage ratio is equal to or below 2.5 to 1.0.

All obligations under the ~~New~~ Senior Secured Credit Facilities ~~Facility~~ are secured by all the assets of Holdings, the Company and each subsidiary of the Company (but limited to the extent necessary to avoid materially adverse tax consequences to the Company and its subsidiaries, taken as a whole, and by restrictions imposed by applicable law).

The agreements and instruments governing our ~~New~~ Senior Secured Credit ~~Facility~~Facilities contain restrictions and limitations that could significantly impact our ability to operate our business. These restrictions and limitations relate to:

•

adherence to specified financial ratios and financial tests;

•

our capital expenditures limit;

•

our ability to declare dividends and make other distributions;

•

our ability to issue, redeem and repurchase capital stock;

•

our ability to engage in intercompany and affiliate transactions;

•

our ability to incur additional liens;

•

our ability to engage in consolidations and mergers;

•

our ability to make voluntary payments and modify existing indebtedness;

•

our ability to engage in the purchase and sale of assets (including sale-leaseback transactions); and

•

our ability to incur additional debt and make investments.

~~New~~Amendment to the Senior ~~Notes~~Secured Credit Facilities credit agreement. WeThe ~~issued~~Senior ~~$400~~Secured Credit Facilities were amended in March 2011.0 ~~million~~This ~~aggregate~~amendment ~~principal~~reduced ~~amount~~the interest rate payable with respect to the Term Loans, thereby reducing borrowing costs over the remaining life of ~~8.25%~~the ~~senior~~credit ~~notes~~facilities. ~~due~~The ~~2019~~spread ~~(“New~~on ~~Senior~~the ~~Notes”)~~U.S. dollar and Canadian dollar denominated borrowings was reduced from 325 basis points to 300 basis points, and the minimum LIBOR and BA floors were reduced from 2% to 1%. The ~~net~~spread ~~proceeds~~on ofthe euro denominated borrowing was reduced from 400 basis points to 350 basis points and the ~~offering~~EURIBOR floor was reduced from 2.25% to 1.5%. In addition, ~~after~~the ~~deducting~~amendment changed various financial covenants and credit limits to provide us with greater flexibility to operate our business. These changes include the ~~original~~ability to issue ~~discount~~incremental ofterm ~~$3.3~~loan ~~million~~facilities, ~~but~~the ~~before~~ability ~~estimated~~to ~~offering~~issue ~~expenses~~dividends ~~and~~to ~~other~~Holdings ~~debt~~to ~~issuance~~fund ~~costs~~cash interest payments on the Holdings Senior Notes, ~~were~~and ~~approximately~~the ~~$396.7~~ability ~~million~~to settle the due from parent balance carried in the consolidated financial statements.

Diversey Senior Notes. We ~~will~~issued ~~pay~~$400.0 ~~interest~~million onaggregate ~~our~~principal ~~New~~amount ~~Senior~~of 8.25% senior notes due 2019 (“Original Senior Notes”). onThe ~~May 15~~net ~~and~~proceeds ~~November 15~~of the offering, after deducting the original issue discount of ~~each~~$3.3 ~~year~~million, ~~beginning~~but onbefore ~~May 15~~estimated offering expenses and other debt issuance costs, ~~2010~~were approximately $396.7 ~~Our~~million. ~~New~~In connection with the issuance and sale of the Original Senior Notes, ~~will~~the ~~mature~~Company onentered into an exchange and registration rights agreement, dated as of November 1524, ~~2019.~~2009, pursuant to which the Company agreed to either offer to exchange the Original Senior Notes for substantially similar notes that are registered

4852

~~The~~ under ~~New~~the Securities Act of 1933 or, in certain circumstances, register the resale of the Original Senior Notes. ~~are~~In ~~unsecured~~compliance ~~and~~with ~~are~~this ~~effectively~~agreement, ~~subordinated~~on toJuly 14, 2010, the ~~New~~Company, ~~Senior~~upon the ~~Secured~~declaration ~~Credit~~of ~~Facility~~effectiveness toby the ~~extent~~SEC on July 12, 2010 of its registration statement filed on Form S-4, as amended, commenced an exchange offer whereby the ~~value~~notes were exchanged for new notes registered under the Securities Act of ~~our~~1933 (“Diversey ~~assets~~Senior ~~and~~Notes”). The terms of the ~~assets~~New Diversey Senior Notes are substantially identical to the terms of ~~our~~the ~~subsidiaries~~Original Senior Notes, except that ~~secure~~the ~~such~~Diversey ~~indebtedness~~Senior Notes are registered under the Securities Act and are not be subject to restrictions on transfer or provisions relating to additional interest. The exchange offer closed on August 13, 2010, with all of the Original Senior Notes having been tendered for exchange.

~~The~~We ~~indenture~~will ~~governing~~pay ~~our~~interest ~~New~~on ~~Senior~~May 15 ~~Notes contains restrictions~~ and ~~limitations~~November 15 ~~that could also significantly impact the ability~~ of useach ~~and~~year, ~~our~~beginning ~~restricted~~on ~~subsidiaries~~May 15, to2010. ~~conduct~~The ~~certain~~Diversey ~~aspects~~Senior ofNotes ~~the business. These restrictions and~~will ~~limitations~~mature ~~relate~~on ~~to:~~November 15, 2019.

The Diversey Senior Notes are unsecured and are effectively subordinated to the Senior Secured Credit Facilities to the extent of the value of our assets and the assets of our subsidiaries that secure such indebtedness.

The indenture governing the Diversey Senior Notes contains restrictions and limitations that could also significantly impact the ability of us and our restricted subsidiaries to conduct certain aspects of the business. These restrictions and limitations relate to:

•

incurring additional indebtedness;

•

paying dividends, redeeming stock or making other distributions;

•

making investments;

•

creating liens on assets and

•

disposing of assets.

As of December 31, ~~2009~~2010, we had total indebtedness of approximately $1.4239 billion, consisting of $400 million of ~~New~~Diversey Senior Notes, $~~981~~814.18 million of borrowings under the ~~New~~ Senior Secured Credit ~~Facility~~Facilities and $2724.72 million in other short-term credit lines. In addition, we had $~~178~~169.16 million in operating lease commitments, $21.36 million in capital lease commitments and $43.87 million committed under letters of credit as of December 31, ~~2009~~2010.

InRestricted ~~connection~~Cash. ~~with~~In ~~the~~December ~~issuance~~2009, ~~and~~we ~~sale~~transferred of$27.4 ~~the~~million ~~New~~to ~~Senior~~irrevocable ~~Notes,~~trusts for the ~~Company~~settlement ~~entered~~of certain ~~into~~obligations anassociated ~~exchange~~with ~~and~~the ~~registration rights~~November ~~agreement,~~2005 ~~dated~~Plan. asAt ~~of November~~December 2431, ~~2009~~2010, ~~pursuant~~we tocarried ~~which~~ the ~~Company~~balance ~~agreed~~of to$20.4 ~~either~~million ~~offer~~related to ~~exchange~~these ~~the~~accounts ~~New~~as ~~Senior~~restricted ~~Notes~~cash ~~for substantially similar notes that are registered under the Securities Act or,~~ in ~~certain~~our ~~circumstances, register~~consolidated ~~the~~balance ~~resale of the New Senior Notes~~sheet.

~~Restricted~~53 Cash. In December 2009 and December 2008, we transferred $27.4 million and $49.5 million, respectively, to irrevocable trusts for the settlement of certain obligations associated with the November 2005 Plan. At December 31, 2009, we carried the balance of $39.7 million related to these accounts as restricted cash in our consolidated balance sheet.

As of December 31, ~~2009~~2010, our contractual obligations were as follows:

			~~Payments Due by Period:~~	Payments Due by Period:
	Total		~~2010~~	2011		~~2011-2012~~		2012-2013	~~2013-2014~~		2014-2015 ~~andThereafter~~		2016 andThereafter
Contractual Obligations	(dollars in millions)
Long-term debt obligations:
New Term Loan Facilities	$	981.1	$	9.8		$	19.6		$	19.6	$	932.1
Term Loan Facilities	$	814.8		$	9.5			$	19.0		$	786.3	$	—
New Senior Notes (1)		729.2		32.2			66.0			66.0		565.0
Diversey Senior Notes (1)		697.0			33.0				66.0			66.0		532.0
Operating leases		~~178~~169.16		~~54.9~~	56.2		~~62.2~~		62.5	~~29.1~~		3124.9		26.0
Capital leases		21.36		~~1.0~~	1.0		~~1.2~~		0.5	~~0.1~~		—0.1		—
Purchase commitments (2)		~~14.~~7.4		~~6.5~~	6.3		~~7.1~~		0.7	~~1.1~~		—0.4		—
Total contractual obligations	$	1,905.4	$	104.4		$	156.1		$	115.9	$	1,529.0
Total contractual obligations (3) (4)	$	1,690.4		$	106.0			$	148.7		$	877.7	$	558.0

(1) Includes scheduled annual interest payments at a rate of 8.25% per annum aggregating to $~~329~~297.20 million over the term of the note.

(2) Represents maximum ~~penalties~~pentalties that would be contractually binding if we do not meet any portion of our volume commitments, primarily for the purchase of floor care related polymers.

(3)

Pension obligations are excluded from this table as we are unable to estimate the timing of payment due to the inherent assumptions underlying the obligation. However, we estimate that in fiscal 2011, we will contribute $28.1 million to our defined benefit plans and $5.3 million to our post-employment benefit plans.

(4)	Income tax reserve liabilities of $56.8 million as of December 31, 2010 are excluded from this table as we are unable to provide a reasonably reliable estimate of the timing of future payments. However, we estimate that payments expected to be made in fiscal 2011 are $9.3 million.

Our financial position and liquidity are, and will be, influenced by a variety of factors, including:

•

our ability to generate cash flows from operations;

•

the level of our outstanding indebtedness and the interest we are obligated to pay on this indebtedness; and

•

our capital expenditure requirements, which consist primarily of purchases of equipment.

We intend to fund our principal liquidity and capital resource requirements through existing cash and cash equivalents, cash provided by operations, and available borrowings under our ~~New~~ Senior Secured Credit ~~Facility, available borrowings and proceeds from our receivables securitization facility~~Facilities.

We believe that cash flows from continuing operations, together with available cash, and borrowings available under our ~~New~~ Senior Secured Credit ~~Facility,~~Facilities ~~and the proceeds from our receivables securitization facility~~ will generate sufficient cash flow to meet our liquidity needs for the foreseeable future. Please refer to “Forward-Looking Statements” and “Item 1A. Risk Factors” in this annual report on Form 10-K for certain risks associated with our substantial indebtedness and our restructuring programs.

~~We have obligations related to our pension and post~~Off-~~retirement~~Balance ~~plans~~Sheet ~~that~~Arrangements are discussed in detail in Notes 17 and 18 to our consolidated financial statements included in this annual report on Form 10-K. As of the most recent actuarial estimate, we anticipate making $24.7 million of contributions to our defined benefit pension plans in fiscal year 2010. Post-retirement medical claims are paid as they are submitted and are anticipated to be $5.2 million in fiscal year 2010.

~~Off-Balance~~Prior ~~Sheet~~to ~~Arrangements.~~November We2010, ~~account~~the ~~for~~Company ~~our~~and ~~accounts~~certain ~~receivable~~of ~~securitization~~its ~~arrangements~~subsidiaries asentered ainto ~~sale~~an ~~under~~agreement (the ~~provisions~~“Receivables ~~of FASB~~Facility”), ~~ASC~~as ~~Topic 860~~amended, ~~Transfers~~whereby ~~and~~they ~~Servicing~~sold, ~~that~~on ~~was~~a ~~effective~~continuous upbasis, certain trade receivables to ~~December 31~~JWPR Corporation (“JWPRC”), ~~2009~~a wholly-owned, consolidated, special purpose, bankruptcy-remote subsidiary of the Company. ~~With~~JWPRC was formed in March 2001 for the ~~adoption~~sole purpose of abuying ~~new~~and ~~standard~~selling ~~made~~receivables ~~effective~~generated by the Company ~~FASB~~and incertain ~~2010,~~of weits ~~expect~~subsidiaries party to ~~restore~~the ~~securitized~~Receivables Facility. JWPRC sold an undivided interest in the accounts receivable ~~onto~~to ~~our~~a ~~balance~~nonconsolidated ~~sheet~~financial institution (the “Conduit”) for an amount equal to the value of all eligible receivables (as defined under the receivables sale agreement between JWPRC and the Conduit) less the applicable reserve. The total potential for securitization of trade receivables under the Receivables Facility at December 31, 2009 ~~recognize~~was ~~short-term~~$50.0 ~~borrowings~~million. The maturity date of the Receivables Facility, as amended, was December 19, 2011. In November 2010, JWPRC terminated the Receivables Facility.

We54 and certain of our subsidiaries entered into an agreement (the “Receivables Facility”) in March 2001, as amended, whereby we and each participating subsidiary sell, on a continuous basis, certain trade receivables to JWPR Corporation (“JWPRC”), our wholly owned, consolidated, special purpose, bankruptcy-remote subsidiary. JWPRC was formed for the sole purpose of buying and selling receivables generated by us and certain of our subsidiaries party to the Receivables Facility. JWPRC, in turn, sells an undivided interest in the accounts receivable to nonconsolidated financial institutions (the “Conduits”) for an amount equal to the value of all eligible receivables (as defined under the receivables sale agreement between JWPRC and the Conduits) less the applicable reserve.

~~As of December 31~~Also, ~~2009,~~prior ~~and~~to ~~December 31,~~November ~~2008~~2010, ~~our~~certain ~~total~~subsidiaries ~~potential for securitization~~ of ~~trade~~the ~~receivables~~Company ~~under~~entered into agreements (the “European Receivables Facility”) ~~was~~to ~~$50.0~~sell, ~~million~~on ~~and~~a ~~$75.0~~continuous ~~million~~basis, ~~respectively.~~certain Intrade ~~December~~receivables ~~2008,~~originated in the ~~Receivables~~United ~~Facility~~Kingdom, ~~was~~France ~~amended~~ and ~~restated~~Spain to ~~include~~JDER ~~our~~Limited ~~Canadian~~(“JDER”), ~~subsidiary~~a ~~and~~wholly-owned, toconsolidated, ~~extend~~special ~~the maturity~~purpose, bankruptcy-remote subsidiary of the ~~agreement~~Company. toJDER ~~December~~was ~~2009.~~formed Inin ~~July~~September 2009, for the ~~Receivables~~sole ~~Facility~~purpose ~~was~~of ~~amended~~buying toand ~~allow~~selling ~~for~~receivables originated by subsidiaries subject to the ~~repurchase~~European ofReceivables ~~receivables~~Facility. ~~relating~~JDER tosold ~~our~~an ~~subsidiary~~undivided interest in the accounts ~~United~~receivable ~~Kingdom~~to ~~and~~a ~~extend~~nonconsolidated financial institution (the ~~maturity~~“European ofConduit”) for an amount equal to the ~~facility~~value ~~through~~of ~~July 14,~~the ~~2010. This~~eligible ~~amendment~~receivables ~~reduced~~less the applicable reserve. The total ~~potential~~amount available for securitization of trade receivables under the European Receivables Facility ~~from~~was ~~$75.0 million to $~~€50.0 million. InThe ~~December~~maturity ~~2009,~~date of the European Receivables Facility was ~~amended~~September 8, to2012. ~~extend~~In ~~the~~November ~~maturity~~2010, ofJDER terminated the ~~facility~~European toReceivables ~~December 19, 2011~~Facility.

AsEffective ~~of December~~January 311, ~~2009~~2010, ~~and~~the ~~December 31,~~accounting ~~2008,~~treatment for the ~~Conduits~~Company’s ~~held~~receivables $0securitization ~~million~~facilities ~~and~~(see ~~$43.7~~Note ~~million,~~2 ~~respectively,~~to the ofconsolidated financial statements) required that accounts receivable ~~that~~sold ~~are~~to ~~not~~the ~~included~~Conduit inand to the European Conduit be included in accounts receivable, ~~balance~~with ~~reflected~~a incorresponding ~~our~~increase ~~consolidated~~in ~~balance~~short-term ~~sheets~~borrowings.

As ofa ~~December 31,~~result ~~2009~~of ~~and~~the ~~December 31,~~facility ~~2008~~terminations, weJDER ~~had~~repurchased athe ~~retained~~remaining ~~interest~~receivables oftransferred ~~$60.1~~to ~~million~~the European Conduit, and ~~$74.7~~transferred its ~~million,~~retained ~~respectively,~~interest in receivables back to the ~~receivables~~subsidiaries ofthat ~~JWPRC~~originated them. ~~The~~JWPRC also transferred its retained interest isin ~~included~~receivables inback to the ~~accounts~~subsidiaries ~~receivable~~that ~~balance~~originated ~~and~~them; isit did not have any receivables outstanding with the ~~reflected~~Conduit. Moreover, $2.8 million of unamortized fees were written off and included in ~~the~~interest ~~consolidated~~expense ~~balance~~in ~~sheets~~the atCompany’s ~~estimated~~consolidated ~~fair~~statements ~~value~~of operations.

~~For~~As ~~the~~of ~~year~~December 31, ~~ended~~2010 and December 31, 2009, ~~JWPRC’s cost~~the Company had a retained interest of ~~borrowing~~$0 ~~under~~and $60.1 million, respectively, in the ~~Receivables~~receivables ~~Facility~~of ~~was~~JWPRC, atand aof ~~weighted~~$0 ~~average~~and ~~rate~~$110.4 million, respectively, in the receivables of 3JDER.~~22% per~~ ~~annum~~The retained interest is included in the accounts receivable balance and is reflected in the consolidated balance sheets at estimated fair value.

OnPrior ~~September 8, 2009,~~to ~~certain of our subsidiaries entered into agreements (~~the ~~“European~~effective ~~Receivables~~date ~~Facility”)~~of ~~and, together with~~ the ~~Receivables~~change ~~Facility, the “Receivables Facilities” to sell, on a continuous basis, certain trade receivables originated~~ in ~~the~~accounting ~~United Kingdom~~treatment, ~~France~~as ~~and~~of ~~Spain to JDER Limited (“JDER”)~~December 31, ~~our wholly-owned~~2009, ~~consolidated,~~the ~~special~~European ~~purpose,~~Conduit ~~bankruptcy-remote~~held ~~subsidiary~~$18.7 ~~JDER~~million, ~~was formed for the sole purpose~~ of ~~buying~~accounts ~~and~~receivable ~~selling~~that ~~receivables~~were ~~originated by~~not ~~indirect~~included ~~subsidiaries subject to the European Receivables Facility. JDER sells an undivided interest~~ in the accounts receivable tobalance ain ~~nonconsolidated financial institution (~~the ~~“European~~Company’s ~~Conduit”)~~consolidated ~~for~~balance ~~an amount equal to the value of the eligible receivables less the applicable reserve~~sheet. The total amount available for securitization of trade receivables under the European Receivables Facility is €50.0 million. The maturity date of the European Receivables Facility is September 8, 2012.

AsFinancial ofCovenants ~~December 31,~~under ~~2009,~~Our ~~the~~Senior ~~European~~Secured ~~Conduit~~Credit ~~held $18.7 million of accounts receivable that are~~Facilities ~~not included in the accounts receivable balance reflected in the Company’s consolidated balance sheets.~~

AsUnder ~~of December 31,~~the ~~2009,~~terms of the ~~Company~~credit ~~had~~agreement afor ~~retained~~our ~~interest~~Senior ofSecured ~~$110.4~~Credit ~~million~~Facilities, inwe ~~the~~are ~~receivables~~subject ofto ~~JDER~~certain financial covenants. The ~~retained~~financial ~~interest~~covenants isunder ~~included~~our inSenior ~~the~~Secured ~~accounts~~Credit ~~receivable~~Facilities ~~balance~~require ~~and~~us isto ~~reflected~~meet in the ~~consolidated~~following ~~balance~~targets ~~sheets~~and ~~at estimated fair value~~ratios.

~~For~~Maximum Leverage Ratio. We are required to maintain a leverage ratio for each financial covenant period of no more than the ~~year~~maximum ~~ended~~ratio ~~December~~specified in the credit agreement for our Senior Secured Credit Facilities for that financial covenant period. The maximum leverage ratio is the ratio of (1) ~~31,~~our ~~2009,~~consolidated ~~JDER’s~~indebtedness ~~cost~~(excluding up to $55 million of ~~borrowing~~indebtedness incurred under ~~the~~our ~~European~~ Receivables ~~Facility~~Facilities ~~was~~less cash and cash atequivalents aas ~~weighted~~of ~~average~~the ~~rate~~last day of the financial covenant period to (2~~.64%~~) ~~per~~our ~~annum.~~consolidated EBITDA (“Credit Agreement EBITDA”) as defined in the credit agreement for Senior Secured Credit Facilities for the same financial covenant period.

~~The~~55 ~~net amount of trade receivables at any time outstanding under these and any other securitization facility that we may enter into may not exceed $200.0 million in the aggregate.~~

Measurement of income tax reserve position impacting liquidity. During the fiscal year ended December 31, 2009, we increased income tax reserve liabilities by $4.8 million, resulting in total income tax reserve liabilities of $57.5 million. Total income tax reserve liabilities for which payments are expected in less than one year are $9.1 million. We are not able to provide a reasonably reliable estimate of the timing of future payments relating to non-current income tax reserve liabilities.

Financial Covenants under Our New Senior Secured Credit Facility

Under the terms of the credit agreement for our New Senior Secured Credit Facility, we are subject to certain financial covenants. The financial covenants under our New Senior Secured Credit Facility require us to meet the following targets and ratios.

Maximum Leverage Ratio. We are required to maintain a leverage ratio for each financial covenant period of no more than the maximum ratio specified in the credit agreement for our New Senior Secured Credit Facility for that financial covenant period. The maximum leverage ratio is the ratio of (1) our consolidated indebtedness (excluding up to $55 million of indebtedness incurred under our Receivables Facilities less cash and cash equivalents as of the last day of the financial covenant period to (2) our consolidated EBITDA (“Credit Agreement EBITDA”) as defined in the credit agreement for New Senior Secured Credit Facility for the same financial covenant period.

The maximum leverage ratio we are required to maintain for each period is set forth below:

Period Ending		MaximumLeverage Ratio
December 31, 2009		4.75 to 1
March 31, 2010		4.75 to 1
June 30, 2010		4.75 to 1
September 30, 2010		4.75 to 1
December 31, 2010		4.75 to 1
March 31, 2011		4.75 to 1
June 30, 2011		4.75 to 1
September 30, 2011		4.50 to 1
December 31, 2011		4.50 to 1
March 31, 2012		4.50 to 1
June 30, 2012		4.50 to 1
September 30, 2012		4.00 to 1
December 31, 2012		4.00 to 1
March 31, 2013		4.00 to 1
June 30, 2013		4.00 to 1
September 30, 2013		3.75 to 1
December 31, 2013		3.75 to 1
March 31, 2014		3.75 to 1
June 30, 2014		3.75 to 1
September 30, 2014 and thereafter		3.50 to 1

Minimum Interest Coverage Ratio. We are required to maintain an interest coverage ratio for each financial covenant period of no less than the minimum ratio specified in the credit agreement for our ~~New~~ Senior Secured Credit ~~Facility~~ Facilities for that financial covenant period. The minimum interest coverage ratio is the ratio of (1) our consolidated Credit Agreement EBITDA for a financial covenant period to (2) our cash interest expense for that same financial covenant period calculated in accordance with the New Senior Secured Secured Facility.

