EXHIBIT (10)U


 


NON-EMPLOYEE DIRECTOR COMPENSATION AND
BENEFITS SUMMARY


 


COMPENSATION


 


Annual Payments


 


	
  Annual Retainer

  	
   

  	
  $

  	
  70,000

  	
   

  
	
  Committee Chair Fee

  	
   

  	
   

  	
   

  
	
  ·
  Audit

  	
   

  	
  $

  	
  15,000

  	
   / 7,500 (for other members)

  
	
  ·
  Compensation and Finance

  	
   

  	
  $

  	
  10,000

  	
   

  
	
  ·
  Governance / Presiding Director

  	
   

  	
  $

  	
  15,000

  	
   

  



 


In addition, a number of shares of stock units are credited annually to
each director’s deferred stock unit account. The Board has fixed the annual
value of the stock units to one-half the value of the annual retainer, or $35,000.


 


All reasonable travel, telephone and other expenses incurred on behalf
of Ecolab are reimbursable.


 


Directors may choose, at the time of initial election to the Board and
annually thereafter, to have the portions of their compensation which are paid
in cash deferred into an interest bearing deferred account or the stock unit
account.


 


Deferred Accounts


 


Deferred accounts are of two types: (i) stock unit accounts which
are comprised of stock equivalents, which increase/decrease with Ecolab’s stock
price and are credited with dividend equivalents; and (ii) interest-bearing
accounts, which are credited with interest at the prime rate.


 


Deferred accounts for a director are tax deferred until the director
ceases Board service. At that time, the proceeds are paid in a lump sum or in
equal annual installments for up to 10 years depending on the director’s
election, which can be made, generally, as late as one year prior to leaving
the Board for amounts deferred before 2005. Amounts deferred in 2005 or later
must be paid in a lump sum. Amounts deferred to the interest-bearing account,
are paid in cash. Amounts in the stock unit account are paid in Ecolab stock. Upon
death, a lump sum of any remaining amounts will be paid to the director’s beneficiary.


 


BENEFITS


 


Stock Option Plan


 


Directors receive a non-qualified option to purchase a number of shares
of Common Stock, as fixed from time-to-time by the fair market value on such
date. The right to exercise the option vests 25% at the end of each three-month
period following the grant date. Currently, the Board has fixed the value of
the annual stock option grant at $55,000.


 

















 


Options may be exercised for a period of 10 years from grant. However,
in the event a director ceases to be a director, the exercise period is
shortened to the lesser of five years from the date the director terminates
director status or the remaining term of the original option period.


 


Matching Gifts


 


Ecolab will match, up to $1,000 per fiscal year, a director’s
contributions to accredited U.S. educational institutions and an additional
$100 for contributions to qualifying U.S. public radio and television stations.


 


Eligibility for this program continues through the calendar year in
which a director ceases to be a director.


 


Travel Insurance


 


Directors are covered by $150,000 business travel accident coverage
while traveling on Ecolab business.


 


Director Liability Protection


 


·                  The current
D&O coverage is $75 million. There is no individual deductible.


 


·                  Ecolab’s
Certificate of Incorporation eliminates the ability of Ecolab or its
stockholders to recover monetary damages resulting from good-faith breaches of
certain fiduciary duties by a director.


 


·                  Directors are
entitled to indemnification by Ecolab for actions as a director taken in good
faith and in a manner reasonably believed to be in, or not opposed to, the best
interests of Ecolab.