Document:

Exhibit
10(D)i

 

MASTER AGREEMENT

RELATING TO OPTIONS GRANTED UNDER THE

ECOLAB INC. 2001 NON-EMPLOYEE DIRECTOR STOCK OPTION

AND DEFERRED COMPENSATION PLAN

 

THIS AGREEMENT is entered into and effective as of
this             day of
                           ,
       , by and between Ecolab Inc. (the
“Company”) and
                                    
(the “Optionee”).

 

A.            The
Company has adopted the Ecolab Inc. 2001 Non-Employee Director Stock Option and
Deferred Compensation Plan (the “Plan”), authorizing the Board of Directors of
the Company, or a committee as provided for in the Plan (the Board or such a
committee to be referred to as the “Committee”), to grant from time to time
Periodic Options to Qualified Directors and to grant as of each Annual Meeting
Date and November 1st Elective Options to those Qualified Directors
that have elected to receive credits to their Option Cash Accounts in lieu of
Share Unit Compensation pursuant to Section 5.3 of the Plan or have elected to
receive credits to their Option Cash Accounts in lieu of all or part of their
Other Director Compensation pursuant to Section 5.2 of the Plan.

 

B.            The
Company desires to advance the interests of the Company and its stockholders by
enabling the Company to attract and retain the services of experienced and
knowledgeable non-employee directors and to provide an incentive for such
directors to increase their proprietary interest in the Company’s long-term
success and progress.

 

Accordingly, the parties agree as follows:

 

ARTICLE 1.  GRANT OF OPTIONS.

 

Effective as of each of the dates (each, a “Date of Grant”) set forth
in a written notification a grant, which written notification will be provided
by the Company to the Optionee from time to time as Options (as hereinafter
defined) are granted under the Plan, the Company hereby grants to the Optionee
the right, privilege, and option (the “Option” and collectively, the “Options”)
to purchase that number of shares (the “Option Shares”) of the Company’s common
stock, $1.00 par value (the “Common Stock”) as set forth opposite such Date of
Grant on the written notification, according to the terms and subject to the
conditions hereinafter set forth and as set forth in the Plan.  None of the Options are intended to be
“incentive stock options,” as that term is used in Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”).

 

ARTICLE 2.  EXERCISE PRICE.

 

The per share
price to be paid by the Optionee in the event of an exercise of any of the
Options will be the respective price set forth opposite such Option in the
written notification of grant referred to in Article 1 above.

 

1

 

ARTICLE 3.  DURATION OF
OPTIONS AND TIME OF EXERCISE.

 

3.1           Exercisability
and Duration.  Each Option will be immediately
exercisable in full and will remain exercisable until 5:00 p.m. (St. Paul,
Minnesota time) on the tenth anniversary of such Option’s respective Date of
Grant (“Time of Termination”).  At the
Time of Termination of an Option, such Option will become void and expire as to
all unexercised Option Shares.

 

3.2           Termination
of Service as a Director of the Company. 
If the Optionee ceases to serve as a director of the Company for any
reason, then each Option will remain exercisable until the earlier of the
expiration of five years after the date the Optionee ceased to serve as a
director of the Company or the remaining term of such Option, at which time
such Option will terminate and no longer be exercised.

 

3.3           Effects
of Actions Constituting Cause.  Notwithstanding
anything in this Agreement to the contrary, in the event that the Optionee is
determined by the Committee, acting in its sole discretion, to have committed
any action which would constitute Cause, irrespective of whether such action or
the Committee’s determination occurs before or after the Optionee ceases to
serve as a director of the Company, all rights of the Optionee under the Plan
and this Agreement attributable to unexercised Periodic Options then held by
the Optionee will terminate and be forfeited without notice of any kind.

 

ARTICLE 4.  MANNER OF OPTION
EXERCISE; RELOAD GRANTS.