The minimum interest coverage ratio we are required to maintain for each period is set forth below:

Period Ending		Minimum InterestCoverage Ratio
March 31, 2010		2.75 to 1
June 30, 2010		2.75 to 1
September 30, 2010		2.75 to 1
December 31, 2010		2.75 to 1
March 31, 2011		2.75 to 1
June 30, 2011		2.75 to 1
September 30, 2011		3.00 to 1
December 31, 2011		3.00 to 1
March 31, 2012		3.00 to 1
June 30, 2012		3.00 to 1
September 30, 2012 and thereafter		3.25 to 1

5256

Credit Agreement EBITDA. For the purpose of calculating compliance with these ratios, the credit agreement for our ~~New~~ Senior Secured Credit ~~Facility~~Facilities requires us to use a financial measure called Credit Agreement EBITDA, which is calculated as follows:

(dollars in millions)
EBITDA	$	~~312~~361.27
Restructuring related costs		598.6
Acquisition and divestiture adjustment		210.24
Non-cash and other items, net		12.2
Non-cash expenses and charges		21.1
Compensation adjustment		17.0
Non-recurring gains or losses		31.1
Credit Agreement EBITDA	$	403.2
Compensation adjustment		20.0
Credit Agreement EBITDA	$	452.9

We present Credit Agreement EBITDA because it is a financial measure that is used in the calculation of compliance with our financial covenants under the credit agreement for our ~~New~~ Senior Secured Credit ~~Facility~~Facilities. Credit Agreement EBITDA is not a measure under U.S, GAAP and should not be considered as a substitute for financial performance and liquidity measures determined in accordance with U.S. GAAP, such as net income, operating income or operating cash flow.

Borrowings under our ~~New~~ Senior Secured Credit ~~Facility~~Facilities are a key source of our liquidity. Our ability to borrow under our ~~New~~ Senior Secured Credit ~~Facility~~Facilities depends upon, among other things, compliance with certain representations, warranties and covenants under the credit agreement for our ~~New~~ Senior Secured Credit ~~Facility~~Facilities. The financial covenants in our ~~New~~ Senior Secured Credit Facilities ~~Facility~~ include a specified debt to Credit Agreement EBITDA leverage ratio and a specified Credit Agreement EBITDA to interest expense coverage ratio for specified periods.

Failure to comply with these financial ratio covenants would result in a default under the credit agreement for our ~~New~~ Senior Secured Credit ~~Facility~~Facilities and, absent a waiver or amendment from our lenders, would permit the acceleration of all our outstanding borrowings under our ~~New~~ Senior Secured Credit ~~Facility~~Facilities.

53Compliance with Maximum Leverage Ratio and Minimum Interest Coverage Ratio. For our financial covenant period ended on December 31, 2010, we were in compliance with the maximum leverage ratio and minimum interest coverage ratio covenants contained in the credit agreement for our Senior Secured Credit Facilities.

~~Table~~Capital Expenditures. Capital expenditures are limited under the Senior Secured Credit Facilities (with certain exceptions) to $150.0 million per fiscal year. To the extent that we make capital expenditures of ~~Contents~~less than the limit in any fiscal year, however, we may carry forward into the subsequent year the difference between the limit and the actual amount we expended, provided that the amounts we carry forward from the previous year will be allocated to capital expenditures in the current fiscal year only after the amount allocated to the current fiscal year is exhausted. As of December 31, 2010, we were in compliance with the limitation on capital expenditures for fiscal year 2010.

~~Compliance~~The ~~with~~credit ~~Maximum~~agreement ~~Leverage~~for ~~Ratio~~our ~~and~~Senior ~~Minimum~~Secured ~~Interest~~Credit ~~Coverage~~Facilities ~~Ratio.~~contains ~~For~~additional covenants that restrict our ~~financial~~ ~~covenant~~ability ~~period~~to ~~ended~~declare ondividends ~~December 31,~~and ~~2009,~~to weredeem ~~were~~and inrepurchase ~~compliance~~capital ~~with~~stock. ~~the~~The ~~maximum~~credit ~~leverage~~agreement for ~~ratio~~our ~~and~~Senior ~~minimum~~Secured ~~interest~~Credit ~~coverage~~Facilities ~~ratio~~also ~~covenants~~limits ~~contained~~our ability to incur additional liens, engage in ~~the~~sale-leaseback ~~credit~~transactions, ~~agreement~~incur ~~for~~additional ~~our~~indebtedness ~~New~~and ~~Senior~~make ~~Secured~~investments, ~~Credit~~among ~~Facility~~other restrictions.

Capital Expenditures. Capital expenditures are limited under the New Senior Secured Credit Facility (with certain exceptions) to $150.0 million per fiscal year. To the extent that we make capital expenditures of less than the limit in any fiscal year, however, we may carry forward into the subsequent year the difference between the limit and the actual amount we expended, provided that the amounts we carry forward from the previous year will be allocated to capital expenditures in the current fiscal year only after the amount allocated to the current fiscal year is exhausted. As of December 31, 2009, we were in compliance with the limitation on capital expenditures for fiscal year 2009.

The credit agreement for our New Senior Secured Credit Facility contains additional covenants that restrict our ability to declare dividends and to redeem and repurchase capital stock. The credit agreement for our New Senior Secured Credit Facility also limits our ability to incur additional liens, engage in sale-leaseback transactions, incur additional indebtedness and make investments, among other restrictions.

Holdings Senior Notes

In connection with the Transactions, on November 24, 2009, Holdings issued $250.0 million initial aggregate principal ~~amount~~ of its 10.50% senior notes due 2020 (“Original Holdings Senior Notes”) in a private transaction exempt from the registration requirements of the Securities Act. ~~The Holdings Senior Notes bear interest at a rate~~ of 10 1933.~~50% per~~ ~~annum,~~In ~~compounded~~connection ~~semi-annually~~with onthe ~~each~~issuance ~~May 15~~ and ~~November 15.~~sale ~~Under the terms~~ of the ~~indenture~~Original ~~governing the~~ Holdings Senior Notes, ~~prior to November 15, 2014,~~ Holdings ~~may~~entered ~~elect~~into toan ~~pay~~exchange ~~interest~~and onregistration ~~the~~rights ~~Holdings Senior~~agreement, ~~Notes~~dated inas ~~cash or by increasing the principal amount~~ of ~~the Holdings Senior Notes. Thereafter, cash interest will be payable on the Holdings Senior Notes on May 15 and~~ November ~~15 of each year~~24, ~~commencing on May 15~~2009, ~~2015; provided~~with ~~that~~the ~~cash~~purchasers ~~interest~~party ~~will~~thereto, bepursuant ~~payable only~~ to ~~the~~which ~~extent~~Holdings ofagreed ~~funds~~to ~~actually~~either ~~available~~offer ~~for distribution by the Company~~ to ~~Holdings~~exchange ~~under applicable law and under any agreement governing~~ the ~~Company’s~~Original ~~indebtedness. The~~ Holdings Senior Notes for ~~will~~substantially ~~mature~~similar onnotes ~~May 15,~~that ~~2020. The Holdings Senior Notes~~ are ~~not~~registered ~~guaranteed~~under by the ~~Company~~Securities orAct ~~any~~ of ~~its~~1933 ~~subsidiaries.~~or, ~~The~~in ~~indenture governing the Holdings Senior Notes contains~~ certain ~~covenants~~circumstances, ~~and~~register ~~events~~the resale of ~~default that~~ the ~~Company~~Original ~~believes are~~Holdings ~~customary~~Senior ~~for~~Notes. ~~indentures~~In ofcompliance ~~this type.~~

In57 connection with the issuance and sale of the Holdings Senior Notes, Holdings entered into an exchange and registration rights agreement, dated as of November 24, 2009, with the purchasers party thereto, pursuant to which Holdings agreed to either offer to exchange the Holdings Senior Notes for substantially similar notes that are registered under the Securities Act or, in certain circumstances, register the resale of the Holdings Senior Notes.

with this agreement, on July 14, 2010, the Company, upon the declaration of effectiveness by the SEC on July 12, 2010 of its registration statement filed on Form S-4, as amended, commenced an exchange offer whereby the Original Holdings Senior Notes were exchanged for new notes registered under the Securities Act of 1933 (“Holdings Senior Notes”). The terms of the Holdings Senior Notes are substantially identical to the terms of the Original Holdings Senior Notes, except that the Holdings Senior Notes are registered under the Securities Act and are not subject to restrictions on transfer or provisions relating to additional interest. The exchange offer closed on August 13, 2010, with all of the Original Holdings Senior Notes having been tendered for exchange.

The Holdings Senior Notes bear interest at a rate of 10.50% per annum, compounded semi-annually on each May 15 and November 15. Under the terms of the indenture governing the Holdings Senior Notes, prior to November 15, 2014, Holdings may elect to pay interest on the Holdings Senior Notes in cash or by increasing the principal amount of the Holdings Senior Notes. Thereafter, cash interest will be payable on the Holdings Senior Notes on May 15 and November 15 of each year, commencing on May 15, 2015; provided that cash interest will be payable only to the extent of funds actually available for distribution by the Company to Holdings under applicable law and under any agreement governing the Company’s indebtedness. The Holdings Senior Notes will mature on May 15, 2020. The Holdings Senior Notes are not guaranteed by the Company or any of its subsidiaries. The indenture governing the Holdings Senior Notes contains certain covenants and events of default that the Company believes are customary for indentures of this type.

On May 15, 2010, the principal amount of the Holdings Senior Notes increased by $12.5 million, in lieu of a cash interest payment, to $262.5 million.

On April 26, 2010, Holdings provided notice to the trustee appointed under the indenture as required therein, of its election to pay interest in cash on the Holdings Senior Notes on November 15, 2010. The amount of such cash interest was $13.8 million. Holdings also elected to pay in cash, the interest of $13.8 million on the Holdings Senior Notes due on May 15, 2011.

Related Party Transactions

Until 1999, we were part of SCJ. In connection with our spin-off from SCJ in November 1999, we entered into a number of agreements relating to the separation and our ongoing relationship with SCJ after the spin-off. A number of these agreements relate to our ordinary course of business, while others pertain to our historical relationship with SCJ and our former status as a wholly owned subsidiary of SCJ.

For further discussion of related party transactions, see Note 2324 to our consolidated financial statements and “Item 13. Certain Relationships and Related Transactions, and Director Independence,” included elsewhere in this Form 10-K.

Acquisitions

InIntangible ~~June~~Acquisition 2008, we purchased certain intangible assets relating to a cleaning technology for an aggregate purchase price of $8.0 million. The purchase price includes a $1.0 million non-refundable deposit made in July 2007; $5.0 million paid at closing; and $2.0 million of future payments that are contingent upon, among other things, achieving commercial production. Assets acquired include primarily intangible assets, consisting of trademarks, patents, technological know-how, customer relationships and a non-compete agreement. We paid the sellers $1.0 million in both September 2008 and December 2008 having met certain contingent requirements.

54In June 2008, the Company purchased certain intangible assets relating to a cleaning technology for an aggregate purchase price of $8.0 million. The purchase price includes a $1.0 million non-refundable deposit made in July 2007; $5.0 million paid at closing; and $2.0 million of future payments that are contingent upon, among other things, achieving commercial production. Assets acquired include primarily intangible assets, consisting of trademarks, patents, technological know-how, customer relationships and a non-compete agreement. The Company paid the sellers $1.0 million in both September 2008 and December 2008 having met certain contingent requirements.

In conjunction with the acquisition, the Company and the sellers entered into a consulting agreement, under which the Company was required to pay to the sellers $1.0 million in fiscal 2009. The Company paid the sellers $0.5 million in both January 2009

In and ~~conjunction~~July ~~with~~2009 as the ~~acquisition,~~sellers wemet ~~and~~ the ~~sellers~~contingent ~~entered~~requirements. ~~into~~In aDecember ~~consulting agreement~~2010, ~~under~~ ~~which~~the weCompany ~~are~~and ~~required~~the tosellers ~~pay~~amended to the ~~sellers~~consulting ~~$1.0~~agreement ~~million~~and inthe ~~fiscal~~Company ~~2009~~recorded ~~and~~an additional consideration of $1.0.4 million ~~in fiscal 2010~~, ~~subject~~which towas ~~certain~~capitalized ~~conditions.~~and Weallocated ~~paid~~to the ~~sellers~~purchase ~~$1.0~~price ~~in fiscal 2009~~ as ~~the~~technical ~~sellers met those contingent considerations~~know-how.

In addition to the purchase price discussed above, wethe Company previously maintained an intangible asset in ~~our~~its consolidated balance sheets in the amount of $4.7 million, representing a payment from usthe Company to the sellers in a previous period in exchange for an exclusive distribution license agreement relating to this technology. This distribution agreement was terminated as a result of the acquisition and the value of this asset iswas considered in the final allocation of purchase price.

55At December 31, 2010, after consideration of the contingent payments and increased consideration described above, the Company’s allocation of purchase price was as follows (in millions):


	Fair Value		Useful Life
Trademarks	$	0.5	Indefinite
Patents		0.1	18 years
Technical know-how		12.2	20 years
Customer relationships		0.4	10 years
Non-compete		0.6	10 years

~~At December 31, 2009, our completed allocation of the purchase price is as follows (in~~Joint ~~millions):~~Venture

	Fair Value		Useful Life
Trademarks	$	0.5	Indefinite
Patents		0.1	18 years
Technological know-how		11.8	20 years
Customer relationships		0.4	10 years
Non-compete		0.6	10 years

In December 2010, the Company and Atlantis Activator Technologies LLC (“Atlantis”), an Ohio-based limited liability company, formed a joint venture, Proteus Solutions, LLC (“Proteus”), to develop and market products for laundry and other applications. The Company contributed $3.4 million and Atlantis contributed intellectual property, with each holding a 50% interest in Proteus. The Company expects to provide operational funding and management resources to Proteus following formalization of the business plan. The joint venture is not expected to generate operating results until the second half of fiscal 2011. At December 31, 2010, the Company’s investment in Proteus is included at cost in other assets in the consolidated balance sheets.

Divestitures

Auto-Chlor Master Franchise and Branch Operations

In December 2007, in conjunction with our November 2005 Plan, we executed a sales agreement for our Auto-Chlor Master Franchise and substantially all of our remaining Auto-Chlor branch operations in North America, a business that marketed and sold low-energy dishwashing systems, kitchen chemicals, laundry and housekeeping products and services to food service, lodging, healthcare, and institutional customers, for $69.8 million.

The ~~sales~~transaction ~~agreement~~closed ~~was~~on ~~subject~~February 29, to2008, ~~the~~resulting ~~approval~~in ofa net ~~our~~book ~~Board~~gain of ~~Directors~~approximately ~~and~~$1.3 ~~Unilever~~million ~~consent,~~after ~~both~~taxes ofand ~~which~~related wecosts. ~~considered~~The ~~necessary~~gain ~~in order~~associated towith ~~meet~~these ~~“held~~divestiture ~~for~~activities ~~sale”~~is ~~criteria~~included ~~under~~as ~~ASC~~a ~~Topic~~component ~~360,~~of ~~Property~~selling, ~~Plant~~general and ~~Equipment~~administrative expenses in the accompanying consolidated statements of operations. ~~Accordingly~~In fiscal years 2010 and 2009, ~~these~~the ~~assets~~Company ~~were~~recorded ~~classified~~adjustments asrelated ~~“held~~to ~~and~~closing ~~used”~~costs asand ofpension-related ~~December 28~~settlement charges, ~~2007.~~reducing Wethe ~~obtained~~gain ~~approval~~by ~~from~~$0.2 ~~our~~million ~~Board~~each. ~~of Directors~~Additional ~~and~~post-closing ~~consent~~adjustments ~~from~~are ~~Unilever~~not inanticipated ~~January~~to ~~2008~~be significant.

~~The~~Net ~~transaction~~sales ~~closed~~associated onwith ~~February 29,~~these ~~2008,~~businesses ~~resulting~~were ~~in a net book gain of~~ approximately $19.39 million ~~after~~for ~~taxes and related costs. The gain associated with these divestiture activities is included as a component of selling, general and administrative expenses in~~ the ~~accompanying consolidated statements of operations. In~~ fiscal year ~~2009~~ended December 31, ~~the Company recorded adjustments related to closing costs and pension-related settlement charges, reducing the gain by $0~~2008.2 ~~million. The gain is subject to additional post-closing adjustments including potential pension-related settlement changes.~~

As59 ~~of the divestiture date, net assets were as follows (in millions):~~

Inventories	$	8.3
Property, plant and equipment, net		11.4
Goodwill, allocated		12.8
Other intangibles, net		32.5
Net assets divested	$	65.0

Net sales associated with these businesses were approximately $9.9 million and $63.0 million for the fiscal years ended December 31, 2008 and December 28, 2007, respectively.

Auto-Chlor Branch Operations

In August 2007, in conjunction with our November 2005 Plan, we divested certain of our Auto-Chlor branch operations in the eastern United States for $2.5 million, resulting in a gain of $0.5 million after taxes and related costs. The gain is included within selling, general and administrative expenses in the accompanying consolidated statements of operations. Net sales associated with this business were approximately $3.4 million for the fiscal year ended December 28, 2007.

Discontinued Operations

DuBois

On September 26, 2008, we and JohnsonDiversey Canada, Inc., a wholly-owned subsidiary of our company, sold substantially all of the assets of DuBois to The Riverside Company (“Riverside”), for approximately $69.7 million, of which, $5.0 million was escrowed subject to meeting certain fiscal year 2009 performance measures and $1.0 million was escrowed subject to resolution of certain environmental representations by us. The purchase price iswas also subject to certain post-closing adjustments that ~~are~~were based on net working capital targets and performance measures. WeFinalization of the working capital adjustment in the first quarter of 2009 did not require any purchase price adjustment. In July of 2009, the Company met certain environmental representations and Riverside ~~expect~~released tothe ~~finalize~~$1.0 million escrow to the Company. The Company and Riverside finalized certain performance related adjustments during the second quarter of 2010. ~~The~~which ~~$1.0~~did ~~million~~not ~~environmental~~require ~~escrow~~any ~~was~~purchase ~~released~~price ~~in 2009~~adjustment.

~~DuBois~~The issale ~~a North American based manufacturer and marketer~~ of ~~specialty~~Dubois chemicals, control systems and related services primarily for use by industrial manufacturers. DuBois was a non-core asset of our company and a component of the North American business segment. The sale resulted in a gain of approximately $14.8 million ($10.7 million after tax) being recorded in the fiscal year ended December 31, 2008, net of related costs. During the fiscal year ended December 31, 2009, we reduced the gain by approximately $0.9 million ($0.3 million after tax) as a result of additional one-time costs, pension-related settlement charges, partially offset by proceeds from the environmental escrow. ~~The~~During the fiscal year ended December 31, 2010, the Company reduced the gain isby ~~subject~~$0.1 tomillion ~~additional~~($0.1 ~~post-closing~~million ~~adjustments~~after ~~including~~tax income) as a result of additional ~~potential~~one-time costs and pension-related settlement charges. Any additional post-closing adjustments are not anticipated to be significant.

~~The~~60 ~~following summarizes the carrying amount of assets and liabilities of DuBois immediately preceding the divestiture (in millions):~~

ASSETS
Current assets:
Accounts receivable, less allowance of $0.1 million	$	13.3
Inventories		7.2
Other current assets		0.1
Current assets	$	20.6
Non current assets:
Property, plant and equipment, net	$	11.0
Goodwill		9.8
Other intangibles, net		9.9
Non current assets	$	30.7
LIABILITIES
Current liabilities:
Accounts payable	$	2.5
Accrued expenses		2.7
Current liabilities	$	5.2

Net sales from discontinued operations relating to DuBois were as follows (in millions):

	Fiscal Year Ended
	December 31,2008		December 28,2007
Net sales 1	$	72.1	$	121.7

1 Includes intercompany sales of $7.2 million and $33.4 million for the fiscal years ended December 31, 2008 and December 28, 2007, respectively.

Income from discontinued operations relating to DuBois was comprised of the following (in millions):

	Fiscal Year Ended
	December 31,2009			December 31,2008			December 28,2007
	December 31,2010			December 31,2009			December 28,2008
Income from discontinued operations before taxes and gain from sale	$	—		$	~~6.6~~—		$	106.96
Taxes on discontinued operations		—			(1.9	)		(4.2	)
Tax provision on income from discontinued operations		—			—			(1.9	)
Gain on sale of discontinued operations before taxes		(0.9	)		14.8			—
Gain (loss) on sale of discontinued operations before taxes		(0.1	)		(0.9	)		14.8
Taxes on gain from sale of discontinued operations		1.2			(4.1	)		—
Tax benefit (provision) on gain (loss) from sale of discontinued operations		—			1.2			(4.1	)
Income from discontinued operations	$	0.3		$	15.4		$	6.7
Income (loss) from discontinued operations	$	(0.1	)	$	0.3		$	15.4

The asset purchase agreement relating to the DuBois disposition refers to ancillary agreements governing certain relationships between the parties, including a distribution agreement and supply agreement, each of which is not considered material to our consolidated financial results.

Polymer Business

On June 30, 2006, Johnson Polymer, LLC (“Johnson Polymer”) and JohnsonDiversey Holdings II B.V. (“Holdings II”), an indirectly owned subsidiary of our company, completed the sale of substantially all of the assets of the Polymer Business to BASF for approximately $470.0 million plus an additional $8.1 million in connection with the parties’ estimate of purchase price adjustments that are based upon the closing net asset value of the Polymer Business. Further, BASF paid us $1.5 million for the option to extend the tolling agreement (described below) by up to six months. In December 2006, we finalized purchase price adjustments with BASF related to the net asset value and we received an additional $4.1 million.

The Polymer Business developed, manufactured, and sold specialty polymers for use in the industrial print and packaging industry, ~~industrial~~ industrial paint and coatings industry, and industrial plastics industry. The Polymer Business was a non-core asset of our company and had been reported as a separate ~~business~~operating segment. The sale resulted in a gain of approximately $352.9 million ($235.9 million after tax), net of related costs.

~~During~~The ~~the~~Company ~~fiscal year ended December 28, 2007, we finalized and paid certain pension-related adjustments: adjusted net assets disposed and~~ recorded additional closing costs, reducing the gain by $10.72 million ($0.2 million after- tax ~~gain~~loss), during the fiscal year ended December 31, 2008. WeDuring the fiscal year ended December 31, 2009, the Company recorded certain pension-related adjustments and additional closing costs, reducing the gain by $0.2 million ($0.2 million after- tax loss)~~, during the fiscal year ended December 31, 2008~~. During the fiscal year ended December 31, ~~2009~~2010, the Company ~~paid~~recorded certain pension-related adjustments and ~~recorded~~ additional closing costs, reducing the gain by $0.28 million ($0.28 million after~~-tax~~ tax loss). Any additional post-closing adjustments are not anticipated to be significant.

