EXHIBIT (10)M(ii)


 


AMENDMENT NO. 1 AND INSTRUMENT OF
BENEFIT FREEZE

TO THE ECOLAB MIRROR PENSION PLAN

(As Amended and Restated effective January 1, 2003)

WITH RESPECT TO

THE AMERICAN JOBS CREATION ACT OF 2004


 


WHEREAS, Ecolab Inc. (the “Company”) amended and
restated the Ecolab Mirror Pension Plan (the “Plan”) effective January 1, 2003;
and


 


WHEREAS, the Plan is classified as a “nonqualified
deferred compensation plan” under the Code; and


 


WHEREAS, the American Jobs Creation Act of 2004, P.L.
108-357 (the “AJCA”) added a new Section 409A to the Code, which significantly
changed the Federal tax law applicable to “amounts deferred” under the Plan
after December 31, 2004; and


 


WHEREAS, pursuant to the AJCA, the Secretary of the
Treasury and the Internal Revenue Service will issue proposed, temporary or
final regulations and/or other guidance with respect to the provisions of new
Section 409A of the Code (collectively, the “AJCA Guidance”); and


 


WHEREAS, the AJCA Guidance has not yet been issued;
and


 


WHEREAS, to the fullest extent permitted by Section
409A of the Code and the AJCA Guidance, the Company wants to protect the “grandfathered”
status of the Mirror Pension Benefits that are accrued prior to January 1,
2005; and


 


WHEREAS, due to the uncertainty regarding the effect
of the AJCA on Mirror Pension Benefits under the Plan, the Company has decided
to temporarily freeze all Mirror Pension Benefits as of December 31, 2004;


 


NOW, THEREFORE, pursuant to Section 1.3 of the Plan
and Section 5.1 of the Administrative Document, the Company hereby adopts this
Amendment No. 1 to the Plan, which amendment is intended to (1) allow amounts
deferred prior to January 1, 2005 to qualify for “grandfathered” status and
continue to be governed by the law applicable to nonqualified deferred
compensation prior to the addition of Section 409A of the Code (as specified in
the Plan as in effect prior January 1, 2005); and (2) temporarily freeze the
accrual of Mirror Pension Benefits hereunder as of December 31, 2004.


 


Words and phrases used herein with initial capital
letters that are defined in the Plan are used herein as so defined and the
provisions hereof shall be effective as of the close of business on December
31, 2004.


 





















 


Section 1


 


Article I of the Plan is hereby amended by the
addition of the following new Section 1.4 at the end thereof, to read as
follows:


 


“Section 1.4           American
Jobs Creation Act (AJCA).


 


(a)           To
the extent applicable, it is intended that the Plan (including all Amendments
thereto) comply with the provisions of Section 409A of the Code, as enacted by
the AJCA, so as to prevent the inclusion in gross income of any amount of
Mirror Pension Benefit accrued hereunder in a taxable year that is prior to the
taxable year or years in which such amounts would otherwise be actually
distributed or made available to the Executives.  The Plan shall be administered in a manner
that will comply with Section 409A of the Code, including proposed, temporary
or final regulations or any other guidance issued by the Secretary of the
Treasury and the Internal Revenue Service with respect thereto (collectively
with the AJCA, the “AJCA Guidance”).  Any
Plan provisions that would cause the Plan to fail to satisfy Section 409A of
the Code (including, without limitation, those added or amended by this
Amendment No. 1) shall have no force and effect until amended to comply with
Code Section 409A (which amendment may be retroactive to the extent permitted
by the AJCA Guidance).


 


(b)           The
Administrator shall not take any action hereunder that would violate any
provision of Section 409A of the Code. 
The Administrator is authorized to adopt rules or regulations deemed
necessary or appropriate in connection with the AJCA Guidance to anticipate
and/or comply with the requirements thereof (including any transition or
grandfather rules thereunder).


 


(c)           The
effective date of Amendment No. 1 to this Plan is December 31, 2004.  This Amendment No. 1 temporarily freezes the
Mirror Pension Benefits under the Plan effective as of December 31, 2004, with
the intent being that the Company will rescind the freeze upon issuance of the
AJCA Guidance.  In furtherance thereof,
but without limiting the foregoing, any Mirror Pension Benefit that is deemed
to have been deferred prior to January 1, 2005 and that qualifies for “grandfathered
status” under Section 409A of the Code shall continue to be governed by the law
applicable to nonqualified deferred compensation prior to the addition of
Section 409A to the Code and shall be subject to the terms and conditions specified
in the Plan as in effect prior to January 1, 2005.”


 


Section 2


 


Article III of the Plan is hereby amended by the
addition of the following new Section 3.1(4) thereto, immediately following
Section 3.1(3), to read as follows:


 


“(4)         Benefit
Freeze.  Notwithstanding any
provision of the Plan to the contrary, all Mirror Pension Benefits under the
Plan shall be frozen as of December 31, 2004. 
In furtherance thereof, but without limiting the foregoing, a
Participant shall not receive credit under this Plan for any service or
compensation that is earned after December 31, 2004 (even if such service and
compensation is taken into account for purposes of


 


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calculating the Actual Pension Plan Benefit or the amount
credited to the Executive’s Retirement Account in the Pension Plan).  The Company intends that Mirror Pension
Benefits that are accrued (and, only if required under the AJCA Guidance,
vested) on or before December 31, 2004 will qualify for “grandfathered” status
under the AJCA and will continue to be governed by the law applicable to
nonqualified deferred compensation prior to the addition of Section 409A of the
Code.”


 


Section 3


 


Section 6.1 of the Plan is hereby amended by adding
the following clause to the end thereof, to read as follows:


 


“; provided, however, that this limitation shall not
apply the extent deemed necessary by the Company to comply with the
requirements of Code Section 409A.”


 


Section 4


 


Section 6.3(2)(b)(iii) of the Plan is hereby amended
by adding the following clause to the end thereof, to read as follows:


 


“; to the extent permitted by Section 409A.”


 


IN WITNESS WHEREOF, Ecolab Inc. has executed this
Amendment No. 1 and has caused its corporate seal to be affixed this 16th
day of December, 2004.


 


	
   

  	
  ECOLAB INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Steven L. Fritze

  
	
   

  	
  Steven L. Fritze

  
	
   

  	
  Executive Vice
  President and

  
	
   

  	
  Chief Financial Officer

  
	
   

  
	
  (Seal)

  
	
   

  
	
  Attest:

  
	
   

  
	
   

  
	
  /s/ Lawrence T.
  Bell

  	
   

  
	
  Lawrence T. Bell

  
	
  Senior Vice President,

  
	
  General Counsel and Secretary

  
				



 


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