 

4.1           Notice.  Each Option may be exercised by the Optionee
in whole or in part from time to time, subject to the conditions contained in
the Plan and in this Agreement, by delivering, in person, by facsimile or
electronic transmission or through the mail, a written notice of exercise to
the Company at its principal executive office in St. Paul, Minnesota
(Attention:  Corporate Secretary, or
such other person as may, from time to time, be authorized by the Corporate
Secretary to receive such notices). 
Such notice must be in a form satisfactory to the Committee, identify
the particular Option that is being exercised (by the Date of Grant and total
number of Option Shares subject to such Option), specify the number of Option
Shares with respect to which such Option is being exercised, and signed by the
person or persons so exercising such Option. 
Such notice must be accompanied by payment in full of the total purchase
price of the Option Shares purchased. 
In the event that an Option is being exercised, as provided by the Plan
and Sections 5.2 and 5.3 below, by any person or persons other than the
Optionee, the notice must be accompanied by appropriate proof of right of such
person or persons to exercise such Option. 
As soon as practicable after the effective exercise of such Option, the
Optionee will be recorded on the stock transfer books of the Company as the
owner of the Option Shares purchased, and the Company will deliver to the
Optionee one or more duly issued stock certificates evidencing such
ownership.  In the event that such
Option is being exercised, as provided by resolutions of the Committee and
Section 4.2 below, by tender of a Broker Exercise Notice, the Company will
deliver such stock certificates directly to the Optionee’s broker or dealer or
their nominee.

 

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4.2           At
the time of exercise of an Option, the Optionee will pay the total purchase
price of the Option Shares to be purchased entirely in cash (including a check,
bank draft or money order, payable to the order of the Company); provided,
however, that the Committee, in its sole discretion and upon terms and
conditions established by the Committee, may allow such payment to be made, in
whole or in part, by tender of a Broker Exercise Notice, by tender, or
attestation as to ownership, of Previously Acquired Shares, or by a combination
of such methods. In the event the Optionee is permitted to pay the total
purchase price of such Option in whole or in part by tender or attestation as
to ownership of Previously Acquired Shares, the value of such Previously
Acquired Shares will be equal to their Market Price on the date of exercise of
such Option.  Notwithstanding the
foregoing, the exercise price payable upon the exercise of an Option by the
Optionee if the Optionee has a deferral election in effect under Section 5.4 of
the Plan and Section 4.3 of this Agreement must be made solely by attestation
as to ownership, of Previously Acquired Shares.

 

4.3           Deferral
of Receipt of Option Shares Issuable Upon the Stock-for-Stock Exercise of
Options.  So long as the Optionee is
a Qualified Director, the Optionee may elect, in accordance with Section 5.4 of
the Plan and this section and any other rules and procedures the Committee
deems appropriate, to defer receipt of all or a portion of the Option Shares
issuable upon the stock-for-stock exercise of an Option.  An election made pursuant to this section
will not be effective unless it is made on a properly completed election form
received by the Committee at least six months prior to the Optionee’s exercise
of the Option covered by the deferral election.  An election made pursuant to this section will not be effective unless
the Optionee is a Qualified Director both at the time of execution of the
deferral election and at the time of the exercise of the Option, receipt of the
Option Shares of which will be deferred. 
The Optionee must pay the Option exercise price by attestation as to
ownership of Previously Acquired Shares. 
Receipt of Option Shares deferred with respect to an Option pursuant to
this section will be credited to an Optionee’s Share Account under the Plan as
of the day of exercise of such Option. 
The number of Share Units credited to the Optionee’s Share Account will
equal the number of Option Shares with respect to which the Option was
exercised pursuant to this section by the Optionee, net of the number of Shares
attested to in payment of the exercise price pursuant to this section.  An election to defer receipt of all or a
portion of the Option Shares issuable upon the stock-for-stock exercise of an
Option pursuant to this section is irrevocable.

 

4.4           Reload
Grants.  To the extent that (i) an
Option is exercised in whole or in part at the time the Optionee is a director
of the Company; and (ii) the exercise price of such Option is satisfied by the
Optionee by tender or attestation as to ownership of Previously Acquired
Shares, then the Optionee will automatically be granted, effective as of such
date of exercise, a Reload Option to purchase the number of Shares tendered or
attested to in exercising such Option, at an exercise price equal to the Market
Price on the date of grant.  Such Reload
Option will be immediately exercisable, will expire at the Time of Termination
set forth in Section 3.1 of the original underlying Option, or earlier upon the
Optionee’s termination of service as provided in Section 3.2 and will be
subject to the other terms and conditions of the original underlying
Option.  The right to receive a Reload
Option under this section will accrue, on the terms and conditions set forth
above, solely to the Optionee, and not to any permitted transferee under the
terms of the Plan.  A Reload Option will
not

 

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accrue or be granted on a
Reload Option. Written notification will be provided by the Company to the
Optionee from time to time as Reload Options are granted pursuant to this
section.