The asset and equity purchase agreement relating to the disposition of the Polymer Business refers to ancillary agreements governing certain relationships between the parties, including a supply agreement and tolling agreement, each of which is not considered material to our consolidated financial results.

Supply Agreement

A ten-year global agreement provides for the supply of polymer products to usthe Company by BASF. Unless either party provides notice of its intent not to renew at least three years prior to the expiration of the ten-year term, the term of the agreement will extend for an additional five years. The agreement requires that wethe Company purchase a specified percentage of related products from BASF during the term of agreement. Subject to certain adjustments, wethe ~~have~~Company has a minimum volume commitment during each of the first five years of the agreement.

~~Tolling~~61 ~~Agreement~~

A three-year agreement provides for the toll manufacture of polymer products by us, at our manufacturing facility in Sturtevant, Wisconsin, for BASF. The agreement has been extended by none months to March 2010. The agreement specifies product pricing and provides BASF the right to purchase certain equipment retained by us.

InTolling ~~association~~Agreement with the tolling agreement, we agreed to pay $11.4 million in compensation to SCJ, a related party, primarily related to pre-payments and the right to extend terms on the lease agreement at the Sturtevant, Wisconsin manufacturing location. We are amortizing $9.2 million of the payment into the results of the tolling operation over the term of the tolling agreement, with the remainder recorded as a reduction of the gain on discontinued operations.

A three-year agreement provided for the toll manufacture of polymer products by the Company, at its manufacturing facility in Sturtevant, Wisconsin, for BASF. The agreement, after a nine month extension, was terminated on March 2010. The agreement specified product pricing and provides BASF the right to purchase certain equipment retained by the Company.

In association with the tolling agreement, we agreed to pay $11.4 million in compensation to SCJ, a related party, primarily related to pre-payments and the right to extend terms on the lease agreement at the Sturtevant, Wisconsin manufacturing location. We amortized $9.2 million of the payment into the results of the tolling operation over the term of the tolling agreement, with the remainder recorded as a reduction of the gain on discontinued operations.

We considered our continuing involvement with the Polymer Business, including the supply agreement and tolling agreement, concluding that neither the related cash inflows nor cash outflows were direct, due to the relative insignificance of the continuing operations to the disposed business.

Income from discontinued operations relating to the Polymer Business was comprised of the following (in millions):

	Fiscal Year Ended
	December 31,2009			December 31,2008			December 28,2007
	December 31,2010			December 31,2009			December 31,2008
Income from discontinued operations before taxes and gain from sale	$	—		$	—		$	—
Loss on sale of discontinued operations before taxes	$	(0.8	)	$	(0.2	)	$	(0.2	)
Taxes on income from discontinued operations		—			—			—
Tax benefit on loss from sale of discontinued operations		—			0.1			—
Gain (loss) on sale of discontinued operations before taxes		(0.2	)		(0.2	)		(1.8	)
Income (loss) from tolling operations		(9.5	)		(1.1	)		0.5
Taxes on gain (loss) from sale of discontinued operations		0.1			(0.0	)		2.0
Tax (provision) benefit on income (loss) from tolling operations		—			0.4			(0.2	)
Income from tolling operations		(1.1	)		0.5			1.9
Income (loss) from discontinued operations	$	(10.3	)	$	(0.8	)	$	0.1
Taxes on income from tolling operations		0.4			(0.2	)		(0.7	)
Income from discontinued operations		(0.8	)		0.1			1.4

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk relating to our operations results primarily from our debt level as well as changes in foreign exchange rates and interest rates. In addition, risk exposures associated with raw materials price changes and customer credit have increased significantly relative to our historical experience due to the recent global economic slowdown, the ~~ongoing~~ credit crisis, and unprecedented volatility and unpredictability of raw materials prices. The following discussion does not consider the effects that an adverse change may have on the overall economy, and it also does not consider additional actions we may take to mitigate our exposure to these changes. We cannot guarantee that the actions we take to mitigate these exposures will be successful.

Debt Risk

We have a significant amount of indebtedness. As of December 31, ~~2009~~2010, we had total indebtedness of approximately $1.~~409~~239 billion, consisting of $400 million of New Senior Notes, $~~981~~814.18 million of borrowings under the credit agreement for our ~~New~~ Senior Secured Credit ~~Facility~~Facilities and $2724.72 million in other short-term credit lines. In addition, we had $~~178~~169.16 million in operating lease commitments, $21.36 million in capital lease commitments and $43.87 million committed under letters of credit as of December 31, ~~2009~~2010.

Interest Rate Risk

As of December 31, ~~2009~~2010, we had approximately $~~981~~814.18 million of debt outstanding under the credit agreement for our ~~New~~ Senior Secured Credit ~~Facility~~Facilities based on LIBOR, EURIBO or the BA rate. To the extent LIBOR, EURIBO or the BA rate exceed the floor rates set forth in the credit agreement for our ~~New~~ Senior Secured Credit ~~Facility~~Facilities, this debt will be subject to variable interest rate risk. Accordingly, our earnings and cash flows could be affected by changes in interest rates. At the above level of variable rate borrowings, we do not anticipate a significant impact on earnings in the event of an increase in LIBOR within a reasonable range. In the event of an adverse change in LIBOR EURIBO or the BA rate, however, management may take actions to attempt to mitigate our exposure to interest rate risk. Because it is difficult to predict what alternatives may be available to management in such an environment or their possible effects, this analysis does not consider any such actions. Further, this analysis does not consider the effects that such an environment could have on the financial or credit markets or economic activity in general.

Foreign Currency Risk

We conduct our business in various regions of the world and export and import products to and from many countries. Our operations may, therefore, be subject to volatility because of currency fluctuations, inflation changes and changes in political and economic conditions in these countries. Sales and expenses are frequently denominated in local currencies, and results of operations may be affected adversely as currency fluctuations affect product prices and operating costs. We engage in hedging operations, including forward foreign exchange contracts, to reduce the exposure of our cash flows to fluctuations in foreign currency rates. All hedging instruments are designated and effective as hedges, in accordance with U.S. GAAP. Other instruments that do not qualify for hedge accounting are marked to market with changes recognized in current earnings. We do not engage in hedging for speculative investment reasons. There can be no assurance that our hedging operations will eliminate or substantially reduce risks associated with fluctuating currencies.

Based on our overall foreign exchange exposure, we estimate that a 10% change in the exchange rates would not materially affect our financial position and liquidity. The effect on our results of operations would be substantially offset by the impact of the hedged items.

Raw Materials Price Risk

We utilize a variety of raw materials in the manufacture of our products, including surfactants, polymers and resins, fragrances, solvents, caustic soda, waxes, chelates and phosphates, which have experienced significant fluctuations in prices. In addition, our freight costs as well as raw material costs for certain of our floor care products have been unfavorably impacted by volatile energy prices (primarily oil and natural gas). Our profitability is sensitive to changes in the costs of these materials caused by changes in supply, demand, or other market conditions, over which we have little or no control. In response to inflationary pressures, we implement price increases to recover costs to the fullest extent possible and pursue cost reduction initiatives; however, we may not be able to pass on these increases in whole or in part to our customers or realize cost savings needed to offset these increases.

Customer Credit Risk

Customer credit risk is the possibility of loss from customers’ failure to make payments according to contract terms. Given the recent ~~ongoing~~ credit crisis and volatility of the financial markets, we ~~are~~continue ~~monitoring~~to monitor credit risk. Through December 31, ~~2009~~2010, we have not experienced an increased level of bad debt relative to our historical bad debt experience, and we believe that we are fully reserved for this financial risk as of December 31, ~~2009~~2010. As a result of the recent global economic slowdown and the ~~continued~~tight ~~tightening of~~ credit markets, our customers may be delayed in obtaining, or may not be able to obtain, necessary financing for their purchases of our products. A lack of liquidity in the capital markets ~~or the continued global recession~~ may cause our customers to increase the time they take to pay or default on their payment obligations, which would negatively affect our results. Continued weakness in the economy could cause some of our customers to become illiquid, delay payments or adversely affect our collection on their accounts, which could result in a higher level of bad debt expense. We have an active collections program in place to help mitigate this potential market risk to the fullest extent possible.

6063

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the Index to Consolidated Financial Statements beginning on page F-1.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

During fiscal years ~~2009~~2010 and ~~2008~~2009 and through the date of this annual report, there were no disagreements with Ernst & Young LLP, our independent registered public accounting firm, on accounting principles or practices, financial statement disclosures, audit scope or audit procedures.

ITEM 9A.

CONTROLS AND PROCEDURES

Evaluation of Diversey’s Disclosure Controls and Internal Control over Financial Reporting. As of December 31, ~~2009~~2010, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures and internal controls over financial reporting. The controls evaluation was done under the supervision and with the participation of management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”).

CEO & CFO Certifications. Attached as exhibits 31.1 and 31.2 to this annual report are certifications of the CEO and the CFO required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This portion of our annual report includes the information concerning the controls evaluation referred to in the certifications and should be read in conjunction with the certifications for a more complete understanding of the topics presented.

Disclosure Controls and Procedures. As of the end of the period covered by this annual report, we evaluated the effectiveness of the design and operation of our “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Exchange Act. Based upon the controls evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this annual report, our disclosure controls and procedures are effective in recording, processing, summarizing, and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act, and that information is accumulated and communicated to the CEO and CFO, as appropriate, to allow timely discussions regarding required disclosure.

Changes in Internal Control Over Financial Reporting. There has not been any change in our internal control over financial reporting during the quarter ended December 31, ~~2009~~2010, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting. Our management team is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Our management team, with the participation of our CEO and CFO, has evaluated the effectiveness of our internal control over financial reporting based on the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management team has concluded that, as of the end of December 31, ~~2009~~2010, our internal control over financial reporting was effective.

Our independent registered public accounting firm has issued an attestation report on our internal control over financial reporting as of December 31, ~~2009~~2010. Its report appears in the consolidated financial statements included in this annual report of Form 10-K on page F-3.

Limitations on the Effectiveness of Controls. Our management team, including the CEO and CFO, does not expect that our disclosure controls and procedures and internal control over financial reporting will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable assurance of achieving the designed control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

6164

A control system, no matter how well designed and operated, can provide only reasonable assurance of achieving the designed control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

ITEM 9B.

OTHER INFORMATION

Not Applicable

6265

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANACE

The following is a list of our directors and executive officers, their ages as of March 54, ~~2010~~2011, and their positions and offices:

Name	Age	Position
S. Curtis Johnson III	54	Director and Chairman
Helen P. Johnson-Leipold	54	Director and acting Chairman (1)
Edward F. Lonergan	50	Director, President and Chief Executive Officer
S. Curtis Johnson III	55	Chairman (1) (2)
Norman Clubb	55	Executive Vice President and Chief Financial Officer
Edward F. Lonergan	51	Director, President and Chief Executive Officer
Nabil Shabshab	44	Executive Vice President – Global Portfolio Management
Norman Clubb	56	Executive Vice President and Chief Financial Officer
Gregory F. Clark	56	Senior Vice President – Global Value Chain
Scott D. Russell	49	Executive Vice President, Chief Compliance Officer, General Counsel & Corporate Secretary and Interim Global Human Resources Lead
James W. Larson	57	Senior Vice President—Global Human Resources
Gregory F. Clark	57	Senior Vice President and Chief Process Officer
John W. Matthews	5051	Senior Vice President, –Chief of Staff, Corporate Affairs and Chief ofSustainability ~~Staff to the President~~Officer
Scott D. Russell	48	Senior Vice President, General Counsel and Secretary
Richard K. McEvoy	44	Senior Vice President – Global Value Chain
John Alexander	4546	Regional President – Americas
Pedro Chidichimo	5152	~~Regional~~ President – ~~Europe,~~Global ~~Middle~~Customer ~~East,~~Solutions ~~Africa~~& Innovation
Moreno Dezio	49	Regional President – Greater Asia-Pacific
Moreno G. Dezio	50	Regional President – Europe
David S. Andersen	49	Vice President – Global Business Development
Yagmur Sagnak	44	Regional President – Asia Pacific, Africa, Middle East, Turkey and the Caucasian and Asian Republics
P. Todd Herndon	44	Vice President and Corporate Controller
Nobuyoshi Yamanaka	63	Regional President – Japan
Brent W. Hoag	46	Vice President and Chief Information Officer
P. Todd Herndon	45	Vice President – Finance
Lori P. Marin	4849	Vice President and Corporate Treasurer
Clive A. Newman	46	Vice President, Finance – Europe, Middle East, Africa
Clive A. Newman Christopher J. Slusar	47 44	Vice President – Finance Europe Vice President and Corporate Controller
James G. Berges	62	Director
Manvinder S. Banga	56	Director
Todd C. Brown	6061	Director
Robert M. Howe	6566	Director
George Jaquette	35	Director
Winifred J. Marquart	51	Director
Helen P. Johnson-Leipold	53	Director
George K. Jaquette	36	Director
Philip W. Knisely	5556	Director
Richard C. Levin	62	Director
Clifton D. Louis	55	Director
Rick Schnall	40	Director
Richard J. Schnall	41	Director

S.(1) ~~Curtis~~Under Johnson III has been Chairman since February 1996. He also has been Chairman of CMH since November 1999 and Chairman of Holdings since November 2001. Mr. Johnson joined SCJ in 1983 and became a general partner of Wind Point Partners, L.P., a $126 million venture capital partnership which he co-founded and in which SCJ was a major limited partner. He also served as Vice President—Global Business Development of SCJ from October 1994 to February 1996. Since joining SCJ in August 1983, Mr. Johnson has served in several other offices, including Vice President and Managing Director of Mexican Johnson, a subsidiary of SCJ, and Director—Worldwide Business Development. Mr. Johnson earned a Bachelor of Arts degree in Economics from Cornell University in 1977 and a Master of Business Administration in Marketing/Finance from Northwestern University in 1983. Mr. Johnson also serves as a director of Cargill, Incorporated and the ~~World~~Company’s ~~Wildlife Fund. He is a descendant of Samuel Curtis Johnson~~bylaws, the ~~brother~~position of ~~Helen~~Chairman ~~Johnson-Leipold~~is ~~and~~designated ~~cousin~~as ofan ~~Clifton~~executive ~~Louis,~~officer ~~both directors of our company~~position.

~~Edward~~(2) FMr. ~~Lonergan~~Johnson ~~has~~took ~~served~~a asleave ~~director~~of ~~and~~absence ~~President~~from ~~and~~his ~~Chief~~position ~~Executive~~as ~~Officer~~Chairman ~~since~~effective February 13 21, ~~2006~~2011. ~~Mr. Lonergan~~On ~~has~~March ~~also served as director and President and Chief Executive Officer of Holdings since February 13~~17, ~~2006. Prior to joining us~~2011, Mr. ~~Lonergan~~ ~~had~~Johnson ~~over~~announced 25his ~~years~~retirement offrom ~~experience~~his inposition ~~the~~as ~~consumer~~Chairman ~~products~~effective ~~industry, most recently serving~~ as ~~President~~ of ~~the~~March ~~European region for The Gillette Company from May 2002 until January 2006. He was employed from 1981 to April 2002 by The Procter & Gamble Company~~31, ~~where he held a variety of responsibilities including most recently Customer General Management assignments in Europe and the United States~~2011. ~~Mr. Lonergan graduated from Union College of New York in 1981 with a Bachelor of Arts degree in Political Science.~~

63Helen P. Johnson-Leipold has been acting Chairman since February 2011. She has served as a director since December 1999. Ms. Johnson-Leipold was a director of CMH from November 1999 through May 2003, and again has served as director of CMH since July 2009. She has served as a director of Holdings since May 2002. Since 1999, Ms. Johnson-Leipold has been the Chairman and Chief Executive Officer of Johnson Outdoors Inc., a manufacturer and marketer of outdoor recreational equipment. In addition, since July 2004, she has been Chairman of Johnson Financial Group, a global financial services company. From 1995 through 1999, she was with SCJ in various executive positions, last serving as Vice President - North America Consumer Cleaning Products. Ms. Johnson-Leipold is a descendant of Samuel Curtis Johnson, sister of S. Curtis Johnson III, the Chairman of the Company who is currently on a leave of absence from this position, sister of Winifred J. Marquart, a director, and cousin of Clifton D. Louis, another director of our Company.

S. Curtis Johnson III has been Chairman since February 1996 and is presently on a leave of absence, which begun effective February 21, 2011. He also has been Chairman of CMH since November 1999 and Chairman of Holdings since November 2001until his leave of absence from his positions at those companies. Mr. Johnson joined SCJ in 1983 and became a general partner of Wind Point Partners, L.P., a venture capital partnership which he co-founded and in which SCJ was a major limited partner. He also served as Vice President—Global Business Development of SCJ from October 1994 to February 1996. Since joining SCJ in August 1983, Mr. Johnson has served in several other offices, including Vice President and Managing Director of Mexican Johnson, a subsidiary of SCJ, and Director—Worldwide Business Development. Mr. Johnson earned a Bachelor of Arts degree in Economics from Cornell University in 1977 and a Master of Business Administration in Marketing/Finance from Northwestern University in 1983. Mr. Johnson also serves as a director of Cargill, Incorporated and serves on the Council of the World Wildlife Fund. He is a descendant of Samuel Curtis Johnson, the brother of Helen P. Johnson-Leipold, a director and our acting Chairman, Winifred J. Marquart, another director, and cousin of Clifton D. Louis, another director of our Company.

Edward F. Lonergan has served as director and President and Chief Executive Officer since February 13, 2006. Mr. Lonergan has also served as director and President and Chief Executive Officer of Holdings since February 13, 2006. Prior to joining us, Mr. Lonergan had over 25 years of experience in the consumer products industry, most recently serving as President of the European region for The Gillette Company from May 2002 until January 2006. He was employed from 1981 to April 2002 by The Procter & Gamble Company, where he held a variety of responsibilities including most recently Customer General Management assignments in Europe and the United States. Mr. Lonergan graduated from Union College of New York in 1981 with a Bachelor of Arts degree in Political Science.

Norman Clubb has served as Executive Vice President and Chief Financial Officer since January 2010. Prior to that, he was a director of Holdings from February 2007 – November 2009. Before joining us, Mr. Clubb was appointed President and Chief Operating Officer for Unilever Foodsolutions in November 2004 and led the company’s North American operations. In September 2007, he assumed leadership of the new American region, which includes both North and South America. Previously he served as Senior Vice President Finance and Information for Unilever’s Foods Division from 2000 – 2004; Senior Vice President Finance for Central Asia and Middle East Business Group from 1999 – 2000; and SVP Finance and Supply Chain for the DiverseyLever Business Group from 1996 – 1999.

~~Nabil~~Scott ~~Shabshab~~D. Russell has served as Executive Vice President, –Chief ~~Global~~Compliance ~~Portfolio~~Officer, ~~Management~~General ~~since~~Counsel & ~~September~~Corporate ~~2009.~~Secretary for ~~Before~~Holdings ~~that~~and heDiversey ~~was Senior~~since ~~Vice~~January ~~President~~2011. –He ~~Chief~~has ~~Marketing~~also ~~Officer~~served ~~since~~as ~~January~~an ~~2007~~Interim ~~after~~Global ~~joining~~Human usResources asLead ~~Vice~~since ~~President~~October of2010. ~~Global~~He ~~Marketing~~was aHoldings’ ~~couple~~and ofDiversey’s ~~months~~Senior ~~earlier.~~Vice ~~Mr. Shabshab~~President, ~~brings~~General 21Counsel ~~years~~and ofSecretary ~~experience~~from inJanuary ~~general~~2007 ~~management,~~through December ~~sales~~2010 and ~~marketing strategy,~~Senior ~~brand~~Counsel ~~management,~~from ~~and~~May ~~strategy~~2006 ~~consulting~~through December 2006. ~~Prior~~Between toMay ~~joining~~1993 usand October 2005, Mr. ~~Shabshab~~Russell ~~served~~was asat ~~Principal~~RR ~~of Zyman Group~~Donnelley, a ~~leading~~global ~~international~~full-service ~~management~~provider ~~consulting~~of ~~firm,~~print ~~from~~and ~~July~~related ~~2004~~services, ~~until~~including ~~July~~business ~~2006~~process outsourcing, most recently as Vice President, ofDeputy ~~Client Solutions &~~General ~~Consulting~~Counsel atand ~~Information~~Assistant ~~Resources, Inc~~Secretary. ~~from~~From ~~May~~October ~~2002~~1988 ~~until~~to ~~July~~May ~~2004~~1993, ~~and~~he inwas ~~various~~an ~~global~~associate ~~sales~~in ~~and~~the ~~marketing~~corporate ~~positions~~practice ~~with~~group ~~Fortune~~of ~~100~~Skadden, ~~companies~~Arps, ~~such~~Slate, asMeagher & ~~Pfizer~~Flom ~~Pharmaceutical~~LLP & ~~Company and the Coca-Cola Company~~Affiliates. Mr. ~~Shabshab~~Russell holds a Bachelor of ~~Science~~Arts degree in ~~Computer~~Economics and Political Science from ~~the~~Alma ~~American~~College ~~Lebanese University~~ and a ~~Master~~Juris ofDoctor ~~Business Administration~~ degree from the ~~Kellogg~~University ~~School~~ of ~~Management~~Detroit atSchool ~~Northwestern~~of ~~University in Chicago~~Law.

Gregory F. Clark has served as Senior Vice President and Chief Process Officer since December 2010. Prior to that, he was Senior Vice President – Global Value Chain (formerly referred to as “Supply Chain”) ~~since~~ from January 2004 to November 2010. He was our Senior Vice President – Global Development and Customer Solutions from May 2002 until January 2004 and was our Vice President – Global Manufacturing and Sourcing from May 1999 until May 2002. From 1978 through May 1999, Mr. Clark served at SCJ in a variety of manufacturing, operations and financial positions domestically and internationally. Mr. Clark holds a Bachelor degree in Chemical Engineering from Purdue University and a Master of Business Administration from the University of Chicago.

~~James~~67 W. Larson has served as Senior Vice President – Global Human Resources since May 2007. Prior to joining us, Mr. Larson was the head of Global Human Resources for InterContinental Hotel Group from 2002 to 2006. He also held numerous Human Resource leadership positions in major companies, including American Express, Frito Lay/PepsiCo, Pfizer Pharmaceuticals and Kellogg’s, where he was the Global Executive Vice President of Human Resources. Mr. Larson holds a Bachelor degree in Management and Master of Business Administration from California Polytechnic State University.

John W. Matthews has served as Senior Vice President – Corporate Affairs and Chief of Staff to the President since January 2007. Mr. Matthews was Vice President – Corporate Affairs from May 2002 until January 2007. Mr. Matthews has more than 25 years of experience in strategic communications, regulatory and public affairs. Prior to joining us, Mr. Matthews led the national Public Affairs Practice Group for the Foley & Lardner law firm based in Milwaukee. Mr. Matthews began his career as a news reporter, and then moved into government, eventually becoming chief of staff to former Wisconsin Governor Tommy Thompson. Mr. Matthews holds a Bachelor degree in Journalism from the University of Wisconsin – Whitewater.

Scott D. Russell has served as Senior Vice President, General Counsel and Corporate Secretary since January 2007. Mr. Russell has also served as the Senior Vice President, General Counsel and Corporate Secretary of Holdings since January 2007. He was our Senior Counsel from May 2006 through December 2006. From May 1993 until October 2005, Mr. Russell was at RR Donnelley, a global full-service provider of print and related services, including business process outsourcing, most recently as Vice President, Deputy General Counsel and Assistant Secretary. From October 1988 to May 1993, he was an associate in the corporate practice group of Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates. Mr. Russell holds a Bachelor of Arts degree in Economics and Political Science from Alma College and a Juris Doctor degree from the University of Detroit School of Law.

John ~~Alexander~~W. Matthews has served as ~~Regional~~Senior Vice President, –Chief ~~Americas~~of Staff, Corporate Affairs and Chief Sustainability Officer since ~~October~~December ~~2008~~2010. Prior to ~~joining Diversey~~that, ~~Mr. Alexander~~he ~~served~~was asSenior Vice President ~~and~~– ~~General~~Corporate ~~Manager,~~Affairs ~~New Business~~ and ~~Innovation~~Director, ~~North~~Office ~~America~~of ~~with~~the ~~Whirlpool~~President ~~Corporation. Before~~from ~~that,~~January he2007 ~~served~~until asNovember ~~Whirlpool’s~~2010. Mr. Matthews was Vice President – ~~and~~Corporate ~~General Manager-Brand~~Affairs ~~Management,~~from aMay ~~position~~2002 ~~that~~until ~~included~~January ~~all~~2007. UMr.~~S.-branded~~ Matthews ~~businesses~~has more than 25 years of experience in strategic communications, regulatory and public affairs. ~~While~~Prior ~~with~~to ~~Whirlpool~~joining us, Mr. ~~Alexander~~Matthews ~~also~~led ~~served~~the innational aPublic ~~number~~Affairs Practice ofGroup ~~other~~for ~~managerial~~the ~~positions~~Foley & inLardner ~~planning,~~law ~~merchandising~~firm ~~and~~based ~~product~~in ~~development~~Milwaukee. Mr. ~~Alexander holds~~Matthews began his career as a ~~bachelor’s~~news ~~degree~~reporter, inand ~~mechanical~~then ~~engineering~~moved ~~from~~into ~~Ohio~~government, ~~Northern~~eventually ~~University~~becoming ~~and~~chief of staff to former Wisconsin Governor Tommy Thompson. Mr. Matthews holds a ~~master~~Bachelor ofdegree ~~business~~in ~~administration~~Journalism from ~~Ohio~~the ~~State~~ University of Wisconsin – Whitewater.

~~Pedro~~Richard ~~Chidichimo~~K. McEvoy has served as ~~Regional~~Senior ~~President~~Vice ~~– Europe~~President, ~~Middle~~Global ~~East,~~Value ~~Africa~~Chain since ~~October~~December ~~2006~~2010. ~~Mr. Chidichimo,~~He ~~who~~was ~~joined~~our usHead of Channel in ~~1994,~~EMA ~~has~~from ~~served~~July as2009 ~~Regional~~until ~~President~~November –2010 ~~Latin America~~and UK & Ireland Country Director from ~~July~~March ~~2005~~2008 until ~~October~~June ~~2006,~~2009. ~~Vice~~Mr. McEvoy led ~~President~~the ofGlobal ~~our~~Strategic ~~Southern &~~Sourcing ~~Andina~~Initiative ~~Latin~~in ~~America~~2006 ~~sub-region~~and ~~from~~2007 ~~2002~~(based ~~until~~out ~~June~~of ~~2005,~~the USA) and aswas ~~managing~~Vice ~~director~~President of– ~~our~~Europe, ~~Argentina~~Middle ~~operations~~East, ~~from~~Africa ~~1997~~Value ~~until~~Chain ~~June~~between 2003 and 2005. From 1989 through 2002, Mr. ~~Chidichimo~~McEvoy ~~holds a~~served ~~Bachelor~~at ~~degree~~Unilever inand Imperial Chemical ~~Engineering~~Industries ~~from~~in ~~Universidad~~a devariety ~~Buenos~~of ~~Aires~~manufacturing and aoperating ~~Master~~positions ofin ~~Business~~Europe ~~Administration~~and ~~from~~Asia. ~~Universidad~~He ~~Austral~~holds a Master degree in ~~Argentina~~Chemical Engineering from Leeds University.

~~Moreno~~John G.Alexander ~~Dezio~~ has served as Regional President – ~~Greater~~Americas ~~Asia-Pacific~~ since ~~January~~October ~~2009~~2008. Prior to ~~that~~joining heDiversey, Mr. Alexander served as ~~Regional~~Vice President –and ~~Latin~~General Manager, New Business and Innovation, North America ~~since~~with ~~January~~Whirlpool ~~2007~~Corporation. ~~Mr.~~ ~~Dezio~~Before ~~has~~that, ~~also~~he served as Whirlpool’s Vice President ~~North~~and ~~Europe &~~General ~~Managing~~Manager-Brand ~~Director~~Management, ~~U.K.~~a ~~from~~position ~~November~~that ~~2005~~included toall ~~December~~U.S.-branded ~~2006~~businesses. ~~From~~While ~~November~~with ~~1996 through October 2005~~Whirlpool, Mr. ~~Dezio~~Alexander also served in ~~numerous~~a ~~senior~~number ~~management~~of ~~positions,~~other ~~most recently~~managerial aspositions ~~Vice~~in ~~President for Africa & Middle East from June 2002 until October 2005~~planning, ~~Group~~merchandising ~~Managing Director for Italy, Greece~~ and ~~Central~~product ~~Eastern~~development. ~~Europe from November 1996 to May 2002~~Mr. Alexander ~~From~~holds ~~March~~a ~~1993~~bachelor’s todegree ~~October~~in ~~1996~~mechanical heengineering ~~served~~from ~~as Marketing~~Ohio ~~Manager~~Northern ~~Europe~~University ~~for our predecessor, Johnson Wax Professional (“JWP”)~~ and ~~prior~~a toMaster ~~that~~of heBusiness Administration ~~covered~~from ~~several~~Ohio ~~sales~~State ~~and marketing positions at SCJ and JWP~~University.

~~David~~Pedro S.Chidichimo ~~Andersen~~ has served as ~~Vice~~ President, – Global ~~Business~~Customer Solutions & ~~Development~~Innovation since ~~July~~December ~~2003~~2010. ~~From~~Prior ~~February~~to ~~1997~~that ~~through~~he ~~July 2003,~~was ~~Mr. Andersen~~Regional ~~served in numerous management positions, most recently as Vice~~ President – ~~Global~~Europe, ~~Enterprise~~Middle ~~Development~~East, Africa from ~~May~~October ~~2002~~2006 until ~~July~~November ~~2003~~2010. Mr. Chidichimo, ~~Vice~~who ~~President~~joined –us ~~eSolutions~~in ~~from~~1994, ~~October~~has ~~2000~~served ~~until~~as ~~May~~Regional ~~2002, and Vice~~ President – ~~Global~~Latin ~~Enterprise~~America ~~Development Group~~ from July ~~1999~~2005 until October ~~2000.~~2006, ~~From~~Vice ~~1991~~President ~~through~~of ~~February~~our ~~1997, Mr.~~Southern ~~Andersen~~& ~~held~~Andina ~~numerous~~Latin ~~management~~America ~~positions~~sub-region atfrom ~~SCJ,~~2002 ~~most~~until ~~recently~~June as2005, ~~Director~~and ofas ~~Worldwide~~managing ~~Business~~director ~~Development. He is currently a Director~~ of ~~Virox~~our ~~Technologies~~Argentina ~~Inc.~~operations ~~and~~from ~~Chairman~~1997 ofuntil ~~KidsUganda.~~June 2005. Mr. ~~Andersen~~Chidichimo holds a Bachelor’s degree in Chemical Engineering from ~~Brown~~Universidad ~~University~~de Buenos Aires and a ~~Masters~~Master of Business Administration from ~~Harvard~~Universidad ~~University~~Austral in Argentina.

PMoreno G. ~~Todd~~Dezio ~~Herndon~~ has served as ~~Vice~~Regional President – ~~Corporate~~Europe ~~Controller~~ since ~~September~~December ~~2007~~2010. ~~From~~Prior ~~March~~to ~~2005~~that, ~~through~~he ~~August~~was ~~2007,~~Regional President Mr– Greater Asia Pacific from January 2009 until November 2010. ~~Herndon~~ He served as ~~the~~Regional ~~Vice~~ President of– ~~Finance~~Latin ~~for North~~ America ~~and~~since ~~from~~January ~~February~~2007. ~~2003~~Mr. Dezio ~~through~~has ~~February~~also ~~2005,~~served heas ~~was~~Vice ~~the~~President ~~General~~North ~~Manager~~Europe & ofManaging ~~the~~Director ~~BG&E~~UK ~~business~~from ~~within~~November 2005 ~~North~~to ~~America~~December 2006. From ~~1988~~November 1996 through ~~2003~~October 2005, Mr. ~~Herndon~~Dezio ~~held~~served ~~various financial~~in ~~positions~~numerous ~~within~~senior ~~Johnson~~management ~~Wax~~positions, ~~Professional~~most ~~and~~recently S.as C.Vice ~~Johnson~~President for Africa & ~~Son~~Middle East from June 2002 until October 2005, ~~Inc.~~Group MrManaging Director for Italy, Greece and Central Eastern Europe from November 1996 to May 2002. ~~Herndon~~ ~~holds~~From aMarch ~~Bachelor~~1993 ofto ~~Science~~October ~~degree~~1996 inhe ~~Business~~served ~~from~~as ~~Indiana~~Marketing ~~University~~Manager Europe for our predecessor, Johnson Wax Professional and aprior ~~Master~~to ofthat ~~Business~~he ~~Administration~~covered ~~from~~several ~~Marquette~~sales ~~University.~~and marketing positions at SCJ and JWP.

~~Brent~~Yagmur W.Sagnak ~~Hoag~~ has served as ~~Vice~~Regional President – Asia Pacific, Africa, Middle East, Turkey and ~~Chief~~the ~~Information~~Caucasian/Asian ~~Officer~~Republics (APAT) since December ~~2009~~2010. HePrior to that, he was ~~our~~Vice ~~Senior~~President Institutional & Laundry Sales & Service – Europe for over two years. Mr. Sagnak served as Area Vice President ~~Director—Business~~– ~~Solutions~~CEETAM (Central Eastern Europe Turkey Africa Middle East) from ~~May~~July ~~2008~~2006 ~~until~~to ~~December~~September ~~2009~~2008 and he was ~~our~~the Managing Director~~—IT~~ ~~Vendor~~of ~~Management~~Turkey & ~~Office~~Middle ~~from~~East ~~July~~for ~~2006~~over ~~until~~3 ~~May~~years ~~2008~~prior to that. HeFrom ~~joined~~September ~~Diversey~~1995 through March 2003, he served in numerous ~~2002~~management ~~serving~~positions, most recently as ~~our~~Global Customer Development Director~~—JDEdwards~~ ~~Solution~~–Food ~~Center~~Service from ~~September 2002~~February 2000 until ~~July~~February ~~2006.~~2003, ~~Mr. Hoag~~and ~~spent~~National 13Sales & ~~years~~Marketing inDirector ~~the~~– ~~management~~Turkey ~~consulting~~from ~~industry~~September ~~prior~~1995 to ~~joining~~January ~~Diversey~~2000. ~~Mr. Hoag~~From January ~~holds~~1990 ato ~~Bachelor~~September ~~degree~~1995 inhe ~~Business~~covered ~~Administration~~several ~~from~~management ~~the~~positions ~~University~~in ofUnilever ~~Wisconsin~~Turkey, –most ~~Eau~~recently ~~Claire,~~as ~~and~~Group ~~two~~Product ~~Master degrees~~Manager – Dental from ~~the~~September ~~University~~2002 ofto ~~Wisconsin~~September –2005. ~~Whitewater,~~Mr. Sagnak holds a ~~Master~~Bachelor ofDegree in Business Administration from inIstanbul ~~Finance~~University ~~and a Master of Science~~ in ~~Education~~Turkey.

~~Lori~~68 P. Marin has served as Vice President and Corporate Treasurer since May 2005. Prior to joining us, Ms. Marin served as Managing Director of the Risk Services Group for Aon Corporation from June 2003 until May 2005. From September 1996 until January 2003, Ms. Marin served as Vice President and Treasurer of Keebler Foods Co. Ms. Marin has over 16 years of global treasury experience having also served as Director of Finance for Dominick’s Finer Foods, and over 10 years of experience as a commercial banker, having commenced her career as a First Scholar at The First National Bank of Chicago. Ms. Marin is a Certified Cash Manager and holds a Bachelor of Science in Finance from Washington University in St. Louis and a Master of Business Administration from the University of Chicago.

~~Clive~~Nobuyoshi A.Yamanaka ~~Newman~~ has served as ~~Vice~~Regional President, ~~Finance~~ – ~~EMA~~Japan since ~~September~~December ~~2007~~2010. Prior Heto ~~was Vice President~~that, ~~Corporate~~he ~~Controller~~served ~~from~~at ~~May~~Bain ~~2002~~Capital, ~~until~~first ~~2007.~~as ~~From~~Vice ~~1986~~Chairman ~~until~~and ~~May~~Senior ~~2002,~~Executive ~~Mr. Newman~~from ~~held~~November ~~various~~2009 ~~positions~~to atJuly ~~Unilever,~~2010 ~~most~~and ~~recently~~ as ~~Controller~~Advisor ~~and~~from ~~Vice~~July ~~President—Finance~~2010 ~~Europe~~to ~~for~~December ~~DiverseyLever~~2010. ~~from~~From ~~May 2001~~February ~~until~~1999 ~~May~~to ~~2002~~November ~~and~~2009, ~~Finance~~Mr. Yamanaka ~~Manager—Beverages~~was ~~for~~Corporate Officer ~~Unilever~~of ~~from~~Emerson ~~2000~~Electric ~~until~~Headquarters ~~April~~in ~~2001~~St. ~~Mr. Newman~~Louis, ~~has~~USA, ~~over~~President & 12CEO ~~years~~ of ~~experience~~Emerson inElectric ~~the~~Japan ~~institutional~~ and ~~industrial~~CIO ~~cleaning~~of ~~and~~Emerson ~~hygiene~~Electric ~~industry.~~Asia MrPacific. ~~Newman~~ ~~holds~~From a1995 ~~Bachelor degree~~to inFebruary ~~Economics~~1999, ~~from~~he ~~Leicester~~was ~~University~~President & inCEO ~~the~~of ~~U.K.~~GE ~~and~~Hitachi isLighting, anTokyo ~~Associate~~from 1995 ofto ~~the~~February ~~Chartered Institute of Management Accountants~~1999.

~~James G~~P. ~~Berges~~Todd Herndon has served as aVice ~~director~~President – Finance since ~~November~~January ~~2009~~2011. He ~~joined~~was ~~Clayton~~Vice President ~~Dubilier &~~and ~~Rice~~Corporate inController ~~2006.~~from ~~Previously,~~September he2007 ~~served~~to asDecember ~~vice~~2010. ~~chairman~~From ~~and~~March ~~president~~2005 atthrough ~~Emerson~~August ~~Electric~~2007, CoMr., Herndon ~~where~~served heas ~~led~~the ~~corporate~~Vice ~~growth~~President ~~and development~~of ~~activities~~Finance ~~and was responsible~~ for ~~the~~North ~~company’s~~America ~~motors~~ and ~~appliance~~from ~~components,~~February ~~industrial~~2003 ~~automation,~~through ~~and~~February ~~network power businesses. Previously~~2005, he ~~worked~~was atthe General Manager ~~Electric~~of ~~Company. Mr. Berges is~~ the ~~chairman~~B,G&E atbusiness ~~Sally Beauty~~within ~~and~~North HDAmerica. ~~Supply~~From ~~and~~1988 ~~serves~~through ~~on the board of PPG Industries~~2003, ~~Inc~~Mr. Herndon Heheld isvarious afinancial ~~past~~positions ~~chairman~~within ofJWP ~~the National Association of Manufacturers~~ and ~~also~~SCJ. ~~received~~Mr. Herndon holds a ~~presidential~~Bachelor ~~appointment~~of toScience ~~the~~degree ~~Advisory~~in ~~Committee~~Business ~~for~~from ~~Trade~~Indiana ~~Policy~~University and ~~Negotiations in March~~a ~~2005.~~Master Heof ~~holds~~Business aAdministration ~~B.S. in electrical engineering~~ from ~~the~~Marquette University ~~of Notre Dame~~.

~~Todd~~Lori CP. ~~Brown,~~Marin ~~except~~has ~~for~~served ~~the November~~as ~~2009~~Vice –President ~~February~~and ~~2010~~Corporate Treasurer ~~period,~~since ~~has~~May ~~served~~2005. asPrior ato ~~director~~joining ~~since~~us, ~~April 2001~~Ms. ~~Mr.~~ ~~Brown~~Marin ~~was~~served aas ~~director~~Managing Director of ~~CMH~~the ~~from~~Risk ~~April~~Services ~~2001-~~Group ~~May~~for ~~2003~~Aon ~~and~~Corporation offrom ~~Holdings~~June ~~since~~2003 until May ~~2002~~2005. ~~Since~~From ~~August~~September 1996 until January 2003, MrMs. ~~Brown~~Marin ~~has~~ served as Vice ~~Chairman~~President and Treasurer of ~~ShoreBank~~Keebler ~~Corporation~~Foods ~~and~~Co. ~~Chairman~~Ms. Marin has over 17 years of ~~the~~global ~~Board~~treasury experience having also served as Director of ~~Directors~~Finance for ~~ShoreBank~~Dominick’s ~~banking~~Finer ~~operations~~Foods, inand ~~Chicago,~~over ~~Detroit,~~10 ~~and~~years ~~Cleveland.~~of ~~From~~experience ~~1985~~as ~~through~~a ~~June~~commercial ~~2003~~banker, ~~Mr. Brown~~having ~~served~~commenced inher career ~~various~~as ~~positions~~a First Scholar at ~~Kraft~~The ~~Foods,~~First ~~Inc~~National Bank of Chicago., ~~most~~Ms. Marin ~~recently as~~is ~~Executive~~a ~~Vice~~Certified ~~President~~Cash Manager and ~~President~~holds a Bachelor of ~~its~~Science ~~e-Commerce~~in ~~Division~~Finance from ~~January~~Washington ~~2001~~University ~~until~~in ~~June~~St. ~~2003~~Louis and ~~President~~a Master of ~~Kraft~~Business ~~Foodservices~~Administration ~~Division~~ from ~~April~~the University ~~1998~~of ~~until December 2000~~Chicago.

~~Robert~~Clive MA. ~~Howe,~~Newman ~~except~~has ~~for~~served ~~the~~as ~~November~~Vice ~~2009~~President – ~~February~~Finance ~~2010~~Europe ~~period, has served as a director~~ since ~~September~~December ~~1997~~2010. He was a ~~director~~Vice ofPresident ~~CMH from November 1999~~ – ~~May~~Finance ~~2003~~Europe, ~~and~~Middle ofEast, ~~Holdings~~Africa ~~since~~from ~~May~~September ~~2002.~~2007 ~~Since~~to ~~November~~December ~~2002, Mr~~2010. ~~Howe~~ ~~has~~He ~~been~~was ~~the~~Vice ~~Chairman of Montgomery Goodwin Investments~~President, ~~LLC,~~Corporate aController ~~private~~from ~~investment~~May ~~and~~2002 ~~consulting~~until ~~firm~~2007. From ~~April~~1986 ~~2000~~until ~~to September~~May 2002, Mr. ~~Howe~~Newman ~~was~~held ~~the~~various ~~Chairman~~positions ofat ~~Scient~~Unilever, ~~Inc.,~~most recently aas ~~provider~~Controller ofand ~~integrated~~Vice ~~e-Business~~President ~~strategy~~– ~~and~~Finance ~~technology~~Europe ~~services,~~for DiverseyLever from May 2001 until May 2002 and ~~previously~~Finance ~~served~~Manager as– ~~its~~Beverages ~~Chief~~for ~~Executive~~Unilever ~~Officer.~~from ~~From~~2000 ~~1991~~until toApril ~~1998,~~2001. Mr. ~~Howe~~Newman ~~was~~has ~~with~~over ~~International Business~~12 ~~Machines~~years ~~Corporation,~~of ~~last~~experience ~~serving~~in asthe institutional ~~General~~and ~~Manager~~industrial ofcleaning ~~its~~and ~~global~~hygiene ~~banking,~~industry. ~~financial~~Mr. Newman ~~and~~holds ~~securities~~a ~~services~~Bachelor ~~business.~~degree Hein ~~has~~Economics ~~also~~from ~~been~~Leicester aUniversity ~~director~~in ofthe ~~Symphony~~U.K. ~~Services,~~and is an ~~information~~Associate ~~technology~~of ~~consulting~~the ~~firm,~~Chartered ~~since~~Institute ~~July~~of ~~2004~~Management Accountants.

~~George~~Christopher ~~Jaquette~~J. Slusar has served as aVice ~~director~~President, Corporate Controller since ~~November~~January ~~2009~~2011. He ~~has~~was ~~been~~Assistant ~~with~~Corporate ~~Clayton Dubilier & Rice for~~Controller ~~ten~~from ~~years~~September ~~and~~2008 isto ~~principally~~December ~~engaged~~2010. inFrom ~~sourcing~~August ~~and~~1997 ~~evaluating~~until ~~investment~~September ~~opportunities.~~2008, Hehe ~~has~~held ~~been~~various ~~involved~~finance inpositions awith ~~broad~~the ~~range~~company, ~~of transactions and~~ most recently ~~was~~as ~~instrumental~~Director, inGlobal ~~the~~Accounting ~~Firm’s~~and ~~investment~~Reporting. ~~in,~~From ~~and~~March ~~subsequent~~1995 ~~sale~~to ofAugust ~~VWR~~1997, ~~where~~ he ~~also~~ ~~served~~was asemployed aby ~~director.~~Johnson Outdoors ~~Previously,~~where he ~~worked~~held inbusiness ~~the~~and ~~principal~~accounting ~~investment~~support ~~area~~roles. ~~and~~From ~~investment~~1991 ~~banking~~to ~~division~~March ~~of Goldman~~1995, ~~Sachs~~Mr. &Slusar ~~Co.~~was ~~He also worked~~ at KKPMG ~~Capital~~Peat ~~Management~~Marwick, amost ~~multi-strategy~~recently ~~investment~~as ~~firm~~Audit Manager. Mr. ~~Jaquette~~Slusar ~~earned~~holds a ~~B.S.~~ Bachelor degree in Accounting from ~~Bucknell~~the University ~~and~~of anWisconsin- Milwaukee ~~M.B.A.~~and ~~from~~is ~~Harvard~~a ~~Business~~Certified ~~School~~Public Accountant.