 

ARTICLE 5.  RESTRICTIONS ON
TRANSFER.

 

5.1           General
Restriction on Transfer.  Except as
otherwise provided in the Plan and this section, none of the Options nor the
Option Shares acquired upon exercise of the Options may be transferred by the
Optionee, either voluntarily or involuntarily, or subjected to any lien,
directly or indirectly, by operation of law or otherwise.  Any attempt to transfer or encumber any of
the Options or the Option Shares other than in accordance with this section and
the Plan will be null and void and will void such Option.

 

5.2           Designation
of Beneficiary.  The Optionee is
entitled to designate a beneficiary to receive an Option upon the Optionee’s
death, and in the event of the Optionee’s death, payment of any amounts due
under the Plan will be made to, and exercise of any of the Options (to the
extent permitted pursuant to Article 3) may be made by, the Optionee’s legal
representatives, heirs and legatees.

 

5.3           Gifts
to Related Parties.  So long as the
Optionee is a director of the Company, the Optionee is entitled to transfer all
or a portion of an Option, other than for value, to the Optionee’s child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, any person sharing the
Optionee’s household (other than a tenant or employee), a trust in which any of
the foregoing have more than fifty percent of the beneficial interests, a
foundation in which any of the foregoing (or the Optionee) control the
management of assets, and any other entity in which these persons (or the
Optionee) own more than fifty percent of the voting interests.  Any permitted transferee will remain subject
to all the terms and conditions applicable to the Optionee prior to the
transfer except that a transferee will have no rights to receive Reload Options
under Section 4.4.  A permitted transfer
may be conditioned upon such requirements as the Committee may, in its sole
discretion, determine, including, but not limited to execution and/or delivery
of appropriate acknowledgements, opinion of counsel, or other documents by the
transferee.

 

ARTICLE 6.  LIMITATION OF
RIGHTS.

 

6.1           No
Right to Continue As a Director. 
Neither the Plan, nor the granting of any of the Options under the Plan
and this Agreement, nor any other action taken pursuant to the Plan, will
constitute or be evidence of any agreement or understanding, express or
implied, that the Company will retain the Optionee as a director of the Company
for any period of time, or at any particular rate of compensation.

 

6.2           Rights
as a Stockholder.  The Optionee will
have no rights as a stockholder with respect to any Option Shares covered by an
Option until the Optionee has exercised such Option, paid the exercise price
and become the holder of record of such Option Shares, and, except as otherwise
provided in Article 8 below, no adjustment will be made for dividends or other

 

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distributions or other
rights as to which there is a record date preceding the date the Optionee
becomes the holder of record of such Option Shares.

 

ARTICLE 7.  WITHHOLDING TAXES.

 

7.1           General
Rules.  The Company is entitled to
(a) withhold and deduct from the Optionee’s compensation and all other amounts
which may be due and owing to the Optionee from the Company), or make other
arrangements for the collection of, all legally required amounts necessary to
satisfy any federal, state or local withholding and other tax requirements
attributable to the grant or exercise of any Option or otherwise incurred with
respect to such Option, or (b) require the Optionee promptly to remit the
amount of such withholding to the Company before taking any action on the Optionee’s
notice of exercise of any Option, including issuing any Option Shares, with
respect to such Option.  In the event
that the Company is unable to withhold such amounts, for whatever reason, the
Optionee hereby agrees to pay to the Company an amount equal to the amount the
Company would otherwise be required to withhold under federal, state or local
law.