~~Helen~~Manvinder PS. ~~Johnson-Leipold~~Banga has served as a director since ~~December~~August ~~1999~~2010. ~~Ms. Johnson-Leipold~~He ~~was~~is an aoperating ~~director~~partner ofwith ~~CMH from November 1999 – May 2003~~Clayton, ~~and~~Dublier & ~~again since July 2009; and of Holdings since May 2002~~Rice. ~~Since 1999, Ms~~Mr. ~~Johnson-Leipold~~Banga ~~has~~served ~~been~~in ~~the~~a ~~Chairman~~variety ~~and Chief Executive Officer~~ of ~~Johnson~~roles ~~Outdoors~~over ~~Inc.,~~ a ~~manufacturer~~33-year ~~and~~career ~~marketer~~with ofUnilever, ~~outdoor~~most ~~recreational~~recently ~~equipment.~~as ~~In addition~~President, ~~since July 2004~~Foods, ~~she~~Home ~~has~~and ~~been~~Personal ~~Chairman~~Care ofand ~~Johnson~~as ~~Financial Group,~~ a ~~global~~member ~~financial~~of ~~services~~the ~~company.~~Unilever ~~From~~plc ~~1995 through 1999,~~Executive ~~she~~Committee. ~~was~~He ~~with~~has ~~SCJ~~served inon ~~various~~the ~~executive~~Prime ~~positions,~~Minister ~~last~~of ~~serving~~India’s asCouncil ~~Vice~~of ~~President—North~~Trade & ~~America~~Industry ~~Consumer~~since ~~Cleaning Products~~2004. MsMr. Banga ~~Johnson-Leipold~~also isserves as a ~~descendant~~non-executive ofdirector ~~Samuel~~on ~~Curtis Johnson,~~ the ~~sister~~boards of S.Thomson ~~Curtis~~Reuters ~~Johnson III, our Chairman,~~ and ~~cousin~~ ofMaruti ~~Clifton~~Suzuki ~~Louis, another director of our company~~Ltd.

66Todd C. Brown has served as a director since April 2001. Mr. Brown was a director of CMH from April 2001- May 2003 and of Holdings since May 2002. Mr. Brown served as Vice Chairman of ShoreBank Corporation from August of 2003 until his retirement in December of 2009. From 1985 through June 2003, Mr. Brown served in various positions at Kraft Foods, Inc., most recently as Executive Vice President and President of its e-Commerce Division from January 2001 until June 2003 and President of Kraft Foodservices Division from April 1998 until December 2000.

~~Philip~~Robert WM. ~~Knisely~~Howe ~~joined~~has ~~the Board of Directors in February 2010. He retired from Danaher Corporation in 2010 where he~~ served ~~for 10 years~~ as ~~Executive~~a ~~Vice~~director ~~President~~since ~~and~~September ~~Corporate Officer~~1997. He was a ~~member~~director of CMH ~~the~~from ~~Office~~November of1999 ~~the~~until ~~Chief~~May ~~Executive~~2003 ~~managing the performance, corporate strategy,~~ and ~~organization evolution~~ of ~~the corporation.~~Holdings ~~Danaher~~since ~~Corporation~~May ~~(NYSE:DHR)~~2002. isSince aNovember ~~leading $12B manufacturer of medical equipment~~2002, ~~environmental and professional Instrumentation.~~ Mr. ~~Knisely~~Howe ~~continues~~has inbeen athe ~~consulting~~Chairman ~~capacity~~of ~~for~~Montgomery ~~Danaher.~~Goodwin ~~Prior~~Investments, ~~to joining Danaher~~LLC, hea ~~was Co-Founder,~~private ~~President~~investment and ~~CEO~~consulting offirm. ~~Colfax~~He ~~Corporation,~~is ~~where~~also hea ~~managed~~managing ~~portfolio~~partner ~~companies~~of ~~totaling~~High Note ~~$900~~Ventures, ~~million~~a inventure ~~revenue~~development ~~with~~company. ~~$200~~From ~~million~~April in2000 ~~equity~~to ~~capital~~September ~~investments~~2002, ~~(NYSE:CFX)~~Mr. Howe Hewas ~~served~~the asChairman ~~President~~ of ~~AMF~~Scient, ~~Industries~~Inc., a ~~privately~~provider ~~held diversified~~of ~~manufacturer~~integrated ~~firm, from 1988~~e-~~1995,~~Business strategy and ~~before~~technology ~~AMF~~services, heand ~~had~~previously aserved ~~ten-year~~as ~~career~~its ~~with~~Chief ~~Emerson Electric~~Executive Officer. HeFrom ~~received~~1991 ato ~~BSIE~~1998, ~~from~~Mr. Howe ~~General~~was ~~Motors~~with ~~Institute~~International inBusiness ~~1976~~Machines ~~and~~Corporation, ~~his~~last ~~MBA~~serving inas ~~1978~~General ~~from~~Manager ~~the Darden School~~ of ~~Business.~~its ~~Mr. Knisely~~global ~~was~~banking, ~~a 1977~~financial ~~Shermet~~and ~~Award~~securities ~~winner~~services ~~while~~business. atHe ~~Darden~~has ~~and~~also ~~today~~been is a ~~member~~director of ~~the~~Symphony ~~Darden~~Services, ~~School~~an information ~~Foundation~~technology ~~Board~~consulting offirm, ~~Trustees~~since July 2004.

~~Richard C~~Winifred J. ~~Levin~~Marquart ~~joined~~has ~~the~~served ~~Board~~as ofa ~~Directors~~director insince February ~~2010~~ 2011. HeShe ishas ~~also~~served ~~the~~as President of ~~Yale~~The ~~University~~Johnson ~~and~~Family isFoundation ~~the~~since ~~longest-serving~~December, ~~Ivy~~1994 ~~League president~~ and iswas ~~recognized~~elected asto ~~one~~The ofJohnson ~~the~~Foundation ~~leaders~~board of ~~American~~trustees ~~higher~~in ~~education~~2004. ~~Prior~~She tohas ~~assuming Yale’s~~served ~~presidency~~on inthe ~~1993,~~board ~~he was Dean~~ of ~~the~~directors ~~Graduate School~~ of ~~Arts~~Johnson ~~and~~Financial ~~Sciences. A distinguished economist~~Group, hea ~~has~~global ~~served~~financial services ascompany, ~~Chair~~since ofJuly ~~Yale's~~1999 ~~Economics Department~~ and ~~has~~the ~~been~~board aof ~~member~~trustees ofat ~~Yale's~~Norfolk ~~faculty~~Academy since ~~1974~~1998. InFrom ~~the~~1986 ~~spring~~to ofNovember ~~2008~~1986, he Ms. Marquart was ~~elected~~Project toCoordinator ~~the~~in ~~Board~~Corporate ofPublic ~~Directors~~Affairs ofat ~~the National Committee on U~~SCJ.~~S.-China~~ ~~Relations~~Ms. Marquart ~~He also~~ is a ~~director~~descendant of ~~American~~Samuel ~~Express~~Curtis Johnson, ~~and he is~~ a ~~trustee~~sister of ~~the~~Helen ~~William~~P. ~~and Flora Hewlett Foundation~~Johnson-Leipold, ~~one~~a ofdirector ~~the~~and ~~largest philanthropic organizations in~~ the ~~United~~Company’s ~~States.~~acting HeChairman, ~~served~~and ~~on Presidential Commissions reviewing the U.~~S. ~~Postal~~Curtis ~~Service~~Johnson ~~and~~III, the ~~effectiveness~~Chairman of ~~U.S.~~the ~~intelligence~~Company ~~operations.~~who Asis acurrently ~~member of the board~~ on ~~Science, Technology and Economic Policy at the National Academy of Science, he co-chaired~~ a ~~committee~~leave ~~that examined the effects~~ of ~~intellectual~~absence ~~property~~from ~~rights~~this ~~policies~~position, ~~on economic~~ and ~~scientific~~cousin ~~progress and made recommendations for reform~~ of ~~the~~Clifton ~~patent system that are currently under active consideration by the U~~D.~~S. Congress.~~ ~~In addition~~Louis, another hedirector ~~served~~of on the ~~Blue Ribbon Panel on Baseball Economics~~Company.

~~Clifton~~George DK. ~~Louis~~Jaquette has served as a director since ~~December~~November ~~1999~~2009. ~~Mr. Louis~~He ~~was~~has abeen ~~director~~with Clayton, ofDubilier & ~~CMH~~Rice ~~from~~for ~~November~~eleven ~~1999~~years. –He ~~May~~has ~~2003,~~been ~~and~~involved ~~again~~in ~~since~~a ~~July~~broad ~~2009;~~range of transactions and ofwas ~~Holdings~~instrumental ~~since~~in ~~May~~the ~~2002.~~Firm’s ~~Mr. Louis~~investment isin, ~~the~~and ~~owner~~subsequent sale of ~~The Vineyard~~VWR, ~~Inc.,~~where ahe ~~retail~~also ~~wine~~served ~~store~~as a director. Previously, ~~and~~he ~~has~~worked ~~been~~in ~~its~~the ~~President~~principal investment area and ~~Chief~~investment ~~Executive~~banking ~~Officer~~division ~~since~~of ~~1985.~~Goldman, ~~Mr.~~Sachs ~~Louis~~& isCo. aHe ~~descendant~~also ofworked ~~Samuel~~at ~~Curtis~~K ~~Johnson~~Capital Management, a ~~cousin~~multi-strategy ofinvestment Sfirm. ~~Curtis~~Mr. Jaquette ~~Johnson~~earned ~~III,~~a ~~the~~Bachelor ~~Chairman~~degree offrom ~~our~~Bucknell ~~company,~~University and a ~~cousin~~ Master of ~~Helen~~Business ~~Johnson-Leipold,~~Administration ~~another~~from ~~director~~Harvard ofBusiness ~~our company~~School.

~~Rick~~Philip ~~Schnall~~W. ~~has~~Knisely ~~served~~joined asthe aBoard ~~director~~of ~~since~~Director ~~November~~in ~~2009~~February 2010. He ~~has~~retired ~~been~~from ~~with~~Danaher ~~Clayton~~Corporation ~~Dubilier &~~in ~~Rice~~2010 where he served for ~~thirteen~~ 10 years. Heas ~~led~~Executive ~~CD&R’s~~Vice ~~purchase~~President and ~~subsequent~~Corporate ~~sale~~Officer. ofMr. Knisely ~~VWR;~~was ~~the~~a ~~acquisition~~member of ~~U.S.~~the ~~Foodservice~~Office ~~from~~of ~~Royal~~the ~~Ahold~~Chief ~~N.V.;~~Executive managing the ~~investment~~performance, incorporate ~~Sally~~strategy, ~~Beauty;~~ and organization evolution of the ~~public-to-private~~corporation. ~~negotiation~~Danaher ~~for~~Corporation ~~and~~(NYSE:DHR) ~~acquisition~~is a leading $12B manufacturer of ~~Brakes~~medical equipment, environmental and professional Instrumentation. AsHe continues in a ~~board~~consulting capacity for Danaher. Prior to joining ~~member~~Danaher, Mr. Knisely was Co-Founder, President and CEO of ~~Alliant~~Colfax Corporation, where he ~~led~~managed ~~negotiations~~portfolio ~~which~~companies ~~resulted~~totaling $900 million in ~~its~~revenue ~~profitable~~with ~~sale~~$200 million in equity capital investments (NYSE:CFX). ~~Previously~~He served as President of AMF Industries, a privately held diversified manufacturer firm, from 1988-1995, and before AMF, Mr. ~~Schnall~~Knisely ~~worked~~had a ten-year career with Emerson Electric. He received a BSIE from General Motors Institute in ~~the~~1976 ~~investment~~and ~~banking~~his ~~divisions~~MBA in 1978 from the Darden School of ~~Smith~~Business. ~~Barney~~Mr. &Knisely ~~Co.~~was ~~and~~a ~~Donaldson,~~1977 ~~Lufkin &~~Shermet ~~Jenrette,~~Award ~~Inc.~~winner Hewhile at Darden and today is a ~~director~~member of ~~Sally~~ ~~Beauty~~the ~~and~~Darden USchool Foundation Board of Trustees.S In 2011, Mr. Knisely ~~Foodservice~~became an Advisor to Clayton, Dubilier & Rice and serves as Chairman of Atkore International. HeAtkore International is a ~~graduate~~global ofleader in the ~~University~~design, manufacture and distribution of ~~Pennsylvania’s~~galvanized ~~Wharton~~steel ~~School~~tubes and ~~holds~~pipes, anarmored ~~M.B.A.~~wire ~~from~~and ~~Harvard~~cable ~~Business~~and ~~School.~~building components.

Clifton D. Louis has served as a director since December 1999. Mr. Louis was a director of CMH from November 1999 – May 2003, and again since July 2009; and of Holdings since May 2002. Mr. Louis is the owner of The Vineyard, Inc., a retail wine store, and has been its President and Chief Executive Officer since 1985. Mr. Louis is a descendant of Samuel Curtis Johnson and a cousin of Helen P. Johnson-Leipold, a director and the Company’s acting Chairman, S. Curtis Johnson III, the Chairman of the Company who is currently on a leave of absence from this position, and Winifred J. Marquart, another director of the Company.

Richard J. Schnall has served as a director since November 2009. He has been with Clayton, Dubilier & Rice for fifteen years. Mr. Schnall led CD&R’s purchase and subsequent sale of VWR; the acquisition of HGI Holding, Inc.; the acquisition of U.S. Foodservice from Royal Ahold N.V.; the investment in Sally Beauty; and the public-to-private negotiation for and acquisition of Brakes. As a board member of Alliant, he led negotiations which resulted in its profitable sale. Previously, Mr. Schnall worked in the investment banking divisions of Smith Barney & Co. and Donaldson, Lufkin & Jenrette, Inc. He is a director of HGI Holding, Inc., Sally Beauty and U.S. Foodservice. He is a graduate of the University of Pennsylvania’s Wharton School and holds Master of Business Administration from Harvard Business School.

Board of Directors

Our business and affairs are managed under the direction of our board of directors. Our directors hold office until their successors have been elected and qualified or until the earlier of their resignation or removal.

Pursuant to the Stockholders Agreement, each of CMH and CD&R Investor has the right to representation on the board of directors of any subsidiary of Holdings, including us, in proportion to the relative number of such party’s designees on the Holdings Board. We currently have ~~eleven~~ ten directors, five of which were designated by CMH and ~~five~~four of which were designated by CD&R Investor. Mr. Lonergan, our President and Chief Executive Officer, serves as the ~~eleventh~~tenth director. The composition of our board of directors mirrors the Holdings Board.

Ms. Johnson-Leipold, Ms. Marquart and Messrs. Brown, Howe, ~~Johnson~~ and Louis ~~and Ms. Johnson-Leipold~~ were elected to our board of directors pursuant to our obligations to CMH under the Stockholders Agreement. Messrs. ~~Berges~~Banga, Jaquette, Knisely, ~~Levin,~~ and Schnall were elected to our board of directors pursuant to our obligations to CD&R Investor under the Stockholders Agreement. Each of our directors brings specific experience, qualifications, attributes and skills to our board of directors.

67As the acting Chairman of our Company, Ms. Johnson-Leipold has detailed knowledge of our Company and its history, employees, client base, prospects and competitors. Prior to serving as acting Chairman and before joining Johnson Outdoors, Inc., where she currently serves as Chairman and Chief Executive Officer, Ms. Johnson-Leipold held senior management positions with SCJ, including Vice President – Worldwide Consumer Products. Ms. Johnson-Leipold, together with her relatives, Mr. Johnson, Ms. Marquart and Mr. Louis, has a detailed understanding of our history and culture, including the principles described in “The Diversey Way.”

~~Table~~The CMH nominated independent directors, Messrs. Brown and Howe, each bring beneficial experience and attributes to our board. Mr. Brown spent a significant portion of ~~Contents~~his career with Kraft Foods, Inc., including service as Executive Vice President, and most recently was Vice Chairman of ShoreBank Corporation prior to retiring at the end of 2009. Mr. Brown has served on our board and Holdings’ board since 2001. Mr. Howe has a strong background in information technology and e-commerce from past experience with Scient, Inc. and International Business Machines Corporation. Mr. Howe has served on our board and Holdings’ Board since 2002.

~~As the Chairman of our company since its formation, Mr~~Messrs. ~~Johnson~~ ~~has detailed knowledge of our company and its history~~Banga, ~~employees~~Jaquette, ~~client base, prospects~~ and ~~competitors.~~Schnall ~~Prior~~are toeach ~~serving~~actively asinvolved ~~Chairman,~~in ~~Mr. Johnson held senior management positions with SCJ, including Vice President – Global Business Development and Managing~~managing ~~Director~~the portfolio of ~~SCJ’s~~investments ~~operations~~ in ~~Mexico.~~public ~~Mr. Johnson~~and ~~also~~private ~~currently~~companies ~~serves~~by asCD&R aInvestor ~~director~~and ~~with~~its ~~the World Wildlife Fund. Similarly~~affiliates, ~~Ms. Johnson-Leipold~~and ~~held~~each ~~senior~~serve ~~management~~on ~~positions~~the ~~with~~board ~~SCJ,~~of ~~including~~directors ~~Vice~~for ~~President~~certain –of ~~Worldwide Consumer~~such ~~Products,~~portfolio ~~before joining Johnson Outdoors, Inc~~companies., ~~where~~All ~~she~~have ~~currently~~significant ~~serves~~experience ~~as Chairman~~ and ~~Chief~~expertise ~~Executive Officer. Mr. Louis, together~~ with ~~his~~companies having ~~relatives, Mr. Johnson and Ms. Johnson-Leipold, has~~ a ~~detailed~~distribution ~~understanding of our history~~ and ~~culture,~~service ~~including the principles described in “This We Believe~~focus.”

The ~~CMH~~CD&R Investor nominated ~~independent~~ ~~directors~~director, ~~Messrs~~Mr. Knisely, ~~Brown~~has ~~and~~an ~~Howe,~~extensive ~~each~~career in ~~bring~~business ~~beneficial~~and ~~experience~~academia ~~and~~that ~~attributes~~will tobenefit our board.’s ~~Mr. Brown~~discharge ~~spent a significant portion~~ of ~~his~~its ~~career~~responsibilities. ~~with Kraft Foods, Inc~~Mr., Knisely ~~including~~formerly ~~service~~served as Executive Vice President, and ~~most recently~~Corporate ~~was~~Officer ~~Vice Chairman~~ of ~~ShoreBank~~Danaher Corporation ~~prior to retiring at the end of 2009. Mr. Brown has served on our board~~ and ~~Holdings’ board since 2001. Mr. Howe~~ has aover ~~strong~~30 ~~background~~years experience in ~~information technology and e-commerce from~~diversified ~~past~~manufacturing ~~experience with Scient, Inc~~operations. ~~and International Business Machines Corporation. Mr. Howe has served on our board and Holdings’ board since 2002.~~

Messrs. Berges, Jaquette and Schnall are each actively involved in managing the portfolio of investments in public and private companies by CD&R Investor and its affiliates, and each serve on the board of directors for certain of such portfolio companies. All have significant experience and expertise with companies having a distribution and service focus.

The CD&R Investor nominated independent directors, Messrs. Knisely and Levin each have extensive careers in business and academia that will benefit our board’s discharge of its responsibilities. Mr. Knisely formerly served as Executive Vice President and Corporate Officer of Danaher Corporation and has over 30 years experience in diversified manufacturing operations. Mr. Levin, an economist with over 30 years of academic experience, is the current President of Yale University. He also currently serves on the board of American Express.

In addition to the members designated by CMH and CD&R Investor, Mr. Lonergan’s day-to-day leadership of our company provides him with intimate knowledge of our operations. Mr. Lonergan also has over 25 years of experience in the consumer products industry.

Our board believes that the qualifications described above bring a broad set of complementary experience, coupled with a strong alignment with the interest of the stockholders of Holdings, to the board’s discharge of its responsibilities.

Although we do not maintain a formal diversity policy governing board nominations, we continually strive to make progress toward board diversity in accordance with our key cultural indicators, which define ~~our~~ “~~This~~The WeDiversey ~~Believe~~Way” culture.

~~Audit~~71 ~~Committee~~

The Audit Committee of our board of directors appoints our independent registered public accounting firm, reviews the scope and results of the audits with the auditors and management, approves the scope and results of the audits, monitors the adequacy of our system of internal controls and reviews the annual report, auditors’ fees and non-audit services to be provided by the independent registered public accounting firm. The members of our Audit Committee are Robert Howe, chairman of the Audit Committee, Todd Brown, Philip Knisely, and Richard Levin. Our board of directors has determined that each of Messrs. Howe, Brown, Knisely and Levin meets the definition of an audit committee financial expert, as set forth in Item 401(h) (2) of Regulation S-K, and has also determined that they meet the independence requirements of the SEC.

Audit Committee

The Audit Committee of our board of directors appoints our independent registered public accounting firm, reviews the scope and results of the audits with the auditors and management, approves the scope and results of the audits, monitors the adequacy of our system of internal controls and reviews the annual report, auditors’ fees and non-audit services to be provided by the independent registered public accounting firm. The members of our Audit Committee are Robert M. Howe, chairperson of the Audit Committee, Todd C. Brown and Philip W. Knisely. Our board of directors has determined that Messrs. Howe, Brown and Knisely meets the definition of an audit committee financial expert, as set forth in Item 401(h)(2) of Regulation S-K, and has also determined that each of Messrs. Howe and Brown meet the independence requirements of the SEC.

Code of Ethics

We and our employees operate under ~~the~~“The ~~values~~Diversey Way” ~~and~~statement ~~principles~~of ~~defined~~values inand ~~our~~operating ~~“This We Believe” culture~~principles, which extends to our customers and users, the general public, our neighbors and the world community. We have adopted a Finance Officers Code of Ethics applicable to our principal executive officer, principal financial officer and principal accounting officer. In addition and as a best practice, this code has been executed by all other key financial and accounting personnel. Furthermore, we have adopted a general code of business conduct for all of our directors, officers and employees, which is known as the Diversey, Inc. Code of Ethics and Business Conduct. The Finance Officers Code of Ethics, the Diversey, Inc. Code of Ethics and Business Conduct and other information regarding our corporate governance is available on our website (www.diversey.com), or free of charge by writing c/o Investor Relations at the address on the cover page of this annual report on Form 10-K. In addition to any reports required to be filed with the SEC, we intend to disclose on our website any amendments to, or waivers from, the Finance Officers Code of Ethics or the Diversey, Inc. Code of Ethics and Business Conduct that are required to be disclosed pursuant to SEC rules. To date, there have been no waivers of the Finance Officers Code of Ethics or the Diversey, Inc. Code of Ethics and Business Conduct.

6972

ITEM 11 – EXECUTIVE COMPENSATION

Compensation Discussion and Analysis (CD&A)

Organization of Information

This Compensation Discussion and Analysis (“CD&A”) describes our executive compensation philosophy, programs and policies, and includes analysis on the compensation earned by our Named Executive Officers (“NEOs”) as detailed in the accompanying executive compensation tables. The CD&A covers the following topics:

• ~~Overview~~Consideration of ~~the~~Shareholder ~~Role~~Advisory ~~of the Compensation and Management Succession Committee (“Compensation Committee”) in Executive Compensation~~Vote

•

Overview of the Role of the Company’s Compensation Committee (“Compensation Committee”) in Executive Compensation

•

Executive Compensation Philosophy and Objectives

•

Compensation Elements and Pay Mix

•

Determining Compensation Levels

•

Executive Compensation Market Benchmarking and Peer Group

•

Total Target Compensation Relative to Market Compensation

•

Program Components and Policies:

•

Base Salary

•

Annual Incentives

•

Long-Term Incentives

•

Executive Severance

•

Executive Benefits and Perquisites

•

Tax, Regulatory and Accounting Implications

•

Assessment of Incentive Risk

•

Executive Compensation Tables and Supplemental Narrative Disclosures

• Executive Agreements

•

Compensation Committee Report

•

Compensation Committee Interlocks and Insider Participation in Compensation Decisions

•

Director Compensation

Consideration of Shareholder Advisory Vote

The Compensation Committee believes that the non-binding shareholder advisory vote on the Company’s executive compensation will provide useful feedback to the Compensation Committee regarding whether it is achieving its goal of designing an executive compensation program that promotes the best interests of the Company by providing its executives with the appropriate compensation and meaningful incentives. The Compensation Committee intends to review the results of the advisory vote, being completed for the first time this year, and will consider this feedback as it completes its annual review of each pay element and the total compensation packages for our NEOs with respect to the next fiscal year.

Overview of the Role of the Compensation Committee in Executive Compensation

Our Compensation Committee charter gives the Compensation Committee responsibility over executive compensation matters. Our Compensation Committee is appointed by our ~~Board~~Company’s board of ~~Directors~~directors (“Board”), and is charged with approving and overseeing all executive compensation programs and policies. The Compensation Committee approves all compensation actions with respect to our NEO compensation.

~~The~~73 Compensation Committee relies on management and outside advisors for staff work, contextual information and technical guidance in conducting its affairs. For the past several years, the Compensation Committee has retained W.T. Haigh & Company, a compensation consulting firm in Cambridge, Massachusetts, to provide independent advice on executive and director compensation and to conduct independent studies when needed. W.T. Haigh & Company reports directly to the Compensation Committee and has worked exclusively on executive compensation and does not have other consulting arrangements with the company.

On November 24, 2009, as described under Item 1. Business in this annual report on Form 10-K, our company completed a recapitalization through debt and equity investment transactions. Effective on this date, the Board was

~~reconstituted~~The Compensation Committee relies on management and aoutside ~~new~~advisors ~~Compensation~~for ~~Committee~~staff ~~was~~work, contextual ~~established.~~information ~~All~~and ~~references~~technical guidance in ~~this~~conducting ~~CD&A~~its toaffairs. ~~actions~~For ~~taken~~the bypast several years, the Compensation Committee inhas ~~2009~~retained ~~apply~~W.T. toHaigh & ~~the~~Company ~~Compensation~~(“Haigh”), ~~Committee~~a ~~that~~compensation ~~was in~~consulting ~~place~~firm ~~prior~~in Cambridge, Massachusetts, to ~~the~~provide ~~recapitalization.~~independent ~~All~~advice ~~references~~on inexecutive ~~this~~and ~~CD&A~~director tocompensation ~~actions~~and ~~taken~~to byconduct ~~the~~independent ~~Compensation~~studies ~~Committee~~when inneeded. ~~2010~~Haigh ~~apply~~reports directly to the Compensation Committee ~~that~~and ~~was~~has inworked ~~place~~exclusively ~~after~~on executive compensation and does not have other consulting arrangements with the ~~recapitalization~~Company.

On November 24, 2009, our Company completed a recapitalization plan and commenced a new partnership with CD&R, a leading private equity firm. Effective on that date, the Board was reconstituted and a new Compensation Committee was established. All references in this CD&A to actions taken by the Compensation Committee in 2010 and 2011 apply to the Compensation Committee that was in place after the recapitalization.

Executive Compensation Philosophy and Objectives

Our executive compensation program is designed to attract, retain, and motivate high performing individuals through an integrated rewards package of compensation and benefits that is competitive with other companies in our marketplace and industry.

We have adopted the following objectives as the foundation for our executive compensation philosophy:

• Ensure that our total rewards program motivates and drives a pay -for -performance culture, including the successful ~~execution~~achievement of the ~~company’s restructuring plan and the~~ financial metrics established as part of the bank-approved financing plan.

•

Reward executives appropriately based on their job responsibilities and performance, individual contribution to the business, overall business performance, and local market considerations.

•

Ensure total rewards are externally competitive and administered with internal equity in mind.

• Align total rewards to support our strategic objectives and align with shareholder interests. Specifically, in ~~2009~~2010, we structured the terms of incentive compensation to include performance hurdles that enabled our ~~company~~Company to meet debt obligations, with adequate cushion, before annual or long-term incentives ~~were~~are funded for executives. Our goal ~~has~~is ~~been~~ to provide for a fair economic sharing between management and shareholders only when performance hurdle requirements have been met and our bank-approved financing plan goals have been achieved.

•

Comply with all applicable laws and regulations.

Compensation Elements and Pay Mix

Our executive compensation program includes the following elements, all of which are described in more detail below.

1. Direct Compensation, which includes:

•

Base salary

•

Annual incentives

•

Long-term incentives

We structure our executives’ direct compensation to deliver a substantial portion of value through variable, performance-based annual and long-term incentives. The allocation between annual and long-term incentives is determined based on market benchmarking against our peer group (as described below), with a higher proportion delivered through long-term incentives. The incentive components (both annual and long-term) are intended to motivate and reward sustained profitable growth, reinforce executive accountability and increase enterprise value for our shareholders. ~~These~~This ~~incentives~~is ~~have been~~ especially critical in light of our ~~restructuring~~growth ~~plan, the targeted~~ goals and strategic priorities that we established for meeting our financial obligations and, ~~ultimately,~~ delivering long-term value to our shareholders. As a result of ~~our~~this emphasis on performance-based incentive pay, we expect direct compensation amounts to vary from year to year.

In ~~2009, we awarded all of our long-term incentives in cash based on the achievement of our company’s profitability targets. However, starting in~~ 2010 we ~~are~~implemented ~~implementing~~a new equity-based ~~incentives~~incentive asplan weto ~~believe that equity-based incentives best~~ align the long-term interests of our executives with those of our shareholders. The provisions of our new equity-based incentive program are described ~~below~~ in more detail under “Long Term Incentives”.”

2. Indirect Compensation, which includes:

•

Benefits

•

Perquisites

71Our executives participate in benefit programs available broadly to all of our employees. In addition, we maintain certain executive benefit and perquisite programs that we believe are consistent with market practice. In keeping with our culture, the value of these programs do not make up a significant percentage of total executive compensation.

Our executives participate in benefit programs available broadly to all of our employees. In addition, we maintain certain executive benefit and perquisite programs that we believe are consistent with market practice. In keeping with our culture, the value of these programs does not make up a significant percentage of total executive compensation.

Determining Compensation Levels

The following are key factors we consider in determining compensation levels for our executives:

1. Performance. We consider the performance of our ~~company~~Company, as well as individual performance and contributions. Performance goals are defined annually, and we utilize a disciplined performance review process to ensure that our executives’ goals align with the achievement of our ~~bank-approved~~business ~~financing~~ plan and with our strategic priorities. Company goals require aggressive growth year over year and have only been fully attained in four of the last ~~seven~~eight years.

2. Market competitiveness. We benchmark compensation for our executive positions to comparable jobs in the marketplace to understand what we need to pay to stay competitive. The process for conducting market benchmarking and determining market competitiveness is described in more detail ~~below~~in the material that follows.

3. Cost. We review the cost of our executive rewards program for reasonableness in light of our financial condition and relative to our performance. In addition, as mentioned above, in ~~2009~~2010 we structured the incentive components of our program so that we met our debt obligations ~~and~~with ~~restructuring~~a ~~expenses~~fair return to shareholders before executives earned incentives.

Internal equity. We assess the relative value of our executive positions using factors such as responsibilities and performance, scope and impact, problem solving and leadership. Our goal is to compensate executives fairly and equitably based on each executive’s role and potential impact on our company’s success.

Executive Compensation Market Benchmarking and Peer Group

We are a market leader in our industry with a broad, diversified line of products and related services. As a result, we seek to attract and retain highly qualified executives from companies with a similar business mix and profile, but which are not necessarily direct business competitors. We use the following criteria to assist with the selection of peer companies for purposes of market benchmarking compensation for our executives:

•

Manufacturing companies

•

Comparable revenues ($1–6 billion)

•

Global scope (measured by foreign sales as a percentage of total sales)

•

Growth orientation in terms of EBITDA and sales

•

Service, business-to-business and technology orientation

•

Source for executive talent

•

United States public companies (to access data)

Based on these factors, our current peer group consists of the following 20 companies:

Acuity Brands, Inc. EMCOR Group Inc. Sealed Air Corporation Avery Dennison Corporation FMC Corporation Sensient Technologies Corporation Brunswick Corporation H.B. Fuller Company Sigma-Aldrich Company Cabot Corporation Goodrich Corporation Snap-On Inc. Clorox Company Lubrizol Corporation Westlake Chemical Corporation Corn Products International, Inc. Nalco Holding Company W.W. Grainger, Inc. Ecolab Inc. Olin Corporation

72Albemarle

Avery Dennison Corporation

Cabot Corporation

Clorox Company

Corn Products International, Inc.

~~Our~~Ecolab ~~Compensation Committee last reviewed and approved our peer group in October 2007~~Inc. ~~At that time, we were in the mid- range of the peer group in terms of revenue. We intend to continue to review and refine our peer group periodically.~~

~~Each~~FMC ~~year~~Corporation we review executive market total compensation with our Compensation Committee. The Compensation Committee consults with our independent compensation consultant, W.T. Haigh & Company, to compare our executive compensation levels against compensation levels for similar executive positions in the peer group. In addition, we participate in an executive compensation study conducted by Hewitt Associates that includes similar companies based on various factors, including certain of the same criteria used to define our peer group. We also validate these peer company findings with general industry compensation data for similar sized companies using Mercer and Hewitt surveys. We use the comparisons made in this process to develop competitive market ranges for our executives for purposes of assessing overall market competitiveness.

H.B. Fuller Company

Goodrich Corporation

Lubrizol Corporation

Nalco Holding Company

Olin Corporation

Sealed Air Corporation

Sensient Technologies Corporation

Sigma-Aldrich Company

Snap-On Inc.

Westlake Chemical Corporation

W.R. Grace & Co.

W.W. Grainger, Inc.

Our Compensation Committee last reviewed and approved our peer group in October 2010. At that time, we deleted Brunswick Corp. and EMCOR Group which did not fully meet our criteria. We added Albermarle and W.R. Grace which generally met our selection criteria. Based on this list, we are in the mid-range of the peer group in terms of revenue. We intend to continue to review and refine our peer group periodically.

Each year we review executive market total compensation with our Compensation Committee. The Compensation Committee uses Haigh to compare our executive compensation levels against compensation levels for similar executive positions in the peer group. In addition, we participate in an executive compensation study conducted by Hewitt Associates that includes similar companies based on various factors, including certain of the same criteria used to define our peer group. We also validate these peer company findings with general industry compensation data for similar sized companies using Mercer and Hewitt surveys. We use the comparisons made in this process to develop competitive market ranges for our executives for purposes of assessing overall market competitiveness.

Total Target Compensation Relative to Market Compensation

The total target compensation of our executives relative to market compensation varies based on performance. In general:

•

For attainment of business goals (target performance), we target direct compensation at the 50th percentile of the competitive market range, or slightly above.

•

For significant overachievement of business goals, we target direct compensation closer to the 75th percentile of the competitive market range, with a higher relative positioning to market for annual and long-term incentives than for base salary.

•

For underachievement of business goals, we target direct compensation below the 50th percentile of the competitive market range as our incentive components are structured to deliver below mid-market incentive levels for underperformance of goals.

The Compensation Committee retains the discretion to provide awards above or below these targets based on individual performance.

Program Components and Policies

Base Salary

Our goal is to pay base salaries in the mid-range of the competitive market. We review the base salaries of our executives annually with any salary increases taking effect April 1 of each year. Any salary increase is generally based on the executive’s performance within specific areas of accountability, as well as market competitiveness and budget considerations.

~~Base~~76 ~~salaries for corporate officers were not increased in 2009, with the exception of Mr. Chidichimo who was granted a market adjustment effective January 1, 2009.~~

Annual Incentives

Our Annual Incentive Plan (“AIP”) is designed to recognize and reward outstanding performance, achievements and contributions to fiscal year results and focus attention on specific challenges and opportunities as defined by and aligned with our strategy. The AIP is a goal-based program for executives. Each year, performance goals are established and approved by our Compensation Committee which provides a basis for funding the overall AIP pool globally for all participants. The following were the performance categories and weightings applicable for 2009:

• Operating EBITDA (45% weighting)

• Net Sales Growth (25% weighting)

On February 1, 2010 our Compensation Committee approved the following 2010 base salaries for our NEOs:


	Base Salary Rate
Name	2009		2010
Edward F. Lonergan	$	825,000	$	850,000
S. Curtis Johnson III		650,000		650,000
Norman Clubb		n/a		500,000
Pedro Chidichimo		415,000		427,450
John Alexander		370,000		381,100
2010 Additional Individual that Qualifies:
Joseph F. Smorada		500,000		500,000

Annual Incentives

Our Annual Incentive Plan (“AIP”) is designed to recognize and reward outstanding performance, achievements and contributions to fiscal year results and focus attention on specific challenges and opportunities as defined by and aligned with our strategy. The Plan is a goal-based program for executives. Each year, performance goals are established and approved by our Compensation Committee which provides a basis for funding the overall AIP pool globally for all participants. The following were the performance categories and weightings applicable for 2010:

•

Management EBITDA (55% weighting)

•

Net Sales Growth (15% weighting)

•

Working Capital (30% weighting)

Our AIP incentive design includes threshold financial performance hurdles that must be met before any incentives can be earned under this plan. This ensures that adequate funds are available to satisfy outstanding debt and ~~restructuring obligations and~~ provides for a reasonable and fair distribution of incremental profit between management and shareholders.

Target awards and potential payouts are defined for each executive based on an evaluation of financial results and individual contributions. These amounts are reviewed and approved annually by our Compensation Committee. The following table presents the ~~2009~~2010 annual incentive opportunities for our NEOs:

AIP AWARD OPPORTUNITY (% OF BASE SALARY)

Name	Minimum			~~Target~~	Target		~~Maximum~~		Maximum
Edward Lonergan	0	%		100	%		200	%
Edward F. Lonergan		0	%			100	%			200	%
S. Curtis Johnson	0	%		80	%		160	%
S. Curtis Johnson III		0	%			80	%			160	%
Joseph Smorada	0	%		65	%		130	%
Norman Clubb		0	%			65	%			130	%
Pedro Chidichimo	0	%0	%	65	%	65	~~130~~%	%		130	%
John Alexander	0	%0	%	65	%	65	~~130~~%	%		130	%
2010 Additional Individual that Qualifies:
Joseph F. Smorada		0	%			65	%			130	%

Payments are ~~generally~~ generally made in cash in the first or early second quarter of the fiscal year after approval by the Compensation Committee. The Compensation Committee determines whether goals have been met under the AIP Plan.

~~Financial~~77 ~~Restructuring Recognition Bonus~~

In October 2009, our Compensation Committee approved special, one-time cash bonuses to recognize and reward the exceptional commitment made by select individuals in preparing, managing and delivering the closing of the recapitalization of the company. Two of our NEOs were granted awards:

Name	Award
Edward Lonergan	$	300,000
Joseph Smorada	$	200,000

Long-Term Incentives

In 2006, we discontinued our equity-based long-term incentive program and implemented a cash long-term incentive program (“LTIP”) to motivate and reward the attainment of global profitability targets. As discussed above, this was done to emphasize the successful attainment of our bank-approved financing plan, which is in place for a specified period of time. Starting in 2010, we are returning to an equity-based long-term incentive program that will promote long-term stock ownership and further alignment of management interests with those of our shareholders.

The LTIP awards compensation based on specific performance goals during three-year performance cycles that begin each year. Target awards are defined by position as a dollar amount with a potential payout of 0–200% based on attainment of the goals defined for each performance cycle. The 2007–2009, 2008– 2010 and 2009-2011 cycle awards will be based 100% on global EBITDA. The following table provides the target award opportunities and range of potential payouts, under our LTIP for the 2009–2011 performance cycle prior to implementation of the 2010 Stock Incentive Plan as described below:

LTI AWARD OPPORTUNITY

Name	Minimum		Target		Maximum
Edward Lonergan	$	0	$	3,000,000	$	6,000,000
S. Curtis Johnson		0		2,100,000		4,200,000
Joseph Smorada 1		350,000		1,000,000		2,000,000
Pedro Chidichimo		0		900,000		1,800,000
John Alexander		0		750,000		1,500,000

1. A special floor was established in December 2005 to support retention.

Consistent with our AIP Plan, our existing LTIP cycles include a financial performance hurdle to ensure that our obligations from outstanding debt covenants are satisfied and all other financial obligations are met before longLong-~~term~~Term ~~incentives~~Incentives ~~are paid. For example, there is no payout for a given LTIP cycle if the cumulative three-year global EBITDA is less than 85% of target or our debt covenants are not met.~~

Payment is made in the first quarter after the end of the three-year performance period, upon approval by the Compensation Committee. For example, for the 2007-2009 performance cycle, any earned payments will be made in cash in the first quarter of 2010. With limited exceptions (e.g., retirement, death, disability, job elimination), executives must be actively employed on the date the payment is made to receive an award. The Compensation Committee determines whether goals have been met under the LTIP.

2010 Stock Incentive Plan

On January 11, 2010, the Board approved a new Stock Incentive Plan. The principal objectives of this plan are to:

•

Align incentives and interests between management and shareholders

•

Promote an “owner” mentality through providing an opportunity to acquire equity ownership in the company

•

Focus management on long-term value creation

• Promote teamwork by building a strong affiliation and link to total enterprise success.

All NEOs with the exception of JMr. Smorada, who isretired ~~retiring~~on ~~from~~March 31, ~~the company in early~~ 2010, ~~will~~are be participants in the plan. In addition, approximately 50 other associates ~~will~~ participate in the program.

The new program consists of three components:

One-time offering to allow participants to purchase shares at the current share price at the time of the offering.

2. Conversion of outstanding cash awards under previously granted LTIP cycles (2008-2010 and 2009-2011) into Deferred Share Units (DSUs) based on the then current share price at time of conversion.:

3.• ~~Matching~~Consistent ~~grants~~with ofthe ~~stock~~prior ~~options~~cash ~~based~~LTIP, onDSUs ~~shares~~are ~~purchased~~subject ~~and~~to ~~DSUs~~earn-out atbased aon ~~multiple~~the ~~based~~attainment onof the ~~participants~~preset ~~tier~~EBITDA upgrowth togoals ~~pre-set~~approved ~~limits~~by the Compensation Committee.

~~Settlement~~• Amounts earned through December 31, 2009 for the 2008-2010 and 2009-2011 performance cycles were determined and approved by the Compensation Committee on a prorated basis for the number of ~~Outstanding~~completed ~~Stock~~years ~~Awards~~in each cycle based on performance versus goals established at the beginning of each performance cycle. DSUs granted based on the completed performance cycles remain subject to attainment of threshold levels of EBITDA for the remaining portions of the cycles starting January 1, 2010.

In• ~~early~~Amounts ~~November~~earned ~~prior~~for to the ~~recapitalization~~remaining ~~that~~portions ~~closed~~of cycles starting on ~~November 24,~~January ~~2009~~1, an2010 ~~offer~~are ~~was~~subject ~~extended from CMH~~ to ~~purchase~~earn-out ~~and~~based ~~cancel~~on ~~all~~new ~~(1) outstanding~~EBITDA ~~stock~~goals ~~options~~established toby ~~purchase~~the ~~shares~~Compensation ~~of Class~~Committee ~~C common stock of CMH,~~ and ~~(2) owned~~are ~~shares~~capped ofat ~~Class~~100% ~~C common stock~~ of ~~CMH,~~target ~~which~~award ~~had~~levels ~~been~~(prior ~~granted under our former equity~~ plan ~~which~~had ~~was~~a ~~terminated~~200% inof ~~2006.~~target ~~The~~award ~~following NEOs and Directors participated in this tender offer:~~ cap).

~~SETTLEMENT~~3. OFMatching ~~OUTSTANDING~~grants ~~STOCK~~of ~~AWARDS~~stock options based on shares purchased and DSUs at a multiple based on the participant’s tier up to preset limits (as described below in the footnotes of the “Grants of Plan-Based Awards Table”).

Executives	Form	Settlement
S. Curtis Johnson	Stock Options and Owned Shares	$	3,690,362
J. Smorada	Owned Shares		210,277
Outside Directors
H. Johnson-Leipold	Stock Options and Owned Shares	$	143,942
C. Louis	Stock Options and Owned Shares		190,751
R. Howe	Stock Options and Owned Shares		275,508
R. Wittwer	Stock Options		4,480

The table below presents a summary of stock purchases, LTIP conversions into DSUs and matching stock option grants made in January and February 2010:


Name	# of Purchased Shares		Matched Options to Shares Purchased		# of DSUs		Matched Options from DSUs
Edward F. Lonergan		125,000		500,000		622,800		2,491,200
S. Curtis Johnson III		500,000		200,000		458,500		458,500
Norman Clubb		95,000		285,000		60,000		180,000
Pedro Chidichimo		100,000		300,000		196,500		589,500
John Alexander		52,500		157,500		147,650		442,950

As stated above, the grants of DSUs are in replacement of the former cash LTIP program’s three-year performance cycles granted for fiscal 2008 and 2009. Grants of matching options are intended to cover a multi-year period and are forfeitable based on a combination of service, performance and DSU tax withholding provisions. The Compensation Committee does not intend to make additional equity grants to our NEOs for the next three fiscal years.

Please see the “Summary Compensation Table” and the “Grants of Plan-Based Awards Table” below for more information.

After this offering, no directors or executive officers hold stock options to purchase shares of Class C common stock of CMH or shares of Class C common stock of CMH.

Executive Severance

Our Compensation Committee has approved an executive severance policy for certain key employees including our NEOs (excluding Mr. Johnson). Key provisions of the executive severance policy are identified below:

•

Cash severance (salary continuation) of two times base salary for NEOs.

•

Pro rata AIP bonus for fiscal year in which termination occurs.

• ~~AIP~~Performance bonus (AIP) at the target level for each year during the salary continuation period.

• Pro rata ~~bonus~~payout ~~for~~of ~~any~~ outstanding ~~LTIP~~DSU awards and in-the-money value of vested options.

~~The~~Severance ~~following~~payments ~~table~~resulting ~~quantifies~~from ~~severance~~termination ~~benefits~~events, ~~that~~as ~~our~~defined ~~NEOs~~in ~~would~~the ~~have~~applicable ~~been~~severance ~~entitled~~agreements, toare ~~receive~~paid ~~assuming~~only ~~termination~~if ~~had~~executives comply ~~occurred~~with asall the provisions of ~~December 31~~the agreements, ~~2009~~including ~~(excluding~~Confidentiality ~~pro~~Agreement, ~~rata~~Trade ~~AIP~~Secret, Invention, and ~~LTIP~~Copyright ~~awards~~Agreement, Non-Competition Agreement and general release. Please refer to “Termination Scenarios for Executive ~~based~~Benefits” onfor ~~actual~~additional ~~performance):~~details relating to benefits received upon termination from our company.