 

7.2           Special
Rules.  The Committee may, in its
sole discretion and upon terms and conditions established by the Committee,
permit or require the Optionee to satisfy, in whole or in part, any withholding
or other tax obligation as described in Section 7.1 above by remitting such
amounts to the Company, by electing to tender, or attest as to ownership of,
Previously Acquired Shares, by delivery of a Broker Exercise Notice or a
combination of such method.  For
purposes of satisfying the Optionee’s withholding or other tax obligation,
Previously Acquired Shares tendered or covered by an attestation will be valued
at their Market Price.

 

ARTICLE 8.  ADJUSTMENTS.

 

In the event of any reorganization, merger,
consolidation, recapitalization, liquidation, reclassification, stock dividend,
stock split, combination of shares, rights offering, divestiture or
extraordinary dividend (including a spin-off), or any other similar change in
the corporate structure or shares of the Company, the Committee (or, if the
Company is not the surviving corporation in any such transaction, the board of
directors of the surviving corporation), in order to prevent dilution or
enlargement of the rights of the Optionee, will make appropriate adjustment
(which determination will be conclusive) as to the number, kind and exercise
price of securities subject to each Option.

 

ARTICLE 9.  SUBJECT TO PLAN.

 

9.1           Terms
of Plan Prevail.  Each Option and
the Option Shares granted and issued pursuant to this Agreement have been
granted and issued under, and are subject to the terms of, the Plan.  The terms of the Plan are incorporated by
reference in this Agreement in their entirety, and the Optionee, by execution
of this Agreement, acknowledges having received a copy of the Plan. The
provisions of this Agreement will be interpreted as to be consistent with the
Plan, and any ambiguities in this Agreement will be interpreted by reference to
the Plan.  In the event that any
provision of this Agreement is inconsistent with the terms of the Plan, the
terms of the Plan will prevail.

 

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9.2           Definitions.  Unless otherwise defined in this Agreement,
the terms capitalized in this Agreement will have the same meaning as given to
such terms in the Plan.

 

ARTICLE 10.  MISCELLANEOUS.

 

10.1         Binding
Effect.  This Agreement will be
binding upon the heirs, executors, administrators, designated beneficiaries and
successors of the parties to this Agreement.

 

10.2         Governing
Law.  This Agreement and all rights
and obligations under this Agreement will be construed in accordance with the
Plan and governed by the laws of the State of Minnesota without regard to
conflicts of laws provisions.  Any legal
proceedings related to this Agreement will be brought in an appropriate
Minnesota court, and the parties to this Agreement consent to the exclusive
jurisdiction of the court for this purpose.

 

10.3         Entire
Agreement.  This Agreement (including
any written notification of the grant of an Option) and the Plan set forth the
entire agreement and understanding of the parties to this Agreement with
respect to the grant and exercise of each Option and the administration of the
Plan and supersede all prior agreements, arrangements, plans and understandings
relating to the grant and exercise of such Option and the administration of the
Plan.

 

10.4         Amendment
and Waiver.  This Agreement may be
amended, waived, modified or canceled only by a written instrument executed by
the parties hereto or, in the case of a waiver, by the party waiving
compliance.

 

 

[Remainder of page intentionally left blank]

 

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The parties to
this Agreement have executed this Agreement effective the day and year first
above written.

 

 

	
   

  	
  ECOLAB INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Kenneth A. Iverson

  
	
   

  	
   

  	
  Vice President
  and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [By execution of this

  Agreement, the Optionee

  acknowledges having

  received a copy of

  the Plan.]

  	
  OPTIONEE

  

  

  

  (Name)

  

 

7Exhibit
10(D)ii

 

MASTER AGREEMENT

RELATING TO PERIODIC OPTIONS GRANTED UNDER THE

ECOLAB INC. 2001 NON-EMPLOYEE DIRECTOR STOCK OPTION

AND DEFERRED COMPENSATION PLAN

(as amended effective as
of May 1, 2004)

 

THIS AGREEMENT is entered into and effective as of
this         day of 
                          ,         , by and
between Ecolab Inc. (the “Company”) and
                             
(the “Optionee”).

 

A.                                   The
Company has adopted the Ecolab Inc. 2001 Non-Employee Director Stock Option and
Deferred Compensation Plan, as amended effective as of May 1, 2004 (the
“Plan”), authorizing the Board of Directors of the Company, or a committee as
provided for in the Plan (the Board or such a committee to be referred to as
the “Committee”), to grant from time to time Periodic Options to Qualified
Directors.

 

B.                                     The
Company desires to advance the interests of the Company and its stockholders by
enabling the Company to attract and retain the services of experienced and
knowledgeable non-employee directors and to provide an incentive for such
directors to increase their proprietary interest in the Company’s long-term
success and progress.

 

Accordingly, the parties agree as follows:

 

ARTICLE 1.                                GRANT OF PERIODIC OPTIONS.

 

Effective as of each of the dates (each, a “Date of Grant”) set forth
in a written notification of the grant, which written notification will be
provided by the Company to the Optionee from time to time as Periodic Options
are granted under the Plan, the Company hereby grants to the Optionee the
right, privilege, and option to purchase that number of shares (the “Option
Shares”) of the Company’s common stock, $1.00 par value (the “Common Stock”) as
set forth opposite such Date of Grant on the written notification, according to
the terms and subject to the conditions hereinafter set forth and as set forth
in the Plan.  None of the Periodic
Options are intended to be “incentive stock options,” as that term is used in
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

ARTICLE 2.                                EXERCISE
PRICE.

 

The per share
price to be paid by the Optionee in the event of an exercise of any of the
Periodic Options will be the respective price set forth opposite such Periodic
Option in the written notification of grant referred to in Article 1 above.

 

ARTICLE 3.                                DURATION OF PERIODIC OPTIONS AND TIME OF EXERCISE.

 

3.1                                 Exercisability
and Duration.  Each Periodic Option
will be immediately exercisable in full and will remain exercisable until 5:00
p.m. (St. Paul, Minnesota time) on the tenth anniversary of

 

1

 

such
Periodic Option’s respective Date of Grant (“Time of Termination”).  At the Time of Termination of a Periodic
Option, such Option will become void and expire as to all unexercised Option
Shares.

 

3.2                                 Termination
of Service as a Director of the Company. 
If the Optionee ceases to serve as a director of the Company for any
reason, then each Periodic Option will remain exercisable until the earlier of
the expiration of five years after the date the Optionee ceased to serve as a
director of the Company or the remaining term of such Periodic Option, at which
time such Periodic Option will terminate and no longer be exercised.

 

3.3                                 Effects
of Actions Constituting Cause. 
Notwithstanding anything in this Agreement to the contrary, in the event
that the Optionee is determined by the Committee, acting in its sole
discretion, to have committed any action which would constitute Cause,
irrespective of whether such action or the Committee’s determination occurs before
or after the Optionee ceases to serve as a director of the Company, all rights
of the Optionee under the Plan and this Agreement attributable to unexercised
Periodic Options then held by the Optionee will terminate and be forfeited
without notice of any kind.

 

ARTICLE 4.                                MANNER OF PERIODIC OPTION EXERCISE.

 

4.1                                 Notice.  Each Periodic Option may be exercised by the
Optionee in whole or in part from time to time, subject to the conditions
contained in the Plan and in this Agreement, by delivering, in person, by
facsimile or electronic transmission or through the mail, a written notice of
exercise to the Company at its principal executive office in St. Paul,
Minnesota (Attention:  Corporate
Secretary, or such other person as may, from time to time, be authorized by the
Corporate Secretary to receive such notices). 
Such notice must be in a form satisfactory to the Committee, identify
the particular Periodic Option that is being exercised (by the Date of Grant
and total number of Option Shares subject to such Periodic Option), specify the
number of Option Shares with respect to which such Periodic Option is being
exercised, and signed by the person or persons so exercising such Periodic
Option.  Such notice must be accompanied
by payment in full of the total purchase price of the Option Shares
purchased.  In the event that a Periodic
Option is being exercised, as provided by the Plan and Sections 5.2 and 5.3
below, by any person or persons other than the Optionee, the notice must be
accompanied by appropriate proof of right of such person or persons to exercise
such Periodic Option.  As soon as
practicable after the effective exercise of such Periodic Option, the Optionee
will be recorded on the stock transfer books of the Company as the owner of the
Option Shares purchased, and the Company will deliver to the Optionee one or
more duly issued stock certificates evidencing such ownership.  In the event that such Periodic Option is
being exercised, as provided by resolutions of the Committee and Section 4.2
below, by tender of a Broker Exercise Notice, the Company will deliver such
stock certificates directly to the Optionee’s broker or dealer or their
nominee.