Name	Severance Payment
Edward Lonergan	$	3,300,000
S. Curtis Johnson		Not Eligible
Joseph Smorada		1,650,000
Pedro Chidichimo		1,369,500
John Alexander		1,221,000

Severance payments resulting from termination events, as defined in the applicable severance agreements, are paid only if executives comply with all the provisions of the agreements, including certain confidentiality and non-compete restrictions and the execution of a general release of claims. Please refer to “Termination Scenarios for Executive Benefits” for additional details relating to benefits received upon termination from our company.

Executive Benefits and Perquisites

Our NEOs are eligible for company-sponsored benefits available broadly to our employees. Although benefit programs may vary by country, our objective is to have common benefit programs across all operating groups within a country and to provide equitable offerings across pay levels. Our benefit programs typically include healthcare and dental benefits, short-term and long-term disability, life insurance and 401(k) and other retirement plans.

Executive Flexible Spending Account:

Our NEOs are eligible for flexible spending accounts with annual limits to be used for such items as country club and health club dues, financial planning, tax advice and preparation, estate planning, legal fees associated with estate or property matters, automobile lease and automobile payments ~~(monthly payments only)~~.

For ~~2009~~ 2010, the maximum annual amount available to Mr. Lonergan under his flexible spending account was $25,000 and the maximum amount available to each of ~~our~~the other NEOs was $15,000.

Use of Company Resorts:

Through a shared service agreement with SCJ (as defined in Item 13 of this ~~annual report on~~ Form 10-K) our executives, including our NEOs, are eligible to use the SCJ-owned property in Aspen, Colorado. ~~Mr. Smorada~~None ~~was~~of the named ~~only~~NEOs ~~NEO~~used ~~to use~~ this resort in ~~2009~~2010.

Retirement Plans:

Our NEOs participate in company-sponsored retirement plans available broadly to our employees. These plans are described below in the narrative disclosure following the Pension Benefits table.

Executive LTD Plan:

We sponsor an executive long-term disability (“LTD”) plan for U.S. based NEOs to supplement the maximum monthly benefit limits ($12,500) in our broad-based U.S. LTD plan. The covered NEOs are Mr. Lonergan, Mr. Johnson, and Mr. ~~Smorada,~~Alexander. ~~and~~ Mr. ~~Alexander~~Clubb will be offered participation in 2011. The policy provides an additional $2,500 monthly LTD benefit ($5,000 for Mr. Johnson) for covered NEOs.

Deferred Compensation Plan:

We sponsor a non-qualified deferred compensation plan that allows employees to defer a portion of their base salary and annual performance bonus every year. None of our NEOs have elected to participate in the plan through December 31, ~~2009~~2010.

Tax, Regulatory and Accounting Implications

The Company believes it is operating its executive compensation programs in good faith compliance with respect to all tax, regulatory and accounting standards.

Assessment of Incentive Risk

In December 2010, Haigh shared the conclusions of its risk review of our compensation programs with the Compensation Committee. The goal of this audit was to determine whether the general structure of our policies and programs pose any material risks to our company.

Based on this review, the Compensation Committee determined that the performance goals and incentive plan structures would not result in encouraging any excessive risk or inappropriate actions that would not be in the best interests of shareholders.

Executive Compensation Tables and Supplemental Narrative Disclosures

Overall, compensation levels for ~~2009~~2010 and actions taken in ~~2010~~2011 reflect continuing progress ~~with~~versus our ~~restructuring~~financial and strategic ~~plans. Most~~growth ~~notably~~goals, ~~incentive~~although AIP levels reflect ~~above-target~~ awards slightly below target for NEOs for ~~2009~~2010 due to the following:

• ~~Overachievement~~Net ofsales ~~pre-established~~growth ~~2009~~that ~~financial~~did not meet threshold levels and working capital performance ~~hurdles~~that was slightly below target levels.

• ~~Our~~This ~~executive~~was ~~leadership’s~~offset ~~strong~~slightly ~~contribution to the performance of our company. In 2009, we met or exceeded the performance goals as established~~ by ~~our~~overachievement ~~Board~~ of ~~Directors~~Management ~~under~~EBITDA ~~our AIP~~targets. ~~Such goals were consistent with our internal operating budget, which was aligned with the performance metrics contained in our restructuring plan.~~

•DSUs ~~The~~granted continued strong leadership and oversight of our executives in implementing our restructuring plan. In 2009, we continued to effectively execute this program, significantly exceeding the EBITDA improvement targets set for the ~~program,~~2008-2010 ~~while~~performance ~~containing~~cycle ~~one-time~~were ~~cost~~vested ~~and~~at ~~capital~~100% ~~expenditures~~based ~~within~~on ~~budgeted~~overachievement ~~levels~~of ~~and~~Management ~~financial covenants~~EBITDA.

•The ~~LTIP~~following ~~payouts~~tables ~~for~~and narrative disclosure provide additional information about the ~~2007-2009~~material ~~measurement~~components ~~period~~of ~~were~~our ~~above-target~~NEO ~~due~~compensation toand the ~~strong~~related ~~above-~~actions ~~target~~taken ~~EBITDA~~by ~~performance~~our ~~over~~Compensation Committee in 2010 and the ~~3-year~~first ~~period~~quarter of 2011.

~~The~~Summary ~~following tables and narrative disclosure provide additional information about the material components of our NEO compensation and the related actions taken by our~~ Compensation ~~Committee in 2009 and the first quarter of 2010.~~ Table

~~Summary~~The following table sets forth information concerning the compensation of our NEOs including the CEO and President, the ~~Compensation~~CFO ~~Table~~and the other three most highly compensated executive officers, who served in such capacities during 2010. Note that the grants of DSUs (~~SCT~~shown in “Stock Awards”) are in replacement of the former cash LTIP program’s three-year performance cycles granted for fiscal 2008 and 2009. Grants of matching options (shown in “Option Awards”) are intended to cover a multi-year period and are forfeitable based on a combination of service, performance and DSU tax withholding provisions. The Compensation Committee does not intend to make additional equity grants to our NEOs for the next three fiscal years.

~~The~~80 following table sets forth information concerning the compensation of our NEOs including the CEO and President, the CFO and the other three most highly compensated executive officers, who served in such capacities during 2009.

~~2009~~2010 SUMMARY COMPENSATION TABLE

Name and Principal Position	Year		~~Salary~~		Salary	~~Bonus~~			Bonus	~~StockAwards~~		~~OptionAwards~~	StockAwards	~~Non-EquityIncentive PlanCompensation~~			OptionAwards	~~Change inPension ValueandNonqualifiedDeferredCompensationEarnings 1~~		~~All~~Non-EquityIncentive ~~OtherCompensation~~PlanCompensation			~~Total~~Change inPension ValueandNonqualifiedDeferredCompensationEarnings 1		All OtherCompensation			Total
Edward LonerganCEO	2009		$	825,000		$	300,000	2						$	4,468,500	3		$	38,419	$	222,142	4	$	5,854,061
Edward F. LonerganCEO		2010			$	843,462			$	0			$	6,228,000	2		$	10,247,851	3	$	732,700	4	$	22,559	$	222,281	5	$	18,296,853
	2008			811,038			0								3,952,500	5			145,125		29,973	6		4,938,636
		2009				825,000				300,000	6										4,468,500	7		38,419		222,142	8		5,854,061
	2007			752,500			0								1,716,115	7			155,280		20,358	8		2,644,253
		2008				811,038				0											3,952,500	9		145,125		29,973	10		4,938,636
S. Curtis JohnsonChairman	2009			650,000			0								2,979,600	9			-220,144		128,671	10		3,538,127
S. Curtis Johnson IIIChairman		2010				650,000				0				4,585,000	11			2,256,021	12		448,240	13		126,941		136,330	14		8,202,532
	2008			650,000			0								3,413,520	11			49,104		13,807	12		4,126,431
		2009				650,000				0											2,979,600	15		-220,144		128,671	16		3,538,127
	2007			662,500			0								1,148,540	13			150,490		20,107	14		1,981,637
		2008				650,000				0											3,413,520	17		49,104		13,807	18		4,126,431
Joseph SmoradaCFO	2009			500,000			200,000	15							1,390,350	16			15,655		276,160	17		2,382,165
Pedro ChidichimoPresident, Global Customer Solutions & Innovation		2010				425,668				0				1,965,000	19			3,047,427	20		222,274	21		0		367,424	22		6,027,792
	2008			493,349			0								1,588,200	18			103,778		39,476	19		2,224,803
		2009				436,889				0											1,102,087	23		0		325,884	24		1,864,860
	2007			470,350			0								1,161,801	20			91,030		61,326	21		1,784,507
		2008				348,584				0											1,077,500	25		0		424,586	26		1,850,670
Pedro ChidichimoPresident, EMA	2009			436,889			0								1,102,087	22			0		325,884	23		1,864,860
John AlexanderPresident, Americas		2010				378,197				0				1,476,500	27			2,057,142	28		242,761	29		187		92,004	30		4,246,791
	2008			348,584			0								1,077,500	24			0		424,586	25		1,850,670
		2009				370,000				225,000	31										823,536	32		329		58,507	33		1,477,372
	2007			335,156			0								835,175	26			0		350,458	27		1,520,789
Norman ClubbCFO		2010				480,769				20,000	34			600,000	35			1,593,090	36		302,250	37		0		63,735	38		3,059,844
John AlexanderPresident, Americas	2009			370,000			225,000	28							823,536	29			329		58,507	30		1,477,372
2010 Additional Individual that Qualifies:
Joseph F. SmoradaCFO		2010				140,382				0											1,334,588	39		7,487		679,820	40		2,162,276
		2009				500,000				200,000	41										1,390,350	42		15,655		276,160	43		2,382,165
		2008				493,349				0											1,588,200	44		103,778		39,476	45		2,224,803

1.	Includes the annual change in pension value only. None of the NEOs participate in the Company’s Nonqualified Deferred Compensation Plan. Please refer to “Pension Benefits” for the specific assumptions used in estimating present value.

2. ~~One-time~~Includes ~~cash~~grant ~~bonus~~date ~~for~~fair ~~the~~value ~~exceptional~~of ~~commitment~~$2,898,000 ~~made~~for ~~in preparing~~289,800 ~~managing,~~performance ~~and~~Deferred ~~delivering~~Share ~~the~~Units ~~closing~~(DSUs) ofgranted for the ~~financial~~2008-2010 ~~restructuring~~performance ofcycle and $3,330,000 related to 333,000 DSUs granted for the ~~company~~2009-2011 performance cycle.

3. ~~Non-Equity~~Equals ~~Incentive~~the ~~Plan~~grant ~~Compensation~~date ~~earned~~fair ~~during~~value ~~2009~~of ~~includes~~2,991,200 ~~AIP~~total ~~bonus~~options ofgranted $1in 2010. 2,~~039~~491,~~500~~200 ~~and~~options anwere ~~LTIP~~granted ~~payout~~based on the number of ~~$3,429,000~~DSUs for the ~~2007~~2008-2010 and 2009-2011 performance ~~cycle~~cycles subject to additional service based vesting provisions if earned. 500,000 were granted based on number of shares directly purchased and are subject to additional service based vesting provisions.

4. ~~Consists~~Represents ofAIP ~~$25,000~~bonus ofearned ~~flexible~~during spending account, $1,723 of premiums for company provided life insurance, $1,209 of premiums for company paid executive LTD, $9,800 of 401(k) company match, $19,160 of 401(k) pension plan contribution, and $165,250 of 401(k) excess contribution2010.

5. ~~Non-Equity~~Consists ~~Incentive~~of ~~Plan~~$25,000 ~~Compensation~~of ~~earned~~flexible ~~during~~spending ~~2008~~account, ~~includes~~$1,316 ~~AIP~~of ~~bonus~~premiums offor company provided life insurance, $1,~~072~~209 of premiums for company paid executive LTD,~~500~~ ~~and~~$9,800 anof ~~LTIP~~401(k) ~~payout~~company match, $19,160 of 401(k) pension plan contribution, $2163,~~880~~796 of 401(k) excess contribution, and $2,000 ~~for~~of ~~the~~retiree ~~2006-2008~~medical ~~performance~~savings ~~cycle~~account company match.

6. ~~Consists~~One-time ofcash ~~$25,000~~bonus offor ~~flexible~~the ~~spending~~exceptional ~~account,~~commitment ~~$1,250~~made ofin ~~flexible credit for benefits~~preparing, $1managing,~~723~~ ofand ~~premiums~~delivering ~~for~~the ~~company~~closing ~~provided~~of ~~life~~the ~~insurance,~~financial ~~and~~restructuring ~~$2,000~~ of ~~retiree~~the ~~medical savings account~~ company ~~match~~.

7. Non-Equity Incentive Plan Compensation earned during ~~2007~~2009 includes ~~performance~~AIP bonus of $1,~~116~~039,~~115~~500 and aan ~~restructuring~~LTIP ~~incentive~~payout ~~award~~ of $~~600~~3,429,000 for the 2007-2009 performance cycle.

8. Consists of $1725,~~500~~000 of flexible spending account, $1,~~250~~723 of ~~flexible~~premiums ~~credit~~ for ~~benefits,~~company ~~and~~provided life insurance, $1,~~608~~209 of premiums for company ~~provided~~paid ~~life~~executive ~~insurance~~LTD, $9,800 of 401(k) company match, $19,160 of 401(k) pension plan contribution, and $165,250 of 401(k) excess contribution.

9. Non-Equity Incentive Plan Compensation earned during ~~2009~~2008 includes AIP bonus of $~~613~~1,~~600~~072,500 and an LTIP payout of $2,~~366~~880,000 for the ~~2007~~2006-~~2009~~2008 performance cycle.

10. Consists of $125,~~357~~000 of ~~premiums~~flexible ~~for~~spending ~~company provided life insurance~~account, $21,~~504~~250 of ~~premiums~~flexible credit for ~~company paid executive LTD~~benefits, $91,~~800~~723 of ~~401(k)~~premiums for company ~~match,~~provided ~~$19,160~~life ~~of 401(k) pension plan contribution~~insurance, ~~$93,850 of 401(k) excess contribution,~~ and $2,000 of retiree medical savings account company match.

11. ~~Non-Equity~~Includes ~~Incentive~~grant ~~Plan~~date ~~Compensation~~fair ~~earned~~value ~~during~~of ~~2008~~$2,254,000 ~~includes~~for ~~AIP~~225,400 ~~bonus~~DSUs ofgranted ~~$533,520~~for ~~and~~the an2008-2010 ~~LTIP~~performance ~~payout~~cycle ofand $2,~~880~~331,000 related to 233,100 DSUs granted for the ~~2006~~2009-~~2008~~2011 performance cycle.

12. ~~Consists~~Equals the grant date fair value of $1658,~~250~~500 oftotal ~~flexible~~options ~~credit~~granted ~~for~~in ~~benefits,~~2010. $1458,~~357~~500 options were granted based on the number of ~~premiums~~DSUs for ~~company~~the ~~provided~~2008-2010 ~~life~~and ~~insurance,~~2009-2011 ~~$9,200~~performance ofcycles ~~401(k)~~subject ~~company~~to ~~match,~~additional ~~and~~service $2based vesting provisions if earned. 200,000 were granted based on number of ~~retiree~~shares ~~medical~~directly ~~savings~~purchased ~~account~~and ~~company~~are ~~match~~subject to additional service based vesting provisions.

13. ~~Non-Equity~~Represents ~~Incentive~~AIP ~~Plan~~bonus ~~Compensation~~ earned during ~~2007 includes performance bonus of $748,540 and a restructuring incentive award of $400,000~~2010.

14. Consists of $1,~~250~~006 of ~~flexible~~premiums ~~credit~~ for ~~benefits~~company provided life insurance, $12,~~357~~504 of premiums for company ~~provided~~paid ~~life~~executive ~~insurance~~LTD, $159,~~500~~800 of 401(k) company match, $19,160 of 401(k) pension plan contribution, $101,860 of 401(k) excess contribution, and $2,000 of retiree medical savings account company match.

15. ~~One~~Non-~~time~~Equity ~~cash~~Incentive ~~bonus~~Plan ~~for~~Compensation ~~the~~earned ~~exceptional~~during ~~commitment~~2009 ~~made~~includes inAIP ~~preparing,~~bonus ~~managing~~of $613,600 and ~~delivering~~an ~~the~~LTIP ~~closing~~payout of ~~the~~$2,366,000 ~~financial~~for ~~restructuring~~the of2007-2009 ~~the~~performance ~~company~~cycle.

~~16.~~81 ~~Non-Equity Incentive Plan Compensation earned during 2009 includes AIP bonus of $399,750 and an LTIP payout of $990,600 for the 2007-2009 performance cycle.~~

17. Consists of $15,000 of flexible spending account, $1,044 of premiums for company provided life insurance, $1,917 of premiums for company paid executive LTD, $9,800 of 401(k) company match, $19,160 of 401(k) pension plan contributions, $72,000 of 401(k) excess contribution, $154,240 for a Restricted Stock SERP payment, and $2,999 for the use of a Company-owned resort.

18. Non-Equity Incentive Plan Compensation earned during 2008 includes AIP bonus of $465,000 and an LTIP payout of $1,123,200 for the 2006-2008 performance cycle.

19. Consists of $15,000 of flexible spending account, $1,250 of flexible credit for benefits, $1,044 of premiums for company provided life insurance, $9,200 of 401(k) company match, and $12,982 for a Restricted Stock SERP payment.

20. Non-Equity Incentive Plan Compensation earned during 2007 includes performance bonus of $561,801 and a restructuring incentive award of $600,000. The performance bonus includes a discretionary amount of $100,000 as approved by the Compensation Committee.

21. Consists of $10,000 of flexible spending account, $1,250 of flexible credit for benefits, $990 of premiums for company provided life insurance, $14,925 of 401(k) company match, and $34,161 for the use of a Company-owned resort.

22. Non-Equity Incentive Plan Compensation earned during 2009 includes AIP bonus of $340,087 and an LTIP payout of $762,000 for the 2007-2009 performance cycle.

23. Consists of $12,651 of flexible spending account, $29,337 of defined contribution pension, and $283,896 of expatriate allowances (including auto allowance).

24. Non-Equity Incentive Plan Compensation earned during 2008 includes AIP bonus of $357,500 and an LTIP payout of $720,000 for the 2006-2008 performance cycle.

25. Consists of $8,131 of flexible spending account, $31,701 of defined contribution pension, and $384,754 of expatriate allowances (including auto allowance).

26. Non-Equity Incentive Plan Compensation earned during 2007 includes performance bonus of $435,175 and a restructuring incentive award of $400,000. The performance bonus includes a discretionary amount of $99,546 as approved by the Compensation Committee.

27. Consists of $342,487 of expatriate allowances, and $7,971 for defined contribution pension.

28. Represents Signing Bonus.

29. Non-Equity Incentive Plan Compensation earned during 2009 includes AIP bonus of $315,536 and an LTIP payout of $508,000 for the 2007-2009 performance cycle.

30. Consists of $15,000 of flexible spending account, $773 of premiums for company provided life insurance, $1,274 of premiums for company paid executive LTD, $9,800 of 401(k) company match, $19,160 of 401(k) pension plan contributions, and $12,500 of 401(k) excess contribution.

~~Additional~~16. ~~Actions~~Consists ~~Taken~~of in$1,357 ~~2010~~of premiums for ~~our~~company ~~NEOs~~provided life insurance, $2,504 of premiums for company paid executive LTD, $9,800 of 401(k) company match, $19,160 of 401(k) pension plan contribution, $93,850 of 401(k) excess contribution, and $2,000 of retiree medical savings account company match.

On17. ~~February 1,~~Non-Equity ~~2010~~Incentive ~~our~~Plan Compensation ~~Committee~~earned ~~approved~~during ~~the~~2008 ~~following~~includes ~~2010~~AIP ~~base~~bonus ~~salaries~~of $533,520 and an LTIP payout of $2,880,000 for ~~our~~the ~~NEOs:~~2006-2008 performance cycle.

	Base Salary Rate
Name	2009		2010
Edward Lonergan	$	825,000	$	850,000
S. Curtis Johnson		650,000		650,000
Joseph Smorada		500,000		500,000
Pedro Chidichimo		415,000		427,450
John Alexander		370,000		381,100

18.	Consists of $1,250 of flexible credit for benefits, $1,357 of premiums for company provided life insurance, $9,200 of 401(k) company match, and $2,000 of retiree medical savings account company match.

~~Retirement~~19. Includes grant date fair value of J.$966,000 ~~Smorada~~for 96,600 DSUs granted for the 2008-2010 performance cycle and $999,000 related to 99,900 DSUs granted for the 2009-2011 performance cycle.

On20. ~~January 7,~~Equals ~~2010,~~ the ~~Company~~grant ~~and~~date ~~Holdings~~fair ~~announced~~value ~~the retirement~~ of ~~Joseph F. Smorada~~889,500 ~~the~~total ~~former~~options ~~Executive~~granted ~~Vice President~~in ~~and Chief Financial Officer of the Company and Holdings~~2010. ~~Mr. Smorada~~589,500 ~~continued~~options inwere ~~his~~granted ~~capacity~~based ason ~~Executive~~the ~~Vice~~number ~~President~~of ~~and~~DSUs ~~Chief~~for ~~Financial Officer of~~ the ~~Company and Holdings until January 11,~~ 2008-2010 and ~~will~~2009-2011 ~~remain~~performance ~~with~~cycles ~~the Company~~subject ~~and~~to ~~Holdings~~additional asservice anbased ~~Executive~~vesting ~~Vice~~provisions ~~President~~if ~~until~~earned. ~~March 31~~300,000 ~~2010.~~were ~~The~~granted ~~terms~~based ofon ~~Mr. Smorada's~~number ~~separation~~of ~~agreement~~shares ~~were~~directly ~~set~~purchased ~~forth~~and inare ~~our~~subject ~~January 11,~~to ~~2010~~additional ~~current~~service ~~report~~based onvesting ~~Form 8-K~~provisions.

21.	Represents AIP bonus earned during 2010.

22.	Consists of $13,565 of flexible spending account, $27,759 of defined contribution pension, and $326,100 of expatriate allowances (including auto allowance).

23.	Non-Equity Incentive Plan Compensation earned during 2009 includes AIP bonus of $340,087 and an LTIP payout of $762,000 for the 2007-2009 performance cycle.

24.	Consists of $12,651 of flexible spending account, $29,337 of defined contribution pension, and $283,896 of expatriate allowances (including auto allowance).

25.	Non-Equity Incentive Plan Compensation earned during 2008 includes AIP bonus of $357,500 and an LTIP payout of $720,000 for the 2006-2008 performance cycle.

26.	Consists of $8,131 of flexible spending account, $31,701 of defined contribution pension, and $384,754 of expatriate allowances (including auto allowance).

27.	Includes grant date fair value of $644,000 for 64,400 DSUs granted for the 2008-2010 performance cycle and $832,500 related to 83,250 DSUs granted for the 2009-2011 performance cycle.

28.

Equals the grant date fair value of 600,450 total options granted in 2010. 442,950 options were granted based on the number of DSUs for the 2008-2010 and 2009-2011 performance cycles subject to additional service based vesting provisions if earned. 157,500 were granted based on number of shares directly purchased and are subject to additional service based vesting provisions.

29.	Represents AIP bonus earned during 2010.

30.	Consists of $15,000 of flexible spending account, $591 of premiums for company provided life insurance, $1,274 of premiums for company paid executive LTD, $9,800 of 401(k) company match, $19,160 of 401(k) pension plan contributions, $44,873 of 401(k) excess contribution, and $1,306 of awards.

31.	Represents Signing Bonus.

32.	Non-Equity Incentive Plan Compensation earned during 2009 includes AIP bonus of $315,536 and an LTIP payout of $508,000 for the 2007-2009 performance cycle.

33.	Consists of $15,000 of flexible spending account, $773 of premiums for company provided life insurance, $1,274 of premiums for company paid executive LTD, $9,800 of 401(k) company match, $19,160 of 401(k) pension plan contributions, and $12,500 of 401(k) excess contribution.

34.	Represents Signing Bonus.

35.	Includes grant date fair value of $200,000 for 20,000 DSUs granted for the 2008-2010 performance cycle and $400,000 related to 40,000 DSUs granted for the 2009-2011 performance cycle.

36.

Equals the grant date fair value of 465,000 total options granted in 2010. 180,000 options were granted based on the number of DSUs for the 2008-2010 and 2009-2011 performance cycles subject to additional service based vesting provisions if earned. 285,000 were granted based on number of shares directly purchased and are subject to additional service based vesting provisions.

37.	Represents AIP bonus earned during 2010.

38.	Consists of $14,839 of flexible spending account, $774 of premiums for company provided life insurance, $5,385 of 401(k) company match, $19,160 of 401(k) pension plan contributions, and $23,577 of 401(k) excess contribution.

39.	Non-Equity Incentive Plan Compensation earned during 2010 includes AIP bonus of $69,078, an LTIP payout of $822,221 for the 2008-2010 performance cycle, and $443,289 for the “earned” portion of the 2009-2011 LTIP performance cycle.

40.	Consists of $18,750 of flexible spending account, $194 of premiums for company provided life insurance, $479 of premiums for company paid executive LTD, $9,800 of 401(k) company match, $19,160 of 401(k) pension plan contribution, $28,552 of 401(k) excess contribution, and $602,885 of severance.

41.	One-time cash bonus for the exceptional commitment made in preparing, managing, and delivering the closing of the financial restructuring of the company.

42.	Non-Equity Incentive Plan Compensation earned during 2009 includes AIP bonus of $399,750, and an LTIP payout of $990,600 for the 2007-2009 performance cycle.

43.

Consists of $15,000 of flexible spending account, $1,044 of premiums for company provided life insurance, $1,917 of premiums for company paid executive LTD, $9,800 of 401(k) company match, $19,160 of 401(k) pension plan contribution, $72,000 of 401(k) excess contribution, $154,240 for a Restricted Stock SERP payment, and $2,999 for the use of a Company-owned resort.

44.	Non-Equity Incentive Plan Compensation earned during 2008 includes AIP bonus of $465,000, and an LTIP payout of $1,123,200 for the 2006-2008 performance cycle.

45.	Consists of $15,000 of flexible spending account, $1,250 of flexible credit for benefits, $1,044 of premiums for company provided life insurance, $9,200 of 401(k) company match, and $12,982 for a Restricted Stock SERP payment.

Additional Actions Taken in 2011 for our NEOs

On February 10, 2011 our Compensation Committee approved the following base salaries for our NEOs:


	Base Salary Rate
Name	2010		2011
Edward F. Lonergan	$	850,000	$	900,000
S. Curtis Johnson III ¹		650,000		650,000
Norman Clubb		500,000		510,000
Pedro Chidichimo		427,450		435,999
John Alexander		381,100		392,533

2010 Additional Individual that Qualifies:
Joseph F. Smorada		500,000		n/a

S. Curtis Johnson III was Chairman of the Board during the last completed fiscal year. In February 2011, he resigned as a director and took a leave of absence as Chairman of the Company, which is an executive officer position in Diversey. During his leave of absence, Mr. Johnson will not be entitled to receive payments of his base salary or payments with respect to such period under the AIP, but will be entitled to participate in the executive benefit and perquisite programs discussed above to the same extent as he participated in such programs prior to his leave of absence. The Company’s Board has appointed Helen P. Johnson-Leipold as acting Chairman. On March 17, 2011, Mr. Johnson announced his retirement from his position as Chairman effective as of March 31, 2011.

Grants of Plan-Based Awards Table

The following table sets forth information relating to plan-based awards granted in ~~2009~~2010 to our NEOs:

~~2009~~2010 GRANTS OF PLAN-BASED AWARDS

				~~Estimated Future Payouts UnderNon-Equity Incentive PlanAwards~~		Estimated Future Payouts UnderNon-Equity Incentive PlanAwards				~~Estimated Future PayoutsUnder Equity IncentivePlan Awards~~				~~AllOtherStockAwards:NumberofSharesof Stockor Units~~	Estimated Future PayoutsUnder Equity IncentivePlan Awards	~~All OtherOptionAwards:Number ofSecuritiesUnderlyingOptions~~	~~Exerciseor BasePrice ofOptionAwards($/Sh)~~			All OtherStockAwards:Numberof Sharesof Stockor Units(#)	All OtherOptionAwards:Number ofSecuritiesUnderlyingOptions (#)		Exercise orBase Priceof OptionAwards($/Sh)		Grant DateFair Value ofEquityIncentivePlan Awards,and StockOptions ($)
Name	Description of Plan	~~Grant Date~~GrantDate		~~Threshold1~~		Threshold($)	~~Target~~	~~Maximum~~	Target($)	~~Threshold~~	~~Target~~	Maximum($)	~~Maximum~~		Threshold(#)			Maximum(#)
Edward Lonergan	Long Term Incentive	3/11/2009		750,000			3,000,000	6,000,000
Edward F. Lonergan	2010 Annual Incentive Plan		n/a			$	—		$	850,000		$	1,700,000
S. Curtis Johnson	Long Term Incentive	3/11/2009		525,000			2,100,000	4,200,000
	2008-2010 DSUs 1		1/11/2010													0			289,800						$	2,898,000
Joseph Smorada	Long Term Incentive	3/11/2009		350,000	2		1,000,000	2,000,000
	2008-2010 Matching Options 2		1/11/2010																			1,159,200	$	10.00		3,971,419
Pedro Chidichimo	Long Term Incentive	3/11/2009		225,000			900,000	1,800,000
	2009-2011 DSUs 3		1/11/2010													0			333,000							3,330,000
John Alexander	Long Term Incentive	3/11/2009		187,500			750,000	1,500,000
	2009-2011 Matching Options 4		1/11/2010																			1,332,000		10.00		4,563,432
	Discretionary Purchase Matching Options 5		2/23/2010																			500,000		10.00		1,713,000
S. Curtis Johnson III	2010 Annual Incentive Plan		n/a				—			520,000			1,040,000
	2008-2010 DSUs 1		1/11/2010													0			225,400							2,254,000
	2008-2010 Matching Options 2		1/11/2010																			225,400		10.00		772,220
	2009-2011 DSUs 3		1/11/2010													0			233,100							2,331,000
	2009-2011 Matching Options 4		1/11/2010																			233,100		10.00		798,601
	Discretionary Purchase Matching Options 5		2/23/2010																			200,000		10.00		685,200
Norman Clubb	2010 Annual Incentive Plan		n/a				—			325,000			650,000
	2008-2010 DSUs 1		1/11/2010													0			20,000							200,000
	2008-2010 Matching Options 2		1/11/2010																			60,000		10.00		205,560
	2009-2011 DSUs 3		1/11/2010													0			40,000							400,000
	2009-2011 Matching Options 4		1/11/2010																			120,000		10.00		411,120
	Discretionary Purchase Matching Options 5		2/23/2010																			285,000		10.00		976,410
Pedro Chidichimo	2010 Annual Incentive Plan		n/a				—			277,843			555,685
	2008-2010 DSUs 1		1/11/2010													0			96,600							966,000
	2008-2010 Matching Options 2		1/11/2010																			289,800		10.00		992,855
	2009-2011 DSUs 3		1/11/2010													0			99,900							999,000
	2009-2011 Matching Options 4		1/11/2010																			299,700		10.00		1,026,772
	Discretionary Purchase Matching Options 5		2/23/2010																			300,000		10.00		1,027,800
John Alexander	2010 Annual Incentive Plan		n/a				—			247,715			495,430
	2008-2010 DSUs 1		1/11/2010													0			64,400							644,000
	2008-2010 Matching Options 2		1/11/2010																			193,200		10.00		661,903
	2009-2011 DSUs 3		1/11/2010													0			83,250							832,500
	2009-2011 Matching Options 4		1/11/2010																			249,750		10.00		855,644
	Discretionary Purchase Matching Options 5		2/23/2010																			157,500		10.00		539,595

1. ~~For~~Shortly ~~attainment~~after closing our transaction and formation of ~~threshold~~Diversey ~~goals~~Holdings, ~~established~~our executives, including our NEOs, converted their long-term incentive cash opportunities under ~~the~~our former LTIP ~~there~~into isperformance aDeferred ~~25%~~Share ~~payout~~Units (DSUs) for each of the 2008-2010 and 2009-2011 performance cycles. For ~~amounts~~the ~~above~~2008-2010 ~~threshold~~performance cycle, ~~awards~~it ~~are~~was ~~earned~~determined onthat aperformance ~~linear~~over ~~basis~~the up2008-2009 period was equal to 111% of target based on the original dollar-denominated targets under our original LTIP. This amount was converted into DSUs based on our stock price on the date of grant of $10/share. The 2010 performance period of the three-year cycle was converted at the original target. ~~and~~The maximum ~~awards~~number asof ~~set~~shares ~~forth~~that could be earned pursuant to this award are illustrated for each NEO. However, all shares could be forfeited if certain performance thresholds are not met. In February of 2011, the Compensation Committee determined that the maximum number of shares for each NEO had been earned. This amount is reported in the ~~table~~Summary Compensation Table above.

2. AFor ~~special~~each ~~floor~~DSU ~~was~~potentially ~~established~~earned under the 2008-2010 performance cycle, “Matching Options” were granted based on the following ratios: Mr. Lonergan, 4 Matching Options for every DSU; For Mr. Johnson, 1 Matching Option for every DSU; For Mssrs. Chidichimo, Alexander, and Clubb, 3 Matching Options for every DSU. The Matching Options are subject to forfeiture based on the same ratio if performance goals are not attained. As described in ~~December~~Note ~~2005~~1 above, the Compensation Committee determined that all Matching Options were earned. In cases where shares earned related to ~~support~~DSUs ~~retention~~are withheld to cover our NEOs’ tax liability, additional Matching Options will be forfeited based on the same ratios described above. Although performance and share earn out for the 2008-2010 performance period have been determined as discussed in Notes 1 and 2, shares have not been delivered to the NEOs and related share withholding to cover tax liabilities (and related Matching Option forfeiture) have not been determined at this time. Matching Options earned will vest in four equal installments beginning on the first anniversary of the date the shares were delivered under the DSU plan and becoming 100% vested in 2015.

793. For the 2009-2011 performance cycle, it was determined that performance over the 2009 period was equal to 133% of target based on the original dollar-denominated targets under our original LTIP. This amount was converted into DSUs based on our stock price on the date of grant of $10/share. The 2010-2011 performance period of the three-year cycle was converted at the original target. The maximum number of shares that could be earned pursuant to this award are illustrated for each NEO. However, all shares could be forfeited if certain performance thresholds are not met. No determination of performance for this performance cycle has been made. The maximum number of shares for each NEO is reported in the Summary Compensation Table above based on the grant date fair value.

As described in more detail in Footnote 2, “Matching Options” were granted related to the DSUs granted for the 2009-2011 performance cycle subject to the similar terms and conditions. Matching Options earned will vest in three equal installments beginning on the first anniversary of the date the shares were delivered under the DSU plan and becoming 100% vested in 2015.

Many of our executives including our NEOs had the opportunity to make a direct discretionary investment in the Company’s Class B stock. Based on each NEO’s individual investment, Matching Options were granted based on the same ratios described for each NEO in more detail in Footnote 2. These Matching Options will vest in four equal installments beginning on the first anniversary date of the grant and becoming 100% vested in 2014.

Equity-Based Long-Term Incentives

As stated above, the grants of DSUs are in replacement of the former cash LTIP program’s three-year performance cycles granted for fiscal 2008 and 2009. Grants of matching options are intended to cover a multi-year period and are forfeitable based on a combination of service, performance and DSU tax withholding provisions. No additional equity grants or long-term incentive awards were made to NEOs in 2011. The Compensation Committee does not intend to make additional equity grants to our NEOs for the next three fiscal years.

Outstanding Equity Awards

The following table sets forth the 2010 outstanding equity awards at fiscal year-end:

2010 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END


	Option Awards										Stock Awards
Name	Number of Earned¹ Securities Underlying Unexercised Options- Exercisable		Number of Earned¹ Securities Underlying Unexercised Options- Unexercisable		Equity Incentive Plan Awards: Number of Unearned Securities Underlying Unexercised Options		Option Exercise Price		Option Expiration Date		Number of Earned² but not Vested Shares or Units of Stock		Market Value of Earned² but not Vested Shares or Units of Stock		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
Edward F. Lonergan		—		1,659,200		1,332,000	$	10.00		12/31/2019		289,800	$	3,941,280		333,000	$	4,528,800
S. Curtis Johnson III		—		425,400		233,100		10.00		12/31/2019		225,400	$	3,065,440		233,100	$	3,170,160
Norman Clubb		—		345,000		120,000		10.00		12/31/2019		20,000	$	272,000		40,000	$	544,000
Pedro Chidichimo		—		589,800		299,700		10.00		12/31/2019		96,600	$	1,313,760		99,900	$	1,358,640
John Alexander		—		350,700		249,750		10.00		12/31/2019		64,400	$	875,840		83,250	$	1,132,200

These Options include those awarded based on the discretionary purchase of Shares, as well as those earned based on the 2008-2010 DSU performance cycle.

These Shares have been earned based on the 2008-2010 DSU performance cycle and became vested on March 17, 2011.

Pension Benefits

The following table sets forth the present value of the NEOs’ accumulated benefits under the specified retirement plans:

PENSION BENEFITS

Name	Plan	Number ofYears CreditedService (#)		~~Present Valueof AccumulatedBenefit~~		Present Valueof AccumulatedBenefit	~~PaymentsDuring LastFiscal Year~~		PaymentsDuring LastFiscal Year
Edward Lonergan	Cash Balance Plan	2.9		$	50,382		$	0
Edward F. Lonergan	Cash Balance Plan		2.9			$	53,205		$	0
	Supplemental Plan	~~2.9~~	2.9		~~334,357~~		354,093	0		0
S. Curtis Johnson	Cash Balance Plan	25.4			693,920			0
S. Curtis Johnson III	Cash Balance Plan		25.4				729,680			0
	Supplemental Plan	~~25.4~~	25.4		~~1,672,324~~		1,763,506	0		0
Joseph Smorada	Cash Balance Plan	4.2			75,633			0
Norman Clubb	N/A		N/A				N/A			N/A
	Supplemental Plan	4.2			230,521			0
Pedro Chidichimo	N/A		N/A				N/A			N/A
Pedro Chidichimo	N/A	N/A			N/A			N/A
John Alexander	Cash Balance Plan		0.2				3,269			0
John Alexander	Cash Balance Plan	0.2			3,082			0
2010 Additional Individual that Qualifies:
Joseph F. Smorada	Cash Balance Plan		4.2				0			76,275
	Supplemental Plan		4.2				0			237,365

~~The~~A ~~pension~~description ~~values~~of ~~included~~Mr. Smorada’s inretirement ~~the above analysis are the current or present value of the~~ benefits ~~expected~~was todisclosed ~~be paid~~ in the ~~future.~~8-k ~~The~~filing ~~amount of each future payment is based~~ on ~~the current accrued pension benefit. The actuarial assumptions~~January 11, ~~with the exception of the expected retirement age, are the same as used for the company’s financial statements~~2010. ~~See Note 17 to our consolidated financial statements included in this annual report on Form 10-K. The retirement age is the earliest unreduced retirement age as defined in each plan.~~

~~The~~84 values set forth in the above table have been developed based on actuarial assumptions that are considered to be reasonable. Other actuarial assumptions could also be considered to be reasonable and produce different results.

The pension values included in the above analysis are the current or present value of the benefits expected to be paid in the future. The amount of each future payment is based on the current accrued pension benefit. The actuarial assumptions, with the exception of the expected retirement age, are the same as used for the company’s financial statements. See Note 18 to our consolidated financial statements included in this annual report on Form 10- K. The retirement age is the earliest unreduced retirement age as defined in each plan.

The results shown in this report have been developed based on actuarial assumptions that are considered to be reasonable. Other actuarial assumptions could also be considered to be reasonable and produce different results.

The amounts shown are based on the plan provisions applicable in each plan in which any of the NEOs participate.

The change in pension values shown in the Summary Compensation Table includes the effect of:

• The actual ~~2009~~2010 investment credit in the Cash Balance Plan and Supplemental Plan;

• ~~Change~~Changes in ~~the pre-2004 interest credit assumption from 7~~assumptions.~~00% to 4.50% as a result of a plan change adopted December 31, 2009 and effective retroactive to January 1, 2009; and~~

• Changes in certain assumptions.

Specific Assumptions used in Estimating Present Values

Assumed Retirement Age:

•

Cash Balance Plan – The earlier of age 62 with 10 years of service or age 65 with 5 years of service

•

Supplemental Plan – Age 65 with 5 years of service

Discount Rate: The applicable discount rate is 5.6555% as of December 31, ~~2009~~2010 and 65.0565% as of December 31, ~~2008~~2009.

Interest Credit Assumption: Cash balance amounts are projected to the Assumed Retirement Age assuming a crediting rate of 4.50% on ~~both pre-2004~~all ~~and post-2003~~ account balances.

Material Terms and Conditions of the Plans:

Cash Balance Plan – This tax-qualified defined benefit plan is generally available to all full-time salaried employees hired prior to ~~December~~January 311, ~~2008,~~2009 following the completion of one year of service. Benefits under the plan are determined based on a cash balance account (the “Cash Balance Account”) that defines the lump sum amount that is payable following a participant’s death, termination or retirement. The Cash Balance Account was established as of January 1, 1998 for then current employees as an amount equal to (1) the present value of the participant’s accrued benefit under the prior formula, plus (2) a special transition amount determined based on the participant’s age, service and compensation. Each year, a service credit (prior to December 31, 2008) and an interest credit are added to each participant’s Cash Balance Account.

80The Cash Balance Plan was frozen and future service credits were moved from the Cash Balance Plan to the Retirement Savings Plan (“401(k) Plan”), effective January 1, 2009. The service credit equals 5% of a participant’s compensation up to the Social Security Wage Base ($106,800 for both 2010 and 2009) plus 10% of a participant’s compensation in excess of the Social Security Wage Base.

~~Table~~Pension eligible compensation in the Cash Balance Plan and the 401(k) Plan includes base salary, commissions, shift differential, overtime, and bonuses under the AIP and excludes amounts deferred in our nonqualified deferred compensation plan. Eligible compensation is also limited by the compensation limit ($245,000 for 2010 and 2009 and $230,000 for 2008) imposed by Section 401(a) (17) of ~~Contents~~the Internal Revenue Code (“IRC”).

The Cash Balance Plan was frozen and future service credits were moved from the Cash Balance Plan to the Retirement Savings Plan (“401(k) Plan”), effective January 1, 2009. The service credit equals 5% of a participant’s compensation up to the Social Security Wage Base ($106,800 for 2009 and $102,000 for 2008) plus 10% of a participant’s compensation in excess of the Social Security Wage Base.

Pension eligible compensation in the Cash Balance Plan and the 401(k) Plan includes base salary, commissions, shift differential, overtime, and bonuses under the AIP and excludes amounts deferred in our nonqualified deferred compensation plan. Eligible compensation is also limited by the compensation limit ($245,000 for 2009 and $230,000 for 2008) imposed by Section 401(a) (17) of the Internal Revenue Code (“IRC”).

Prior to December 31, 2009, the Cash Balance Plan interest credit was separately determined for the pre-2004 balance (initial account balance and service credits earned prior to 2004), and for the post-2003 balance (service credits earned after 2003). Effective January 1, 2009, the interest credit for the pre-2004 balance changed from the greater of 75% of the rate of return earned by the Cash Balance Plan trust during the year or 4%, to a safe harbor rate of 4% for 2009 and, beginning in 2010, the average yield on 10-year Treasury Constant Maturities for the preceding year. The interest credit for the post-2003 balance equals the average yield on 10-year Treasury Constant Maturities during the preceding year.

All Cash Balance Plan benefit options are actuarially equivalent to the participant’s account balance.

The Cash Balance Plan also includes special benefits for employees who became participants in the ~~Cash Balance~~ Plan on or before June 1, 1998. At benefit commencement, these participants receive the greater of the benefit based on their Cash Balance Account or the benefit based on the Prior Plan Formula. The Prior Plan Formula is a monthly annuity benefit equal to:

•

1.75% times a five-year average of participant’s base pay times service, less

•

1.67% times the participant’s primary Social Security benefit times service (not to exceed 30 years)

APension ~~participant’s~~eligible ~~five-year~~compensation ~~average~~for ~~pay and service under~~ the Prior Plan Formula ~~was~~benefit ~~frozen~~is asequal ofto ~~December 31~~base wages, ~~2008.~~limited by IRC Section 401(a)(17).

Pension eligible compensation for the Prior Plan Formula benefit is equal to base wages, limited by IRC Section 401(a) (17).

The Prior Plan Formula benefit is payable unreduced at age 62 as a life annuity with 5 years guaranteed. Benefits are reduced 4% per year prior to age 62 for participants who have attained age 50 with 10 years of service. Benefits are actuarially reduced from age 65 for participants who have not attained age 50 with 10 years of service. Annual cost of living increases, limited to $180 per year, are also added to the Prior Plan Formula benefit.

Mr. Johnson is the only NEO eligible for the Prior Plan Formula.

Supplemental Plan – This is a nonqualified defined benefit plan that provides for the difference between the benefits under the Cash Balance Plan and the amounts that would have been paid under the Cash Balance Plan if benefits were determined without regard to Internal Revenue Service limitations on compensation and if the participant did not defer any compensation under our nonqualified deferred compensation plans.

Benefits are generally determined using the same terms and provisions as used in the Cash Balance Plan except there is no Prior Plan Formula benefit and all amounts are paid as a lump sum immediately following termination.

Consistent with the Cash Balance Plan, effective January 1, 2009, there are no future service credits in the Supplemental Plan. Future service credits related to Internal Revenue Service compensation limitations and compensation under the nonqualified deferred compensation plan have moved from the Supplemental Plan to the Excess Retirement Savings Plan (“401(k) Excess Plan”), effective January 1, 2009.

81Retirement of J. Smorada

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