 

4.2                                 At
the time of exercise of a Periodic Option, the Optionee will pay the total
purchase price of the Option Shares to be purchased entirely in cash (including
a check, bank draft or money order, payable to the order of the Company);
provided, however, that the Committee, in its sole discretion and upon terms
and conditions established by the Committee, may allow such payment to

 

2

 

be
made, in whole or in part, by tender of a Broker Exercise Notice, by tender, or
attestation as to ownership, of Previously Acquired Shares, or by a combination
of such methods. In the event the Optionee is permitted to
pay the total purchase price of such Periodic Option in whole or in part by
tender or attestation as to ownership of Previously Acquired Shares, the value
of such Previously Acquired Shares will be equal to their Market Price on the
date of exercise of such Periodic Option.

 

ARTICLE 5.                                RESTRICTIONS ON TRANSFER.

 

5.1                                 General
Restriction on Transfer.  Except as
otherwise provided in the Plan and this section, none of the Periodic Options
nor the Option Shares acquired upon exercise of the Periodic Options may be
transferred by the Optionee, either voluntarily or involuntarily, or subjected
to any lien, directly or indirectly, by operation of law or otherwise.  Any attempt to transfer or encumber any of
the Periodic Options or the Option Shares other than in accordance with this
section and the Plan will be null and void and will void such Periodic Option.

 

5.2                                 Designation
of Beneficiary.  The Optionee is
entitled to designate a beneficiary to receive a Periodic Option upon the
Optionee’s death, and in the event of the Optionee’s death, payment of any
amounts due under the Plan will be made to, and exercise of any of the Periodic
Options (to the extent permitted pursuant to Article 3) may be made by, the
Optionee’s legal representatives, heirs and legatees.

 

5.3                                 Gifts
to Related Parties.  So long as the
Optionee is a director of the Company, the Optionee is entitled to transfer all
or a portion of a Periodic Option, other than for value, to the Optionee’s
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, any person sharing the
Optionee’s household (other than a tenant or employee), a trust in which any of
the foregoing have more than fifty percent of the beneficial interests, a
foundation in which any of the foregoing (or the Optionee) control the
management of assets, and any other entity in which these persons (or the Optionee)
own more than fifty percent of the voting interests.  Any permitted transferee will remain subject
to all the terms and conditions applicable to the Optionee prior to the
transfer.  A permitted transfer may be
conditioned upon such requirements as the Committee may, in its sole
discretion, determine, including, but not limited to execution and/or delivery
of appropriate acknowledgements, opinion of counsel, or other documents by the
transferee.

 

ARTICLE 6.                                LIMITATION OF RIGHTS.

 

6.1                                 No
Right to Continue As a Director. 
Neither the Plan, nor the granting of any of the Periodic Options under
the Plan and this Agreement, nor any other action taken pursuant to the Plan,
will constitute or be evidence of any agreement or understanding, express or
implied, that the Company will retain the Optionee as a director of the Company
for any period of time, or at any particular rate of compensation.

 

6.2                                 Rights
as a Stockholder.  The Optionee will
have no rights as a stockholder with respect to any Option Shares covered by a
Periodic Option until the Optionee has exercised such Periodic Option, paid the
exercise price and become the holder of record of such Option Shares, and,
except as otherwise provided in Article 8 below, no adjustment will be made for
dividends or other 

 

3

 

distributions
or other rights as to which there is a record date preceding the date the
Optionee becomes the holder of record of such Option Shares.

 

ARTICLE 7.                                WITHHOLDING TAXES.

 

7.1                                 General
Rules.  The Company is entitled to
(a) withhold and deduct from the Optionee’s compensation and all other
amounts which may be due and owing to the Optionee from the Company), or make
other arrangements for the collection of, all legally required amounts necessary
to satisfy any federal, state or local withholding and other tax requirements
attributable to the grant or exercise of any Periodic Option or otherwise
incurred with respect to such Periodic Option, or (b) require the Optionee
promptly to remit the amount of such withholding to the Company before taking
any action on the Optionee’s notice of exercise of any Periodic Option,
including issuing any Option Shares, with respect to such Periodic Option.  In the event that the Company is unable to
withhold such amounts, for whatever reason, the Optionee hereby agrees to pay
to the Company an amount equal to the amount the Company would otherwise be
required to withhold under federal, state or local law.

 

7.2                                 Special
Rules.  The Committee may, in its
sole discretion and upon terms and conditions established by the Committee,
permit or require the Optionee to satisfy, in whole or in part, any withholding
or other tax obligation as described in Section 7.1 above by remitting such
amounts to the Company, by electing to tender, or attest as to ownership of,
Previously Acquired Shares, by delivery of a Broker Exercise Notice or a
combination of such method.  For purposes
of satisfying the Optionee’s withholding or other tax obligation, Previously
Acquired Shares tendered or covered by an attestation will be valued at their
Market Price.

 

ARTICLE 8.                                ADJUSTMENTS.

 

In the event of any reorganization, merger,
consolidation, recapitalization, liquidation, reclassification, stock dividend,
stock split, combination of shares, rights offering, divestiture or
extraordinary dividend (including a spin-off), or any other similar change in
the corporate structure or shares of the Company, the Committee (or, if the
Company is not the surviving corporation in any such transaction, the board of
directors of the surviving corporation), in order to prevent dilution or
enlargement of the rights of the Optionee, will make appropriate adjustment
(which determination will be conclusive) as to the number, kind and exercise
price of securities subject to each Periodic Option.

 

ARTICLE 9.                                SUBJECT TO PLAN.

 

9.1                                 Terms
of Plan Prevail.  Each Periodic
Option and the Option Shares granted and issued pursuant to this Agreement have
been granted and issued under, and are subject to the terms of, the Plan.  The terms of the Plan are incorporated by
reference in this Agreement in their entirety, and the Optionee, by execution
of this Agreement, acknowledges having received a copy of the Plan. The
provisions of this Agreement will be interpreted as to be consistent with the
Plan, and any ambiguities in this Agreement will be interpreted by reference to
the Plan.  In the event that any

 

4

 

provision
of this Agreement is inconsistent with the terms of the Plan, the terms of the
Plan will prevail.

 

9.2                                 Definitions.  Unless otherwise defined in this Agreement,
the terms capitalized in this Agreement will have the same meaning as given to
such terms in the Plan.

 

ARTICLE 10.                          MISCELLANEOUS.

 

10.1                           Binding
Effect.  This Agreement will be
binding upon the heirs, executors, administrators, designated beneficiaries and
successors of the parties to this Agreement.

 

10.2                           Governing
Law.  This Agreement and all rights
and obligations under this Agreement will be construed in accordance with the
Plan and governed by the laws of the State of Minnesota without regard to
conflicts of laws provisions.  Any legal
proceedings related to this Agreement will be brought in an appropriate Minnesota
court, and the parties to this Agreement consent to
the exclusive jurisdiction of the court for this purpose.

 

10.3                           Entire
Agreement.  This Agreement (including
any written notification of the grant of a Periodic Option) and the Plan set
forth the entire agreement and understanding of the parties to this Agreement
with respect to the grant and exercise of each Periodic Option and the
administration of the Plan and supersede all prior agreements, arrangements,
plans and understandings relating to the grant and exercise of such Periodic
Option and the administration of the Plan.

 

10.4                           Amendment
and Waiver.  This Agreement may be
amended, waived, modified or canceled only by a written instrument executed by
the parties hereto or, in the case of a waiver, by the party waiving
compliance.

 

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left blank]

 

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The parties to
this Agreement have executed this Agreement effective the day and year first
above written.

 

 

	
   

  	
  ECOLAB INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Timothy P. Dordell

  
	
   

  	
   

  	
  Associate General
  Counsel - Corporate and

  Assistant Secretary

  

 

 

	
  [By execution of this Agreement,

  the Optionee acknowledges having

  received a copy of the Plan.]

  	
  OPTIONEE

  
	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  	
   

  

 

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